Real Estate Principles and Practices Exam Study

Which of these statements could be negligent misrepresentation? "The uneven floors just mean that the building dates to colonial times." "I think these low doorways are a charming part of the Cape Cod style." "The simple design is uncluttered and can give you many possibilities for decor." "The size of the bedrooms makes them wonderfully cozy and perfect for your children."

"The uneven floors just mean that the building dates to colonial times."

From the application and renewal fees for each real estate license, $10 is put aside to further the cause of education and research of real estate at Ohio institutions of higher education. $1 is put aside to further the cause of education and research of real estate at Ohio institutions of higher education. $40 is put aside to replenish the real estate recovery special account. $10 is put aside to replenish the real estate recovery special account.

$1 is put aside to further the cause of education and research of real estate at Ohio institutions of higher education.

If an apartment rents for $750 per month and the manager receives a 12% commission on all new tenants, how much will the manager receive when renting an apartment, assuming that this commission is calculated in the usual way? $90 $750 $1,080 $1,800

$1,080

What is the annual real estate tax on a property valued at $135,000 and assessed for tax purposes at $47,250, with an equalization factor of 125%, when the tax rate is 25 mills? $945 $1,181 $1,418 $1,477

$1,477

A man owns an apartment building that generated $60,000 in rental income, $15,000 in expenses, and $35,000 in debt service last year. Also, the property appreciated about $10,000 last year. What was the amount of cash flow on the man's apartment building last year? $10,000 $15,000 $20,000 $25,000

$10,000

In one state, transfer tax is $1.20 for each $300 (or fraction of $300) of the sales price of any parcel of real estate. If a seller's property sold for $250,000, what will be the amount of the transfer tax due? $97.00 $999.99 $1,000.80 $1,250.50

$1000.80

At a realty agency, salespeople pay a monthly desk rent of 15% of their monthly income. In May, one salesperson receives 5% on a $560,000 sale; 6% on a $348,000 sale; and 6.75% on an $89,500 sale. The only other salesperson at the agency who received a commission in May got 6% on a $410,000 sale. How much did the agency receive in May? $7,095.97 $11,928.19 $12,251.53 $14,945.00

$11,928.19

A small multifamily property generates $50,000 in rental income, $10,000 in expenses, and $25,000 in debt service. The property appreciates about $25,000 each year. What is the cash flow on this property? $15,000 $25,000 $35,000 $40,000

$15,000

The homestead exemption in a town is $15,000. Four years ago, a man purchased a home for $58,000 and then experienced hard times. At a court-ordered sale, the man's property is purchased for $60,000. If the man has an outstanding mortgage balance of $35,000 and credit card debts amounting to $24,360, how much is protected by the homestead exemption? $640 $2,140 $15,000 $16,500

$15,000

A mortgage company charges borrowers a 1.5% loan origination fee. A man buys a house for $210,000 and pays $50,000 in cash. He applies for a mortgage to cover the balance. What will the mortgage company charge as a fee if the asking price of the house was $235,000? $2,400 $3,150 $3,525 $3,750

$2,400

The broker listed a home for $360,000 under a 90-day exclusive-right-to-sell listing agreement with a 6% commission. The next week, the broker began advertising the home in a local paper and showed the property to two prospective buyers. Later that week, the seller announced that he had decided to sell his home to a relative for $340,000. The seller is liable to the broker for $1,200. $20,400. $21,600. none of these.

$20,400

A two-unit apartment building is being appraised. In this neighborhood, the accepted gross rent multiplier is 144. The annual income on the building is $16,800 (both units rented). The monthly expenses are $300. Based on the income approach, what is the estimated market value of the apartment building? $201,600 $224,800 $232,500 $258,600

$201,600

A seller listed and sold her property for $325,000. She agreed to pay the listing broker a 7% commission. The listing broker offered a listing 40/60 selling split to any cooperating broker who sold the property. How much did the seller have to pay in commission fees? $9,100 $11,375 $13,650 $22,750

$22,750

The commission on the sale of a house was $16,500, which was based on a 7.5% commission rate. What was the final selling price of the house? $127,000 $145,000 $199,000 $220,000

$220,000

Two real estate professionals were found guilty of conspiring with each other to allocate real estate brokerage markets. A seller suffered a $90,000 loss because of their activities. If the seller brings a civil suit against the two real estate professionals, what can the seller expect to recover? Nothing, because a civil suit cannot be brought for damages resulting from antitrust activities Only $90,000-the amount of actual damages the seller suffered Actual damages plus attorney's fees and costs $270,000 plus attorney's fees and costs

$270,000 plus attorney's fees and costs

An apartment building has $65,000 in potential gross annual income. The vacancy rate is estimated at 5%, total operating expenses are $29,000, and the capitalization rate is 9%. Using the income approach, what is the value of the building? $324,773 $363,889 $372,895 $392,367

$363,889

A specific parcel of real estate has a market value of $160,000 and is assessed for tax purposes at 75% of market value. The tax rate for the county in which the property is located is 40 mills. The tax bill will be $6,400. $5,000. $5,200. $4,800.

$4800

A house is listed for $250,000. A man buys it for $230,000, with a 20% down payment. He borrows the balance on a fixed-rate mortgage at 6%. The lender charges four points. If there are no other closing costs involved, how much money does the man need at closing? $7,360 $26,000 $46,000 $53,360

$53,360

Under state law, one-half of an intestate decedent's property goes to the decedent's spouse, one-fourth is divided equally among the decedent's children, and one-fourth goes to the state. If there is no spouse, the children divide three-fourths equally. A citizen of this state dies intestate, survived by an ex-spouse and seven adult children. If the estate is $865,550, how much will each child receive under state law? $0 $61,825.25 $92,737.50 $123,650.00

$92,737.50

The market value of an undeveloped parcel is $40,000. Its assessed value is 40% of market value, and properties in its county are subject to an equalization factor of 1.50. If the tax rate is $4 per $100, what is the amount of the tax owed on the property? $480 $960 $1,080 $1,800

$960

A bargain and sale deed contains how many express warranties? 0 2 3 5

0

At least how much of a tank must be underground for it to be considered an underground storage tank? 10% 15% 25% 35%

10%

What is the GRM for a residential duplex with a selling price of $234,000 if the monthly rent for each unit is $925? l.054 10.54 126.5 252.9

126.5

Even if a consumer has requested placement on the National Do Not Call Registry, a real estate professional may call the consumer up to how many months after the consumer's last purchase? 3 6 12 18

18

Mobile home, rather than manufactured housing, is the term used for a factory-built home that was built before 1976. 1980. 1987. 1990.

1976

A real estate broker has a computerized loan origination (CLO) terminal in her office. Because there are more than a dozen lending institutions in the city, the broker has found that the CLO greatly streamlines the application process for her clients. She sits down at the terminal with a homebuyer and these three events take place: 1.The broker explains that there is a fee for using the terminal of one-half point, based on the loan amount, and that the homebuyer may choose to finance the fee. 2.The broker explains only the different kinds of services offered by the two local lenders who pay her a monthly screen fee to be included on the CLO system. 3.The broker helps the homeowner answer the on-screen qualification questions. Which of these events is an improper use of a CLO system? 1 only 2 only 2 and 3 1 and 3

2 only

To qualify for most conventional loans, the borrower's monthly housing expenses and total other monthly obligations cannot exceed what percent of the total gross monthly income? 28% 36% 41% 45%

36%

If a property's annual net income is $24,000 and it is valued at $300,000, what is its capitalization rate? 8% 10.5% 12% 15%

8%

Which of the following is considered dual agency? A broker acting for both parties in the same transaction Two brokerage companies cooperating with each other A broker representing more than one principal A broker listing a property and then, after it is relisted with another broker, selling the same property

A broker acting for both parties in the same transaction

Regarding the federal Lead-Based Paint Hazard Reduction Act, which statement is TRUE? All residential housing built before 1978 must be tested for the presence of lead-based paint before being listed for sale or rent. A disclosure statement must be attached to all sales contracts and leases involving residential properties built before 1978. A lead-hazard pamphlet must be distributed to all prospective buyers but not to tenants. Purchasers of housing built before 1978 must be given five days to test the property for the presence of lead-based paint.

