national practice exam
Casey signed a contract form offering a purchase price of $309,000 on a home, and gave his agent a $5,000 earnest money deposit. The owner is out of town and her agent can't reach her. At this point what does Casey have? An executory contract An implied contract An offer A voidable contract
An offer Until the terms are negotiated and the contract is signed by both parties, acceptance hasn't occurred and the sales contract is considered an offer.
A deed states, "For love and affection, the receipt and sufficiency of which is hereby acknowledged." What does this statement represent in the deed? Consideration Granting clause Habendum clause Subject to clause
Consideration (Consideration (something of value) is required for transfer of this deed. In a traditional sale, the consideration is the purchase price stated in the deed. In deed transfers, "for love and affection" may be the consideration offered.)
In a real estate transaction, which two parties are owed the same duties? Clients and cooperating agents Clients and customers Clients and other parties Customers and other parties
Customers and other parties (Other parties in the transaction are owed the same duties as customers. Only clients receive the full offering of your duties).
Amira's seller Tom just received the news that his buyers are walking away from the sale. They weren't willing to proceed after they saw the inspection report. Neither Amira nor Tom has requested a copy of the report. What's the most likely reason for that? Amira doesn't trust this particular inspection company. If they see the report, they'll be required to disclose any adverse findings. They are unwilling to pay for the report as the buyer requires. Tom wants to pay for his own inspector so that he can question the inspector.
If they see the report, they'll be required to disclose any adverse findings. (Some licensees (and sellers) may opt NOT to see the inspection report so that they don't learn about any adverse material facts which then must be disclosed. They may also be concerned about the accuracy of the report.)
Why are galvanized pipes a problem in older homes? They are not a problem. They are out of date and can lead to a variety of electrical problems. They can rust and cause leaks and low water pressure. They indicate the heating and cooling system(s) are outdated.
They can rust and cause leaks and low water pressure. (Galvanized pipes can be a problem if they start to rust. The rust can cause the pipe to deteriorate, causing leaks and low water pressure.)
Charlie represents Sue, a buyer. Charlie is being paid by Claude, the seller, through his brokerage. What's true about this situation? Charlie is Claude's agent. Sue is Claude's customer. This doesn't change the agency relationships. This is undisclosed dual agency.
This doesn't change the agency relationships. (you can be paid by someone and not be that person's agent. Compensation doesn't determine agency—the agency relationship agreement does.)
Your buyer is worried that after she closes on her property, she'll find out someone else has a claim to its ownership. What can reassure her? Abstract of title Chain of title Title insurance Title search
Title insurance (Title insurance protects property buyers from financial loss due to title defects. However, it covers only those items included in the policy.)
Lawrence is a buyer closing on a home purchase for which he's obtaining financing. He receives a Loan Estimate from his lender. What's the purpose of this document? To detail the amount Lawrence needs to bring to closing To detail the estimated closing costs for Lawrence's loan To disclose the interest rates available on this lender's various loan programs
To detail the estimated closing costs for Lawrence's loan (The Loan Estimate, which the lender must provide within three days of loan application, provides an estimate of mortgage loan costs.)
Sylvan, the seller, and Eric, the buyer, have signed an option agreement, which is an offer to purchase a specific piece of real estate without the obligation to buy it. Until Eric exercises his option to buy, only Sylvan is bound by the option agreement; he may not sell the property to anyone else during the option period. What type of contract is this? Bilateral Executed Mutual Unilateral
Unilateral (A contract in which consideration is only offered by one of the parties is a unilateral contract. In other words, the consideration only goes one way.)
Commander Halfback retires after 25 years of service in the Coast Guard. He is looking to buy a home. What type of loan should he use? Conventional FHA FHA, VA, or conventional VA
VA (The fact he was in the military doesn't mean he has to take a VA loan. There isn't enough information to determine the best loan, so at this point all loans mentioned are viable options to consider.)
