MO 48 Hour Real Estate Review 2
Carlson presents a real estate purchase contract to his clients. Along with the contract are several supplemental documents attached to it. What are these called?
Addendums
_______ is a standardized measure for interest rates and other costs of the loan.
Annual percentage rate
What information about a property is the licensee required to disclose to potential buyers?
Any material, adverse information that the licensee has actual knowledge of concerning the physical condition of the property
REALTOR® Arnold was instructed by his client Sebastian to find a buyer who would "fit into the neighborhood." What is Arnold's responsibility in this situation?
Arnold must explain to his client the responsibilities for fair treatment that they both have under the Fair Housing Act
Matt is a developer who's obtained a permit that he must post on the job site. Which entity inspects the various phases of his work and signs off on the permit?
Building department inspectors
A buyer with a 15-year, $250,000 loan at a 5.5% interest rate has a monthly principal and interest payment totaling $2,042.71. What's the total amount the borrower will pay back over the life of the loan?
$367,687.80
Sandra is purchasing a home for $200,000 and provides a $3,000 earnest money check to the seller. Her closing costs and down payment total $7,000. Assuming that Sandra is financing the purchase, how much should she bring to the closing?
$4,000
The lender will charge a one-and-a-half-point origination fee and two loan discount points. What will be the total due for points on a $115,000 loan?
$4,025
You're working with buyers who are pre-approved for a loan of as much as $200,000. Assuming they lock in a 5.25% interest rate at closing, how much of their first payment will go toward interest?
$875
In addition to fines, individuals who violate antitrust laws may face imprisonment for up to what length of time?
10 years
Johannes must obtain a permit for a construction project that is located right next to a wetlands. Which federal law or regulation requires him to get the permit?
Clean Water Act
Which of the following is an example of a universal agent? 1. Buyer's agent 2. Conservator 3. Escrow officer 4. Listing agent
Conservator
Which one of the following is true about ownership or title to a property? 1. Constructive notice to the public of the real property ownership occurs when the deed is recorded 2. The last party to record has priority 3. The seller is responsible for paying for owner's and lender's title insurance 4. Title isn't finalized until the deed has been recorded
Constructive notice to the public of the real property ownership occurs when the deed is recorded
Danielle's friend, Joanna, is an agent. Danielle is considering listing her property and shares the details with Joanna. Joanna creates an MLS listing and places a sign in Danielle's yard. Danielle knows that Joanna will do a good job, so even though she hadn't actually agreed to let Joanna list the property, she permits her to start scheduling showings. Which of these is an example of ratification?
Danielle knows Joanna will do a good job, so she permits Joanna to start scheduling showings
Which factor influences property value and addresses questions such as, "What's the market like?" and "Are there more buyers than sellers, or vice versa?"
Demand
Morgan has agreed to sell his home to Dierks, and they've signed a contract. Which of these actions changes the contract from executory to executed? 1. Dierks delivered the earnest money to Morgan's broker 2.Dierks' lender funded the loan and closing took place 3. Dierks's lender approved the mortgage loan 4. Morgan completes the inspection repairs that Dierks requested
Dierks' lender funded the loan and closing took place
Margaret has an L-shaped living room. How would you calculate the area of this room?
Divide the room into two rectangles, calculate the area of each and add those together
When it comes to earnest money, which one of the following statements is true? 1. Earnest money is rarely the subject of lawsuits against real estate licensees 2. Earnest money must be placed in a trust account 3. The amount of earnest money is non-negotiable between buyer and seller The seller dictates the amount of earnest money in the MLS listing
Earnest money must be placed in a trust account
Agricultural fixtures, even if they are installed by a tenant, are _______.
Real property
Kristin has been unable to make her mortgage payments. Her property went to auction but the lender didn't accept the high bid. What stage of the foreclosure process is this property now in?
Real-estate owned
The primary component you look for when building a short list of qualified lenders is ________.
Real-world experience
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
Richard is interested in purchasing some rural land and included outbuildings. When reviewing the legal description, he sees the name of a principal meridian. What type of legal description is this?
Rectangular government survey
When questions arise that are outside of your scope of expertise, what should you do?
Refer clients and customers to a competent professional in that field
Bob signed a contract to purchase Ingrid's apartment building. Bob decided he didn't want to be a landlord, and Ingrid decided she didn't want to sell and move to Maui. They mutually agreed to cancel the contract, and Ingrid returned Bob's earnest money. This is referred to as ______.
Rescission
What's the meaning of "good faith" in relation to contract law?
The parties agree that they'll execute the contract to the best of their ability and without any fraud or misrepresentation
Which act states that communities and facilities that meet certain criteria for providing housing to older persons are legally exempt from familial status discrimination?