A disclosure statement must be attached to all sales contracts and leases involving residential properties built before 1978.

Which of these would disqualify someone from claiming innocent landowner immunity under the Superfund Amendments and Reauthorization Act (SARA)? The pollution was caused by a third party. A landowner exercised due care when the property was purchased. A landowner had only constructive knowledge of the damage. A landowner took reasonable precautions in the exercise of ownership rights.

A landowner had only constructive knowledge of the damage.

Which of the following describes a net lease? An agreement in which the tenant pays a fixed rent and the landlord pays all taxes, insurance, and expenses related to the property A lease in which the tenant pays rent, plus some-or most-of the operating expenses related to the property A lease in which the tenant pays the landlord a percentage of the monthly income derived from the property An agreement granting an individual a leasehold interest in fishing rights for shoreline properties

A lease in which the tenant pays rent, plus some-or most-of the operating expenses related to the property

A title insurance policy that protects the interests of a mortgagee is called a leasehold policy. a lender's policy. a certificate of sale policy. an ALTA policy.

A lender's policy

Which of these BEST defines density zoning? The mandatory use of clustering The average number of units in a development A restriction on the average number of houses per acre A restriction on the average number of acres per parcel

A restriction on the average number of houses per acre

An empty lot is located in a neighborhood of single-family homes. It is the only empty lot in this well-maintained neighborhood. A busy street with many stores is located three blocks away. An industrial area is about six blocks away. What is the probable highest and best use of this lot? A store A factory A parking lot A single-family home

A single-family home

What is a seller's agent required to disclose to prospective buyers about material defects in the property? Only information about material defects the seller has provided the agent Only information about material defects that the agent has personally observed Both information the seller has provided the agent, and material defects that the agent has personally observed All information about material defects that the agent knows or should know

All information about material defects that the agent knows or should know

Which of the following describes a gross lease? An agreement in which the tenant pays a fixed rent and some or all of the utilities and the landlord pays all taxes, insurance, and expenses related to the property A lease in which the tenant pays rent plus some of the operating expenses related to the property A lease in which the tenant pays the landlord a percentage of the monthly income derived from the property An agreement allowing the tenant to terminate the lease if certain conditions near the premises become unbearable

An agreement in which the tenant pays a fixed rent and some or all of the utilities and the landlord pays all taxes, insurance, and expenses related to the property

A real estate professional showed a pre-World War I house to a prospective buyer. The buyer has two toddlers and is worried about potential health hazards. Which of the following is TRUE? There is a risk that urea-formaldehyde foam insulation was used in the original construction. The real estate professional can offer to personally inspect for lead and remove any lead risks. Because of the age of the house, there is a good likelihood of the presence of lead-based paint. Removal of lead-based paint and asbestos hazards is covered by standard title insurance policies.

Because of the age of the house, there is a good likelihood of the presence of lead-based paint.

A woman purchased property from a man. Shortly after closing, the woman discovered that there were serious flaws in the title that made it unlikely that the property could be resold in the future. What can she do now? Because the title was flawed, the woman can legally void the sale, and the man must return any consideration. The woman has no recourse. Because the man conveyed unmarketable title, the woman is entitled to a new title report. Because the woman has accepted the deed, her only recourse is to sue the man under any covenants contained in the deed.

Because the woman has accepted the deed, her only recourse is to sue the man under any covenants contained in the deed.

Zoning powers are conferred on municipal governments in which of the following ways? By state enabling acts Through the master plan By popular local vote Through city charters

By state enabling acts

A sells a portion of property to B. B promptly records the deed in the appropriate county office. If A tries to sell the same portion of property to C, which of the following statements is TRUE? C has been given constructive notice of the prior sale because B promptly recorded the deed. C has been given actual notice of the prior sale because B promptly recorded the deed. Because C's purchase of the property is the more recent, it will have priority over B's interest, regardless of when B recorded the deed. Because C purchased the property from its rightful owner, C is presumed by law to be aware of B's prior interest.

C has been given constructive notice of the prior sale because B promptly recorded the deed.

A new structure has been completed to the satisfaction of the inspecting city engineer. What documentation must be issued before anyone can move in? Appraisal report Certificate of occupancy Certificate of reasonable value Conditional-use permit

Certificate of occupancy

Which of these reports would a salesperson MOST likely research and deliver to a prospective seller? Comparative market analysis Appraisal Letter of intent Cost benefit analysis

Comparative market analysis

A broker would have the right to dictate which of the following to an independent contractor? Number of hours the person would have to work Work schedule the person would have to follow Sales meetings the person would need to attend Conduct in compliance with statutory law and regulations

Conduct in compliance with statutory law and regulations

In which approach to value are the square-foot method, the unit-in-place method, and the quantity-survey method used? Sales comparison approach Cost approach Income approach Reconciliation approach

Cost approach

What is NOT included in public land-use controls? Subdivision regulations Covenants, conditions, and restrictions Environmental protection laws Comprehensive plan specifications

Covenants, conditions, and restrictions

Which of these is responsible for administering the Superfund? EPA PRP CERCLA HUD

EPA

For as long as anyone can remember, neighbor families have used a footpath to get to the river. Recently, the current owner erected a fence across the path. Which of these easements might the neighbors claim, which would require him to remove the fence? Easement by necessity Easement by prescription Easement in gross Appurtenant easement

Easement by prescription

Which of these is defined as anything-such as a mortgage, tax, lien, easement, or restriction-that may diminish the value or use and enjoyment of a property? License Escheat Deed Encumbrance

Encumbrance

A farmer has posted a number of "No Trespassing" and "No Hunting" signs on his property. Which "stick" in the bundle of rights gives the farmer this authority? Exclusion Enjoyment Control Disposition

Exclusion

In which of these types of listing agreements is the broker appointed as the seller's only agent? Exclusive-right-to-sell and exclusive-agency listings Open listing Net listing Option listing

Exclusive-right-to-sell and exclusive-agency listings

Which of these makes direct loans to qualified borrowers? VA FSA Fannie Mae FHA

FSA

A man conveyed a one-acre parcel of land to a preschool. In the deed, the man stated that the property was to be used only as a playground; the man reserved a right of reentry. What kind of estate has the man granted? Leasehold Fee simple subject to a condition subsequent Fee simple absolute Curtesy

Fee simple subject to a condition subsequent

Which of these would be covered in a standard title insurance policy? Defects discoverable by physical inspection Unrecorded liens Forged documents Easements and restrictive covenants

Forged documents

Lenders that make conventional loans to sell in the secondary mortgage market follow the standardized forms and guidelines issued by Fannie Mae and the FSA. the FHA. Ginnie Mae. Freddie Mac.

Freddie Mac

What is the compensation plan called if a salesperson's commission split increases depending on whether the salesperson achieves higher production goals? Procuring cause commission Cooperating broker commission Graduated commission split 100% commission plan

Graduated commission split

Which of the following is a legal life estate? Leasehold Fee simple absolute Homestead Determinable fee

Homestead

A seller accepts an offer on her home, which was built in 1892. Which of these statements about lead-based paint is FALSE? The seller must attach a lead-based paint disclosure statement to the sales contract. If the seller is aware of any lead-based paint on the premises, she must disclose that fact to the buyer. If the buyer requests a lead-based paint inspection, the seller has ten days in which to obtain one at her own expense. The buyer is entitled to receive a pamphlet that describes the hazards posed by lead-based paint.

If the buyer requests a lead-based paint inspection, the seller has ten days in which to obtain one at her own expense.

Which of the following is TRUE regarding asbestos? Improper removal of asbestos can cause further contamination of a building. Asbestos causes health problems only when it is eaten. The level of asbestos in a building is affected by weather conditions. HUD requires that all asbestos-containing materials be removed from all residential buildings.

Improper removal of asbestos can cause further contamination of a building.

