Real Estate Midterm

Mitch, your seller client, has asked you about the tax ramifications of selling his townhome. What's your best response?

"That's not my area of expertise. You should ask your tax advisor."

Dawn is a real estate licensee working with Midge, a buyer. If Dawn were trying to explain the advantages of a buyer representation to Midge, what could she say?

"Without a written representation agreement, I don't represent you."

A central element of an antitrust violation is _______.

A contract

When accepting compensation, which of the following statements is most accurate, according to the NAR Code of Ethics?

A licensee shall not accept compensation from more than one party to a transaction without the consent of all parties.

When Shauna looked at the legal description of the property she was interested in purchasing, she read the following: "Beginning at the corner of State Route 61 and Hallowell Road, north for 314 feet, then southwest for 193 feet." In this description, what does "north for 314 feet" represent?

A mete

Which of the following is an easement?

A path providing neighborhood access to a pond cuts through part of Bill's property.

What's a monument?

A permanent land marker sometimes used in legal descriptions

Most construction that is proposed near a floodway requires __________.

A special floodplain permit

What's the biggest difference between an area variance and a use variance?

A use variance prevents economic loss of the property. An area variance need not show potential economic loss.

Henry died, and his property wasn't held in a trust. Thus, his estate will go through probate to ensure his property is distributed to his beneficiaries in accordance with his will. The probate process often takes ______ before the property is distributed.

A year or more

After the closing, Donna ensures that her client has keys to the property and copies of all the transaction paperwork. Which fiduciary duty is Donna performing?

Accounting

Millie is a buyer who has given her agent an earnest money check for $10,000 with an offer to purchase. When will the check be deposited?

After the seller accepts the purchase offer

What does the FTC consider to be a deceptive ad?

Any ad likely to mislead consumers acting reasonably under the circumstances

Which of the following refers to rights that come with the land?

Appurtenance

If you suspect there might be an environmental issue with a property you're selling, but you're not sure, what should you do?

Ask a lot of questions, ask for help, and disclose everything if issues do exist.

Where is the best place to hold a sit-down meeting with a new buyer client?

At your office

Which of the following statements is true regarding community property rights and property ownership?

Both partners may own other properties purchased before the marriage separately (in severalty), but any properties purchased during their marriage are owned equally.

Hanna represents the buyer, and Hank, an agent from a different firm, represents the seller in the same transaction. What type of agency relationship does Hanna have with her client?

Buyer agency

Renae moved to the U.S. from Nigeria and became a citizen. Which act specifically provides Renae with the right to buy, sell, convey, inherit, and possess property?

Civil Rights Act of 1866

Which of the following is true about the security of your clients' information?

Client data can be compromised if the brokerage's computer system is compromised.

A licensee has several tasks to perform for seller clients. One of these tasks is to ______.

Communicate all offers and counter-offers to the sellers

Which of the following is a life estate in property held by a widow?

Dower

Your client, Ada, wants to purchase property that includes a garage apartment that's subject to an existing lease. Ada plans to rent the garage apartment to her sister next year. What should Ada specifically look for when reviewing the existing lease terms to decide if this is the right property for her?

Duration and renewal options

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

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

What did the Resource Conversation and Recovery Act authorize the EPA to do?

Establish control of all aspects of hazardous waste

Leon and Beth own 1/13 of a timeshare estate. They own weeks 20 and 21, and also weeks 40 and 41. These weeks are inheritable. What type of ownership is this?

Fee simple

What form of ownership is inheritable and includes the entire bundle of rights, not subject to any conditions or qualifications?

Fee simple absolute

Roxanne just finished making a buyer presentation to Fred and Regina Jones. Now that they understand the difference between being customers and being clients, they're anxious to be represented. What is one of Roxanne's duties to them as their buyer's agent?

Finding properties to show to Fred and Regina

As Tina's agent, Marcus has broad responsibility to handle all the details of a specific transaction. What type of agent is Marcus?

General

One of Jackie's creditors sued her in civil court. As a result of the judgment against her, her house, car, and art collection were all subject to sale in order to pay the creditor. What type of lien is this?

General

Phil is a property manager, which means he serves as a ______ agent to his landlord/client.

General

Which of the following terms is most closely associated with legal nonconforming use?

Grandfathering

Deb, a licensee, is unhappy with the marketing materials a local company produced. While having coffee with Irving, a licensee with another firm, she tells him about her troubles and recommends he not do business with this company. Irving agrees and even volunteers to spread the word among his colleagues. What's this an example of?

Group boycotting

Why might you opt out of working with a buyer unless you're working under an agency agreement?

Having an agency agreement prevents you from wasting your time.

Bob wants an open listing agreement. Why might this not be in Bob's best interest?

He won't get full representation from any one licensee.

Paulo signed an open listing agreement with Debbie, his real estate agent. Which of the following statements is true?