Fee Simple Determinable
A few simple determinable has limitations as to what can or can't be done with a property. It used phrases such as "so long as," "while," or "during" to describe the required condition
Katherine purchased a property for $255,000, borrowing $242,250. The assessed value of the property is $249,700. The property appraisal came in at $257,000. Which of these amounts is used in calculating the transfer tax? $242,500 $249,700 $255,000 $257,000
$255,000 (Transfer tax is calculated based on the purchase/sales price ($255,000).)
Alexandra sells her house to Clark for $178,000. They negotiate to split the transfer tax, which has a rate of $0.33 per $100. What do they each pay to cover the transfer tax? $29.37 $293.70 $58.74 $587.40
$293.70 (The total transfer tax is $587.40 ($178,000 x .0033), so they each pay $293.70 ($587.40 ÷ 2).)
Roland's farm land is assessed at 1.5 million dollars and the improvements for $500,000. At a tax rate of 4 mills, how much are Rolan's monthly taxes? $6,667.00 $667.00 $8,000.00 $80,000.00
$667.00 Assessed value + improvements = total value of $2,000,000. Multiply 2 million by 4 (mills/millage rate) then divide by 1000 = $8,000 in annual taxes . Divide $8,000 by 12 to give you the monthly tax amount ($8,000 ÷ 12 = $667.00).
Required elements of a deed
-grantor must sign deed -grantor must be of legal capacity and positively identified -deed must include an act of conveyance
Sondrine's beach cottage has a right of way that allows nearby residents to get to the beach. What is the primary difference between a right of way and an easement? A right of way always has a defined expiration date. A right of way is always for an indefinite time period. A right of way offers the right to use the property for some function, as compared to just as a pass-through. A right of way provides a pass-through, but not a right to use the property.
A right of way provides a pass-through, but not a right to use the property. (A right of way doesn't grant the right to use the property in any way, or to construct anything on it. It merely grants an individual or a business the right to pass through the property to get to another property.)
Jackson Elementary School is undergoing some major renovations during the summer while school is out of session. The renovation crew has a detailed list of requirements for the disposal and drainage of wastewater and sewage. These requirements are likely part of the ________ with which the renovators must comply. Building code Deed restriction Safety laws Zoning regulation
Building code (Building codes specify construction standards to ensure the health and safety of those using the buildings. Sanitary drainage and disposal are a common building code standard.)
In the states where full disclosure isn't required, it's the __________ responsibility to perform due diligence on the property
Buyer's
Next step after loan pre approval
Complete loan application
What are the two categories of comparison when evaluating comparables to a subject property in the market comparison approach? Broad and specific Components and measures Elements and units General and detailed
Elements and units (There are two categories of comparison: elements, which look at physical and locational characteristics, and units, which look at the numbers.)
Jerry and Lewis have entered into a sales contract. They're about three weeks into the transaction, with several terms of the agreement yet to be met. What type of contract do Jerry and Lewis have? Executed Executory Option Unilateral
Executory (A valid contract that is in progress is an executory contract, which means that one or more terms of the agreement remain undone.)
The Nettles have accepted the Briars' purchase offer, and both parties have signed the sales contract. What type of contract do the Nettles and the Briars have? Executed Executory Unilateral Voidable
Executory (The Nettles and Briars have a valid contract that's in the process of being completed. Because one or more terms of the contract must still be completed, they have an executory contract.)
Which of these describes a bridge loan? Frieda is leasing a property from Thomas, and has the first right to purchase the property if Thomas decides to sell it. Gina is moving across the country to be closer to her family. Her existing home hasn't sold, but she is ready to purchase her new home. Rhonda is purchasing land from Kenneth on which she hopes to build a tiny home. Kenneth carries the mortgage note. Terry and Carla take out a home equity loan to make the down payment on a vacation home in Mexico.
Gina is moving across the country to be closer to her family. Her existing home hasn't sold, but she is ready to purchase her new home. (A bridge loan is an option that will help Gina make the down payment on her new home while waiting for her existing home to sell.)