Generally, where does a probate proceeding involving real property take place? Only in the county in which the property is located Only in the county in which the decedent resided In both the county where the decedent resided and the county in which the property is located In the county in which the executor or the beneficiary resides

In both the county where the decedent resided and the county in which the property is located

What is the main value of a multiple listing service (MLS) for sellers? Real estate professionals do not have to work as hard to secure property listings. It simplifies closing procedures. It reduces cooperation among brokers. It exposes the property to a greater number of prospective buyers.

It exposes the property to a greater number of prospective buyers

Which statement is TRUE about a syndicate? Members must hold title as joint tenants. Most profit on the investment is realized from rents. It is a private or public business venture to own property. Blue-sky laws do not apply.

It is a private or public business venture to own property

After license laws are enacted by the legislature, who is responsible for adopting administrative regulations? A subcommittee that reports to the legislature A local association of REALTORS® Licensing authority (division, commission, etc.) Brokers and salespeople appointed by the governor

Licensing authority (division, commission, etc.)

Homeowners may deduct which of these from their gross income? Interest paid on overdue real estate taxes Balloon payments Loan discount points and loan prepayment penalties IRA penalties

Loan discount points and loan prepayment penalties

A man particularly liked the ornate brass lighting fixtures in a woman's house and immediately made an offer, which the woman accepted. On moving day, the man discovered that the woman had replaced all the ornate brass lighting fixtures with plain steel ones. Which of these is MOST likely a correct assumption? Woman: "As long as I replaced them with something of comparable value, I can take them with me." Man: "Lighting fixtures are normally considered to be real property." Woman: "The lighting fixtures were personal property when I bought them at the store, so they're personal property forever." Woman: "The lighting fixtures belong to me because I installed them."

Man: "Lighting fixtures are normally considered to be real property."

A qualified buyer makes a written offer on a property on March 6 by filling out and signing a sales agreement. Later that day, the seller accepts and signs the agreement, keeping one copy. The broker gives a copy of the signed agreement to the buyer on March 8. The seller's deed is delivered on May 1. The deed is recorded on May 7, and the buyer takes possession on May 15. When is the broker's commission payable if this is a usual transaction? March 8 May 1 May 7 May 15

May 1

A man considered having a new garage built and talked about the project with a contractor. In April, while the man was on vacation, the contractor began building the garage according to the man's specifications. Work was complete by the end of May. In June, the man returned from vacation and refused to pay for the garage. The contractor decided to file a mechanic's lien in July. Is the contractor entitled to a lien? Yes, because the garage was constructed according to the man's specifications. Yes, because the garage is not a part of an owner-occupied residence. No, because notice of the lien should have been filed in May, when the work was completed. No, because there was no express or implied contract between the man and the contractor.

No, because there was no express or implied contract between the man and the contractor.

In front of witnesses, a woman says to a man, "I never made a will, but I want you to have my property when I die." If the man becomes the owner of the property, it is because the state recognizes what kind of will? Holographic Testamentary Nuncupative Probated

Nuncupative

How can tenants insure their personal belongings in apartments they rent? Pay an extra fee so they are added to their landlord's commercial insurance Obtain a surety bond Obtain HO-4 or renter's insurance Obtain errors and omissions (E&O) insurance

Obtain HO-4 or renter's insurance

The listing agreement on a residential property states that it expires on May 2. Which event would terminate the listing before that date? The agreement is renewed before May 2. The owner becomes ill on April 29. On April 15, the owner and agent cancel the agreement. The house is destroyed by fire on May 3.

On April 15, the owner and agent cancel the agreement.

Priority of liens refers to which of the following? Order in which a debtor assumes responsibility for payment of obligations Order in which liens will be paid if property is sold to satisfy a debt Dates liens are filed for record Fact that specific liens have greater priority than general liens

Order in which liens will be paid if property is sold to satisfy a debt

A real estate professional who has several years of experience in the industry decided to retire from actively marketing properties. Now this person helps clients choose among the various alternatives involved in purchasing, using, or investing in property. What is this person's profession? Real estate counselor Real estate appraiser Real estate educator REALTOR®

Real estate counselor

Which statement BEST explains why instruments affecting real estate are recorded? Recording gives constructive notice to the world of the rights and interests claimed in the identified parcel of real estate. Failing to record will void the transfer. The instruments must be recorded to comply with the terms of the statute of frauds. Recording proves the execution of the instrument.

Recording gives constructive notice to the world of the rights and interests claimed in the identified parcel of real estate.

At which step does title to the house actually transfer or pass to B? Step 1: A decided to convey a house to B. Step 2: A signed a deed transferring title to B. Step 3: A gave the signed deed to B, who accepted it. Step 4: B took the deed to the county recorder's office and had it recorded.

Step 3: A gave the signed deed to B, who accepted it

In Ohio, if a written complaint against a licensee is filed, the complaint should be sent to whom? The governor The director of commerce The superintendent The Ohio Division of Real Estate

The Ohio Division of Real Estate

A broker has an agency agreement to represent a seller in the sale of a house. The agreement's expiration date is June 10. On May 5, the house is struck by lightning and burns to the ground. The seller, overwhelmed by grief, dies. Based on these facts, which of these is TRUE? The agency agreement was terminated by the fire, although the seller's death also would have done so. The agency agreement was not terminated until the seller's death. If the house had not been destroyed by the fire, the seller's death would not have terminated the agreement; the broker would become the broker for the seller's estate. Only the mutual agreement of the parties can terminate a valid agency agreement before its expiration date.

The agency agreement was terminated by the fire, although the seller's death also would have done so.

Two sales associates who work for the same firm agree to divide their town into a northern region and a southern region; one sales associate will handle listings in the north, and the other will handle listings in the south. Which statement is TRUE? The agreement does not violate antitrust laws. The agreement constitutes illegal price-fixing. The two sales associates have violated the Sherman Antitrust Act and are liable for treble damages. The two sales associates are guilty of a group boycott with regard to other sales associates in their firm.

The agreement does not violate antitrust laws.

When may a broker's agreement to represent a property buyer be terminated? The property buyer dislikes all of the properties shown by the broker. Only agreements between brokers and sellers can be terminated. The broker and buyer mutually agree to cancel the agreement. None of these

The broker and buyer mutually agree to cancel the agreement.

A real estate broker signed an agency agreement with a seller. The asking price for the seller's house was $499,000. A few days later, the broker met a prospective buyer who was interested in buying a home in the $480,000 to $510,000 price range. The broker agreed to help the buyer locate such a property and to represent him in negotiating a favorable purchase price. Based on these facts, which of these statements is TRUE? The broker's relationships and the buyer and seller are separate issues, and no dual agency question arises. The seller is the broker's client, and the buyer is the broker's customer; there is no dual agency problem. The broker has created a potential undisclosed dual agency problem and should disclose the relationships to both parties before showing the seller's home to the buyer. The broker has created a dual agency problem and should immediately terminate the agreement with either the buyer or seller.

The broker has created a potential undisclosed dual agency problem and should disclose the relationships to both parties before showing the seller's home to the buyer.

A broker represents a woman but is currently working with a man to find a home. Assuming that no statute has replaced the traditional common law, which of these correctly identifies the parties in this relationship? The broker is the man's agent; the woman is the broker's client. The man is the broker's client; the woman is the broker's principal. The woman is the broker's customer; the man is the broker's client. The broker is the woman's agent; the man is the broker's customer.

The broker is the woman's agent; the man is the broker's customer.

A real estate broker had a listing agreement with a seller that specified a 6% commission. The broker showed the home to a prospective buyer. The next day, the buyer called the seller directly and offered to buy the house for 5% less than the asking price. The seller agreed to the price and informed the broker in writing that no further brokerage services would be required. The sale went to closing six weeks later. Based on these facts, which of these statements is TRUE? While the broker was the procuring cause of the sale, the seller properly canceled the contract; without a valid employment agreement in force at the time of closing, the broker is not entitled to a commission. The broker is entitled to a partial commission, and the buyer is obligated to pay it. Under the facts as stated, the broker is not the procuring cause of this sale but is still entitled to a commission. The broker was the procuring cause of the sale and is entitled to the full 6% commission.

The broker was the procuring cause of the sale and is entitled to the full 6% commission.

