Real Estate

Appraiser Niles uses ______ to determine a range of values based on comparing a subject property to comparable sales. He makes sure to use some comparables that lack features of his subject property, and others that have even more desirable features, to balance out the comparison.

Bracketing

Rhonda and Jade both consider themselves to be African-American, although Rhonda has much darker skin and hair than Jade. When Rhonda went to the Valley Falls apartment manager's office to request a rental application, she was told there were no vacancies. Jade went in a day later and received an application. This may be discrimination based on _______.

Color

Chrissy lives in Lake Ridge Estates, a neighborhood that has a homeowner's association and corresponding HOA dues and HOA regulations that must be followed. Chrissy isn't allowed to put up a chain link fence for her dog because of the regulations. These HOA regulations are what kind of private land control?

Covenant

What type of agreement would guarantee payment of commission regardless of who actually sells the property?

Exclusive right-to-sell agreement

Who or what entity enforces the Telephone Consumer Protection Act?

Federal Communications Commission (FCC)

Kenneth, an appraiser, is driving around the area where the subject property is located. Which step in the appraisal process does this represent?

Gather and analyze data.

Which of these is NOT an example of agency coupled with interest?

Gene, a real estate professional, is purchasing a home for his personal use. He negotiates a reduction in the sales price in return for taking no commission from the seller.

Which of the following is an acceptable ad based on Regulation Z?

Get a low interest rate of 4.75% (4.925% APR) with as little as 10% down payment and a 30-year fixed rate with no points.

Anita is a new buyer. Luckily, ______ will help her before the sale and can reimburse her after the sale if a title issue arises.

Her title insurance

Trenton Excavating owns land on which it intends to build an equipment storage facility. It's found to be contaminated with agricultural chemicals. What's true of Trenton's liability?

If Trenton had no knowledge of the damage and no reason to suspect that the property was contaminated, it may be immune from liability.

A seller received $800,000 for a 5.5 acre rectangular parcel alongside a road frontage. The property is 400' deep. What was the price per front foot of the property?

$1,335.67

The Smith home has an assessed value of $64,120, and their tax rate is 3.2%. What is their annual tax bill?

$2,051.84

If a cash investment of $100,000 results in a 25% ROI, what was the amount of cash flow?

$25,000

Your clients sold their property for $500,000. Your commission rate is 5%. What's your commission (before splits or sharing with the cooperating agent)?

$25,000

Buyer Maria and seller Doug are closing on June 1. Maria's mortgage loan is $927.86, and $871.86 will go to interest in the first month. Maria will have to pre-pay interest for June using the 360-day proration method. If Doug owns the closing day, what Maria's prepaid interest cost be at closing?

$842.80

Recently retired Admiral Bongo and his wife, Lucy, contact you. They want you to help them purchase their dream house now that he's retired, but one that has the necessary accommodations for the admiral's disability. They also confide in you that they don't have a lot of money saved up for a down payment. Which type of financing may work best for them?

A VA loan, which requires no down payment.

Which of these situations is most likely to be covered by E&O insurance?

A client's claim that a licensee breached her fiduciary duty of obedience

Greg and Neha are interested in buying a ranch-style home in a suburban family neighborhood. The sellers have only lived there for 19 months, so they have no information about the addition that was put on 20 or 30 years ago. Why does it matter whether the owners at the time got permits to do the addition?

If the addition WAS NOT permitted, it may need to be inspected to ensure it meets code and perhaps even be taken down.

Which one of these would NOT be an element of comparison an appraiser would use when applying the sales comparison approach to a property valuation?

Income generated

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?

Meg must sign the deed and have her signature acknowledged.

Select the situation that correctly represents a true conflict of fiduciary duties.

Nikki's seller client has instructed her not to present offers that are less than the listing price. This is a conflict of Nikki's duty of disclosure, which requires her to present all offers, and her duty of obedience.

Which one of the following statements about asbestos is true?

No amount of it is considered safe.

The best way to start comparative market analysis data collection is to use properties that sold when?

No later than three to six months ago

What is the key difference between assignment and novation of a contract?

Novation releases the original party from all obligations, while assignment does not.

Patsy's home had been on the market for five weeks, and two brokers had buyers who were ready to make offers. If Patsy accepted one of those offers, the corresponding broker would be the only one to earn a commission. What type of listing does this describe?

Open listing

A/an_______ contract is an offer to purchase a specific piece of real estate, but without the obligation to buy it.

Option

Several actions take place on the secondary mortgage market. Which of these is a common activity?

Packaging loans into mortgage-backed securities

Patricia is meeting with James and Cindy, potential buyers of a listing. They are in the office to make an offer when James says, "The only thing that bothers me are those black spots on the ceiling in the bathroom. Do you think that could be the bad kind of mold? It's not dangerous, is it?" What should Patricia do?