Georgina is an escrow agent who's holding funds for several transactions. Which of these statements about how she'll disburse these funds is true? If the transaction closes, Georgina will disburse the earnest money to the listing broker as part of his commission. If the transaction closes, she'll refund the earnest money to the buyer, since the buyer brings the full amount necessary for the down payment and loan costs to closing. If the transaction doesn't close, Georgina will disburse the earnest money as instructed by the parties or according to state law. If the transaction doesn't close, Georgina will refund the earnest money to the buyer.
If the transaction doesn't close, Georgina will disburse the earnest money as instructed by the parties or according to state law. (If the transaction fails to close, she'll disburse the funds as instructed by the parties, or until the parties agree to a solution or a court does.)
Purpose of title insurance
It protects the buyer against loss resulting from previously unreported title defects
Contrary to federal fair housing laws, the state where Katrina lives includes age as a protected class. Which of these statements about this conflict is true? Katrina can follow either the federal or the state law as long as she is consistent. Katrina is permitted to follow whichever law is least restrictive. Katrina must follow federal law for any federally related transaction. Katrina must follow the more restrictive of federal or state law.
Katrina must follow the more restrictive of federal or state law.
Murphey's farm has been in his family for generations, since his great-great-great-grandfather received it as a land grant in 1862. What's the beginning point of this property's chain of title? Murphey's grandfather, the previous owner Murphey's great-great-great-grandfather Murphey, the current owner The federal government that originally granted the land
Murphey, the current owner (Chain of title always begins with the current owner and goes back in time.)
A property owner wants to achieve an annual return on investment (ROI) of at least 10%. He paid $500,000 for his rental property and experienced an annual cash flow of $45,000. Did he achieve his desired ROI? No, the property owner experienced an ROI of 9%. Yes, the property owner experienced a 10% ROI. Yes, the property owner experienced an ROI of 11%. You can't determine this from the information provided.
No, the property owner experienced an ROI of 9%. (Return on investment = Annual cash flow ÷ Initial cash investment. For our example, $45,000 ÷ $500,000 = .09 or 9% which is a little bit lower than the 10% the owner was hoping for.)
Acceptance
Occurs when all parties have signed a contract. Binding acceptance is when the offer is delivered.
To make valid computations of adjustments for the sales comparison approach to value, elements of comparison must be applied in a specific order. Which one of these elements listed is applied last? Conditions of sale Location Market conditions Physical characteristics
Physical characteristics (The elements considered in the sales comparison approach are applied in a specific order: financing terms and cash equivalency, conditions of sale, market conditions at the time of contract and closing, location, and physical characteristics.)
Uniqueness
Physical characteristics of land include its immobility, indestructibility, and uniqueness
The fewer properties on the market, the greater the scarcity. What's the effect on prices? Prices are pushed downward. Prices are pushed upward. Prices remain the same. There's no correlation between scarcity and price
Prices are pushed upward.
Net Operating Income (NOI) formula
Rate x value = income
What is a potential disadvantage for a buyer who enters into a lease with an option to buy contract?
The buyer/lessee could lose any funds credited to the purchase price if he breaches the lease's terms
Marge works for Morgan Realty as a transaction coordinator. Which of these factors may cause the IRS to classify an Marge as an employee? Marge is required to belong to the local REALTORS® association. Marge works the hours she chooses. The firm doesn't provide any benefits to Marge. The firm pays Marge a salary.
The firm pays Marge a salary. (Employees are paid a set salary or hourly wage; independent contractors are compensated based on their sales output.)
Which of these statements about frontage is true? A lot that's 75 feet wide by 30 feet deep has a frontage of 30 feet. Frontage is used in calculating property taxes. The frontage for a lot that's 120 feet by 85 feet is 120 feet. The frontage of a property on a corner is measured from the lot line on one side to the street's center on the other.
