Federal RE Exam - Missed Questions
When Gillian 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 "Beginning at the corner of State Route 61 and Hallowell Road" represent?
Bounds
Appraiser Niles uses ______ to determine a range of values based on comparing a subject property to comparable sales. He makes sure to use some comparables that lack features of his subject property, and others that have even more desirable features, to balance out the comparison.
Bracketing
Elvin owns 150 acres of prime hunting land. Every year, he gets requests from private groups that would like to use his land for a day or two during hunting season. He sometimes grants these requests, but this year, he's decided to only use it himself with his friends. Which right in the bundle of rights says that he can say no to these requests?
Exclusion
Your client submits an application to rent a condo unit. He has excellent credit and has had the same job for a long time. He uses a cane to help with his mobility. When his application is rejected, he feels it's due to his disability. He is protected under what federal law?
Fair Housing Amendments Act of 1988
After a life estate holder dies and ownership rights have either reverted to the original owner or have been transferred to a remainderman, with what type of estate is the property held?
Fee simple
Which physical characteristic of land addresses the concept that the geographic location of a piece of land is fixed and can never be changed?
Immobility
The appraisal report submitted to Jenkins, the lender, notes that the property is being conveyed with all property rights intact. Which step in the appraisal process does this represent?
State the problem.
What is TRID?
TILA-RESPA Integrated Disclosures
Which of these regarding the impact of the Brownfields Law is true?
The Smiths have discovered chemical contamination on the property deed to them by their late parents. The Brownfields Law may provide funds to help them clean up the site.
You're explaining to your client that using electronic documents and signatures simplifies the home buying process. Your client is skeptical about these signatures. You describe the Uniform Electronic Transactions Act (UETA) and tell your client ______.
The UETA gives electronic signatures the same legal weight as "wet" signatures
A "homes for sale" magazine contains the following ad: "Cozy two-bedroom starter home, neat and clean, ready for move-in. $140,000. Low down payment and easy financing!" Which of these statements is true?
The ad complies with TILA because it doesn't contain any of the trigger terms that require full disclosure of all financing terms. (Regulation Z requires all financing terms to be included in an ad only if certain trigger terms are present, but "low down payment and easy financing" are not triggers.)
When a buyer is represented by a licensee, who is responsible for following up on issues identified in the inspection report to ensure that they are addressed?
The buyer's agent
Shira bought a condominium in a planned unit development. The development has a small playground, tennis and basketball courts, and a putting green. Who owns these recreational facilities?
The condo owners
Steven owns 114 acres of wooded, rural land. The abundance of wildlife on his property means that his friends are always asking for permission to hunt on it during various game seasons. If Steven gives a friend permission to hunt on his land, it can be said that he has given his friend a ______.
License
When a contract doesn't provide specific dates for when the terms need to be met, what should the parties assume regarding performance of the contract?
Performance must take place within a "reasonable time."
Which of these is an example of practicing within your area of competence?
Researching the property tax amount that a client will pay on the home he's purchasing.
Which of these statements about the homeowner's right of redemption is true?
Rights of redemption window with REOs may have expired.
John and Michelle received a general warranty deed when they purchased their house from Ted. A couple of months after they moved in, their neighbor, Bryant, drove his four-wheeler across their property to access the lake front. John discovered that Ted and Bryant agreed to an easement over Ted's property several years earlier. Which general warranty deed covenant does this represent?
The covenant against encumbrances
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 _______ is 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 based on the specific terms of a timeshare agreement, usually in one- to two-week intervals during the year.
Timeshare estate
Chelsea's mother owns several rental properties and intends to keep them to pass on to the family. Chelsea holds a special power of attorney to manage the rental properties, including working with the property manager to place and evict tenants as necessary. Which of these would violate the POA?
Without consulting her mother, Chelsea decides to completely refurbish one of the properties.
Gus has applied for a home equity line of credit from his federally insured bank so that he can make some renovations to his kitchen. The same bank is his lender for his home mortgage. Will this loan be subject to Real Estate Settlement Procedures Act requirements?
Yes, because RESPA applies to any residential loan transaction from a federally insured financial institution, including equity lines of credit.
Your clients are looking at buying a $200,000 property with a 30-year loan at a 5% interest rate. If the amortization factor is 5.36822, how much would their principal and interest payment be per month? Remember: The monthly payment multiplier is per $1,000 of the mortgage.
$1,073.64
A buyer has a 15-year, $250,000 loan with a 5.5% interest rate. How much of the first monthly payment is interest?
$1,145.83 [($250,000 x 0.055) ÷ 12 = $1,145.83]
A seller wants to net $10,000 after the broker's commission of 6% and a loan balance of $250,000 are paid. For how much does the property need to sell?
