Real Estate - National
A developer has a 25- acre tract to be developed. Five percent of the land will be used for parks and 15% will be used for the streets. Half-acre lots are selling for $19,500. What is the potential gross income from sale of this development:
$780,000
A city has determined that next fiscal year they will need to raise $1,240,000 in real estate tax revenue. The assessed value of all real estate within the city is $310 million, so the city establishes a mill rate of $.004. A property owner's home in the city is assessed for tax purposes at $210,000. Next fiscal year, what will this property owner pay in property taxes:
$840
A property contains 10 acres. How many lots of not less than 50ft. by 100ft. can be subdivided out of the property if 26k square feet were dedicated for roads?
81
Which of the following will not terminate an offer to purchase real estate? A. Death of the offeror/offeree. B. Conditional acceptance of the offer by the offeree. C. Revocation by the offeror after being notified by offerees accep
A
The Martins come to your office and explain that neither Mary nor her supervising broker are available. They insist that you immediately write an offer for the house. What should you do? Select the best option A. Write an offer after entering into a buyer broker agreement with the Martins B. Write the offer, but explain that they may owe Mary or the supervising broker because of the preexisting agreement. C. Write the offer after trying to contact the Martins' broker yourself. D. Refuse to write the offer and explain that doing so would be unethical E. Refuse because writing the offer would be illegal F. Refuse and tell the Martins to contact someone else in Mary's office.
B
An elderly couple is represented by a broker who does not hold any professional license other than other than the broker license. The couple finds a home they want to purchase and ask their broker's advice about how to take title, explaining that they want to be sure that when one of them dies, the other will automatically become the sole owner of the home. It would be LEAST APPROPRIATE for the broker to a. Recommend that they consultant a real estate attorney about the best way to ensure this outcome b. Explain that this is a complex matter that is beyond his expertise c. Recommend that they take title as joint tenants or tenants by the entirety to ensure the desired outcome d. Explain the basic differences between the state's forms of joint ownership and suggest consulting an estate planning professional
C
A broker notifies their Broker Company that they are moving to another firm at the end of the month. Which of the following statements is TRUE? a. The broker company needs to give the broker a copy of all of the listing files b. The broker shall turn over to the broker company all the names of their clients unless they have a written agreement to the contrary c. The broker shall turn over to the broker company any listing obtained unless they have a written agreement to the contrary d. The broker company needs to collect all the yard signs from the broker
C
A buyer and seller have negotiated a contract on the seller's property. With a closing date set for June 14th. Time is of the essence. On June 12th the listing agent tells the buyer's agent that the seller will be unable to close on the 14th. The seller can close on the 16th. At this time what is true? A. The contract is terminated B. The contract is void. C. The contract is voidable by the buyer D. The contract is voidable by either party
C
A buyer has specified in writing an interest in purchasing a property without any legal obligation and without defining a specific project. This is referred to as a. An option b. No binding option c. A letter of intent d. A project intent letter
C
A contract is terminated if A. One of the parties decides not to go forward. B. Third party intervenes. C. It is impossible for one of the parties to perform. D. One party assigns his rights to another.
C
A feature of joint tenancy with a survivorship is that a. It provides for the disposition of personal possessions b. A corporation can be a joint tenant c. The surviving joint tenant(s) acquire the property free and clear of any liens against the deceased d. It eliminates probate
C
A licensee is the property manager for a shopping center. The shopping center owner tells the licensee to avoid Internet marketing because he distrusts the technology. The licensee discuss is this with the owner, but eventually complies. The licenses compliance is due to the duty of A. Care B. Loyalty C. Obedience D. fair dealing
C
A listing broker has recently sold a house to an investor. Prior to making an offer, the investor told the broker he planned to turn the large property into apartments. It was that had many multi-family properties. The buyer has now discovered that the other properties are non-confirming, and that the area is zoned single family. The broker: a. Should have asked the seller about the local zoning ordinances b. Is responsible for the buy's failure to do due diligence c. Should have advised the buyer to check the zoning in the area before purchasing property d. Need not worry as his errors and omission insurance should cover this
C
A loan is offered and later there is a change in APR of 0.125%. What will be required to close? A. An expedited closing B. A shortened loan term C. A revised closing disclosure D. A notification from the Consumer Financial Protection.
C
A purchase agreement will not be terminated EXCEPT for the following reason. a. Death of offeror/offeree b. Contingency acceptance agreement c. Revocation of an offer if not met within time specified d. Hospitalized buyer
C
A purchase contract required that the property be free of tenants when the property conveyance occurred. On the day of closing, the tenants were still living in the property. Who is responsible for ensuring that tenants vacated the property prior closing? A. The Buyer B. The Selling Agent C. The Seller D. The Listing Agent
C
A ranch house with a double garage is being valued. The house next door, which is similar except that it lacks a garage and has an outside deck, was sold last month for $138,000. Experience in that area shows that a two car garage is probably worth $10,000 to buyers, while in general, they will pay only $500 extra for a deck. The ranch house is most likely to sell around for around: A. $123,500 B. $128,500 C. $147,500 D. $148,500
C
A real estate broker enters into an agreement to represent a buyer who is seeking a property to purchase, and remains a single agent throughout the transaction. A seller with whom this broker negotiates is this broker's A. Client B. Principal C. Customer D. Fiduciary
C
A real estate professional working with a buyer has disclosed the options for representation under state law but has not signed a buyer representation agreement and considers that buyer a customer. While showing the buyer a property, which of the following statements by the professional could create implied agency in a jurisdiction where the common law of agency prevails? a. "You should consider having any property inspected by a professional" b. "You should speak to an attorney about how to take title to the property" c. "You should offer $20,000 less than the asking price due to the repairs needed on the property" d. "You should be prequalified by a lender since most sellers will request this information when you make an offer"
C
A statement "A contract for the transfer of an interest in land must be in writing," best defines which of the following real estate concepts? a. Acknowledgement b. Mutual consent c. Statute of frauds d. Statute of limitations
C
A void contract is one that A. is not in writing B. is rescindable by agreement C. is missing an essential element D. contains an element defective in nature
C
An advantage of PMI a. The entire loan is insured b. The sellers pay the premium c. The buyers can purchase a higher priced home
C
An appraisal made by a certified appraiser is required a. Before real property can transfer from one owner to another b. When heirs receive property c. When the buyer is using an FHA loan to purchase d. Beore any property settlement in a divorce
C
The lease agreement has terms specifically prohibiting pets. What information is crucial for a real estate professional to consider before denying the lease, if the prospective lessee is an elderly individual who owns a pet dog ? A - fair housing act guidelines that protect the landlord B - whether accommodations are required for elderly individuals C - Whether the applicant's pet is a registered guide or service dog D - The definition of " reasonable accommodations" for elderly persons applying to rent
C
The truth in lending law allows Americans a right of recession if each of the following events occurs in sequence even if on different days. The time for recession begins when the A. The loan is funded by the lender. B. The loan application is submitted to the lender C. The lending instrument is signed by the borrower D. The loan is approved by the lender
C
The wife is entitled to split proceeds based on the property value plus $5,000 in the savings account and the $30,000 she paid down on the mortgage B. When the divorce becomes final , the proceeds are split based on the separate property contributions C. Once the property is refinanced, the proceed and debt are shared between husband and wife D. The husband is entitled to half of all proceeds plus 20% of the value of the property
C
Townships, Ranges, and Sections are used in which type of legal description? (A) Metes & Bounds (B) Recorded Plat (C) Government Survey (D)Points of Beginning
C
What is X's best recourse A. Sue Y for selling home back. B. Sue Z for not allowing easement. C. Build a new driveway D. Tear down fence and continue using driveway.