The frontage for a lot that's 120 feet by 85 feet is 120 feet. (When reading lot dimensions, if the frontage isn't identified, it's the first number stated.)
Defeasance
The lender is prevented from trying to pursue additional payment because the loan has been paid in full.
When calculating loan-to-value ratios, which of the following will be used by the lender?
The lesser of the sales price or appraisal value
Real estate professionals handle many documents related to real estate transactions. Which one of the items listed below is one of the most important in detecting mortgage fraud? Agency disclosures Buyer representation agreement The original sales agreement and any addenda The title
The original sales agreement and any addenda (The original sales agreement and any addenda to that agreement must be accurate. They should clearly identify the property and all parties to the transaction.)
Anticipation
The value of property today is impacted by the current value of the total expected future benefits
What type of insurance protects a lender's collateral interest in a property that's being financed? Collateral insurance Hazard insurance Mortgage insurance Title insurance
Title insurance (Lender's title insurance policies protect the lender's collateral investment in a given property.)
Unpaid liens
Unpaid liens can trigger a foreclosure in your property
As part of the sales contract, Garth, the seller, was supposed to provide a copy of the seller's disclosure to the buyer, Melanie, but he failed to do so. What type of contract is this? Implied Incomplete Valid Voidable
Voidable (A voidable contract can be cancelled by one or more parties because it's missing an essential element. In this situation, Melanie, the buyer, has the right to cancel the contract and have her earnest money refunded.)
Competition
When there are too many homes and too few buyers
Nico is buying a home for $625,000. His earnest money deposit is 8%. He wants to avoid private mortgage insurance (PMI) on his conventional loan, and he owes 5% of the purchase price in closing costs. How much money should he bring to closing? $106,250 $156,250 $31,250 $81,250
$106,250 ()Conventional loans often require 20% down to avoid PMI ($125,000), and Nico has paid a $50,000 deposit ($625,000 x .08). Closing costs are $31,250 ($625,000 x .05). He needs $106,250 to close ([$125,000 - $50,000] + $31,250)
A property has a market rental income potential of $20,000 per month. The vacancy and loss rate is 5%. Operating expenses are expected to be 45% of the property's total income potential. The owner's monthly mortgage payment is $5,000. What is the annual net operating income that would be reported on the operating budget? $120,000 $132,000 $228,000 $240,000
$120,000 The owner's mortgage payment isn't a factor in net operating income on the operating budget. Instead, focus on property income, expenses, and the vacancy and loss rate. Net operating income = Operating income - Vacancy and loss rate - Operating expenses. Operating income is $240,000 ($20,000 x 12). Vacancy and loss rate is $12,000 ($240,000 x .05). Operating expenses are $108,000 ($240,000 x .45). Net operating income is $120,000 ($240,000 - $12,000 - $108,000).
Your investor client Julia wants to buy a three-bedroom, one-bath, income-producing property for $125,000. It rents for $820. Comparable three-bedroom, two-bath homes in the area rent for around $1,000 and are valued an average of $20,000 more. The area's gross rent multiplier is 147. Calculate the loss in income due to depreciation based on functional obsolescence using the capitalized value method. $11,111 $13,605 $26,460 $98,540
$26,460 (The monthly rental difference between a one-bath property and a two-bath property is $180 ($1,000 - $820). Multiply that by the area's GRM to find the loss in income due to the subject property's functional obsolescence ($180 x 147 = $26,460).)
A seller wants to net $10,000 after the broker's commission of 6% and a loan balance of $250,000 are paid. For how much does the property need to sell? $250,000 $265,957 $276,596 $650,000
$276,596 (To calculate this, start with 100% minus a 6% commission, which is 94% or .94. Take $250,000 plus $10,000 and divide this amount by .94.)
Hamish makes an offer on a loft in the city for $424,900 with a 10% earnest money deposit. The seller agrees, so Hamish secures an 80% loan. He needs to set aside funds for the mortgage tax as part of his closing costs. The rate in his area is $0.115 per $100. Calculate the mortgage tax Hamish will pay.