Refer James and Cindy to a qualified mold professional.

A homeowner has converted two rooms in his home to a rental unit. What does the "Mrs. Murphy" exemption permit him to do?

Refuse to rent to a female tenant.

Jayne was tired of waiting for her subcontractor to get his part of the deal done. The agreed-upon deadlines came and went, and Jayne lost money waiting for the subcontractor to come through. She decided that if the subcontractor wasn't going to honor his commitments, neither was she, so Jayne consulted with her attorney and then terminated the contract. This is an example of ______.

Rescinding the contract unilaterally

Which of these statements about the homeowner's right of redemption is true?

Rights of redemption window with REOs may have expired.

A policy and procedures manual is a crucial measure in reducing ______.

Risk

Allentown sits on the river, and many of its bridges are in need of repair. Which police power is Allentown administration likely to use in order to fund improvements to its bridges?

Taxation

Which one of the following types of ownership termination allows each tenant to have a specific, divided portion (partition) of the property exclusively?

Termination of co-ownership by partition

As Brandon's listing agent, Lily must disclose all known material facts relative to Brandon's property. Which of the following is a zoning-related fact that Lily might have to disclose to prospective buyers?

The property is right in the middle of a historic preservation district.

Shakira is attending an association meeting when, in a small group breakout, her group begins discussing how to deal with the new kid in town: a real estate firm that charges a flat $500 to list properties, then lets the sellers fend for themselves. Why should Shakira leave the discussion?

This conversation sounds like it might become an antitrust violation

An attorney receives a request to have an appraisal performed on a property inheritance that she is transferring from her deceased client's estate to his heir. Which of these statements is true?

This isn't a federally related transaction and under federal law an appraisal isn't required.

Ned is a listing agent who has learned of a material fact related to the transaction. To whom and when must he disclose this information?

To all parties as soon as possible

What's the purpose of a sales contract?

To document the agreement between a buyer and seller in a real estate sales transaction

Which one of the following property features could contaminate the soil?

Underground storage tanks

Beth is considering buying the one and only geodesic dome in her town and turning it into a writer's retreat. The price is a good bit more than she wanted to pay, and the appraiser is having trouble finding good comparables. What characteristic of land has likely driven up the price of the property?

Uniqueness

Which of the following is a typical accrued adjustment?

Unpaid real estate taxes

Sam and Bridget are cousins who jointly own property. They are both named on the deed, they received title at the same time, they have the right of survivorship, and they each have equal interest and undivided rights of possession. What type of ownership do they have?

Joint tenancy

Marcus, a listing agent, told a potential buyer that his seller client's property had no flooding issues, though the seller had mentioned water in the basement a few years back when there was a particularly heavy rainy season. Which of these statements is true?

Marcus committed intentional misrepresentation because he knew his statement was false.

A new real estate professional is getting to know licensees at his new firm, Tremont Homes. One licensee tells him there's an unwritten agreement with a neighboring firm that Tremont serves the mid-town area, and everyone who has prospective clients in that area refer their leads to Tremont. What's this an example of?

Market allocation

What responsibility does the seller's agent have to the seller?

Seek a sale at the best price at terms acceptable to the seller.

Which of these statements best represents what happens after a federal fair housing complaint is made?

A fair housing specialist will review the complaint.

Which of the following is a way in which property taxes could impact your clients?

A sale in the area may prompt a reassessment, impacting new buyers.

Alluvion describes new deposits of land that are the result of what natural process?

Accretion

Which of the following begins as a unilateral contract and can become a bilateral contract?

An option agreement

Marsha made an offer of $325,000 on a home listed for $350,000. The seller accepted her offer. She's now having a(n) ______ done on the home to determine its actual value and hopes it comes in at more than $350,000.

Appraisal by an appraiser

Victor owns a starter home a few miles outside the city center, and he wants to deed it to his grandson, Tyler. According to the paperwork Victor had drawn up, Tyler will own the property as long as he continues to pay the property taxes on time. After the second late property tax payment, ownership reverts to Victor. What did Victor place on the deed?

Condition

What factors does the underwriter consider in reviewing a mortgage loan application?

Credit, capacity, and collateral

Which of the following properties requires a lead disclosure?

Duplex built in 1959

What did the Clean Air Act authorize the EPA to do?

Establish air quality standards for the protection of human health and the environment.

After purchasing a property, what can Jeremiah do to clear a possible future claim on the property's title?

File a suit to quiet title.