A tenant signed a one-year lease with a landlord on April 10. On the following March 1, the landlord asked the tenant whether the lease would be renewed. The tenant did not respond but was still in the apartment on April 11. What can the landlord do? The landlord must initiate eviction proceedings within the first one-month rental period. The landlord cannot evict the tenant; because the tenant remained in possession of the premises, the lease has been automatically renewed for an additional year. If the tenant offers a rent check, the landlord must accept it and the tenant is entitled to a renewal of the one-year lease. The landlord may either evict the holdover tenant or accept a rent check, creating a holdover or periodic tenancy.

The landlord may either evict the holdover tenant or accept a rent check, creating a holdover or periodic tenancy.

A 16-year-old female applied for a conventional loan in order to purchase a condominium. The lender denied the application, citing the applicant's age as the reason for the denial. Which of these is TRUE? The lender violated the ECOA because the applicant is female and sex cannot be a lending consideration. The lender violated the ECOA because lending decisions cannot be based on age. The lender lawfully denied the application because the applicant was under 18 and therefore was too young to legally sign a contract. None of these.

The lender lawfully denied the application because the applicant was under 18 and therefore was too young to legally sign a contract.

A woman offers to buy a man's house for the full $215,000 asking price. The offer contains this clause: "Possession of the premises on August 1." The man is delighted to accept the woman's offer and signs the contract. First, however, the man crosses out "August 1" and replaces it with "August 3," because he won't be back from vacation on the first of the month. He then begins scheduling movers. What is the status of this agreement? Because the man changed the date of possession rather than the amount, the man and woman have a valid contract. The man has accepted the woman's offer. Because the reason for the change was out of the man's control, the change is of no legal effect once he signed the contract. The man has rejected the woman's offer and made a counteroffer, which the woman is free to accept or reject. While the man technically rejected the woman's offer, his behavior in scheduling movers creates an implied contract between the parties.

The man has rejected the woman's offer and made a counteroffer, which the woman is free to accept or reject.

A woman wanted to rent an apartment from a man. Because of a physical disability, it would be necessary for the woman to have all the doorknobs replaced with lever-type handles. In this case, which of these statements is TRUE? The Fair Housing Act requires that the man make the accommodation for the woman at the man's expense; no additional rent may be charged for the woman's modified unit. The man is legally obligated to permit the modifications to be made at the woman's expense. Because the modifications demanded by the woman are not reasonable, the man is not legally required to permit them. Because the proposed modifications would interfere with a future tenant's use of the premises, the man may refuse to permit them.

The man is legally obligated to permit the modifications to be made at the woman's expense.

A man rented a house from a landlord. During the lease term, the man moved out of the state without telling the landlord. The man assigned the lease to a woman, who failed to make any rental payments. In this situation, which of these statements is TRUE? The man has no obligation to the landlord because the lease was assigned, not sublet. The woman has no obligation to the landlord because her lease agreement is with the man. The man is still liable to the landlord for the outstanding rent because the landlord did not release the man when the lease was assigned to the woman. The man is still liable to the landlord because his arrangement with the woman as described is a sublease, not an assignment.

The man is still liable to the landlord for the outstanding rent because the landlord did not release the man when the lease was assigned to the woman.

A man owns a 2,000-acre tract of undeveloped woodland surrounding a scenic lake. He has divided the tract into 106 individual lots, ranging in size from 15 acres to 100 acres. He has also hired telemarketers to sell the lots to residents of the state and the three states with which it shares a common border. Based on these facts, how does the Interstate Land Sales Full Disclosure Act apply to the project? The man must file a disclosure statement with CFPB. Because the man's project is not fraudulent, it is exempt from the requirements of the law. This development project is exempt from the law because of the lot size exemption. The man's project is exempt from the law because it is not being marketed outside a contiguous multistate region.

The man must file a disclosure statement with CFPB

A state has recently updated its Rules and Regulations for the Real Estate Profession. Assuming this state is like all others, which statement is TRUE regarding this publication? The rules and regulations are state laws enacted by the legislature. The rules and regulations do not have the same force and effect as the statutory license law. The rules and regulations have the same force and effect as the license law itself. The rules and regulations are not enforceable against real estate professionals.

The rules and regulations have the same force and effect as the license law itself.

A broker is retiring and wants to submit his listings to another broker. How can he do this? The broker must sign over the listings to the new broker. The new broker has to sign an acceptance agreement. Each sales associate must sign over the listings to the new broker. The sellers must agree to a new listing with the new broker.

The sellers must agree to a new listing with the new broker.

Five years ago, a lien was recorded against a parcel of property by a construction company. When the lien was recorded, a man was the owner of the property and a woman was an active partner in the construction company. The property is in county A, but the lien was recorded in county B. Now, the woman is trying to buy the property from the man. A title search in county A disclosed no liens against the property. Which of these is TRUE? The woman has constructive notice of the lien but not actual notice, because of the mistake in recording. The woman has actual notice of the lien but not constructive notice, because of the mistake in recording. The woman has both actual and constructive notice of the lien, because of her association with the construction company and the recorded lien. The woman has no notice of the lien.

The woman has actual notice of the lien but not constructive notice, because of the mistake in recording.

Why have real estate license laws been put into effect? To protect licensees from lawsuits To protect the public and establish standards of professionalism To prevent licensees from engaging in profit-making activities To establish maximum levels of competency and a moral marketplace

To protect the public and establish standards of professionalism

Who is the agent's principal? Seller Buyer Person who pays the commission Whoever hired the agent

Whoever hired the agent

Every workday for the past 20 years, a woman has parked her car in a specific place in the nearby parking garage. Today, she receives a notice that the garage will be replaced by an office building. Can they do this to her after all the years she parked there? No, because she has been parking there for more than 20 years; she has an easement by prescription. No, because she paid regularly and on time. Yes, because she only had a license. Yes, because she has nothing in writing.

Yes, because she only had a license.

A legally enforceable agreement under which both parties promise to do something for each other is called an escrow agreement. a legal pledge. a bilateral contract. an option agreement.

a bilateral contract

A modification to the original will is called an addendum. an amendment. a probate. a codicil.

a codicil

A person who advises a real estate client who is making a purchase to use or invest in real estate is called an educator. a mortgage broker. a counselor. a subdivider.

a counselor

A seller accepted all of the terms that the buyer offered, making only one small change in the amount of the earnest money. At the moment, these agreements constitute an offer. a counteroffer. an acceptance. an executed contract.

a counteroffer

Most states require that a real estate listing agreement contain a multiple listing service (MLS) clause. a definite contract termination date. an automatic extension clause. a broker protection clause.

a definite contract termination date.

A plat map is BEST described as a detailed map that illustrates aesthetic preferences. a detailed map that illustrates the geographic boundaries of individual lots. a detailed map that illustrates where a variance might be allowed. none of these.

a detailed map that illustrates the geographic boundaries of individual lots.

The relationship of broker to client in an agency relationship is that of a trustee. a subagent. a fiduciary. an attorney-in-fact.

a fiduciary.

Method of annexation, adaptation to real estate, and agreement between the parties are the legal tests for determining whether an item is a trade fixture or personal property. real property or real estate. a fixture or personal property. an improvement.

a fixture or personal property

When a landowner leases unimproved land to a tenant, who agrees to erect a building on the land, the lease is usually called a lease purchase. a gross lease. a ground lease. an improvement lease.

a ground lease

The holder of a life estate is called an encumbrance. a life tenant. a remainderman. successor.

a life tenant.