$390.91 (Calculate the loan amount first: $424,900 x .80 = $339,920. Then calculate the tax: $339,920 x 0.00115 = $390.91.)
The assessed value for your buyer clients' new purchase is $209,000. They feel they got a great deal since they're purchasing the property for $175,000. They've asked you to estimate their monthly property taxes. You know the rate for their jurisdiction is .52%. What is the monthly tax amount your clients owe? $101.12 $121.98 $75.83 $90.57
$90.57 Multiply the assessed value by the tax rate and divide by 12 to calculate monthly taxes: $209,000 × .52% = $1,086.80, and $1,086.80 ÷ 12 = $90.57.
The Smithwicks, your buyer clients, obtained a 90% loan on their new $400,000 home. At closing, they paid $6,150 for points at closing. How many points did they pay? .017 .02 1.7 1.71
1.71 A point is 1% of the loan amount. The Smithwicks' loan is $360,000 ($400,000 x .90), and they paid $6,150 for points at closing. Divide the cost in points by the loan amount to get the number of points they paid: ($6,150 ÷ 360,000 = 0.0170833, or 1.71).
What's the rate of capitalization of a property generating net property income of $25,000 per year that's valued at $312,500? 10% 12% 6% 8%
8% The capitalization formula is value = income ÷ rate of capitalization. To determine rate of capitalization, divide Income by value ($25,000 ÷ $312,500 = 8%).
Which of the following would be considered a foreign person according to FIRPTA? A company incorporated in France with regional development offices in the U.S. A global corporation headquartered in the U.S. with sales offices in six other countries An individual green card holder currently living in the U.S. A real estate investor with dual citizenship in the U.S. and in Canada
A company incorporated in France with regional development offices in the U.S. (Corporate entities that are formed outside the U.S. are considered foreign persons for the sake of the Foreign Investment in Real Estate Property Tax Act (FIRPTA).)
A property's rental income for the month was $16,000 and expenses were 40% of that income. The property's owner has a $5,000 monthly mortgage payment. What would the profit and loss statement show for the month? A monthly cash flow of $4,600. A monthly cash flow of $5,000. A monthly cash flow of $9,600. You can't determine this from the information provided.
A monthly cash flow of $9,600. (Similar to the cash flow report, the profit and loss statement shows actual income received and expenses paid. However, the profit and loss statement doesn't include the owner's financial activities (such as the mortgage). This property had a profit of $9,600 for the month ($16,000 - $6,400).)
Which of the following statements about the promissory note is true? A promissory note is a negotiable instrument and can be transferred to a secondary holder who has the right to enforce the note's terms. A promissory note isn't a legal document. A promissory note isn't transferable, so it must be held by the original lender until paid in full. A promissory note serves as collateral for a mortgage loan.
A promissory note is a negotiable instrument and can be transferred to a secondary holder who has the right to enforce the note's terms. (The promissory note is evidence of the debt that specifies the borrower's financial obligations. Collateral for the note is typically the property on which the loan is made. It's a negotiable instrument.)
Rennie owns a 240-foot by 130-foot lot. How do you calculate the perimeter? Add the length and width and divide by two. Add two times the length to two times the width. Multiply 240 by 130. Multiply 240 by 130, then multiply by two.
Add two times the length to two times the width. (The perimeter equals the sum of the lengths of each side of the shape (240 × 2) + (130 × 2).)
Monthly taxes
Assessed value x tax rate = annual property tax amount. Then, divide by 12.
Tracy is looking in the MLS and sees a listing marked "REO." Which of these statements regarding REOs is correct? An REO property is one that the lender is trying to help the owner sell before beginning foreclosure proceedings. Banks acquire REOs through failed foreclosure sales or deed in lieu of foreclosure actions. REOs are properties that the lender has given permission to sell for less than the loan amount. REOs refer to investment properties a bank owns.