While working with a buyer client, Jeffrey filled in the blanks on the purchase agreement, drafted an early occupancy addendum, and assured his buyer that she was "fully protected" and would get her earnest money back if the sale didn't close. He encouraged her to hire an attorney to review the contract and addendum, and then invoiced her for a nominal $15 fee to prepare transaction documents. Which of the following tasks was Jeffrey legally permitted to do?

Filling in the contract blanks

After he missed several payments, Eli's lender sent him a delinquency notice. He tried to make the payments, but continued to miss additional payments. His lender sent him a notice of default, and eventually seized and sold his property after he failed to repay them. What process did Eli experience?

Foreclosure

The cost approach method Burt used before investing in his new community was highly dependent on his depreciation estimates. As they begin building the homes they realize the guest bedroom in each has a point of entry that prospective buyers do not like in the layout of the house. The depreciation of this design defect is ______.

Functional obsolescence

Ginnie's Aunt Becca listed the old family mansion with Ginnie. Ginnie put it on the market for Becca, but then she and her cousins talked with Becca and decided they wanted to keep the property in the family. What's the best way to terminate the agreement?

Ginnie and Becca can mutually agree to terminate the agreement.

Which of these statements best describes value in use?

How much the property is worth to its owner as it's currently used

Sander and Ginny bought an old industrial site with plans to get grant money to put an environmental education center on the site. There are a few structures on the property, but they are in disrepair and it will likely be less expensive to tear them down and build new than to rehabilitate them. However, the new owners are sure that they've made a great investment because the land is in great shape. This reflects which physical characteristic of real property?

Indestructibility

Glynnis is ready to close on her new house, but her agent told her that they have to wait for the homeowner to fix the electrical box as agreed. What clause in her contract allowed her to request the repair?

Inspection contingency

Jenna's closing agent has asked her to get a spot survey of the property she's purchasing. What will this accomplish for Jenna and the closing agent?

It notes the location, size, and shape of any improvements on a property.

Which of these is true about the assessed value of real estate?

It's the value used to calculate the property taxes, and it's based on a percentage of the market value.

Your buyers love the 1891 Victorian they have under contract, but they want to get both the water and the paint tested as soon as possible. What are they testing for in both water and paint?

Lead

Which type of agent is an escrow officer?

Limited agent

Which of the following scenarios best describes a net listing?

Maeve wants to get at least $350,000 when she sells her property and tells her listing agent, Stan, that he can keep anything above that amount.

Sunshine Surveyors Inc. created a lot and block survey for a new residential development, Happy Acres. The first thing they did when they surveyed the new neighborhood was to reference what type of description first?

Metes and bounds description

Which of the following is NOT one of the five tests of a fixture?

Method of accountability

Which of these situations represents a unilateral contract?

Sherry promises to give Brent a ride home from work, and then doesn't show up.

Margot has fallen in love with a three-bedroom, 2,500-square-foot property in her friend's neighborhood. It's listed for $400,000. However, just down the street, another three-bedroom, 2,400-square-foot home very similar to the one Margot loves was just listed for $350,000. Margot and her agent immediately make an offer on the second property. Which economic principle is at work here?

Substitution

Your clients received a check for $395,000 when they sold their property, which they owned free and clear. Their closing expenses were $4,575, and they paid 5% in brokerage fees. What was the sales price of their property? Round to nearest whole dollar.

$420,605. 100% - 5% = 95% (.95), and $395,000 + $4,575 (before commission) = $399,575. $399,575 ÷ .95 = $420,605 (rounded).

A new commercial property owner plans to charge $1,000/month for each unit. There are six units. What is the gross potential rental income for one year?

$72,000. At full occupancy, the owner would collect $6,000 times 12 months, or $72,000.

In which of these situations would a listing be most likely to terminate due to listing agreement expiration?

A market with high inventory and low demand

Malcolm loves his apartment, even though he's rarely there. His job in international development has him on the road for months at a time. He doesn't have to worry about missing out on his lease renewal, though, because he has _______.

A periodic estate

Breanna signed a purchase offer stating she'd buy Kathy's home for $150,000. Kathy rejected that offer but said she'd sell it to Breanna for $200,000. Breanna agreed to these terms, and they added their signatures. Which of the following statements is correct?

Breanna accepted the offer Kathy made.

Which factor influences property value and addresses questions such as, "What's the market like?" and "Are there more buyers than sellers, or vice versa?"

Demand

A seller tells his agent that he has to sell his house quickly because of a divorce proceeding and that he's willing to accept less than his list price. His agent tells a buyer that the seller will accept as much as $10,000 less than the list price. Which of these is true?

The agent has breached his duty of confidentiality to his client.

Bart just toured his fourth patio home of the day. To help him remember what he saw in each one, he's making notes about décor, updates, and inclusions that will stay with the property. Which of the following items is NOT considered personal property and would therefore stay with a home?

The chandelier in the foyer