C
What is the best way to discover most encroachments on piece of properly? a. Title insurance b. Chain of title c. Land Survey d. Seller
C
What type of insurance plan decreases the amount of coverage as the mortgage balance decreases? a. Owner's Policy b. Leasehold Policy c. Lenders/Loan Policy d. Homeowner's
C
When an unlicensed person refers a prospect to a real estate firm, that person may A.receive a finder's fee from the Broker Company. B.receive a fee from the broker only. C.not receive any fee. D.receive a gift with a value of less than $25
C
Which of the following terms identifies the clause that allows a lender to call the entire remaining loan balance due in the event of buyer default? a. Novation b. Entitlement c. Acceleration d. Hypothecation
C
Which of the following would be considered a property improvement? A. An alteration to land to make it more useful B. Increase in value of a property C. A chicken coup permanently attached to land D. Decrease in depreciation
C
While preparing a market analysis on a parking lot in a very crowded downtown area, which of the following considerations should the broker consider? A. Social and economic externalities would be extremely important items to consider in this case. B. The principal of substitution tells us that a substituted use is never the best use of the property. C. Highest and best use should be considered as it may indicate parking lot is not the most productive use. D. Regression or progressions may be factors in determining the value of the subject property in this instance.
C
Why do lenders use the standardized forms issued by Freddie Mac & Fannie Mae? A. They require for obtaining a pass through certificate B. They are required by all warehouse agencies C. They required of lenders who want to sell mortgages in the secondary mortgage market D. They require for obtaining a guarantee of payment of all interest and principal to holder
C
A licensee representing a seller has which of the following duties? a. Advising the buyer about the terms of an offer to purchase b. Disclosing confidential information about the seller only if directlyasked by the selling broker c. Seeking additional offers to purchase after an offer has beenaccepted by the seller d. Advising the seller to obtain advice about material matter beyond the licensee's expertise
D
A listing agent is holding an open house. His advertising flyers are distributed among potential buyers and he runs out. An expensive car pulls up and the customer asks him what the price of the home is. He over prices it at 800k. What is the agent guilty of? a. Conciliation b. Price fixing c. Advertising violation d. Misrepresentation
D
A potential buyer seems to be very knowledgeable about home purchases, and decides not to require an inspection, hoping that the lack of an inspection contingency will help to convince the seller that his offer is the best deal. The buyer's broker has noticed a few things that have raised his concerns about the condition of the house. What responsibility, if any, does the buyer's any, does the buyer's agent have in this situation? a. The agent should demand that the buyer order an inspection before he will write the offer b. This buyer is surely aware that he is taking a risk, so the buyer's agent should write the offer as instructed c. Since the seller is required to disclose any material defects, the buyer's agent should go along with his client's strategy d. The agent should explain his concerns to the buyer and work to persuade the buyer include an inspection contingency
D
A real estate agent uses inappropriate comparable properties for purposes of valuation in a comparative market analysis to help her buyer client determine a reasonable offer. Which outcome below would expose the agent to liability? a. An under-secured loan b. A mortgage not funding c. An inflated appraised value d. A buyer overpaying for a property
D
A real estate brokerage advertises specifically for buyer who wish to purchase using VA loans. Do these advertisements violate veterans' rights or the advertising rules of the Federal Fair Housing Act? a. Yes, because such advertising falsely implies that only military veterans can qualify for purchase b. Yes, because such advertising discriminates against individuals who have not served in the military c. No, because brokers are entitled to direct property advertisements to any specific segment of the population d. No, because veterans from all protected classes can qualify for VA loans
D
A sellers broker is negotiating to convince a lender to accept less than the balance due as complete satisfaction of the sellers debt. If the lender agrees, the transaction would be considered: A. A negotiated balance reduction B. An equitable redemption C. Debt forgiveness D. A short sale
D
A single property is regulated by building codes, zoning, and deed restrictions. The rules are in conflict with one another. Which restrictions must the owner obey? A. Deed restrictions always take precedent over other rules B. Zoning always takes precedent over other rules C. Building codes must be obeyed no matter what other rules exist. D. The strictest or most limiting restriction applies
D
An agent working as a subagent for the seller would suggest that a buyer hire an inspector from an outside service in all of the following cases except A. Slow drain in toilet B. Sawdust in kitchen cabinets C. Smell gas in basement D. Hinge off door
D
An associated licensee has decided to disclose latent defects in properties he lists for the brokerage firm only if a buyer makes a specific inquiry. The broker-in-charge has never discussed this issue with the licensee and does not require any reporting from associated licensees because they are independent contractors. When the licensing board investigates complaints arising from this practice, they are likely to find the broker-in-charge a. Has no liability; as in independent contractor, the licensee is solely responsible for failing to disclose material facts b. Liable only if he was aware that the associated licensee had adopted this policy of nondisclosure c. Liable only if the broker was aware of the defects the associated licensee failed to disclose d. Share the liability for this licensee's wrongdoing
D
X receives possession of property under a deed that states that X will own the property as long as the present building on the property is not town down. The type of estate that X holds is A. Life estate B. Non-destructible estate C. Fee simple D. Determinable fee estate
D
X wants to only lease a garage that is part of a property. What would be the best type of lease to use? A. Ground lease B. Net Lease C. Percentage Lease D. Gross Lease
D
In which of the following cases will a formal appraisal ALWAYS be REQUIRED a. When the seller wants to be sure of the home's value b. When the buyer wants to obtain private mortgage insurance c. In order to obtain an FHA insured loan d. To determine a home's market value
CV
A buyer wants to purchase a home for $160,000 with a 15% down payment. The lender charges 2 points. How much money does the buyer need up front to make the purchase?
