WA_Test 1 real estate fundamentals

Agent Amy has a listing on an investment property where she will get a $4,000 commission if it sells. She has another listing on an investment property where she'll get a $5,000 commission if it sells. If she arranges an exchange of the two properties, her commission would be:

$9,000

Bob builds a fence extending 20 feet onto The neighboring property. He uses the land for 15 years without the knowledge of the neighboring owner, who lives in another city. When Bob wants to list his property for sale, including the extra 20-foot strip,

The land is his to sell, having passed through adverse Possession.

A buyer accepts a general warranty deed from a seller, believing that the seller is the sole owner of the property. The buyer later finds out that the seller is only a co-owner. Has a covenant in the general warranty deed been violated?

Yes, there is a covenant providing marketable title.

Maya and Andrew are real estate agents who work for competing brokerages. They don't like a new discount broker and decide together not to show any of the new broker's listings. This is a violation of the 'Sherman Act because it's:

a group boycott.

A broker would need to have a securities license to participate in:

a transaction involving an investment contract.

A mortgage often includes a clause requiring the lender's consent before another borrower may assume the mortgage. This clause is called a:

alienation clause / due-on-sale clause

A property manager of a ten-unit building shows an apartment to a woman who uses a wheelchair. The woman says that she would need to makes some modifications, such as adding grab bars in the shower and removing some carpeting in the bedroom. The landlord:

must allow the tenant to make the modifications at her own expense, but can require her to restore the property at the end of the lease.

John leases a commercial property. In the lease, he agrees to pay part of the utilities and taxes, as well as a fixed monthly rent amount, This is a:

net lease

Mark and Kim's two-year lease on their apartment expires. Unhappy that the couple doesn't plan to renew the lease, the property manager charges them one month's rent for failure to give notice. If the lease is silent regarding this issue, in this case:

no notice is required and no additional fee must be paid.

As a property manager, you may:

offer inducements (incentives) to prospective tenants.

An increasingly common land use pattern allows for subdivisions with smaller lot sizes and little or no setback and side yard requirement. These are known as:

planned unit developments.

For income tax purposes, a homeowner can deduct:

property taxes

A seller finds that he cannot provide marketable title because of a cloud on the title. To clear the title, he must file a:

quiet title action.

A real estate agent takes a listing for a mobile home. He may do this if:

the listing includes the land on which the mobile home rests.

A property manager decides to offer some additional services beyond what is specified in the property management agreement. She may do so after:

the management agreement is amended in writing.

Josephine, a real estate agent is showing a house to a buyer. The buyer loves the house, but wants certain appliances and pieces of furniture to stay with the house. Josephine should advise the buyer:

to make an offer that includes the appliances and furniture, which would be reflected in the higher purchase price.

In a bilateral contract:

two parties have exchanged promises, and both parties are obligated to perform

Which of the following pieces of information must a listing agent convey to a seller?

A potential buyer who has asked for the seller to take back a purchase money mortgage, has abused his credit in the past.

By what right would a railroad company acquire private land necessary for a new railway line?

Eminent domain

A homeowner bought his home for $150,000. Ten years later, he refinanced his mortgage and borrowed $ 100,000. Which of the following is true for this type of property?

Interest on loans such as this one for the purchase or refinance of a principal residence is deductible.

Which of the following is true about a building designated a historical landmark?

It may not be willfully destroyed without a permit.

What is most significant in influencing value?

Location

Legally, how much earnest money must be submitted with a valid purchase and sale agreement?

No earnest money is required.

Cluster zoning, which allows smaller lot sizes and reduced frontages, is suitable if a development:

Still has a density ratio consistent with the general plan.

A buyer purchases a rental home that is fully furnished. The document used to transfer title to the furniture is a:

bill of sale

A home is built on a hillside with underground springs that cause the ground to soften from time to time" The owner, who has had the property for three years with no problems sells the house without mentioning the underground springs. The listing agent is aware of the springs but says nothing. A year later the buyer realizes that a corner of the house is sinking. She is entitled to sue:

both the listing agent and the seller.

