Real Estate

Why might a business owner opt to lease a building rather than purchase it?

Flexibility in moving

A _____________ is an estate that conveys possession, control, and title (ownership).

Freehold estate

Fred is buying Gary's property, which is listed with broker Sara. Who are the parties to the listing agreement?

Gary and Sara

What type of listing agreement provides the sellers with the opportunity to enter into listing contracts with multiple agents and still reserve the right to sell the property themselves, owing no commission?

Open

Adam has received a security deposit from his new tenant, Yolanda. She paid with a check. What is Adam required to do by law before depositing the money?

Provide Yolanda with a receipt for the security deposit.

In full seller disclosure states, whose responsibility is it to fully disclose all items on a seller disclosure form and any known material defects not listed on the form?

Seller

In full seller disclosure states, whose responsibility is it to complete the seller disclosure form which will be reviewed by prospective buyers?

Seller Retake this Exam Return to Course Home View Exam Results

Eleanor is working as a buyer's agent for Luis in a state without full disclosure requirements. What is her responsibility relative to property disclosures?

She must obtain the disclosures, provide them to Luis, and review them with him.

Which of these could be signs of flood damage?

Soft or uneven floors

After closing, a buyer discovers the seller wasn't honest about the property condition on the state's required disclosures. What can the buyer do?

Sue the seller for fraud or breach of contract.

Charles just learned that the master bath addition on the home he purchased was built without obtaining permits. It's actually situated too close to the lot line. What might Charles have to do to his master bath?

Take the addition down.

With a triple net lease, the tenant pays _______ separately from the base rent.

Taxes, insurance, and maintenance

Marla's excited about closing on a cute lakefront cottage. But when she reads the report from the home inspection, she learns that the chimney leaks and that there is water damage in several places. This wasn't on any of the seller's disclosures. Which of these is the best option for Marla?

Terminate the agreement and ask for a refund of her earnest money.

Which type of pest may make mud tubes—tunnels that run along your walls—or shed tiny wings?

Termites

Prakesh and Jean have always wanted to renovate an old home. They found a Victorian that hasn't been lived in for years and are considering making an offer. Their agent warns them that the property as it stands now may not be insurable. Which of the following might make it uninsurable?

The 100-year-old wiring

Which section of the Residential Contract of Sale specifies the time frame a buyer has to submit a written application for financing?

The Financing Application and Commitment section

Which of the following statements about the settlement date is true?

The buyer selects the settlement date.

Who is responsible for following up on issues identified in the inspection report to ensure that they are addressed?

The buyer's agent

Under standard lease provisions, a demising clause would contain ______.

The date the tenant will take possession of the property

In the MAR's Exclusive Right to Sell Residential Brokerage Agreement, what does the Lead-Based Paint section contain?

A notice that sellers of properties built before 1978 must provide lead hazard disclosures

Which of the following statements is true regarding a tenant's indemnity?

A tenant's indemnity is usually limited to issues on the leased premises and doesn't include claims or losses that arise from the landlord's or the landlord's agents' negligence or willful misconduct.

A tenant who is overcharged on a security deposit has the right to recover up to ________ times the extra amount charged.

three

Seth is a licensee working for a buyer, Britney. Britney wants to make sure the seller accepts her offer on a charming Cape Cod, so she tells Seth she wants to make a full-price, non-contingent offer right away. How should Seth respond?

"I highly recommend a home inspection contingency with your offer to protect yourself in the event there are major defects with the house."

Nancy, a broker in Annapolis, is going over the listing agreement with her new client, Josie, who asks, "What if I need to cancel the agreement early?" What should Nancy tell her?

"There's a provision right here that gives either of us permission to cancel the agreement early."

Jon and Talia are artists who are looking for a home with a backyard that is big enough for them to build a studio. Which of the following properties might they want to stay away from?

A lot that is adjacent to or partially on wetlands

Craig is a tenant with a year-to-year tenancy. How much notice must he give his landlord if he wants to terminate his lease?

30 days

Jacob wants to give a written termination notice to his month-to-month tenant. The property is not located in either Montgomery Country or Baltimore City. How much notice must he give the tenant for a periodic estate tenancy?

30 days

In Maryland, listing agreements and their associated disclosure forms must be kept on file with the broker for a minimum of ______.

5 years

A listing agreement is an employment contract between _______.

A broker representing the brokerage company and a seller

Antonia just got her salesperson's license and is selling a home that's been in her family for four generations. She's done a lot of work rehabbing it and is looking forward to seeing it pay off in a nice commission check once it sells. She and her brother are both on the title. What does she need to include in the listing paperwork and disclosures?

A disclosure that she's a real estate licensee and has a personal interest in the sale

Your buyers step outside to view the backyard of a property they're touring, but then they can't get the back door closed again. You recognize that this could be a symptom of ____, and realize that if they are interested in this property, they will want to discuss this issue with a home inspector.

A foundation problem

Which one of the following scenarios describes an adverse condition that would need to be disclosed?

A hail storm damaged some shingles last year.