Housing for Older Persons Act of 1995
Greg and Neha are interested in buying a ranch-style home in a suburban family neighborhood. The sellers have only lived there for 19 months, so they have no information about the addition that was put on 20 or 30 years ago. Why does it matter whether the owners at the time got permits to do the addition?
If the addition WAS NOT permitted, it may need to be inspected to ensure it meets code and perhaps even be taken down
Larry is assisting a buyer who's making an offer on his client's listing. If Larry is too helpful to the buyer, what might occur?
Implied agency and undisclosed dual agency
Glynnis is ready to close on her new house, but her agent told her that they have to wait for the homeowner to fix the electrical box as agreed. What clause in her contract allowed her to request the repair?
Inspection contingency
What happens to an initial offer from the buyer after a seller counters?
It's no longer in play
Widget Corporation just bought land on which it plans to build a new manufacturing facility. How is the land owned?
It's owned as an estate in severalty
In which of the following scenarios can landlords enter a rental unit without notice? 1. The landlord must perform routine maintenance 2. The lessee is not home 3. The tenant in the unit below reports water coming through the ceiling from the apartment 4. The tenant is a day late paying rent
The tenant in the unit below reports water coming through the ceiling from the apartment
Which of the following statements is true about government loans? 1. They originate in the secondary market 2. They're insured or guaranteed by a government agency 3. They're services by the U.S. Department of treasury 4. They're underwitten by the Federal Reserve
They're insured or guaranteed by a government agency
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 of these is an encroachment? 1. A path providing neighborhood access to a pond cuts through part of Bill's property 2. Jeff installed a sidewalk next to his driveway, six inches outside his property 3. The city seized a formerly private parcel of land for public use 4. The state took ownership of Dawn's property when no heirs could be locates following his death
Jeff installed a sidewalk next to his driveway, six inches outside his property
Regina closed on the sale of her house to Tom on Thursday, then went to a second closing on Friday and sold it to Martin. How could the title company in Martin's transaction have missed the fact that Tom had purchased the property?
Tom's title company didn't have time to record Tom's deed before Regina closed with Martin
The ______ can offer direct loans to farmers and ranchers. The loans are funded by congressional appropriation.
USDA Farm Services
Your client, Darnell, is interested in buying a rental property that has current tenants. He plans to rent the property to friends the month after he buys it. Which of the following statements is true and could affect Darnell's decision to buy the property?
Unless stated otherwise in the lease, the existing tenants usually have the right to retain possession of a property even if it's sold during their lease term
Supply and demand determine competition within a market. Which of the following is a true statement? 1. When there are fewer houses on the market, buyers will pay less 2. When there are fewer houses on the market, demand wanes as well 3. When there are fewer houses on the market, neighborhood blight occurs 4. When there are fewer houses on the market, seller can demand more for their properties
When there are fewer houses on the market, seller can demand more for their properties
Christina purchased a house from Thomas. When did she officially gain ownership of the property?
With the transfer of deed from the seller to the buyer
Unauthorized practice of law and acting outside the scope of one's expertise are similar issues. Which of the following circumstances specifically relates to the unauthorized practice of law?
Writing contract addenda provisions that cover unfamiliar circumstances
An exclusive right-to-sell agreement must include ______.
a start and end date for the listing period
Municipality XYZ created a document that regulates the permitted land uses and zoning classifications within the town boundaries, and does so while staying within the parameters of the comprehensive plan. Municipality XYZ has created _______.
a zoning ordinance
The element of a deed that signifies the grantor's intention to transfer title to the grantee is the ______.
act of conveyance
Harold's clients signed the real-estate contract a couple of days ago, but the seller wishes to change the amount they are going to contribute to closing. What type of contract addition will likely be used to convey the change?
amendment
At what point must a listing agent disclose material facts to all parties involved in the transaction?
as soon as possible
Which of these scenarios is a violation of federal fair housing laws? 1. Janae refuses to rent an apartment to a Greek couple whose credit history is sketchy. 2. Maureen, a buyer, selects a house in a neighborhood because of its demographic makeup 3. Miguel follows his client's request to only show him properties where the neighborhood is mainly Hispanic 4. Wanting to be closer to her Cuban community. Miranda asks her agent to show her properties in the West Palm area, so he focuses his search on that demographic area.
Miguel follows his client's request to only show him properties where the neighborhood is mainly Hispanic
Which of the following is an example of commingling? 1. Mixing earnest money with personal finance 2. Mixing two earnest money deposits 3. Paying licensee bonuses from forfeited escrow deposits 4. Using escrow funds to pay business expenses
Mixing earnest money with personal finance
Joshua just got a copy of the preliminary report from his title company and is surprised to see that there's a mechanic's lien against his property. What does he have to do to clear this lien?
Pay the bill that resulted in the mechanic's lien
Because there were no deadlines specified in the contract, a buyer delayed applying for a loan to help purchase the property. The seller ended up suing the buyer for breach of contract, stating that the delay was impacting the seller's ability to purchase a new home. What did the buyer fail to do?