To give notice of a potential claim against the property and to establish priority, a creditor may file a lis pendens. an attachment. a general lien. a specific lien.

a lis pendens

A person or company responsible for maintaining a client's property and maximizing the return on the client's investment is serving as a rental agent. a building maintenance specialist. a property manager. an investment counselor.

a property manager

A property owner who does not want to deal with the everyday tasks of managing a rental property can hire a property manager. an appraiser. a home inspector. a developer.

a property manager

A buyer makes an offer to buy a seller's house. Pursuant to this offer, the buyer is obligated to perform only if the buyer is first able to sell her condominium. This is an example of a mortgage contingency. an option contingency. a time-is-of-the-essence contingency. a property sale contingency.

a property sale contingency

A REALTOR® is BEST described as an individual who is... a real estate professional who acts as a point of contact between two or more people in negotiating the sale, purchase, or rental of property. any real estate professional who assists buyers, sellers, landlords, or tenants in any real estate transaction. a member of the National Association of Real Estate Brokers who specializes in residential properties. a real estate licensee and a member of the National Association of REALTORS® (NAR).

a real estate licensee and a member of the National Association of REALTORS (NAR)

All of these are acceptable evidence of an owner's title EXCEPT a recorded deed. an abstract of title and attorney's opinion. a title insurance policy. a certificate of title.

a recorded deed

A subdivision declaration reads, "No property within this subdivision may be further subdivided for sale or otherwise, and no property may be used for other than single-family housing." This is an example of a restrictive covenant. an illegal reverter clause. R-l zoning. a conditional-use clause.

a restrictive covenant.

A man and a woman are married, 65 years old, and retired. They have almost $800,000 in equity in their home, but they don't have enough cash to travel as they have always dreamed of doing. The couple should consider which of these financing alternatives? Novation An adjustable-rate mortgage A reverse mortgage A growing equity mortgage

a reverse mortgage

All of these are examples of government policies that can affect the real estate market EXCEPT the Federal Reserve Board's discount rate. a shortage of skilled labor or building materials. land-use controls, such as zoning. federal environmental regulations.

a shortage of skilled labor or building materials

An arrangement to sell one product only if the buyer purchases another product as well is called a tie-in agreement. a fee-for-services. a buydown provision. an allocation of customers.

a tie-in agreement

A history of all recorded liens and encumbrances is revealed in the title insurance policy. unrecorded documents. chain of title. abstract.

abstract

The person who prepares a certificate of title is the broker. abstractor. buyer. seller.

abstractor

For appraisal purposes, accrued depreciation is NOT caused by functional obsolescence. physical deterioration. external obsolescence. accelerated depreciation.

accelerated depreciation

Which clause would give a lender the right to have all future installments become due upon default? Escalation Defeasance Alienation Acceleration

acceleration

An owner of real estate was declared legally incompetent and was committed to a state mental institution. While institutionalized, the owner wrote and executed a will. The owner died while still institutionalized and was survived by a spouse and three children. The real estate will pass to the owner's spouse. to the heirs mentioned in the owner's will. according to the state laws of descent. to the state.

according to the state laws of descent

P signed a deed transferring ownership of P's house to Q. To provide evidence that P's signature was genuine, P executed a declaration before a notary. This declaration is known as an affidavit. acknowledgment. affirmation. estoppeL

acknowledgment

A man made an initial real estate investment of $245,000. He subsequently made $80,000 worth of improvements to the property. If the man subtracts depreciation from the initial cost and adds the cost of improvements, what will be the result? Adjusted basis Capital gain Basis Salvage value

adjusted basis

An investor adds the cost of any physical improvements to the initial cost of the property and then subtracts the amount of any depreciation claimed as a tax deduction. This is the method for calculating the basis. adjusted basis. leverage. cash flow.

adjusted basis

The MOST common source of harmful lead in older residential properties is asbestos. basements. appliances. alkyd oil-based paint.

alkyd oil-based paint

On which type of loan can the borrower prepay without penalty? Loans sold to Fannie Mae and Freddie Mac FHA loans VA loans All of these

all of these

The Equal Credit Opportunity Act prohibits discrimination in the lending process based on race. religion. marital status. all of these.

all of these

For a REMIC, the asset test means funds to buy into the REMIC must come from a previous real estate investment. investors' interests in the REMIC may consist of only one class of regular interests. investors are not allowed to hold residual interests in a REMIC. almost all assets in the REMIC must be qualified mortgages and permitted investments.

almost all assets in the REMIC must be qualified mortgages and permitted investments.

A loan that provides for the full payment of the principal over the life of the loan is atn) reverse mortgage. indexed loan. amortized loan. balloon payment.

amortized loan

If the lender wants to call the entire note due and payable if the borrower stops making payments, the security instrument must include an acceleration clause. a defeasance clause. an alienation clause. a prepayment clause.

an acceleration clause

The verification that the grantor's signature is both genuine and voluntary is a judgment. an attachment. a consideration. an acknowledgment.

an acknowledgment

A new owner received the right to use a parking space in the multi-unit building where she purchased a condominium. This right is an example of an improvement. a fixture. an appurtenance. a chattel.

an appurtenance

A right or privilege tied to real property, although not necessarily part of the property, is called a(n) an emblement. a trade fixture. an appurtenance. a deed.

an appurtenance

All of these are essential to a valid real estate sales contract EXCEPT offer and acceptance. consideration. an earnest money deposit, held in an escrow account. legally competent parties.

an earnest money deposit, held in an escrow account

A listing agreement is a contract between the buyer and the seller. a contract to purchase real property. an employment agreement between the broker and the sales associate. an employment contract between the seller and the broker.

an employment contract between the seller and the broker.

A state delegates zoning powers to a municipality through the Interstate Land Sales Full Disclosure Act. eminent domain. a comprehensive plan. an enabling act.

an enabling act

All of these will terminate an agency relationship EXCEPT the death of either party. the destruction of the property. an offer made on the property. an expiration of the agreement.

an offer made on the property

A broker just explained the value of signing an exclusive-agency listing with a broker who is a member of the multiple listing service. The broker is trying to overcome the misconceptions of the seller who asked about an open listing. an option listing. an exclusive-right-to-sell listing. a net listing.

an open listing

There are five different brokerage signs in the front yard. Evidently, the seller has signed an exclusive-agency listing. an exclusive-right-to-sell listing. a net listing. an open listing.

an open listing

Of these, a high vacancy rate MOST likely indicates rental rates are too low. the property is attractive. building management is effective and responsive. an undesirable property.

an undesirable property

Real estate generally includes all the following EXCEPT trees. air rights. annual crops. mineral rights.

annual crops

All of the following probably would be exempt from real estate taxes EXCEPT public hospitals. golf courses operated by the park district. synagogues and churches. apartment buildings.

apartment buildings

Restrictive covenants are no longer effective when the title is transferred. apply only until the developer has conveyed the title. can be removed by a court of competent jurisdiction. apply to and bind successive owners of the property.

apply to and bind successive owners of the property

One objective of investing in income property is to generate spendable income, also called appreciation. basis. cash flow. pyramiding.

appreciation

Parking spaces in multiunit buildings, water rights, and similar things of value that convey with property are classified as covenants. emblements. chattels. appurtenances.

appurtenances

A buyer is interested in a house that fits most of her needs, but it is located in a busy area where she is not sure she wants to live. Her concern about the property's location is called physical deterioration. area preference. permanence of investment. immobility.

area preference

A woman plans to build a large house in a neighborhood of smaller homes, so she purchases three neighboring lots from their three owners. What is the term for the woman's activity? Substitution Plottage Progression Assemblage

assemblage

In a buyer representation agreement, the broker acts as the agent of the buyer and must protect the buyer's interests at all points in the transaction. only during property showings. until the representation agreement is signed. only when negotiating on behalf of the buyer.

at all points in the transaction.

In Ohio, to be engaged in a real estate brokerage business partnership or an association, all members of the partnership or association who are performing the functions of a real estate broker must be licensed brokers. be licensed brokers or licensed salespersons. be foreign real estate dealers or foreign real estate salespersons. have a majority of the partners with a broker's license, and the rest can hold a salesperson's license.

be licensed brokers

Any additional capital or personal property included with a real property transaction to even out the value of a property exchange is called cost recovery. a REIT. boot. equity build-up.

boot

Parties to lending agreements are referred to by different terms. Which of these refers to the same party? Borrower = beneficiary Borrower = mortgagor Trustee = borrower Trustor = mortgagee

borrower=mortgagor

A man goes all over the country buying large tracts of vacant land, splitting them into smaller parcels, and building identical communities of single-family ranch-style homes surrounding a central shopping center. He sells the homes to residents and leases space in the shopping center to merchants. The man is a developer only. a subdivider only. both a developer and a subdivider. an assembler.

both a developer and a subdivider

A seller hired a broker under the terms of an open listing agreement. While that agreement was still in effect, the seller-without informing the first broker-hired another broker from a separate firm under an exclusive right-to-sell listing for the same property. If the first broker produces a buyer for the property whose offer the seller accepts, the seller must pay a full commission to only the first broker. only the second broker. both brokers. neither broker.

both brokers

A broker is permitted to represent both the seller and the buyer in the same transaction when the principals are not aware of such action. the broker is a subagent rather than the agent of the seller. commissions are collected from both parties. both parties have been informed and agree in writing to the dual representation.

both parties have been informed and agree in writing to the dual representation.