Banks acquire REOs through failed foreclosure sales or deed in lieu of foreclosure actions. (Failed foreclosure sales and deed in lieu of foreclosure actions result in lenders taking title to properties they previously had mortgage loans on. These properties are called real estate owned, or REOs.)
To make valid computations of adjustments for the market comparison approach to value, elements of comparison must be applied in a specific order. Which of these elements has the highest priority? Conditions of sale Location Market conditions Physical characteristics
Conditions of sale (The elements appraisers consider in the market comparison approach are applied in a specific order: financing terms and cash equivalency, conditions of sale, market conditions at the time of contract and closing, location, and physical characteristics.)
One area of town has maximum building height requirements and setbacks for the front, side, and rear yards. These requirements are all indicative of ______. Bulk zoning Commercial zoning Density zoning Residential zoning
Bulk zoning (These requirements are all indicative of bulk zoning, which may be seen in both commercial and residential areas, and which decreases density.)
Select the statement that accurately describes an abstract of title. A title company representative must certify the abstract of title. Few states require an abstract of title when conveying property. The chain of title documents the information found during the title abstract process. Title abstracts provide data for the title company's title search.
Few states require an abstract of title when conveying property. (The abstract of title process is costly and lengthy; only a few states require this process when conveying property.)
Which of the following statements about the fiduciary duty of disclosure is true? It only applies to the seller's agent. It requires licensees to disclose everything to all parties. It's owed to other parties, not just to the licensee's clients. It's owed to the licensee's clients only.
It's owed to the licensee's clients only. (In most states, licensees are required to disclose material facts to all parties to the contract. However, the FIDUCIARY duty of disclosure is due only to the licensee's clients.)
Which of these is an example of severability? Jules and Katrina are under contract for the purchase of Katrina's house. A dispute arises over some contract terms, and they end up in court. The court rules one of the terms invalid but leaves the remainder of the contract in force. Mark's contract with Reuben states that either party may sever the contract if any contract term is only partially performed. Misty's lease agreement with Thomas contains a provision that permits her to sever the lease if Thomas doesn't remodel the apartment as promised. Ricardo and Timothy are under contract in the sale of Ricardo's office building. Ricardo's tenant leases gives him the option to sever the lease agreements upon sale of the building.
Jules and Katrina are under contract for the purchase of Katrina's house. A dispute arises over some contract terms, and they end up in court. The court rules one of the terms invalid but leaves the remainder of the contract in force (Severability refers to the concept that a court can strike down one or more contract terms while leaving the remainder in place.)
Marsha's title insurance policy was issued on closing day, June 18. The policy lists the standard exclusions as well as requirements for the company to issue the policy, such as paying off existing recorded liens. Which of these will NOT be addressed in the schedule of exceptions? Karen has an unrecorded lease on the property. Marsha's second mortgage on the property, which was properly recorded in January. Smith and Martin Building and Rehab files a mechanic's lien on June 18. The local cable company's easement through the property for underground wiring. Marsha disclosed this to the title company.
Marsha's second mortgage on the property, which was properly recorded in January. (Title insurance typically covers events or claims filed on the public record before the title insurance policy's effective date but excludes disclosed and undisclosed easements.)
Meg is considering a move to a foreign country and wants to deed her property to her son, Christian, who's 16. Which of these must occur to make this transfer legal? Christian must agree to the transfer and sign the deed. Christian must provide monetary compensation to Meg. Meg must sign the deed and have her signature acknowledged. Meg must wait until Christian has reached the age of majority.
Meg must sign the deed and have her signature acknowledged. (As the grantee, Christian doesn't have to sign the deed, and he doesn't have to be legally competent or of legal age. The property can be conveyed only if some consideration is in place, but it doesn't have to have a monetary value.)