Perform contractual obligations within a reasonable time
The loss in value caused by deterioration in physical condition is called ______.
Physical depreciation
A trustee is holding the title to Cassandra's house until the loan is paid in full. Which type of security instrument was used?
deed of trust
A tenant violated the terms of his lease by having pets, so the property manager has started ______ proceedings to get him removed from the apartment.
eviction
While conducting a property valuation site visit, Todd realizes that nearly half of the property has no improvements on it. There's no apparent reason why the land would be unusable, which indicates that it is _____.
excess land that could be separated and sold
Janice wanted to sell her townhome, and her neighbor was considering buying it. She wanted to put it on the market while she waited to find out if her neighbor was going to buy. In order to receive the best possible representation but avoid paying a commission if her neighbor buys the property, which type of listing agreement would best suit Janice's needs?
exclusive agency
Basement wall cracks and leaks can be indicators of ______ problems.
foundation
Jerome is developing an ad for three properties he has listed in an upscale community. He wants to keep it short and simple. Which of these would NOT trigger full disclosure under TILA? 1.10% down payment 2. 30 year fixed rate with no points 3. A monthly payment of $900 4. Get a low 4.925% APR
get a low 4.925% APR
Several brokerages in a certain area agree to stop running advertisements in a local publication. What type of antitrust violation is this?
group boycotting
Putting clients' interests ahead of all others describes which fiduciary duty?
loyalty
During a site evaluation to determine property value, all of the following factors are important to consider EXCEPT ______.
neighborhood demographics
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
What might the government do if property owners fail to pay taxes on their property?
place a lien on the property
An easement dictates that property owner A gives the right to property owner B to use a portion of the property. Which term describes property A?
servient estate
The economic principle that tells us that when supply goes up, price goes down is also called ______.
supply and demand
Candace and Phil Tolson listed their home for sale with Trent Richards, the broker for Richards Homes. Sadly, Trent became incapacitated due to a car accident. What's the status of the listing agreement?
the agreement terminates by operation of law
Tom and Jim are neighbors. Jim wants to buy Tom's rental property. In the contract they sign, Jim is identified only as "the neighbor." Which statute or contract element does this violate?
the statue of frauds
Gail was supposed to close on her new home by the end of May, but she kept asking the sellers if they could push the closing date back. Soon the summer was over, and she still hadn't closed. Gail was guilty of not adhering to which aspect of the contract?
time is of the essence
If a contract is for an illegal purpose, it's ______.
void
You sign a contract to purchase a machine that will allow you to travel back in time and meet Abraham Lincoln. Assuming that time machines don't actually exist (for now), what type of contract is this?
void
Ken signed a contract to purchase Debra's condo. Ken signed the contract two weeks prior to turning 18, which is the age of majority in his state. Debra found out about his age prior to the closing but honored the contract, and they closed on the condo a month after Ken's birthday. What was the status of the contract when Ken and Debra entered into it?
voidable
Janine, a professional home inspector, notices a lot of small holes burrowed into a home's attic beams. This could indicate the presence of which pest?
wood-boring beetles
What happens when your client asks you to do something that's against the law?
you must break your duty of obedience
State usury laws are typically not applicable to what type of lending?
credit cards
If your clients are in a competitive bidding situation and want to include multiple contingencies in their offer, what should you say to them?
"Let's evaluate which contingencies matter most to you and consider omitting the rest"
"I understand why you want a buyer representation agreement," your buyer tells you. "But what's in it for me?" You answer:
"without it, you're unrepresented"
Edric owes $115,000 on his lakefront home, which he's selling for $350,000. He's spent $73,000 in major renovations, and he wants to take that expense into consideration when he calculates how much he'll actually pocket at closing. What number does he come up with?
$162,000
A buyer with a $250,000 loan has a monthly principal and interest payment of $2,042.71. If $1,145.83 is interest, what is the new principal balance after the first payment is applied?
$249,103.12
Your clients sold their property for $500,000. Your commission rate is 5%. What's your commission (before splits or sharing with the cooperating agent)?
$25,000
Bob and Mary are financing $180,500 for a new home. Their lender will approve an interest rate of 5% if Bob and Mary pay two discount points at closing. How much will this cost them?
$3,610
A buyer is purchasing a property for $400,000. His lender's loan-to-value ratio is 80%. How much is the buyer financing?
$320,000
A buyer is purchasing a property for $400,000. His loan-to-value ratio is 80%. The lender also charges a one-point loan origination fee. How much is the loan origination fee?
$3,200
Lamar closes on his new home next week. It's a 37-year-old split level, so his agent asked if he's interested in purchasing a home warranty. "Why would I need a warranty?" he wondered. "Didn't the home inspection identify all of the issues?" What's the agent's best response to Lamar's question?