An easement for ingress and egress that is created by a court of law where it is reasonably necessary for the enjoyment of the property is an easement:

by necessity

An Asian-American buyer asks to be shown homes that are located in neighborhoods that he knows are primarily Asian. If a real estate agent complies.with his wishes, this is:

legal, as it is done at the buyer's request

A quitclaim deed conveys:

the grantor's interest in a given property, If any.

.A borrower takes out an $ 88,000 loan at 6% interest. The monthly principal and interest payment, amortized over 30 years, is $ 585. He also makes a $12,000 down payment. The borrower will need to pay one discount point to the lender. How much is the cost of one discount point?

$ 880

The following are all goals of Washington Center for Real Estate Research

1. recommending changes to state statutes regarding licensing. 2. promoting growth and development in Washington. 3. determining low-income vacancy rates. They do not right real estate questions.

A buyer is looking at a house in a neighborhood with newly installed sidewalks. When the buyer asks about taxes, the seller assures her that the home isn't subject to any special assessments. The buyer's agent should:

Advise the buyer that the property may be subject to special assessments and recommend that the buyer look into it

Five people buy an investment property. They take title so that they each have equal ownership shares, and so that if one of them dies, his share will pass to his heirs. How did they take title?

Tenancy in common.

A minor purchases a home right before He turns 18. Immediately after he reaches The age of majority, he contacts the seller and rescinds the contract demanding his Money back.

This is possible because he is doing so within a reasonable amount of time after having reached the age of majority. The age of majority is the threshold of adulthood as it is conceptualized in law.

A survey has been completed, and stakes have been placed marking off the property. The survey can be used to :

construct fences and driveways.

An easement appurtenant is one that:

runs with the land.

A dual-state brokerage firm doing business in Washington must:

maintain a trust account in Washington if holding any funds in trust.

The closing date is August 16.The property's fair market value is $ 180,000. In this community, property is assessed at 50% of its market value, and taxes are applied at 55 mills per dollar of assessed Value. Using a 365-day calendar year and assuming the buyer is responsible for the closing day, what would the buyer's prorated share of the annual property taxes be?

$1,87'1.

A 3,000 square foot retail property rents for $20 per square foot, plus 8% of gross sales. The building's tenant pays $120,000 rent in one year, What were that years gross sales?

$750.000

Which of the following would be grounds for disciplinary action against a licensee?

1. Conversion of funds. 2. A licensee acts as a dual agent without disclosure to both buyer and seller. 3. A licensee acts as a fee broker. Not grounds for disciplinary action: An agent gives a copy of the sales agreement to the purchaser when it has been signed only by the offeror.

J passes the license exam on March 20. How much time does J have to apply for his license, before being required to retake the license examination?

12 months.

After the sale of a property in a 1031 exchange, the seller must close on the new property within:

180 days. Under Section 1031 of the United States Internal Revenue Code, the exchange of certain types of property may defer the recognition of capital gains or losses due upon sale, and hence defer any capital gains taxes otherwise due.

A metes and bounds descriptions reads as follows. "Start at the intersection of Route 120 and Wells Lane. Proceed due south 1,815 feet, then due east 1,200 feet. Proceed due north 1,815 feet, then return west to point of beginning." How many acres is this property?

50

If the mortgage amount is $ 80,000 and the borrower paid $ 4,800 in discount points' how many discount point were charged?

6

Which of the following people might bring a law suit for a specific performance?

A buyer in a real estate transaction in which the seller backed out one day before closing.

Under Title Vlll of the Civil Rights Act of 1968, certain transactions are exempt. name one.

An unlisted home that is for sale by owner, where the only advertising is a sign in front of the property that reads simply "For Sale."

A real estate agent lists Harold's home, which he owns as a life estate. Harold's children hold the remainder interest.

Anyone who buys Harold's life estate receives only the interest held by Harold.

A seller sells his house "as is" to a buyer. Shortly after the sale closest, the buyer finds a large hole in the ground next to the house. The hole, which has caused significant damage to the foundation is, concealed with leaves and branches.

Both the seller and the licensee may be liable.

Which law prohibits discrimination in real estate transactions based on race with no exceptions?

Civil Rights Act of 1866

A borrower defaults on a mortgage What does the acceleration clause in the mortgage allow the lender to do?