Which of these is an example of a sub-agency relationship? Aldrich accepts a designated agency appointment from his broker so his firm can represent both the buyer and the seller. Blaine represents the buyer in a transaction with an unrepresented seller. Greta refers a buyer client to a more experienced colleague, asking for a referral fee from the colleague. Morris, who's licensed independently, finds a buyer customer for Greg's listing with Marvel Homes and is obligated to act in the best interest of Marvel Homes' client.
Morris, who's licensed independently, finds a buyer customer for Greg's listing with Marvel Homes and is obligated to act in the best interest of Marvel Homes' client. (Sub-agency refers to a licensee from one firm who brings an unrepresented buyer for a property listed by another firm. The sub-agent represents the seller in this situation.)
In which of the following situations can the state use its power of escheat? Hannah passed away with no children and no debt, other than $83,000 left on her mortgage. Maury died, and his three children are upset because his estate isn't large enough to settle all of his debts. Nadine died with no heirs and no debt. Sam died with no will, and his son lives overseas.
Nadine died with no heirs and no debt. (Escheat occurs when a property owner dies without a will in place, and no heirs or creditors can be found.)
When buyers haven't spoken to their bank or another lender, how should you handle the situation? Ask questions about their income, assets, and debts to determine their buying power. Ask them to come back when they have spoken to a banker or broker. Inform them that they must be pre-qualified before you can show them any houses. Offer to refer them to a lender and prepare them for the meeting.
Offer to refer them to a lender and prepare them for the meeting. (Offering to refer them to a lender and helping them prepare for the meeting will help build trust and loyalty.)
Tabitha listed her property for sale, but it's been on the market for several months with no offers. She decides to terminate her listing agreement and rent the property out instead of selling it. Assuming that her listing agent has fulfilled all of his responsibilities under the contract, can Tabitha terminate the contract before its expiration date? Only if she and the listing agent mutually agree to terminate the agreement. Only if she succeeds in converting it to a rental. Yes because she's received no offers on the listing. Yes, she is entitled to terminate at any time.
Only if she and the listing agent mutually agree to terminate the agreement. (Since the listing agent hasn't done anything to breach the contract, Tabitha's only options are to let the listing agreement expire or try to reach mutual agreement with the listing agent to terminate the agreement without penalty.)
What's the best definition of real property? Artificial attachments to land that include things such as fencing, buildings, and walkways Earth, soil, and air Land, plus all things permanently attached to it naturally or artificially Real estate, plus all of the interests, benefits, and rights included in ownership
Real estate, plus all of the interests, benefits, and rights included in ownership (Real property includes real estate, plus all of the interests, benefits, and rights included in ownership.)
Regina purchases a farm with 80 acres and owns her property in severalty. What does this mean for the company that purchased the mineral rights from the previous owner? Regina and the company that purchased the mineral rights are automatically tenants in common, since they share ownership of the property. Regina didn't purchase the mineral rights, which have been severed from the property by the previous owner. Regina included the mineral rights in her purchase agreement, since she could not otherwise own the property in severalty. Regina is the sole owner, and the company must accept a fractional portion of the sales price in return for forfeiting the mineral rights.
Regina didn't purchase the mineral rights, which have been severed from the property by the previous owner. (Since the previous owner severed the mineral rights from the property, they aren't included in her purchase. This doesn't affect her ownership of the property in fee simple absolute or her ability to hold title in severalty.)
What classification of water rights includes the two smaller sub-classifications of navigable and non-navigable waterways? Groundwater Littoral Riparian The doctrine of appropriation
Riparian (Riparian water rights may apply to one of two sub-classifications: navigable or non-navigable waterways)
Which of these statements most accurately represents existing federal antitrust legislation? The Clayton Act supports the Sherman Antitrust Act's purpose of prohibiting monopolies by prohibiting mergers or acquisitions that would create a monopoly. The Federal Trade Commission Act established the Sherman and Clayton acts to prevent collusive activities that limit competition. The Federal Trade Commission Act prevents one large firm from acquiring another similar firm that would result in a restraint of trade. The Sherman Antitrust Act was passed to supplement the Clayton Act in an effort to prevent mergers that create monopolies.