A home warranty will cover things like appliances and major systems
Joe gave land to a school, but still wanted to have some control over its use, so a deed was prepared that gave the school title as long as the land is used for educational purposes. What type of interest does the school have?
Fee simple determinable
Which of the following would be considered personal property? 1. Built in microwave 2. Custom curtains 3. Free-standing TV 4. In-ground pool
Free Standing TV
Kenneth, an appraiser, is driving around the area where the subject property is located. Which step in the appraisal process does this represent?
Gather and analyze data
The Perfect Home brokerage firm was found guilty of running deceptive ads. The Federal Trade Commission might require all of the following EXCEPT ______. 1. Letters of apology to all affected consumers 2. New ads to correct previous misinformation 3. Notification to consumers about deceptive ad claims 4. Specific disclosures to consumers
Letters of apology to all affected consumers
Annabelle's previous transactions have all been median-priced, detached single-family residential homes in the main part of the city or its suburbs. In which of these situations would Annabelle be practicing within her area of competence?
Listing a property in the main part of the city that she'll market as a fixer- upper
Which of the following scenarios best describes a net listing? 1. Carmel is selling her condo for $280,000 and is offering 6% commission to the listing broker 2. Jason is listing his duplex for $400,00 but reserves the right to find his own buyer and not have to pay a listing commission 3. Maeve wants to get at least $350,000 when she sells her property and tells her listing agent, Stan, that he can keep anything above that amount 4. Ralph is selling his townhome for $225,000 and is paying a brokerage fee of $25, 000
Maeve wants to get at least $350,000 when she sells her property and tells her listing agent, Stan, that he can keep anything above that amount
Which of these is an example of a sub-agency relationship? 1. Aldrich accepts a designated agency appointment form his broker so his firm can represent both the buyer and the seller 2. Blaine represents the buyer in a transaction with an unrepresented seller 3. Greta refers a buyer client to a more experienced colleague, asking for a referral fee from the colleague 4. Morris, who's licensed independently, finds a buyer customer for Greg's listing with Marvel Homes' client
Morris, who's licensed independently, finds a buyer customer for Greg's listing with Marvel Homes' client
Carla Ricardo has been offered her dream job in another state. She asks her current landlord to let her out of her lease early. The landlord agrees to do so, with no strings attached. Carla and her landlord have decided to terminate the contract through ______.
Mutual agreement
All terms and conditions the client authorizes must be specified and included in an offer to sell or buy. When is it acceptable to offer the property under other terms?
Never
Gregory is a widower who subsequently remarried. The couple lives in a large house Gregory owns in severalty. When they decide to downsize, Gregory grants an ordinary life estate in the property to his daughter from his first marriage, Giselle. He names Giselle's son Will as remainderman. When will the property revert to Gregory's current wife, Dora?
Never
Frieda is practicing dual agency, and neither party seems to mind, even though she didn't obtain written informed consent. Is this legal?
No. without informed consent, it's illegal
Liz is a property manager who is screening applications from prospective tenants. Which of these reflects an acceptable way to perform this task? 1. She accepts or rejects tenants based on her gut feeling: usually if she likes people they work out 2. She looks at each tenant's employment, rental, and credit history in exactly the same order each time she preforms a review 3. She performs a more elaborate background check on anyone from Canada , because she's had bad luck with Canadians in the past 4. She uses her first impression of a person to determine if she'll do a brief review or an extensive review of income, credit and rental history
She looks at each tenant's employment, rental, and credit history in exactly the same order each time she preforms a review
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
To whom should you refer your clients for specific advice about income taxes?
Tax professional
Which of these statements accurately describes finance- and housing-related legislation? 1. As a stipulation of the Housing Community Development Act, lenders must offer reasons when rejecting loan applications and must respond to all applications within 30 days 2. The Americans with Disabilities Act added familial status and disability (both physical and mental ) to the existing protected classes 3. The Equal Credit Opportunity Act of 1974 required lenders to provide consumers with equal access to credit and prohibited credit discrimination based on just the three protected classes of race, color or national origin 4. The Fair Housing Act of 1968 prohibited discrimination in the sale, rental and financing of housing based on race, color religion or national origin
The Fair Housing Act of 1968 prohibited discrimination in the sale, rental and financing of housing based on race, color religion or national origin
Jerry's home has been in his family for nearly 75 years and sits smack dab in the middle of where a public university wants to expand. A government authority has made a fair offer for seizing Jerry's home as part of the process of taking someone's property called ______.
condemnation
You have a client who travels a lot and wants to feel safe and secure at home. Maintaining a house and yard isn't her idea of fun, and neither is fending off door-to-door solicitors. What type of homeownership would most likely fit her lifestyle?
condo