$26,720
What kind of lease would REQIURE the lessee to pay the taxes, insurance, repairs and other operating expenses of the premises in addition to the regular rental payment: a. Net Lease b. Gross Lease c. Percentage Lease d. Sublease
A
A broker has listed a home in a horse property area that is now surrounded by suburban residential subdivisions with much smaller lots. The listed property is immediately adjacent to a new subdivision and the city is demanding that the road separating the listing from the residential lots must be paved. There have already been neighborhood hearings regarding a proposed special assessment affecting both the horse property owners and the subdivision developer. Condemnation of some land to provide enough space for the road plus sidewalks is also being considered. Since there have been no formal actions on either of these proposals, thesellers instruct the broker not to disclose the meetings to any potential buyers. What are the broker's obligations? a. The broker must inform the sellers that she has a duty to disclose these material facts even if the seller prefer not to disclose b. The sellers are correct. Since no formal governmental action has been taken, there is no current lien or other impairment of the property. If anything specific happens it will be public record and therefore no private disclosure would be needed. c. Since the horse property has been in place for some time, these obligations will fall entirely on the developer of the new subdivision. The city cannot do anything to change the horse property or take away any land, so there is nothing to disclose. d. The fact that public meetings have been held places these proposals "in the public domain" and any potential buyer is obligated by law to research such property conditions. The sellers and their broker need not mention mere speculation as factor affecting their property
A
A broker knows the construction costs and square ft. On a property what is the best approach they should consider? a. Cost b. Income c. Market d. Sales Comparison
A
A broker who is assigned to a managing broker may A. list real property in the name of the managing broker company. B. accept an undisclosed commission if the managing broker approves. C. represent another managing broker with whom the broker is not associated. D. not be required to follow Uniform Standards of Professional Appraisal Practice (USPAP) guidelines when preparing an appraisa
A
A broker with a license in referral status is permitted to do which of the following? a. Refer listing to the broker's previous Managing Broker for a fee b. Conduct open houses on behalf of the other licensees c. Appraise real estate for a fee d. Act as a showing assistant for Managing Broker
A
A buyer is purchasing a bank owned property. The broker explains the type of deed she will be receiving only promise that the bank has the right to sell the property and that they have not encumbered it . what type of deed will the buyer most likely receive ? a. Special warranty b. General warranty c. Trustee's deed d. Deed in lieu
A
A buyer is purchasing a bank-owned property. The broker explains the type of deed she will be receiving only promises that the bank has the right to sell the property and that they have not encumbered it. What type of deed will the buyer most likely receive? a. Special warranty b. General warranty c. Trustee's deed d. Deed in lieu
A
A landlord uses their master key to enter rental(s) without consent from tenant(s). Are the allowed to do this? A. No, because of quiet enjoyment B. No, because it would violate the tenant's interest in their freehold estate. C. Yes, because the landlord has the right of ownership. D. Yes, because of co-tenancy
A
A lease in which the tenant pays a fixed or base rent and a percentage of the costs for maintaining the building is a a. Net Lease b. Gross Lease c. Percentage Lease d. Sublease
A
A licensed broker, acting as a real estate appraiser, accepts and appraisal assignment based on a predetermined value. The broker may a. Be subject to license revocation or suspension b. Receive a fee depending upon the amount of predetermined value c. Be required to disclose this fact to the listing broker d. Advertising for future assignments based on this practice
A
A limited agent may disclose which of the following facts? A. The septic system is inadequate to service the property. B. The sellers of the property are filing for divorce. C.The buyer will pay list price for the property. D. The seller has rejected higher offers.
A
A listing broker presents an offer from a customer that meets every term asked for in the listing agreement. The seller decides not to sell. Which of the following statements is MOST likely true a. The broker could collect a commission b. The broker could sue for specific performance c. The buyer could sue for specific performance d. The seller will not have to pay a commission
A
A new sewer will need to go into a subdivision. What type of assessment should the buyers be notified before a decision to purchase is made. a. Special assessment b. utility assessment c. special subdivision assessment d. Ad Valorem
A
A potential home seller meets with an agent to discuss a property. She tells the agent that her sisters both have equal share to their mother's trust. The property sits adjacent to a busy freeway and there is construction work in progress next door. What's the most appropriate action the agent should take next? a. Verify identity of woman and ask for all records pertaining to trust before moving on to any selling discussions b. Have sisters sign a release of liability so she can be the sole signer for all documents going forward c. Begin a 6-month probate if in agreement d. Gather all details and findings of issues with property noise etc. to properly disclose in listing e. Tell her to not worry about the noise because a new buyer will be given constructive notice f. Get the property in the MLS as quickly as possible
A
A property is listed at $450,000, and the prequalified buyer believes no additional financing will be needed. The buyer is then notified the property is encumbered with $30,000 mortgage. The buyer's agent advises his buyer to assume equity by paying the $30,000 mortgage. The sales contract with no mention of existing mortgage terms. The closing statement reflects the price of the property at $450,000 with a credit for $30,000 mortgage. The deed to the buyer was exempt and the loan did not fund. When the mortgage debt was not paid, the mortgage foreclosed. Who is liable for the foreclosure? a. Buyer b. Mortgagee c. Buyer's agent d. Seller's agent
A
When compared with a 30-year payment period, taking out a loan with a 20-year payment period results in A. Higher monthly payments B. Lower monthly payments C. Greater impound requirements D. Lower equity build up
A