The Clayton Act supports the Sherman Antitrust Act's purpose of prohibiting monopolies by prohibiting mergers or acquisitions that would create a monopoly. (The Clayton Act of 1914 supports the Sherman Antitrust Act of 1890 by prohibiting mergers or acquisitions that would result in an unreasonable reduction in competition or the creation of monopolies.)
Katherine is purchasing a second home as an investment/vacation property. She has a large down payment, and the seller is financing the rest of the purchase. Which of these statements is true? The CFPB provides forms similar to the Closing Disclosure and Loan Estimate for seller/financers to use. The Closing Disclosure and Loan Estimate aren't required in a seller-financed transaction. The seller is required to provide the same disclosure forms to Katherine as a standard lender would provide. The seller will provide the Closing Disclosure and Loan Estimate to Katherine but has a longer timeframe to do so than a traditional lender would have.
The Closing Disclosure and Loan Estimate aren't required in a seller-financed transaction. (In a seller-financed transaction, the Closing Disclosure and Loan Estimate aren't required. Some other form of statement may be prepared to show the buyer and the seller their respective closing figures.)
In a residential real estate sale involving a federally related loan, what entity is required to provide Real Estate Settlement Procedures Act disclosures to the consumer? The consumer's lender The consumer's mortgage broker The consumer's real estate broker The settlement officer for the transaction
The consumer's lender (The lender must provide the borrower with a written disclosure of the estimated and final settlement costs.)
What title guarantees will Jody have if her property is deeded to her after a foreclosure?
The convene at of seisin
Licensee Kennie Mae's neighbor, Buzz, wants to sell his house but doesn't want to sign an agency agreement. Kennie Mae works with Buzz to list and show the property and negotiate offers. After the property sells, Buzz discovers that Kennie Mae didn't present all offers to him, and he sues Kennie Mae. Kennie Mae claims that because she didn't have an agency agreement with Buzz, she wasn't required to perform all fiduciary duties. What legal principle applies here? Agency after the fact, because Kennie Mae continued to perform tasks for Buzz through the closing date. Law of agency, because Kennie Mae defined her agency relationship with Buzz through the tasks she performed. The doctrine of estoppel keeps Kennie Mae from disavowing the agency relationship because she provided agency tasks for Buzz. The ratification doctrine states that Kennie Mae ratified her relationship with Buzz by signing the closing paperwork.
The doctrine of estoppel keeps Kennie Mae from disavowing the agency relationship because she provided agency tasks for Buzz.
Corinne, an escrow agent, is preparing for the Thomas/Trenton closing in four days. Which of these documents will Corinne prepare? She'll prepare a seller net sheet to disclose the seller's net profit on the sale. Working with the lender, she'll prepare the Loan Estimate, which details the costs the buyer and seller will pay at closing. Working with the lender, she'll prepare the settlement statement, which details the costs the buyer and seller will have at closing. Working with the title company attorney, she'll prepare the preliminary title commitment.
Working with the lender, she'll prepare the settlement statement, which details the costs the buyer and seller will have at closing. (Just prior to closing, the closing agent will prepare all the closing documents, including settlement statements that detail all the money changing hands on closing day.)
Can a listing agreement be terminated without penalty? Only by the seller Only if it expires Yes, at any time, since listing agreements aren't binding Yes, with both the listing broker and the seller's agreement in writing
Yes, with both the listing broker and the seller's agreement in writing (There are many ways in which a listing agreement may terminate. A listing agreement is a contract, and one of the ways a listing agreement can terminate is if the listing broker and seller agree in writing.)
Which of these terms can be defined as what a buyer has paid for a property and what the seller has accepted? Appraisal Cost Price Value
price (Price is the actual amount that a buyer pays for a property. It may be the same as the market value, or it may not.)