$276,596 [ To calculate this, start with 100% minus a 6% commission, which is 94% or .94. Take $250,000 plus $10,000 and divide this amount by .94.]
In certain cases, antitrust violators may be subject to court-ordered supervision. How long can this supervision last?
10 years
A small duplex sold for $550,000. Each unit can gross $2,500 in monthly rent for the owner, and there are no additional income sources from the property. What's the GRM?
110
How many acres are in a parcel described as, "The S 1/2 NW 1/4 Section 3, Township 4N, Range 2W of the 6th PM"?
80 [This legal description defines half of a quarter section. A quarter section is 160 acres. Half of that is 80 acres. Alternatively, multiply the two fractions' denominators (2 × 4) and divide into 640 (640 ÷ 8 = 80).]
Charles is selling his property to Seth. Charles is financing part of the transaction for Seth, who will make payments to Charles while Charles retains the property title. What is this an example of?
A land contract
Which of these circumstances does NOT require agent disclosure?
A licensee must disclose any situation that presents a conflict of interest. There's no inherent conflict of interest with one licensee representing a client in both the sale and purchase of property.
Li Meng purchased a property that had been owned by the same man for more than 40 years. The title search was clean. In the spring, she started seeing traffic on the path to her dock and discovered that the previous owner had always allowed the locals to use his path to get to the lake. What covenant may have been breached?
Against encumbrances
A former client has filed a formal complaint against Ajit, claiming he failed to properly disclose a material fact that the seller didn't disclose. Which of these statements about Ajit's liability is true?
Ajit may be liable if he operates in a state that requires licensees to make a reasonable effort to discover adverse material facts.
Which act sets guidelines for public and common use areas at housing developments?
Americans with Disabilities Act
Sherman, who owns property in a life estate, neglects the property, significantly diminishing its value. This is called ______.
An act of waste
Which of the following is more likely to act as a closing agent?
An attorney or title company representative
Saul was unhappy after he and Janelle liquidated their business. Janelle sold some items for less than he'd initially agreed to and he wanted the full price to be included in the profit split. He wanted to sue, but he was required to pursue other options. What contract clause kept Saul from being able to sue?
Arbitration
Will was sued for damages related to a car accident in which he was involved last year. As part of the proceedings, the court placed a lien against his primary residence. What type of lien is this?
Attachment Lien
Tracy is looking in the MLS and sees a listing marked "REO." Which of these statements regarding REOs is correct?
Banks acquire REOs through failed foreclosure sales or deed in lieu of foreclosure actions.
Ken, Barbie, and Skipper owned a property as a joint tenancy. When Skipper moved out of state, she sold her interest to Midge. Two years later, Ken died. How is the interest in the property divided?
Barbie owns two-thirds, and Midge owns one-third.
Desmond has a signed listing agreement with his clients, the Harpers. In exchange for helping the Harpers list, market, and sell their home, the Harpers have agreed to pay Desmond a commission. What type of agreement do Desmond and the Harpers have?
Bilateral
Which department typically decides which development projects require a permit or approval?
Building department
Which of the following features is most likely to be the cause of an adjustment to a comparable when preparing a CMA?
Busy street
You represent the buyer in one transaction and the seller in a different transaction. What type of agency relationship do you have with the buyer?
Buyer agency
Cambridge Apartments provides an open parking lot for its residents. There is adequate parking, and all spaces are available on a "first-come, first-served" basis. Alton has multiple sclerosis and uses a motorized wheelchair. Must Cambridge reserve a parking place specifically for Alton if he requests?
Cambridge must allow an exception to the first-come, first-served policy for Alton.
Christine listed her house with you. Tailleur represents the buyer, Rebecca, and the seller's mother, Freida, is paying your commission. Which of these factors determines how legal agency is determined in this situation?
Christine listed the property with you.
What does the metes and bounds system use to develop a property's legal description?
Compass headings and directions
Philip owns land in a state where growing marijuana is illegal. He wants to set up a small marijuana growing operation and export to states where marijuana has been legalized. He asks his attorney about the possibility. "No," his attorney explains. "It's not possible. Although you own the property outright, the right of ______ only allows you to manage the property in ways that are legal in this jurisdiction.
Control
Which of these situations represents the illegal practice of blockbusting?
Corbin tells homeowners in Five Points that an impending influx of Asian immigrants will reduce property values.
Jules is new to property management. Which of the following tasks may be one of her duties?
Creating a budget for next year's projected maintenance costs
A trustee is holding title to Cassandra's house until the loan is paid in full. Which type of security instrument was used?
Deed of trust
The Town of Petersville has just decided to restrict density in one area of town that previously allowed a higher density. This is known as ______.