A prospective seller has arrived to discuss a listing with a broker for a 3- bedroom, 1-bath house with a swimming pool and 2 car detached garage. She explains to the broker that her mother had the property in a trust and she has two sisters that have an equal share of their mother's estate. The house faces the freeway and the prospective seller says she has been at the house during rush house and hasn't noticed any noise. There is also some kind of work going on in a vacant lot next to the house. What should the broker do next? a. Ask to see her identification, a copy of trust and review the preliminary report before she does anything further with the sale b. c. If an agreement with prospective seller, prepare a 6- month probate listing agreement d. Have the other siblings sign a release of liability from so the prospective seller can be the designated signor of all the paperwork e. Gather information that is necessary to properly disclose the activity, construction and noise in the neighborhood f. Get in touch with hold the mortgage and find out how long they before the mortgage accelerates g. Advise the prospective seller that it is not necessary to disclose freeway because the buyer will have constructive notice
A
A purchaser has the right to assume an agency relationship exists between the purchaser and the licensee with whom the purchaser is working unless a. The purchaser and the licensee have a written contract that states otherwise b. The licensee is providing assistance in exchange for a fixed level of compensation c. The licensee is related to the purchaser d. The licensee is the managing broker at the real estate office
A
A selling Managing Broker receives a promissory note as earnest money on an offer. The selling managing broker should a. Inform the seller prior to acceptance that the earnest money deposit is other than cash b. Place the note in the broker's safe until the sale is consummated c. Return the note to the buyer after the offer is accepted d. Deposit the note in an escrow/trust account
A
A tenant executes a 1-year lease on a residential property. Five months later the landlord sells the property to a third party who wants to take procession. If the lease is silent which of the following best describes the status of the lease? a. The lease is not terminated and the buyer does not take possession until lease expiration. b. The landlord as the seller has the right to terminate the lease by operation law. c. landlord cannot sell the property to the buyer as the tenant must be given the first right of refusal d. buyer as the new titleholder can terminate the lease
A
An appraiser knows construction costs and square footage of land. What approach to value do they need to determine? A. Cost B. Income C. Market comparable D. Sales
A
An appraiser who is estimating market value of a mixed-use commercial property with living space above it would use which two approaches to value? a. Income and sales comparison b. Cost approach and sales comparison c. Sales Comparison and Ad Valorem d. Income and Cost Approach
A
An elderly couple is represented by a broker who does not hold any professional license other than other than the broker license. The couple finds a home they want to purchase and ask their broker's advice about how to take title, explaining that they want to be sure that when one of them dies, the other will automatically become the sole owner of the home. It would be MOST APPROPRIATE for the broker to a. Recommend that they consultant a real estate attorney about the best way to ensure this outcome b. Explain that this is a complex matter that is beyond his expertise c. Recommend that they take title as joint tenants or tenants by the entirety to ensure the desired outcome d. Explain the basic differences between the state's forms of joint ownership and suggest consulting an estate planning professional
A
An item may be considered personal property as opposed to real property provided that A. The owner intends to remove it after a period of time. B. It can be removed without altering the integrity of the appearance of the structure. C. It is unnecessary to the integrity of the structure. D. The owner installed sometime after acquiring real property
A
Benefit of general warranty a. Warrants entire chain of title b. Seisin c. Real and personal property protection d. Does not need to be recorded
A
Fred has right of first refusal and the seller decides not to sell. a. Nothing can be done because the seller isn't obligated to sell b. Fred can sue and force specific performance.
A
Seller A entered into an option contract with Buyer B. The contract allowed for a price of $200,000 which Seller A will honor for a 12 month period exclusively for Buyer B. This would be an example of a(n): A. Unilateral contract in which only Seller A has made a promise to perform. B. Bilateral Contract where both parties have an obligation to perform C. An implied contract D. An unenforceable contract
A
The broker company wants to disclose earnest money from their earnest money account from transactions that did not close. They may a. Ask for a mutual release from the broker companies b. Issue a 60-day letter to the parties as to the release process c. Ask for a mutual release from the Indiana real estate commission d. Transfer the money to the Indiana real estate commission within 60 days
A
The current real estate market has been booming for the last 5 years and there is still demand for properties, though the market has slowed for both rental and sale analysis of the area's job market shows a rise in unemployment and stagnant wages, though living costs are still rising. For the last few years the area has welcomed influx of new residents, but this has almost stopped as job opportunities decline. A real estate broker has been asked by a homeowner whether to sell now or wait until market goes higher in the net year or two. Give the facts, what course of action would a prudent professional recommend to the seller? a. Selling the property now, as the market appears likely to adjusted downward b. Renting the property until the market peaks in a few years, then selling it c. Holding the property for another year, as the market runs in seven year cycles so further appreciation can be expected d. Holding the property until it reaches the level of appreciation the seller is seeking, as the market will continue to appreciate
A
The lender requested that the entire loan balance be paid immediately because the property on which the loan was made has been sold. What clause in the mortgage allows this? A. Alienation Clause B. Prepayment Clause C. Condemnation clause D. Defense clause
A
What is the downside of real estate as an investment a. Little Liquidity b. Average person cannot afford it c. Doesn't keep up with inflation rate d. Returns are relatively small
A
You are hosting an open house and Mr. and Mrs. Charles Martin come into the house. You greet them and show them the house. They tell you that the house is exactly what they are looking for and they are very interested in purchasing it. You give them information showing the various types of financing available, down payment options, and projected payments. The Martins tell you they have been working with Mary of XX realty, a competing real estate company. Before leaving you thank them for coming and give them your business card.. The first thing on Monday morning the Martins call and indicate that they have tried to reach Mary and cannot. They indicate that they have a written buyers agency agreement with Mary's broker. They are afraid that someone else will buy the house. Which of the following should you do? Select the best option. A. Seek advice from your supervising broker. B. Tell them to come to your office. C. Ask them to bring the buyers agency agreement to your office. D. Tell them to be patient and to continue to try to reach Mary. E. Tell them to call Mary's supervising broker or branch manager. F. Tell them you are sorry, but there is nothing that you can do.