A woman signs a lease to rent an apartment. Her lease runs from October 1 until November 1 of the following year. A man signs a two-year lease to rent an apartment in a new building that will be ready for occupancy in 15 months. Which of these leases must be in writing to satisfy the statute of frauds? The woman's only The man's only Both the man's and the woman's Neither the man's nor the woman's

both the man and the woman's

The provisions of Regulation Z require all of the following to be disclosed to a residential buyer EXCEPT discount points. brokerage commissions. a loan origination fee. the loan interest rate.

brokerage commissions

Which of the following would be considered a variable expense when a manager develops an operating budget? Employee wages Utilities Building repairs Basic operating costs

building repairs

A man owns a large undeveloped parcel of land on the side of a hill. The property borders a road on the lower edge. The owner sells the lower portion of the property to a woman, and she builds a home on it. Several years later, the owner sells the upper-portion of the property to another man. This man's property does not border any road. For this man to gain access to the road, he must claim by implication of law an easement by necessity. in gross. by prescription. by restriction.

by necessity

Which of these is the byproduct of fuel combustion that may result in death if such equipment is not properly vented? Radon Lead Urea-formaldehyde foam insulation Carbon monoxide

carbon monoxide

Which of these is a source of polychlorinated biphenyls (PCBs)? Plywood and particle board Small home appliances, such as hair dryers or food processors Caulking compounds Computers

caulking compounds

Another term for personal property is realty. fixtures. chattels. fructus naturales.

chattels

What causes mold problems in buildings? Insects Chronic moisture problems Fiberglass building materials Air pollution

chronic moisture problems

All of this information is generally included in a listing agreement EXCEPT lot size. termination clause. client's specific requirements for a suitable property to buy. property condition disclosures.

client's specific requirements for a suitable property to buy.

The buyer and seller agreed to a closing date of September 7 and that time is of the essence. Which of these is the closest meaning of the phrase? The date of closing may only be delayed by one day at a time. If closing is not held on September 7, there is an automatic extension built in. Closing must be on or before September 7. If either party gives notice, the date can be moved back.

closing must be on or before September 7

What type of plan does a property manager implement to manage renters who do NOT pay their rent in a timely way? Eviction plan Collection plan Foreclosure plan Cash flow plan

collection plan

Title III of the Americans with Disabilities Act (ADA) impacts which type of property? Residential Industrial Commercial and public accommodations Privately owned

commercial and public accomodations

Office buildings and retail space are examples of commercial real estate. special-use real estate. residential property. industrial property.

commercial real estate

All of these are violations of federal antitrust laws EXCEPT group boycotting. allocation of customers. commission splitting. tie-in agreements.

commission splitting

The law that requires lenders to find ways to help meet the housing needs of those of low and moderate incomes is the Dodd-Frank Act. Equal Credit Opportunity Act. Community Reinvestment Act. Real Estate Settlement Procedures Act.

community reinvestment act

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 zoning ordinance. comprehensive plan. enabling act. land-control law.

comprehensive plan

The principle that maximum value is realized when land use is in harmony with surrounding standards is contribution. conformity. highest and best use. competition.

conformity.

The reason that deeds and liens and other claims are recorded is to give constructive notice. actual notice. direct notice. nominal notice.

constructive notice

A company was moving from one part of the city to another. During the move, a truck carrying computer equipment worth more than $250,000 accidentally ended up in a river, and the equipment was destroyed. Fortunately, the company was insured under several policies. The policy that would most likely cover the computer equipment during the move from one facility to another is a consequential loss, use, and occupancy policy. casualty policy. contents and personal property policy. liability policy.

contents and personal property policy.

When a broker places trust funds of others into the company's operating account and then withdraws funds for the firm's use, what illegal practice has taken place? Escrowing DBA accounting Conversion Asset-liability management

conversion

When appraising a new home in which no one has ever lived, an appraiser will likely use the sales comparison approach. income approach. cost approach. GRM.

cost approach

In terms of real estate investment, another name for depreciation is leverage. cost recovery. liquidity. intrinsic value.

cost recovery

To serve as public notice, a deed is recorded in the city where the owner lives. county or, in some states, the town where the property is located. state capital. largest city in the state.

county or, in some states, the town where the property is located.

The primary mortgage market lenders that have most recently branched out into making mortgage loans are credit unions. endowment funds. insurance companies. savings associations.

credit unions

The transfer of any interest in a parcel of real estate is typically in a document called the title. deed. attachment. mortgage.

deed

A borrower defaulted on his mortgage loan, leaving an unpaid balance of $95,000. After receiving only $85,000 from the sale of the property, the lender filed for a lis pendens. release deed. satisfaction piece. deficiency judgment.

deficiency judgment

All of the following affect how quickly the forces of supply and demand work EXCEPT a property's specific geographic location. immobility of a property. degree of standardization of the property's price. uniqueness of a property.

degree of standardization of the property's price

All of these factors can affect the supply of real estate EXCEPT demographics. labor force. construction costs. government controls.

demographics

A tenant's tenancy for years will expire in two weeks. The tenant plans to move to a larger apartment across town when the current tenancy expires. In order to terminate this agreement, the tenant must give the landlord immediate notice or the lease will automatically renew. give the landlord one week's prior notice or the lease will automatically renew. do nothing because the agreement will terminate automatically at the end of the current term. sign a lease for the new apartment, which will automatically terminate the existing lease.

do nothing because the agreement will terminate automatically at the end of the current term.

A property owner wants to use water from a river that runs through the property to irrigate a potato field. To do so, the owner is required by state law to submit an application to the Department of Water Resources describing in detail the plan for beneficial use of the water. If the department approves the owner's application, it will issue a permit allowing a limited amount of river water to be diverted onto the property. Based on these facts, it can be assumed that this property owner's state relies on which rule of law? Riparian rights Littoral rights Doctrine of prior appropriation Doctrine of highest and best use

doctrine of prior appropriation

In some states, a husband cannot sell his property unless his wife also signs the deed. The wife's interest is called personal property rights. homestead rights. curtesy rights. dower rights.

dower rights

The type of easement that is a right-of-way for a utility company's power lines is atn) easement in gross. easement by necessity. easement by prescription. nonassignable easement.

easement in gross.

The right of a government body to take ownership of real estate for public use is called escheat. eminent domain. condemnation. police power.

eminent domain

A method of sealing off disintegrating asbestos is called capping. encapsulation. containment. contamination closure.

encapsulation

Sealing off asbestos instead of removing it is called encapsulation. capping. irresponsible remediation. extended liability.

encapsulation

Asbestos, sick building syndrome (SBS), and lead-based paint are all examples of issues beyond the scope of a property manager's job description. problems found only in newly constructed properties. issues that arise under the Americans with Disabilities Act (ADA). environmental concerns that a property manager may have to address.

environmental concerns that a property manager may have to address.

The process by which government takes control of a property after the owner dies without a will or lawful heirs is escheat. lis pendens. condemnation. taxation.

escheat.

An appraiser's role is to set price. average value. determine value. estimate value.

estimate value.

A property owner's bundle of legal rights entitles the owner to do all of the following EXCEPT sell the property to a neighbor. exclude utility meter readers. erect No Trespassing signs. enjoy profits from its ownership.

exclude utility meter readers

A buyer signed an agreement with a broker to compensate the broker even if the buyer purchases the property from a relative. This is called an open buyer representation agreement. exclusive agency buyer representation agreement. exclusive buyer representation agreement. invalid agreement.

exclusive buyer representation agreement.