If Paulo finds a buyer on his own, he owes no one a commission.

Which of the following describes community property rights?

In some states, it's a form of property ownership for married couples with equal ownership and possession of any property acquired during the marriage.

Which physical characteristic of land addresses the concept that while improvements may deteriorate over time, the land itself cannot be destroyed?

Indestructibility

Which of the following is an example of deceptive advertising?

Intentionally misidentifying a property's square footage

Government regulation of a property that deprives the landowner of the economic value of the property without compensation from the government is called ______.

Inverse condemnation

Which of the following is true about the Clean Water Act?

It establishes quality standards for surface waters.

Lily is considering signing a buyer representation agreement with you, but she's unconvinced. "What's in it for me?" she asks. What's one major benefit to her when she signs the buyer representation agreement?

It means you're representing her and not the seller.

Which of the following most closely describes a use variance?

It requires a show of economic hardship.

Which of the following is an example of sub-agency?

Kayla is a licensee with ABC Realty and lists a property for seller Devon. Maurice is a salesperson with XYZ Realty Group and brings a buyer to the table, but owes fiduciary duties to the seller.

Which of the following best indicates that Harold is Kelsey's seller client?

Kelsey and Harold have a signed agency agreement.

Buyer Kristin has a buyer agency agreement with Carlotta, a licensee. Kristin's brother, Dalton, is going to showings with Kristin and working to help her decide which house is the best fit. Who is/are Carlotta's client(s)?

Kristin

Which of the following describes a right-of-way easement?

Land that a railroad company runs its track through

Which of the following actions concerning tenant rights should real estate licensees take?

Learn and understand tenant rights.

What's meant by "minimum ethical standards"?

Licensees should strive to act at least at that level, and more if possible.

Annabelle's previous transactions have all been median-priced, detached single-family residential homes in the main part of the city or its suburbs. In which of these situations would Annabelle be practicing within her area of competence?

Listing a property in the main part of the city that she'll market as a fixer-upper

An exclusive right to sell agreement provides the ________ with a commission no matter who brings the buyer to the transaction.

Listing agent

Putting clients' interests ahead of all others describes which fiduciary duty?

Loyalty

A couple of licensees you know from different firms are tired of competing with one another for the same listings. You overhear them saying, "You take the north side of town and I'll take the south, so we aren't stepping on each other's toes." You stop their conversation to tell them they're committing an antitrust violation. Which one is it?

Market allocation

Which of these circumstances does NOT require agent disclosure?

Marty is representing Dwayne in both the sale of his current home and the purchase of his new home.

Which of these situations does the Americans with Disabilities Act address?

Meridian Apartments provides a gym and pool area for residents, but it's not accessible to residents who use wheelchairs.

Which of these is an example of conversion of funds?

Monica used funds from the firm's trust account to pay her firm's rent.

Which of these is an example of a sub-agency relationship?

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.

Exclusive agency agreements provide sellers with the option to find a buyer themselves. If the seller finds a buyer, who earns the commission?

No one

Enrico, a homebuilder, was caught dumping a load of rubble in an area designated as wetlands. "But I wasn't building anything," he explained. "I wasn't involved in any development when I dumped the dirt there." Was his dumping a legal act?

No, because dumping material in a wetland is one of the activities that isn't allowed without a permit.

Frieda is practicing dual agency and neither party seems to mind, even though she didn't obtain written informed consent. Is this legal?

No. Without informed consent, it's illegal.

James, a seller, signed a listing agreement that allowed him to contract with multiple agents but only pay a commission to the agent who located a buyer. This type of listing agreement is called ______.

Open

Henry is Monica's listing agent. As Monica's agent, Henry has a duty to account for and properly handle her funds and ______.

Paperwork

Government agencies usually become involved during which phase of an environmental assessment?

Phase III: Clean-up

A surveyor created a lot and block survey for a new residential development. The first thing she did when she surveyed the new neighborhood was to reference a metes and bounds land description. From there, she divided the land into numbered lots and blocks. This output is known as a _______.

Plat map

Which of these actions violates the NAR Code of Ethics?

Preparing a written agreement that falsely states a purchase price

According to the U.S. Department of Justice, which type of antitrust violation is an agreement between competitors to set contract terms for a certain length of time?

Price fixing

The duty of reasonable skill and care assumes that agents can provide expert advice to their clients in which area?

Real estate

Kelvin isn't sure how to read this legal description, but his agent said something about reading it from right to left. Here's the description: "The north half of the northwest quarter of Section 6, Township 8 North, Range 68 west of the 5th principal meridian." What land description method did surveyors use for this piece of property?

Rectangular government survey

In 1934, when the Federal Housing Administration was created, it adopted the practice of crossing off cities and neighborhoods it considered risky and withheld mortgage funds from those areas. What is this action called?