A
20'x22' garage must be attached to house in a subdivision. This type of regulation is? a. Municipal b. Covenant c. Zoning d. Building Code
B
A 15 year old inherited property , is the contract: a. Void b. Voidable c. Enforceable d. Invalid
B
A broker has listed a property for $225,000. An offer of $210,000 contingent upon inspection comes in the first week and the seller accepts it. Another offer of $205,000 comes in the second week. The seller accepts it as a secondary offer contingent upon the termination of the first offer. The first offeror demands the seller spends $5,000 in repairs before going through with the purchase. The seller may do all of the following EXCEPT a. Agree to do the needed repairs and consummate the transaction with the first offeror b. Ignore the demand and sell the property to the second offeror c. Terminate the first agreement in writing and sell to the second offeror d. Refuse to do the repairs and still proceed with the sale in as is condition
B
A buyer is concerned about a possible encroachment on a property a listing agent is showing. What should the listing agent advise the buyer to do. a. Not buy it because there may be a violation b. Recommend the buyer hires a surveyor to conduct a thorough finding c. Ask the listing agent to provide records showing there is no violation or demonstrate otherwise d. Assure the buyer that there is no issue
B
A client is leasing a building and wants to minimize her expenses. What lease should she ask for? A. Net Lease B. Gross Lease C. Percentage Lease D. Sublease
B
A client wants to give a $500 bonus check for their hard work, the licensee should.. a. Take the $500 check and immediately deposit it b. Tell the client to give it to their managing broker c. Say that he can't accept it as its illegal d. Put it in their escrow account
B
A licensee commits fraud. Claims he did so because he wasn't trained, who is held liable? a. Licensee b. Both the licensee and the broker c. Broker d. No one
B
A real estate broker enters into an agreement to represent a buyer who is seeking a property to purchase, and remains a single agent throughout the transaction. A seller whom this broker negotiates is this brokers A. Client B. customer C. principal D. fiduciary
B
A recently widowed farm owner has called a broker to list a one-acre building site in order to raise the money to pay the property taxes. How should the broker proceed? a) Pace off the land, put markers on the corners, and advertise the building site for sale b) Contact the municipality to determine if this is possible, and then have a surveyor prepare the description c) Draw up the legal description of the property, list it, and begin the marketing campaign d) Refuse the assignment, as one cannot divide and sell a portion of one's land without selling all of it
B
A seller is unhappy with the effort being put forth by the listing broker and wishes toterminate the listing and relist with a different broker. How should the broker advise the seller? a. Tell the seller to send a certified notice to the listing broker terminating their relationship. A listing broker is a unilateral contract which may be terminated by either party b. Tell the seller to ask the listing broker to agree to terminate the listing. Agency is a bilateral relationship which may be terminated by mutual agreement c. Advise the seller to record a notice of termination at the register of deeds, thereby serving all connections with the listing broker and permitting the new listing agreement d. The seller may withdraw the listing from the local MLS and enter into a listing agreement with a new broker at anytime, as a listing is a service terminated whenever the service being rendered is unsatisfactory
B
A seller's agent is contacted by a potential buyer whose financial status is questionable. When asked to write an offer, the agent should a. Refuse to write the offer b. Relay any reservations to the seller c. Ask for a high earnest payment d. Require the buyer's financial statement to accompany the offer
B
A successful contractor does beautiful finish work for an investment company. The investment company buys properties that need extensive work. They have been making a decent income by improving them and turning them over quickly. The market has recently slowed and the investors need to sell one of the properties in their portfolio. They have gotten behind in paying the contractor for his work and assume they will pay him from the proceeds of the sale. A week later the investors accept an offer and put it in escrow. Considering the contractor's professional relationship with the investment company, which of the following circumstances would be most likely to cause a delay in the close of escrow? a. Contractor seeks satisfaction of lien within 150 days of purchasing materials b. Contractor files a notice of a mechanics lien in the public record where the property is located c. Contractor posts the property with a notice of non-payment d. Contractor informs the prospective buyers that the investment company has failed to pay him, and threatens buyers with liability if they were to continue with the sale
B
A tenant with a disability may reasonably make reversible changes in the physical structure of an apartment to accommodate the tenant's disability if the a. Owner is aware of it and gives permission b. The tenant pays for the modifications c. Other tenants are also permitted to make modifications d. Apartment is in a building with four or more units
B
All of the following would be considered real property except A. Mineral rights B. Leasehold estate C. Fixtures D. Air
B
Broker thinks the metes and bounds description is incorrect. What should they do? a. Leave it be as it is out of their expertise b. Contact a surveyor c. Contact county assessor d. Correct in the MLS
B
Example of modular construction a. Home used as a model b. Prefabricated home c. Apartment building d. Mobile Home
B
For the borrower, the major ADVANTAGE of Private Mortgage insurance (PMI) for a home mortgage loan is that A. the premium is typically paid by the seller. B. A smaller down payment is required. C. the entire amount of the loan is insured. D. the loan is paid in full if the borrower
B
If a person is a licensee, but not a broker, that person (A) Cannot be paid through that sponsoring broker. (B) Must be licensed through sponsoring broker. (C)Need not affiliate with sponsoring broker. (D)Can earn fee directly from principal.
B
If someone gets a deed at a foreclosure sale saying the bank had the right to seize it, what deed is this? a. Deed in lieu b. Special warranty c. General Warranty d. Trustees deed
B
In a case of alleged illegal conduct by a broker in the course of a real estate transaction, which of the following statements about the managing broker is TRUE? a. The managing broker will be held accountable only for the broker's actions of which the managing broker has knowledge b. The managing broker may be held accountable for any actions of the broker c. The broker will be held solely responsible for the broker's illegal conduct d. The broker may be held accountable for the actions of the client
B
In real estate, a "client" is best defined as a person who has A. engaged in a phone conversation with a real estate licensee. B. entered into an agency relationship with a real estate licensee. C. visited an open house and had a discussion with a real estate licensee. D. been provided with services in the ordinary course of a real estate transaction.