Downzoning
Eloise is interested in buying a bungalow on the outskirts of the city. Her agent is reviewing the property details and informs her that there are several easements on the property. In particular, the gas company has a right of way because the natural gas line for the neighborhood runs through the back of the lot. What type of easement would this be?
Easement in gross
In order to protect your commission, which of the following is a best practice regarding a listing agreement?
Get it in writing.
What does the income approach to value rely on when valuing properties that are five or more units?
Gross income multiplier
Title II of The Americans with Disabilities Act of 1990 prohibits discrimination based on disability in programs, services, and activities provided or made available by public entities. Which agency enforces Title II when it relates to state and local public housing, housing assistance, and housing referrals?
HUD
Which one of these would NOT be an element of comparison an appraiser would use when applying the sales comparison approach to a property valuation?
Income generated
Joan and Martha are entering into an 18-month lease with landlord Roger. Which of these statements is true?
Leases for periods of more than one year must be in writing.
When property changes hands, the deed is recorded. There's a fee for recording. What is the benefit to the grantee of having the deed recorded?
It puts the public on notice regarding ownership.
Max has a written agency agreement with Rufus in which Max will receive all of the listings in the subdivision that Rufus purchased (with Max's representation) and is developing. One day when Rufus is visiting the site of the subdivision, a work truck accidentally runs him over and he's seriously injured. Rufus can no longer run the development of the subdivision. What happens to Max's agency coupled with interest?
It's still in place because it doesn't terminate on the death or incompetence of the principal.
Which ownership type is defined by four unities: time, title, interest, and possession?
Joint tenancy
Which of these is an example of severability?
Jules and Katrina are under contract for the purchase of Katrina's house. A dispute arises over some contract terms, and they end up in court. The court rules one of the terms invalid but leaves the remainder of the contract in force.
Luci's client Kaden wants to purchase a new construction property, and he wants to get as much house as he can afford. Which of the following does Luci need to advise Kaden about regarding interest rates when purchasing a newly built home?
Kaden needs to allow for the possibility of an interest rate increase between now and closing because lenders aren't likely to lock in an interest rate for more than 90 days before closing.
Harmony is looking at the legal description on her purchase contract. It mentions that the plat of her property is recorded in Map Book 12, page 14, at the county courthouse. What type of legal description is this?
Lot and block
Lucas, Ivan, Chad, and Trace own a property as joint tenants. After a few years, Ivan sells his interest to Tom (with permission from Lucas, Chad, and Trace). Chad dies intestate but is survived by a wife, Amy. Trace also then passes away but wills his property to Monique. Who owns the property after Trace's death?
Lucas and Tom
Lyle is a developer who placed a number of restrictions on the Happy Valley subdivision when he built it in 2003. Sara bought a home in Happy Valley in 2009 and was surprised to learn that storage sheds weren't allowed. Now Sara has noticed that sheds are popping up here and there throughout the neighborhood, and she puts up a shed of her own knowing she won't face a penalty. Which of the following is most likely to be true?
Lyle set up the restriction to expire after a certain number of years.
John is considering purchasing an office building and is trying to determine whether or not it's a good investment. The methods of income approach he may use when estimating the value are all of the following EXCEPT for which?
Market or sales comparison
Datums and benchmarks are used for ______.
Measuring elevations
Tim and Tina Wells bought a home with absolutely beautiful perennial gardens in the back. The plantings were designed to bring birds, bees, and butterflies and to provide color for most of the year. When they did the final walkthrough, they were dismayed to see that many of the shrubs and flowering plants had been removed. They expected these plantings to be considered part of the real property because of the ________.
Method of annexation
New Day Corporation's application to build a new mixed-income housing development was denied, because the town of Springfield has halted all new development until after city elections. What did Springfield enact?
Moratorium
Which of the following is the price a lender believes the property will bring at a foreclosure sale?
Mortgage value
Taxes, insurance, and maintenance are property expenses that are sometimes covered in a tenant's lease payment. These are collectively referred to as the _______.
Nets
Select the situation that correctly represents a true conflict of fiduciary duties.
Nikki's seller client has instructed her not to present offers that are less than the listing price. This is a conflict of Nikki's duty of disclosure, which requires her to present all offers, and her duty of obedience.
Four brokerage firms operate in the same small city as Jackson's firm. All the firms charge approximately the same listing commission and pay approximately the same cooperating commission to the selling broker. The commission splits within each firm are also similar. Is this an antitrust violation? Why or why not?
Not necessarily. The fact that the firms' commission rates and splits are similar doesn't necessarily mean they agreed to fix those values.