Redlining

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.

______ is the gradual receding of water, which uncovers new land.

Reliction

The Millers moved to a small town and were interested in buying a house. At the first meeting with real estate sales professional Nora, she asked them where they went to church. They replied that they were atheists and didn't attend church. Nora then told them that she didn't know of any listings that met their needs, even though that wasn't true. Nora is discriminating based on ______.

Religion

Deed restrictions imposed by a developer who wants to maintain specific standards in a subdivision under development are often called _______.

Restrictive covenants

Which federal regulation specifically protects our nation's rivers and harbors?

Rivers and Harbors Act

Sam grants Steve a license to hunt deer on his property. Which of the following statements about the license is true?

Sam can revoke the license at any time.

Which of these tasks that Jenna performs does NOT represent the fiduciary duty of accounting?

She discloses the terms of the listing agent's compensation to her client.

Which of the following definitions best describes a consumer?

Someone who uses or purchases a product or service

Along with property ownership, rights are granted to use the land's physical components. Which right allows a property owner to use or sell the underground resources, such as natural gas and minerals?

Sub-surface

Once Greg and Caitlin were married, they decided to purchase a home together. Since it was a shotgun wedding after a weekend in Vegas, they made sure that their ownership included the right of survivorship as well as protection from the other spouse attempting to sell the house from under them. The most likely form of co-ownership under which they would make this purchase is ______.

Tenancy by the entirety

After a few meetings, the Stinsons sign a listing agreement with broker Vera so she can sell their house. The house has already generated interest from a potential buyer named Sergei, who has spoken with Vera about the house's square footage and potential as an investment. Which of the following is true about this situation?

The Stinsons and Vera have an agency agreement.

When the listing agreement's purpose has been fulfilled, what happens to the agency agreement?

The agency agreement terminates by completion.

If an agent fails to perform the duty of obedience, what might the legal consequence be?

The agent may be charged with misrepresentation.

Two large local brokerage firms agreed to lower their commission rates to the same amount, approximately 1% lower than any other firm in town. After extensive marketing of their new lower rate, these two firms began to see a big increase in the number of listings they received, costing their competitors substantial amounts of money. What about this situation makes it a per se antitrust violation?

The agreement between the two firms

When implementing a code of ethics into a brokerage, it's likely to be more effective if ______.

The code is enforced through consequences

If there's no state or local building code to cover a specific situation, what code must the builder abide by?

The federal building code

Agency may be legally terminated in which of the following ways?

The principal broker becomes incapacitated.

Sherman is a listing agent. At what point is he no longer obligated to present offers to his seller client?

The sale has closed.

Which of these situations is addressed by the fiduciary duty of disclosure?

The seller's agent fails to disclose a conflict of interest.

Charlie represents Sue, a buyer. Charlie is being paid by Claude, the seller, through his brokerage. What's true about this situation?

This doesn't change the agency relationships.

A landlord with a strict "no pets" policy won't rent to a woman who uses a service animal to assist with her epilepsy. Which of the following is a true statement about this situation?

This is discrimination based on disability.

What type of estate involves a piece of real estate owned by multiple unrelated individuals who, in addition to their ownership rights, each hold the right to occupy the dwelling unit in one- to two-week intervals during the year?

Timeshare

A group of 26 different families have shared ownership of a vacation condominium. Each family spends two weeks annually at the condominium. Legally, the condominium is considered a _______.

Timeshare property

Vicky and Lee vacation in Cancun, Mexico, every year. They purchased the right to stay in a beach condo for the first two weeks in May, and their agreement continues for the next 10 years. They don't actually own the unit. What did they purchase?

Timeshare use

Which statement correctly identifies a federal fair housing law and what it addresses?

Title VIII of the Civil Rights Act of 1968 prohibits housing discrimination based on race, color, national origin, and religion.

Harriet, an out-of-state licensee, is friends with Tonya, a licensee with Perfectly at Home. Harriet referred one of her buyer friends to Tonya, so Tonya plans to pay Harriet a referral fee. Which statement about this fee is true?

Tonya must pay the referral fee through her brokerage firm to Harriet's brokerage firm.

You're a broker writing MLS policy for your firm. You'll probably want to include _______.

When and if listing data should be submitted to you for approval

Burt terminated his exclusive right-to-sell listing agreement with Scott, his listing broker, without cause. Burt may legally do this as long as he's ______.

Willing to pay Scott's commission anyway

Licensee Janice has found a way to work with prospective buyers without ever leaving her desk: She sets them up with automated email messages for listings that meet their criteria, and answers any questions they have when they call. Is Janice doing anything wrong?

Yes, because she should meet them in person before working for them.

Can police power ever be used in a way that restricts citizens' freedom?

Yes, if it's for the public good.

You're worried about security online. You would be safest visiting which of the following websites?

https://www.google.com