True or false? If you are present when a discussion takes a turn toward a possible antitrust violation, you should leave as discretely as possible. True False

false

True or false? It is an antitrust violation for a broker to force his agents to charge a certain commission. True False

false

True or false? It is an antitrust violation if more than 70% of agents in one city charge the same commission rate. True False

false

True or false? Setting the same fees and commission splits as a competitor does not violate antitrust laws as long as you don't do so through a formal agreement. True False

false

True or false? Though competitors cannot agree to set pricing structures, they can agree to divide territorial boundaries or other types of market segments. True False

false

True or false? You may not ask a prospect what an agent from another firm said he would charge to sell the prospect's home. True False

false

Which of these is a general, statutory, and involuntary lien on both real and personal property? Federal tax lien Mechanic's lien Special assessment Consumer loan lien

federal tax lien

All of these reflect basic principles of value EXCEPT anticipation and conformity. competition and plottage. change. financing concessions.

financing concessions.

All of these are principal responsibilities of the property manager EXCEPT forcibly removing tenants for nonpayment of rent. generating income for the owners. preserving and/or increasing the value of the property. achieving the objectives of the owners.

forcibly removing tenants for nonpayment of rent

The seller's agent is aware that a new landfill has been approved for development on the adjacent property but does not disclose this information to a buyer. This could be an example of negligent misrepresentation. a latent defect. fraudulent misrepresentation. unnecessary disclosure.

fraudulent misrepresentation.

The appraised value of a residence with four bedrooms and one bathroom would probably be reduced because of external obsolescence. functional obsolescence. curable physical deterioration. incurable physical deterioration.

functional obsolescence

A person who is designated by the principal in a broad range of matters related to a particular transaction or activity is a facilitator. special agent. designated agent. general agent.

general agent

A property manager who enters into a management agreement with an owner is usually a special agent. general agent. universal agent. designated agent.

general agent

The grantee receives greatest protection with what type of deed? Quitclaim General warranty Bargain and sale with covenant Executor's

general warranty

Appointments to the Ohio Real Estate Commission are made by the director of commerce. superintendent of real estate. secretary of state. governor.

governor

A home buyer has a mortgage that provides for increasing payments over the life of the loan so that it can be paid off earlier than would be the case with a regular amortized loan. The homebuyer has a mortgage with power of sale. growing-equity mortgage. balloon payment loan. reverse mortgage.

growing-equity mortgage

The grantor is conveying an interest that is less than fee simple absolute. This explanation of the extent of ownership will be found in the seisin clause. granting clause. habendum clause. exceptions and reservations.

habendum clause

After a hearing, the Ohio Real Estate Commission may suspend or revoke the license of a licensee who has violated any of the provisions of the Ohio license law. is not a REALTOR®. is being sued in court. accepts an advance fee to promote the sale or lease of real estate.

has violated any of the provisions of the Ohio license law.

In a preprinted sales contract, several words were crossed out or inserted by the parties. To eliminate future controversy as to whether the changes were made before or after the contract was signed, the usual procedure is to write a letter to each party listing the changes. have each party write a letter to the other approving the changes. redraw the entire contract. have both parties initial or sign in the margin near each change.

have both parties initial or sign in the margin near each change

A house sits on the corner of a busy intersection. Two of the corners are occupied by gas stations, and directly across from the house is a fast food restaurant. The house's owners have been told that the property would be worth more if the lot were vacant. This is an example of progression. highest and best use. regression. conservation.

highest and best use

Before granting a zoning variance, a zoning board of appeals must hold a public hearing where neighbors of a proposed use may voice their opinions. conduct a door-to-door opinion survey of property owners adjacent to the proposed use. check whether the landowner has been granted previous variances. determine whether the proposed use will result in higher property taxes.

hold a public hearing where neighbors of a proposed use may voice their opinion's

The acronym HELOC stands for home equality lender of credit. home equity line of credit. healthy environment lender of cash. home energy lien or credit.

home equity line of credit

The decision whether to buy or rent should involve consideration of whether or not the property is located in a title theory state. the terms of the security agreement. housing affordability and current mortgage interest rates. the availability of a reverse mortgage.

housing affordability and current mortgage interest rates

Under its police powers, a municipality may regulate all of the following about housing in a development EXCEPT lot sizes. building heights. identity of ownership. type of structure.

identity of ownership

CERCLA regulations for administration of the Superfund, which helps pay for cleanup of uncontrolled hazardous waste sites, exempt from responsibility those sites that contaminate neighboring properties. release from liability those owners of contaminated property who did not actually cause known contamination. make no provision for recovering Superfund expenses incurred in cleanup operations. impose strict, joint and several, and retroactive liability on potentially responsible parties

impose strict, joint and several, and retroactive liability on potentially responsible parties

An appraiser asked for an opinion of the value of an existing shopping center would probably give the MOST weight to which approach to value? Cost approach Sales comparison approach Income approach Index method

income approach

Which appraisal method uses a rate of investment return? Sales comparison approach Cost approach Income approach Gross income multiplier method

income approach

When the supply of a certain commodity decreases while demand remains the same, the price of that commodity will tend to remain the same. increase. decrease by 10%. decrease by 20%.

increase

After suffering through a tornado and then flooding from the river, the buildings were gone. The land was still there. This is an example of uniqueness. scarcity. location. indestructibility.

indestructibility

A tenant signs a lease that includes the following clause: "The stated rent under this agreement will be increased or decreased every three months based on the percentage increase in the consumer price index (CPO for that period." What kind of lease has this tenant signed? Percentage Net Graduated Index

index

Lead is commonly found in all of these EXCEPT soldered water pipes. alkyd oil-based paint. soil around industrial sites. insulating material

insulating material

Eminent domain and escheat are two examples of voluntary alienation. adverse possession. transfers of title by descent. involuntary alienation.

involuntary alienation

A real estate licensee who is not an attorney and engages in any activity that constitutes the practice of law may charge a fee for preparing deeds. is in violation of the Ohio Real Estate License Law. may legally do so only in the area of real estate law. is not acting illegally.

is in violation of the Ohio Real Estate License Law.

The investor who sells property on an installment sale basis is taxed on all of the gain in the year the property is sold. is taxed on that part of the gain received in each year's installment payments. gives the buyer all the federal income tax liability. gives the buyer the privilege of deferring all the federal income tax liability.

is taxed on that part of the gain received in each year's installment payments

What is the purpose of an operating budget for a property manager? It documents the month's actual income and expenses. It is a guide for the property's financial performance in the future. It presents the current cash flows in a standardized format. It lists the assets, liabilities, and equity of the investment property.

it is a guide for the property financial performance in the future

All of the following are true about underground water contamination EXCEPT it is a minor problem in the United States. any contamination of underground water can threaten the supply of pure, clean water from private wells and public water systems. protective state and federal laws concerning water supply have been enacted. real estate professionals need to be aware of potential contamination sources.

it is a minor problem in the United States.

A seller sold a buyer a parcel of real estate. Title has passed, but to date the buyer has not paid the purchase price in full, as originally agreed. If the seller wants to force payment, which remedy is the seller entitled to seek? Attachment Mechanic's lien Lis pendens Judgment

judgment

In regulations regarding lead-based paints, HUD requires that homeowners test for its presence. paint be removed from surfaces beforeselling. known lead-based paint hazards be disclosed. only homeowners deal with its removal.

known lead-based paint hazards be disclosed

When a tenant holds possession of a landlord's property without a current lease agreement and without the landlord's approval, the tenant is maintaining a gross lease. landlord can file suit for possession. tenant has no obligation to pay rent. landlord may be subject to a constructive eviction.

landlord can file suit for possession

A house built over a ditch covered with decaying timber or a house with ceilings that are improperly attached to the support beams are examples of stigmatized properties. environmental hazards. latent defects. conditions that need not be disclosed.

latent defects

Mortgagee title policies protect which parties against loss? Buyers Sellers Lenders Buyers and lenders

lenders

Who owns the building that is erected on land that has a ground lease? Testator Lessor Lessee Trustee

lessee

In the states in which it has been adopted, the Marketable Title Act establishes standardized forms for abstracts of title. disqualifies use of an attorney's opinion of title as acceptable evidence of title. limits the time beyond which title records must be searched. provides a certification system for qualifying title insurance companies.

limits the time beyond which title records must be searched.