B
In real estate, a "client" is best described as a person who has a. Engaged in a phone call conversation with a real estate licensee b. Entered into an agency relationship with a real estate licensee c. Visited an open house and had a discussion with a real estate licensee d. Been provided with a service in the ordinary course of a real estate transaction
B
Parcel of land sold for $69,500. It was purchased 4 years ago for $42, 000. What was the appreciation of this investment (to nearest tenth of a percent)? (A) 34.3 % (B) 39.6 % (C)60.4 % (D)65.5 %
B
Person willing to pay $100/month and nothing more to rent a heated garage. What lease is appropriate? (A) Net Lease (B) Gross Lease (C)Group Lease (D)Indexed Lease
B
Private controls on land use include A. Building codes B. Deed restrictions C. Zoning D. Floodplain management
B
RESPA would apply to which of the following? A. Subdivisions only B. 1-4 residential family dwellings C. Residential mobile homes only D. Commercial real estate
B
Rental rates are best determined by: a. Brokers opinion of value b. Local supply and demand c. The MLS d. The Principle
B
Subdivision plat approved. Once approval is granted what is the next step that must be taken? a. utility inspection b. the plat must be recorded c. building permits d. a public hearing must be held
B
The buyer gave the broker an earnest money deposit of $5,000. As closing was approaching the buyer discovered he needed $2,000 back in order to pay a charge card and get his debt-to-income ratio where it needed to be to obtain the loan. The broker wrote him a check for $2,000 from the trust account. Is this acceptable, and why or why not? a. Yes, because the transaction has not yet closed therefore the buyer may request his money b. Yes, because this practice would be permissible with the seller and buyer's written permission c. No, because under no circumstances may money be taken from the broker's trust account; it belongs to the transaction d. No, because the withdrawal of the $2,000 would have reduced the amount of deposit to less than the minimum required
B
The servient estate in an easement appurtenant is A. Owned by the landlord B. On whichever property the easement was placed C. Owned by tenant D. The beneficiary of easement
B
To an individual who you are representing they would be considered the: a. Customer b. Client c. Principal d. Fiduciary
B
What action returns a contract's parties to their positions as if the contract never happened. A. Cancelation B. Rescission C. Substitution D. Subordination
B
When a seller instructs a broker not to show a property to someone not of a specific race. The broker should reply A. Sorry, under these conditions you will have to sell without the services of a real estate broker. B. All brokers must comply with fair housing laws, I cannot place a listing on your property C. I will do my best, but I will have to show it if anyone asks to see it. D. Don't worry, they probably won't want to see it anyway.
B
Which of the following actions best demonstrates compliance with Fair Housing Laws? (A) Maintaining accurate written records of all businesses done with minorities. (B) Maintaining accurate written records with any client or customer. (C) Refer prospects to ones supervising broker or another agent if one is uncomfortable working with them to ensure they receive proper service. (D) Show minority prospects property in many neighborhoods/communities even though they may not qualify for or be interested in properties available.
B
Which of the following are most likely to be addressed by building codes? A. Deed restrictions B. construction standards C. permissible use of structures D. restrictive covenants
B
Which of the following inducements IS ALLOWED? a. Providing a free home warranty to the buyer without the seller's knowledge b. Making a donation to the buyer and seller's favorite charity with their knowledge and approval c. Offering $100 gift card on Facebook to anyone who sends them a listing referral d. Rebating a portion of the commission to the buyer outside of closing
B
to participate in a referral service, a broker company must A) Be a member of a franchise B) Have a written agreement with the cooperating broker C) Be licensed in the state to which they are sending the referral to D. Place their license in a referral status with the state licensing board
B
3 people were concurrent owners of a parcel of real estate when one of the women owners died that interest became part of the deceased's estate. The deceased was A. A tenant by the entireties B. a joint tenant C. a tenant in common D. a severalty owner
C
A Borrower was offered a home loan of $100,000 with an interest rate of 3%. All appropriate forms and disclosures were utilized. This would be an example of predatory lending if the loan required the borrower to (A) Repay the loan in 15 years. (B) Make payments every other week. (C) Pay a prepayment penalty of 20% of the balance. (D) Submit all payments in U.S. currency.
C
A broker has been charged with using improper terms without full disclosure when advertising a real estate property. The broker has MOST likely violated A) the Real Estate Settlement Procedures Act (RESPA). B) the Equal Credit Opportunity Act (ECOA). C) the Truth in Lending Act. D) usury laws.
C
A broker hires an inactive broker to conduct open houses. Which of the following statements about this situation is CORRECT? a. The broker must obtain managing broker approval b. The broker may compensate the inactive broker at closing c. The broker may face disciplinary action for incompetent practice d. The broker must compensate the inactive broker on an hourly basis
C
A broker meets with his client who owns a vacant retails store that is in demand by fast food stores. The area is growing rapidly, and occupants have a history of successfully growing their business. The owner has asked the broker to recommend the most beneficial type of lease to maximize his income. What kind of lease should the broker recommend A. Gross lease b. Sandwich lease c. Percentage Lease d. Reappraisal lease
C
An investor has come to the broker because he may be interested in selling one of his residential properties. His family has owned the eight unit-building for several years and have kept accurate records of income expenses. The investor brings out a file of lavish improvements that he has completed inside each of the units, including granite counters, top of the line appliances and marble floors. He has no idea what the property is worth and has asked the broker to tell him what his potential profit will be before he agrees to list it. In this situation what is most important for the broker to explore before counseling the investors and putting his units on the market? A. Be honest with the investor and tell him that he was foolish for spending so much money on rental properties and she should keep the property until he is able to depreciate all the improvements over the next 31 years B. Establish what the expenses, income, and vacancy rate of the investors building is, and then do an analysis using 4 or 5 comparable 8-unit buildings that have sold in the same area in the past 6-9 months to come up with the market value. Then the broker could estimate the investor's profit C. Explain that he will develop his opinion of valve by using the income approach and that the investors may not be able to recover all the cost of his improvements D. Confirm the purchase price that was paid eight years ago so he will be able to accurately depreciate the property to come to his present market value
C
Another term for personal property. A. Fixtures B. Realty C. Chattels D. Naturales
C
Best way to discover encroachments? a. Chain of title b. Title insurance c. Land survey d. Seller
C
Buyer Jim signs a purchase contract at the asking price with no contingencies and the 30-day closing date as specified by the seller. Seller Tom changes the contract closing date of 40 days and signed the contract. This contract, in its present form, is: a. Valid with the 30-day closing date, since Buyer Jim met all the terms as originally specified by the seller b. Valid with the 40-day closing date, sine a 10-day extension is not considered material to the contract c. Invalid since the signed documents do not yet indicated mutually agreed-upon terms d. Enforceable, since the seller has provided a valid counter-offer