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 covers things the inspection didn't address, like appliances, as well as structural issues that occur within the first year.

Babs is assured of a commission if the seller's listing sells. She likely has what?

An exclusive right to sell listing agreement

All commercial leases should contain the conditions under which the lease can be terminated; the names and signatures of all parties; and ______.

Any additional information based on negotiations and specific situations

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

Ray purchased a new home and soon discovered an issue with one of the windows. He filed a claim with the warranty provider, but it was denied. After mediation, the issue still remains unresolved. What is the most common next step?

Arbitration

At what point must a listing agent disclose material facts to all parties involved in the transaction?

As soon as possible

Adesha made an offer on a three-bedroom townhouse in Hanover on April 5. The sellers accepted her offer on April 6, and all signatures were finalized by April 7. Adesha still hasn't received the property disclosure/disclaimer statement. Until when can Adesha rescind the contract without penalty?

At any time before she receives the disclosure/disclaimer statement

When is the balance of the down payment due?

At closing

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

At your office

A buyer pays the balance of the down payment in the form of cash, bank check, a certified check, or _________________.

Bank-wired funds

Which of the following is an advantage of scheduling an in-person meeting with potential buyers?

Because they have invested time with you, they'll be less likely to want to start all over with another broker.

Which of the following statements about a broker's liability according to the Broker Liability section of the Residential Contract of Sale is true?

Brokers are not liable for the performance of the contract by the parties to it.

Which of the following is one reason for the popularity of commercial leasing?

Business owners can often make more money on their business than they can on the appreciation of the building where they conduct that business.

In states where full disclosure isn't required, it's the ______ responsibility to perform due diligence on the property.

Buyer's

In order for buyers to use alternate financing, they must meet several conditions. Which one of the following is one of those conditions?

Cancel the contract immediately

Your buyer clients are excited because the property they made an offer on provides a home warranty. What should you tell them?

Check the coverage at the time of purchase.

Some groups of people are more vulnerable to lead poisoning and its effects than others. Of those listed, who is most vulnerable?

Children

A sloping hearth is a common ______ issue.

Chimney/fireplace

Darren and Natalie are first-time buyers who have decided to purchase a newly built townhouse. Their agent, Jenner, tells them that the builder must provide a one-year home warranty. Which of the following conditions must be true?

Darren and Natalie are using an FHA-insured loan.

Monica is a listing agent who is in the process of gathering material facts about her client's property. She has had the seller complete the disclosure/disclaimer form, she has checked the public records to verifying the seller's information, and she has reviewed the survey data. What else should Monica do?

Disclose any material facts she discovers when gathering listing information.

Which of the following is a common problem with roof shingles?

Discoloration or curling

Home inspector Murray is explaining to first-time buyers what he looks for during a home inspection. What is his primary goal?

Document health and safety issues that may affect both the cost and enjoyment of the home.

Which of the following could indicate a problem with the chimney flue or ventilation?

Drafts near the fireplace

Jay has a listing agreement with Maury. Even if Maury finds the buyer during the listing term, Jay has earned his listing commission. What type of listing agreement do they have?

Exclusive right-to-sell

Demetrius is a real estate salesperson, and his friend Sharlene is a plumber. Just last week, Demetrius recommended Sharlene's services to a buyer client in desperate need of a new toilet for his new home. Unbeknownst to Demetrius, Sharlene's license expired 18 months ago. What Maryland license law violation is Demetrius potentially guilty of?

Failing to verify annually that Sharlene was still licensed

The Nicholsons just bought a mid-century modern home that will require lead paint abatement. Tom and Genna, their three-year-old daughter Grace, and Genna's mom Pat are waiting to move into the split level until the abatement is complete. Who would be at the most risk of adverse lead effects if they moved in before the abatement was finished?

Grace

In this type of commercial lease, the tenant leases the property where they intend to build a permanent structure.

Ground lease

As soon as potential buyers contact Amelia, she sets them up to receive weekly emails with listings that fit what they're looking for. The thing is, they hardly ever get in touch with her after that. What's the best thing Amelia could do to improve her likelihood of sealing the deal?

Have an in-person buyer presentation meeting.

Donald and Martina decided to purchase a newly built home, and their agent, Ed, recommended that they get a professional home inspection done. The couple tell Ed that they thought inspections were only for older homes. How should Ed respond to that?

He should remind them that every dwelling, no matter the age or size, should have a home inspection.

Inconsistent temperatures from room to room is a common ______ problem.

Heating and cooling

When working with potential buyers who say they just want a little information but won't sign a buyer representation agreement, why should you recommend they become clients?

If they won't sign an agency agreement, there's a higher chance they won't be loyal to you.

In a ground lease situation, what does the ground tenant own?

Improvements (including buildings)

Where are underground storage tanks primarily found?

In older homes and former industrial sites

In which section of the Residential Contract of Sale can the parties indicate items that the seller will leave?

Inclusions/Exclusions section

Which of the following statements about the Maryland Property Condition Disclosure Law is true?