Demand immediate payment of the entire loan balance.

A property management agreement is Amended to take into account some changing circumstances. The amendment must be signed by the owner and the

Designate broker for the firm providing management services

Ben receives a life estate in a property, with his nephew Will designated as the remainderman. When Bend dies, what kind of interest does Will receive?

Fee simple estate.

Three friends own an old lakefront house together. One friend found a developer who would like to buy and redevelop the property, but the other two friends don't agree. What can the friend who'd like to sell do?

File a partition suit in the hope that the court will order the sale of the property and division of the proceeds.

A developer wants to subdivide a parcel and market it to potential buyers in other states. The property is divided into 135 vacant lots. He must register with the Office of Interstate Land Sales, which is administered by:

HUD

Siobhan listed her property with A BC Realty. She asks her agent, Robert' to draft deed covenants that will prevent a buyer from subdividing the land in the future. she'd also like the agent to create a trust from the sale, to benefit her disabled sister. Robert's reply should be:

I can't help you with either of these things; you'll need to contact an attorney.

What would cause a judgment lien to be imposed on a landowner's property?

Lawsuit

Mark is selling his property, which has an unfinished basement. He gets a full-price offer from Susan, but the offer requires Mark to finish the basement prior to closing. Do Mark and Susan have a binding contract?

No, because Mark has not accepted Susan's offer

A buyer and seller were inspecting a property, prior to the buyer making an offer. The property was occupied by a tenant at the time of inspection. The seller told the buyer that the garden furniture would be included in the sale. However the buyer discovers upon possession that the garden furniture belongs to the tenant, not the seller. Is the buyer entitled to the garden furniture?

No, because the seller didn't have the right to include the tenant's personal Property in the deal.

A buyer is unfamiliar with the concept of discount points and asks a licensee to explain. The licensee responds " Discount points are used to replace funds that are being held by the Federal Reserve, so that more funds are available to lend." Is this description correct?

No, discount points are used to increase the yield for lenders who will sell the loans on the secondary market.

A licensee locates what seems like a ready,willing,and able buyer. However, the deal falls though at closing because the buyer couldn't obtain necessary financing. At the same time, though, the seller turned out to be unable to provide marketable title. Does the seller still owe a commission to the listing agent in this case?

No,because there was no ready willing, and able buyer.

Maria buys a home in a subdivision that is subject to restrictive covenants. The city Maria lives in allows fences, but the subdivision's restrictive covenants don't.

The deed's restrictive covenant takes precedence over the city because they are more restrictive

Which of the following is EXEMPT from the pooled interest-bearing account requirement?

Property management trust funds.

A buyer's agent has repeatedly seen sales Collapse at the last minute because the buyers weren't able to obtain financing. How could he best limit his in the future?

Require prospects to be approved first.

The owner of property located along a stream or river may have which type of water right?

Riparian

Price fixing, including setting commission rates in a community, is prohibited by the:

Sherman Antitrust Act and state antitrust laws.

A veteran's guaranty benefits may be restored by a:

Substitution of eligibility/entitlement by another veteran assuming the loan.

Z has been certified by the Department of Social and Health Services as not in compliance with his court_ordered child support payments. What disciplinary action is available to the Director of the Department of Licensing?

Suspend Z's license.

When a broker attempts to renew his license he intentionally lists a 3-hour course twice in order to reach 30 hours. The director can:

Suspend the license and charge him with misrepresentation in in obtaining or reinstating a license.

The requirements of the Truth in Lending Act would apply to a:

loan for the purchase of a mobile - home that will be used as a principal residence.

A tenant farmer has occupied a farm on which she has grown crops for several years. The landowner sells the farm to someone else who immediately gives the tenant notice to vacate. the timing of the notice will mean the crops currently in the ground will not be ready for harvest before the end of her lease. Who do the crops belong to ?

The tenant. A special rule, called the doctrine of emblements, applies to crops planted by the tenant farmer. If the lease is terminated through no fault of the tenant before the crops are ready for harvest, the tenant has the right to reenter the land and harvest the first crop that matures after the tenancy is terminated.