Which type of listing can help a real estate professional determine how quickly a home in a given price range received an accepted offer?
Pending
How are fines assessed for violations of the CAN-SPAM Act?
Per violation, which can be a single email
Sandra and Dwight are neighbors who share a common driveway, but the driveway is on Dwight's property. What kind of ownership rights does Dwight have of the driveway?
Possessory
Hal and Sara own a 212-acre farm. Their property is landlocked, but they have permitted water rights to use the stream located six miles away for irrigation purposes. What kind of water rights do they hold?
Prior appropriation
Tristan refused to let Marla list his property on the MLS, even though Marla told him that more exposure to the property would generate more potential buyers. Which two fiduciary duties are at odds in this situation?
Reasonable skill and care and obedience
Ashton, an appraiser, is estimating value using the sales comparison approach. He applies more weight to two comparables over several others he used. What process is he utilizing?
Reconciliation
Conrad just closed on the house he's buying to fix up. Why should he follow up to be sure the deed has been recorded?
Recording provides constructive notice that he owns the property.
Victor's family has always owned this particular lake house. When he was little, he remembers the "beach" being no more than four feet wide before the waterline. Now Victor brings his own children to the lake house, but the beach is almost seven feet wide. What natural process could explain the beach being bigger?
Reliction
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.
Rhonda purchased an existing pet store in her neighborhood, and she's so excited! Her animal-loving aunt is thrilled for Rhonda but disappointed that she won't be able to visit the store in her wheelchair, as the aisles are narrow and there isn't enough room to move around. What is true about Rhonda's responsibilities to her aunt and other people with disabilities?
Since Rhonda purchased an existing building and business, the ADA requirements aren't as strict as with new construction and vary by building.
If a private individual owner doesn't own more than three single-family homes at one time, which exemption from the Fair Housing Act could apply?
Single-family housing sold or rented without the use of a broker
Which one of the following types of ownership termination allows each tenant to have a specific, divided portion (partition) of the property exclusively?
Termination of co-ownership by partition
Which of these statements most accurately represents existing federal antitrust legislation?
The Clayton Act supports the Sherman Antitrust Act's purpose of prohibiting monopolies by prohibiting mergers or acquisitions that would create a monopoly.
Katherine is purchasing a second home as an investment/vacation property. She has a large down payment, and the seller is financing the rest of the purchase. Which of these statements is true?
The Closing Disclosure and Loan Estimate aren't required in a seller-financed transaction.
What's the relationship between TILA, RESPA, and TRID?
The Dodd-Frank Act requires that lenders use the TILA-RESPA Integrated Disclosures (TRID).
Reuben purchased a property from a seller who gave him a general warranty deed. What's true of Reuben's deed to this property?
The deed provides the greatest protection available from a grantor to a grantee.
When a mortgage is used as a security instrument, who holds the mortgage and the promissory note?
The lender holds the mortgage and the note.
Olivia took out a 15-year loan secured with a deed of trust. She worked two jobs in order to pay the loan back and finally made her last payment this month. What happens now?
The lender tells the trustee to release the title to Olivia.
When a licensee represents a seller, which one of the following statements is true about the licensee's ability to list other properties that are for sale?
The licensee is permitted to list other properties for sale, even if they're competing properties.
What is the primary purpose of the Superfund Amendments and Reauthorization Act (SARA)?
To release homeowners from the responsibility of cleaning up hazardous substances if the homeowner didn't know they existed
Assuming that dual agency is legal where these scenarios occur and that the licensees' brokerages permit it, which of these situations demonstrates illegal dual agency?
Tom is holding an open house for his client. Ruby, a buyer, says she wants to make an offer. She details her situation; Tom waits until she finishes and then suggests that she offer a non-refundable earnest money deposit to strengthen her offer.
Which of the following is an example of price fixing?
Two brokerages determine a standard commission rate.
Warren signed a contract with the Samsons for the sale of property he didn't own. What type of contract is this?
Void
Your 15-year-old son just signed a contract joining a health club, which costs $50 a month. Is this contract valid?
Yes, the contract is valid.
You represent a seller as a listing agent. Do you owe any duties to buyer agents?
Yes, the duty to cooperate on showings
Kennedy tends to be rather informal about her real estate business. Her daughter's teacher, Matthew, tells Kennedy that he'd like her help selling his house. Kennedy agrees and tells Matthew she'll perform all the tasks she'd perform for any listing, though she has no written agency agreement with Matthew. Do Matthew and Kennedy have a legal agreement?
Yes. Express agreements may be verbal or written.
Steve is preparing a market analysis for the Joneses and has selected three comparable properties. What's the maximum number of adjustments Steve should make to the Joneses' property?
Zero