It requires all sellers of single-family residential real properties to provide buyers with a written property condition disclosure or disclaimer statement.

Which of the following statements about a sales contract signed by both parties is true?

It's a legally binding contract.

Who is the lessor in a lease agreement?

Landlord/owner

Lapis is training her new unlicensed assistant, Heidi, and they've come to the subject of recordkeeping. Which of these points is true?

Lapis must keep her transaction records on file for at least five years.

Which statement about lead-related health problems is true?

Lead may cause behavioral problems, learning disabilities, seizures, and, in extreme cases, death.

The contract that allows a tenant to live on the property is a(n) __________.

Lease

Selma and Richard have the temporary right to live at 123 Elm Street. They can come and go and use the property as they see fit, but they can't do so indefinitely. They must vacate the property at the end of next year. What sort of interest do they have in 123 Elm Street?

Leasehold estate

Luciana feels it is only fair to any prospective buyers that she reveal any and all defects about the condition of her property. After all, if the roles were reversed and she were the buyer, she would want the seller to be honest with her. Based on this information, which of the following statements is true?

Luciana will complete the disclosure section of the Maryland Residential Property Disclosure and Disclaimer Statement form.

Amelia's portfolio is on fire! She's got four upcoming listings and each of them will list for at least $500,000. Before she can count her commissions, though, she's got some paperwork to get through. Since she wants to stay on the right side of the Maryland Property Condition Disclosure Law, which of these sellers does Amelia need to remind about completing the Residential Property Disclosure/Disclaimer Statement?

Mikey, an investor who's selling a property that he converted into a three-unit apartment building

Lena's buyer Mindy is making an offer on Leo's house. Which party decides how much earnest money to offer?

Mindy

Home inspector Maura was walking Thad through a property inspection. The frame house, on a slab foundation, had mulch piled up about 18 inches next to the house. Why was Maura noting this as a concern?

Mulch next to wood siding may lead to wood rot.

Leases may be terminated by expiration, eviction, or ______.

Mutual agreement

Which statement about asbestos is true?

No amount of it is considered safe.

With this type of commercial lease, if the option to drill isn't exercised within the stated time frame, the lease expires.

Oil or gas lease

How can you determine lot size, easements, and encroachments of a property? Select the answer that would provide the most comprehensive search.

Research the deed and title history, check maps at the county recorder's office, and review land surveys.

Homebuyer Nancy has made an offer to purchase a house and has plans to schedule a home inspection. How can her agent assist her in relation to the home inspection?

Review the inspection report with her and discuss options.

If the buyer is putting earnest money down, which of the following statements is true?

The buyer must specify the exact amount in the contract.

Which of the following is one of the buyer's responsibilities as stated in the Maryland exclusive buyer agency agreement?

The buyer must work exclusively with the broker during the term of the agreement.

How does the "break-even point" relate to percentage leases?

The landlord doesn't charge a percentage of sales until the tenant's sales exceed a break-even point.

What happens if a landlord fails to demand rent for 20 years in a row?

The landlord loses both the unpaid rent and the property itself.

Under Maryland law, which of the following occurs if a tenant dies during the term of an estate a will tenancy lease?

The leasehold automatically terminates.

A prospective buyer is curious why a previous owner is selling such a perfect home. The licensee knows that the previous owner recently died due to complications from AIDS. How should the licensee respond to the prospective buyer's inquiry?

The licensee can't disclose that a previous owner had HIV or AIDS.

Which of the following is a benefit of a redeemable ground lease?

The tenant can buy out the lease from the landlord.

In order for buyers to use alternate financing, they must meet several conditions. Which one of the following is one of those conditions?

The time allowed to secure the financing commitment is not exceeded.

The seller disclosure indicates that the central air conditioning unit is 26 years old. Why might this worry Margot's buyers?

The unit may need to be replaced.

Which of the following conditions must a buyer meet before they can use alternate financing?

There must not be any added expense to the seller.

Why are galvanized pipes a problem in older homes?

They can rust and cause leaks and low water pressure.

What is the purpose of the Condition of Property and Possession section of the Residential Contract of Sale?

To notify the parties that the seller is responsible for maintaining the property in the same condition as it is on the date of contract acceptance.

What's the purpose of sharing the history of buyer representation with buyers?

To show the progression toward buyer representation over time

What is the purpose of a listing agreement?

To spell out the agreement between the listing broker and the seller

What is the most common way that asbestos enters the body?

When asbestos fibers decay or are disturbed, the friable particles can be inhaled.

Your buyer clients Sylvie and Daryl reviewed their inspection report and decided that they would address small repairs themselves, but they want the seller to have regrading done to direct water away from the house. What is your responsibility at this point?

You need to communicate to the listing agent that the buyers are requesting regrading.

Buyer Peter is eager to make an offer on the two-story home you just showed him, but you're concerned about the back bedroom, since it looks like a relatively recent addition. When Peter asks you why it's an issue, how do you respond?

You recommend that Peter check on the permits for it, so that he doesn't buy the house and then have to correct or even remove the addition because it wasn't built to code.