An apartment building was built in 1960. An apartment is being rented to a couple with no children.

The tenants should sign the lead- based paint disclosure and receive a pamphlet on lead-based paint.

A commercial tenant leases retails pace for$ 1,500 per month. A few months later the owner of the complex adds new counters and increases the rent to $1,750 per month. At the end of the lease term, the commercial tenant:

cannot take the counters with her, because the owner installed them.

A real estate agent took a $3,000 cash earnest money deposit on Friday morning: She had another appointment on Friday Afternoon and didn't want to misplace the Money over the weekend, so she deposited it into her personal bank account. First thing on Monday morning, she transferred the money to her firm's trust account. She has:

commingled funds. The real estate agent has violated state laws concerning trust fund handling, by commingling trust funds with her own personal funds.

A buyer who records a deed is giving:

constructive notice.

The primary purpose of the Truth in Lending Act (Regulation Z) is to require the lender to

disclose the complete cost of credit to consumer loan applicants

A tenancy in which the tenant is in possession with the permission of the landlord, but there is no definite rental period or duration of possession, is called an:

estate at will

Erin entered into a lease that begins on February 1, and ends on January 31 three years later. This lease is an:

estate for years

A minority buyer with a disabled daughter makes a full-price offer on a property. The home doesn't have any grab bars in the bathroom and the front door isn't wide enough for a wheelchair. The seller informs the buyer's agent that the property wouldn't be suitable for the daughter so he is going to refuse the offer. The buyer's agent should:

explain the situation to the buyer and advise her to consult an attorney and/ or file a complain with HUD.

A seller wanting to get an estimate of the value of her property before settling on a listing price should obtain a

fee appraisal

The entity that determines the maximum number of people who may legally live in a rental unit is the:

local health department and zoning authority.

An older retail building has narrow hall ways and window air conditioning units rather than central AC. These would be examples of:

functional obsolescence

When can a minor enter into a binding contract?

if a guardian co-signs

H quits a broker position with X YZ Realty. When must H 's designated broker return her license to the Director?

immediately

Once a lender issues a veteran a VA guaranteed loan, the veteran:

immediately becomes liable for the guaranteed amount

The manager of a 6-story18-unit apartment building carefully screens the tenant Applications, to makes sure that tenants who use wheel chairs are assigned to the first floor. This:

is allowed if there's no elevator to the upper floors.

A small house is situated on a large lot in a 'mixed-use' neighborhood. the city decides that the area will, in the future, be zoned commercial, what Will most likely happen to the property's value?

it will increase in, anticipation of the changing uses.

Addenda to a purchase and sale agreement must be:

kept in the brokerage's transaction file.

A recorded notice of a pending legal action is called a

lis pendens

Buyer Perry would like to assume Seller Joan's loan with ABC Mortgage Company, in a way that would mean no further liability for Joan. To accomplish this, Perry and Joan should use a:

release of liability signed by ABC Mortgage.

If a buyer wants to protect herself against unrecorded encumbrances, she should:

request a title insurance policy that has the fewest exceptions.

The Real Estate Settlement Procedures Act ,RESPA, applies to :

residential first mortgages.

A deed restriction is a covenant that:

restricts future owners of the property

Mineral rights associated with real property are always:

separable and divisible.

Gerald engages a licensee to find a buyer for his listed property. In this context, the licensee is acting as a:

special agent

To avoid tenant problems, a landlord is best off using a standardized lease from that includes:

specific rules and regulations.

On a settlement statement, the seller's net proceeds are calculated by :

subtracting the seller's debits from the seller's credits.

If, at the conclusion of a disciplinary hearing, the Director rules against a licensee and revokes her license, the licensee can appeal to the:

superior court.

Maria has a lease that begins on June 1 and ends on December 1 of that same year. Maria has a:

term tenancy

The parties negotiate the sale of a property by writing letters to each other (in the old-fashioned way-by hand). Their agreement is :

valid under the statute of frauds, contracts to sell real estate are enforceable if they are in writing

A movie theater was built ten years ago, If then neighborhood is now zoned residential, the movie theater:

will be allowed to continue since it was built before the new zoning law went into effect.