C
Buyer and seller enter into a contract. The buyer refuses to purchase for a reason not to excused by a contingency. Which statement is correct? a. The seller is entitled to damages the buyer caused, which are taken from either the earnest money deposit or the 20% down payment b. The original buyer gets the earnest money deposit back as soon as there is a new offer c. The seller has the right to terminate the contract and keep the earnest money deposit d. The seller has the right to keep 20% of the down payment on property
C
Deed restriction means the same as (A) Lease restriction (B) Master plan (C) Restrictive covenant (D)Variance
C
Discount points a. Increase yield to seller b. Decrease yield to seller c. Increase yield to lender d. Decrease yield to lender
C
Federal rules require closing disclosure documents provided by lender. Broker should counsel the borrower to review document and compare it with the Loan Estimate document. Closing disclosure should be received by the homeowner A. At closing of transaction. B. Not later than 30 days following closing. C. At least 3 days prior to loan consummation. D. No later than 3 business days following loan application
C
In a rectangular survey of land description, range three west would be best described as: A. Line 12 miles west of the principal meridian B. Strip of land 12 miles east of the principal meridian C. Strip of land between 12 and 18 Miles west of the principal meridian D. Point 12 miles west of the principal meridian on the principal base line
C
Neighbor "A" has a property adjoining to neighbor "B". Neighbor "A" has been driving across the yard of neighbor "B" for the past 8 years to access his property even though there is direct access to his property. The common principle created is a. An encumbrance b. An easement by taking c. An easement by prescription d. An easement by necessity
C
Neighbor A has a property adjoining to Neighbor B. Neighbor A has been driving across Neighbors B grass to get to his property for 8 years even though he has access to his property is this a: a. Encumbrance b. Easement by necessity c. Easement by prescription d. Easement by taking
C
One of the major disadvantages of real estate as an investment is that? a. Managing it requires expertise. b. It is highly speculative. c. Its liquidity is limited . d. The tax advantages are minimal 136. 20'x22' garage must be attached to h
C
Owner wants to list a property for sale, "as is." Listing agent should A. Assume owner will accept a relatively low price for the property. B. Conclude he is relieved of any responsibility if buyer later discovers defects that were not disclosed. C. Question the seller if any known defects. D. Assume house is a "fixer-upper."
C
Properties in the area assessed at 50% of their value. Tax rate is $6 per $100 (Mill rate of 60.) what is the annual property tax on a house in this area if the house is valued at $72,000? A. $600 B. $1200 C. $2160 D. $4320
C
The broker has noticed that a great number of people who are buying in the neighborhood where his listing is located speak Russian. He also noticed a Russian grocery store right by the neighborhood that was attractive. He decides to minimize the advertising the property and started advertising the property on two different Russian internet sites. This is: a. Acceptable because it is not print media b. Unacceptable due to its discriminatory nature c. Acceptable if the advertisement includes no preferential language. d. The only appropriate way to market property in the neighborhood.
C
The buyer was given a loan estimate at the time of the application for the mortgage and it is now 3 business days before the closing. The appraisal and the closing disclosure have been given to the buyer. The buyers broker meets her client at the property for a walkthrough and to review the documents. Which of the following occurrences will result in the buyer having the right to an additional 3 days to review the documents? a. there was a mathematical error on the proration of taxes or utilities b. appliances are missing even though the seller agreed to include them c. the loan product as changed from a fixed rate to one that is adjustable d. there was an omission in the property disclosure of a recently discovered special assessment
C
X owns a farm in Oakton. It can be divided into two lots. X builds a new house and provides access to it over an existing driveway that leads to x's original house. Y buys the new house. Y's deed indicates that the easement over X's property allows Y to use X's driveway to access Y's home. 10 years later Y says, "I'm selling the house that you built. Are you interested?" X replies, "Yes, I will move in myself and have my son can move into the older home." X's son does not decide to move into the older home so X sells it to Z. After moving in Z builds a fence over X's driveway. X asks why the fence was put up and says that now they cannot use the driveway. Z explains that they want to plant a garden near the driveway and doesn't want anyone else to use it. Does X have the right to use the driveway? A. Yes, X was the original owner. B. Yes, the easement x granted to y still stands. C. No, the easement is no longer valid. D. No, unless X gets permission from Z.
C
X signs a sales contract with a mortgage contingency, but tells the seller that if X is unable to secure a loan, they will pay cash. X has paid earnest money. When can X cancel the transaction and still get the earnest money back? A. X's relative would not give cash B. Lender charged 3 points instead of 1 point C. An undisclosed issue would not allow the lender to disburse the loan in time D. Verbal agreement is unenforceable
C
. A salesperson represents the seller of a commercial property. The salesperson tells the buyer a new highway exit ramp will be built within six months to give access to the property although that is only one of the several possibilities being considered by local planners. The exit ramp is subsequently located elsewhere. Could the salesperson be liable to the buyer for the statement about the ramp? a. No, the statement was the salesperson's opinion b. No, the statement was puffing c. Yes, the statement was puffing d. Yes, the statement was material misrepresentation
D
A broker has a listing agreement to deliver to his out-of-town. To property secure this listing, the agreement a. Must have original ink signature b. Must be retained in the broker's files for three years c. May be an oral agreement d. May be in electronic format
D
A broker has an exclusive buyer agency agreement with Dr. M, a vet who wants to add a satellite office on the south side town. He would prefer a vacant parcel on which he will build to his own specification which is at least one acre and will need a building of at least 2700 square feet. He found 2 properties that may suit him and he has obtained survey on both. The vacant land Is currently zoned residential but Is Immediately adjacent to a commercial area and is considered likely to be rezoned commercial at an upcoming city council meeting. The developed veterinary facility is just three blocks away from the vacant property and is zoned commercial. It is owned by a veterinarian who Is retiring from 35 years of practice and seems well-maintained. Both properties are within the price range the broker's client is comfortable offering, and he has been qualified for the necessary loan. How should the broker advise Dr. M with regards in offering for either property? A. Advise him that the veterinary property's existing commercial zoning means he would not need to worry about being able to use the property he intends. B. Point out that the utility easement would be perfect for the dog run and would be used for that purposes even though a building could not be built within the easement. C. If he decides to offer for the existing vet facility, suggest that he make the offer contingent upon receiving client contact information for the retiring vet's client. D. Urge him to include a zoning verification contingency if he offers for either including making sure that a vet practice falls within ordinary commercial zoning without requiring a variance.
D
A broker listed a home. The listing agreement must be delivered to the owner a. Within three business days b. In triplicate c. Within five business days d. Upon signing the agreement
D
A broker tells a friend, who does not have a real estate license, that if the friend will help the broker obtain listings, the broker will pay a fee A. legal if the broker provides full written disclosure to all parties B. ilegal if there is no written consent from the client C. legal as long as it is considered a finder's fee and not a commission D.illegal because no commission may be paid to an unlicensed person
D
A broker with a license in inactive status is permitted to do which of the following? a. Refer listing to the broker's previous Managing Broker for a fee b. Conduct open houses on behalf of the other licensees c. Appraise real estate for a fee d. Waive requirements for continuing education
D
A home warranty for a previously owned home would most likely cover which of the following a. Structure and building defects b. Appliances and personal property of the seller until closing c. Appliances and personal property of the buyer after closing d. Plumbing, electrical and other home systems along with major appliances
D
A licensee representing a seller has which of the following duties? a. Advising the buy about the terms of an offer to purchase b. Disclosing confidential information about the seller only if directly asked by the selling broker c. Seeking additional offers to purchase after an offer has been accepted by the seller d. Advising the seller to obtain advice about material matters beyond the licensee's expertise
D
An investor buyer informs her broker she is ready to sell her rentals and possibly invest in another investment property. What action should the broker take in this situation? A - Refer the investor to a title insurance company to provide a Section 1031 tax deferred exchange even though this means the broker cannot participate in the transaction for either the listing or the new purchase. B - List her current properties for sale before seeking a replacement property, as she will need the proceeds from the closings to purchase a new property. C - Recommend that the investor simply purchase additional rental properties but retain the current properties to avoid the adverse tax consequences of selling investment properties. D - Advise the investor to consider the tax advantages of a Section 1031 tax deferred exchange, seeking advice from a qualified intermediary as well as her tax advisor, and then have the broker handle the transactions.
D
Borrower applied for a loan on the home of their dreams and were approved for very specific terms based on their credit scores and income. At closing, the interest rate had doubled in the loan documents that were presented for their signatures. The borrowers were told that this was likely to be their only chance to receive any sort of loan and they must sign today. They were told of they did not sign that they would lose the house. This was a. Acceptable because the purchasers would still get their home b. Acceptable because ethe lender did secure some sort of financing c. Unacceptable because the lender did secure some sort of financing d. Unacceptable because the borrowers were pressured to take the loan
D
Brokerage firm holding earnest money deposit in trust account pending closing to take place in a month. Broker is short on funds and uses some of the earnest money deposit to cover his rent. Broker knows he will have another closing in a week and can return the funds. Are the broker's actions legal, and why? A. Yes, as long as he can return funds prior to closing, no harm is done. B. No, illegal act of convergence and could result in loss of license. C. Yes, Broker could arrange for this temporary loan by getting permission from the seller. D. No, illegal act of conversion could result in criminal penalties and loss of license.
D
How much earnest money is required to constitute a contract agreement? a. $1 b. 10% of ask price c. $1000 to show good faith d. $0 because a consideration can be in the form of a promise to fulfill ones end of the bargain
D
In what type of title insurance does the coverage amount decrease as the mortgage balance decreases? A. An Owner's policy B. A leasehold policy C. A foreclosure policy D. A lenders or loan policy
D
Jon sells a property for $800,000 and earns a 3% commission. Jon obtained the sales for this transaction based on a co-brokerage agreement referral for a 50/50 split. Jon works under a managing broker who is owed 40%. How much did Jon's managing broker earn from this transaction? a. $7,200 b. $12,000 c. $24,000 d. $4,800
D
Permitted land uses and set asides, housing projections, transportation issues, and objectives for implementing future controlled development would all be found in a community's _______? A. Land controller B. Enabling Act C. Zoning authority D. Comprehensive plan
D
Sellers broker negotiating to convince lender to accept less than the balance due as satisfaction to the debt. a. Negotiated balance reduction b. Equitable redemption c. Debt forgiveness d. Short sale
D
The proper way for a listing broker company to split a commission is to pay a. Fifty percent of the total fee to the broker b. Thirty-five percent of the total fee to the selling broker company c. Only the agreed amount to the selling broker d. The agreed amount to the selling broker company
D
When may a salesperson open his own real estate business without a sponsoring broker? (A) If he hires a broker to work with him. (B) If he takes listings in name of company only. (C) When the business is a corporation or LLC that is licensed. (D) After he meets all requirements and becomes the sponsoring broker.
D
Which of the following does not buy loans in the secondary mortgage market? A. Federal National Mortgage Association B. Government National Mortgage Association C. Federal Home Loan Mortgage Corporation D. Federal Housing Administration
D
Which of the following is a feature of a quitclaim deed? a. It need not contain a legal description b. It must contain the grantee's signature c. It does not pass title to real property d. It need not contain warranties
D
Which of the following statements is true concerning an unrecorded deed? a. It is not valid between the grantor and the grantee. b. It need not name the grantee. c. It need not contain a legal description. d. It does not give constructive notice of ownership .
D
Which of the following transactions would constitute an in-house agency relationship? A. Two or more clients represented by the same licensee B. one licensee representing another licensee in the sale of a personal residence C. two or more customers represented by the same licensee in the purchase of a property D. Two or more clients represented by different licensees associated with the same real estate firm
D
Working to convince a potential buyer that a single-family house near a university could be converted to student housing, a broker guarantees the buyer a substantial profit. Such a guarantee a. Maybe unethical but is not violation of the real estate rules and regulations b. Requires comparable sales information to support the claim of future value c. Is an acceptable professional practice if the property is properly zoned d. Constitutes failure to engage in competent practice under the real estate rules and regulations
D
You are the broker at a large firm. One of your licenses who is aggressive and specializes in high end properties. She listed a house, but three weeks later the sellers asked her to remove the yard sign and take the house off the market because they wanted to remodel. She agreed to remove the sign. A week later, A prospective buyer contacts the licensee wanting to view the property. The listing agent says she removed the yard sign because the seller requested it. She says she told The prospective buyer the property was off the market but she could still show it to him. What should the broker advise the listing agent to do? A - Show the property to this prospective buyer. B - Comply with the sellers' request to withdraw from the market and not show the property. C - Show the prospective buyers different properties. D - Advise the seller of the potential purchaser and ask for their direction as to showing. E - Establish whether the prospective buyers are financially qualified. F - Ask the buyers if they would like to make an offer on the property.
D