All of these are liens against real property EXCEPT a mortgage. real estate taxes. lis pendens. home improvement loan of a deceased property owner.

lis pendens

The most important economic characteristic of land is permanence. location. uniqueness. possession.

location

From the reproduction or replacement cost of a building, the appraiser deducts depreciation, which represents the remaining economic life of the building. remodeling costs to increase rentals. loss of value due to any reason. costs to modernize the building.

loss of value due to any reason

Asbestos dust can cause lung disease. radiation sickness. skin cancer. AIDS.

lung disease

One way that property managers meet the goals of ECOA is by disqualifying tenant applicants on the basis of receiving welfare payments. not evaluating certain tenant applicants through the use of credit reports. establishing that certain buildings do not allow children as residents. making sure to use the same lease application for every applicant.

making sure to use the same lease application for every applicant.

A seller delivered title to a buyer at closing. A title search had disclosed no serious defects, and the title did not appear to be based on doubtful questions of law or fact or to expose the buyer to possible litigation. The seller's title did not appear to present a threat to the buyer's quiet enjoyment, and the title insurance policy provided was sufficient to convince a reasonably well-informed person that the property could be resold. The title conveyed would commonly be referred to as am) certificate of title. abstract of title. marketable title. attorney's opinion of title.

marketable title

An applicant who fails the Ohio broker or salesperson licensing exam may retake the exam as often as needed, without time limitation. may take the exam again only after completing a review course. must wait one full year before sitting for the exam again. must retake the exam within six months.

may retake the exam as often as needed, without time limitation.

The term encapsulation refers to the process of sealing a landfill with three to four feet of topsoil. way in which insulation is applied to pipes and wiring systems. method of sealing disintegrating asbestos. way in which lead-based paint particles become airborne.

method of sealing disintegrating asbestos.

All of the following would affect demand EXCEPT population. demographics. wage levels. monetary policy.

monetary policy

Residential leases are usually expressed as a{n) annual or monthly rate per square foot. percentage of total space available. monthly rate per unit. annual rate per room.

monthly rate per unit

Which of the following is a voluntary, specific lien? IRS tax lien Mechanic's lien Mortgage lien Seller's lien

mortgage lien

Which of these is an example of a specific, voluntary lien? Decedent's debts Internal Revenue Service liens Mortgage lien Corporate franchise liens

mortgage lien

A deed of trust involves all of these terms EXCEPT lender. borrower. trustee. mortgagor.

mortgagor

A prospective buyer needs to borrow money to buy a house. The buyer applies for and obtains a real estate loan from a mortgage company. Then the buyer signs a note and a mortgage. In this example, the buyer is called the mortgagor. beneficiary. mortgagee. vendor.

mortgagor

A person in the business of collecting and selling information on apartments available for rent is exempt from the Ohio Real Estate License Law. must hold an Ohio securities license. must hold an Ohio real estate license. must hold an Ohio vendor's license.

must hold an Ohio real estate license

A real estate broker acting as the agent of the seller must promote and safeguard the seller's best interests. can disclose the seller's minimum price. should present to the seller only the highest offer for the property. can accept an offer on behalf of the seller.

must promote and safeguard the seller's best interests.

What kind of listing agreement is illegal in many states because of the potential for conflict of interest between a broker's fiduciary responsibility to the seller and the broker's profit motive? Open listing Net listing Exclusive-right-to-sell Exclusive-agency listing

net listing

A town located near a small recreational lake enacts a new zoning code. Under the new code, commercial buildings are not permitted within 1,000 feet of the lake. A commercial building that is permitted to continue in its former use even though it is built on the lakeshore is an example of nonconforming use. variance. special use. adverse possession.

nonconforming use

Which of the following terms is acceptable when discussing your commission? a. standard b. prevailing c. typical d. common e. None of the above.

none of the above

A brokerage charged the seller $1,000 as an advertising fee and 4% of the selling price. The house was listed for $439,500 and sold for $429,350. What was the total amount the seller paid the brokerage? $15,174 $15,580 $16,580 None of these

none of these

The words broker and REALTOR® are interchangeable. different categories of membership in the National Association of REALTORS®. different titles offered by separate professional organizations. not necessarily related; a broker is a real estate licensee, and a REALTOR® is a real estate licensee who is a member of the National Association of REALTORS®.

not necessarily related; a broker is a real estate licensee, and a REALTOR is a real estate licensee who is a member of the National Association of REALTORS

All of these could be included in a zoning ordinance EXCEPT objectives for future development of the area. permissible height and style of new construction. style and appearance of structures. the maximum allowable ratio of land area to structural area.

objectives for future development of the area

An owner listed her home for sale with a broker. When the owner sold the home herself, she did not owe anyone a commission. Based on these facts, what type of listing did the broker and the owner most likely sign? Exclusive-right-to-sell listing Net listing Multiple listing Open listing

open listing

Brokers violate the Ohio Revised Code when they operate in their own name alone and at the same time as an active member or officer of a licensed partnership or corporation. associate with another broker as a salesperson. violate the Code of Ethics of the National Association of REALTORS®. deposit their license with the Ohio Division of Real Estate.

operate in their own name alone and at the same time as an active member or officer of a licensed partnership or corporation.

Which of these is an example of a unilateral contract? Lease Agreement of sale Option Listing agreement

option

Under the negotiated terms of a certain residential lease, the landlord is required to maintain the water heater. If the tenant is unable to get hot water because of a faulty water heater that the landlord has failed to repair after repeated notification, the tenant could do all of the following EXCEPT sue the landlord for damages. order a new water heater and send the bill to the landlord. abandon the premises claiming constructive eviction. terminate the lease agreement.

order a new water heater and send the bill to the landlord

A woman is purchasing a fully furnished condominium unit. In this situation, the woman would be MOST likely to use a package loan. blanket loan. wraparound loan. buydown.

package loan

The buyers purchased a model home and all its furnishings and appliances by using a package loan. blanket loan. wraparound loan. buydown.

package loan

The Equal Credit Opportunity Act prohibits lenders from discriminating against credit applicants on the basis of all of these factors EXCEPT religion. past credit history. income from public assistance. marital status.

past credit history

A salesperson may face disciplinary action for advertising properties in another county. using a broker's separate account as a depository for monies received. paying a finder's fee to an unlicensed person. completing 30 hours of continuing education in one year.

paying a finder's fee to an unlicensed person.

A man operates a small store in a shopping center. Under the terms of the lease, the landlord pays all operating expenses. The man pays a base rent of $1,000 per month, plus 15% of monthly gross profits over $10,000. The man has a gross lease. percentage lease. net lease. variable lease.

percentage lease

A tenant enters into a commercial lease that requires a monthly rent of a minimum fixed amount, plus an additional amount determined by a percentage of the tenant's gross receipts exceeding $5,000. This type of lease is called a standard lease. gross lease. percentage lease. net lease.

percentage lease

Two years ago, a woman rented a parcel of property to a man. The agreement stated only that the man agreed to pay the woman $500 per month. What type of tenancy does the man have? Holdover At sufferance For years Periodic

periodic

To determine whether an item is a fixture, the MOST important test is whether the effort needed to remove the item is significant. item must be dismantled for removal. value of the item is high. person who installed it intended for it to be permanent.

person who installed it intended for it to be permanent

A license is an example of a: easement appurtenant. encroachment. personal privilege. restriction.

personal privilege

Touching-up peeling paint is an example of curing physical deterioration. functional obsolescence. external obsolescence. straight-line depreciation.

physical deterioration.

A licensee in Ohio can face disciplinary actions for placing a For Sale sign on a property without the owner's consent. advertising in the local newspapers. belonging to a local trade association. buying a property the licensee has listed after having disclosed to the seller, in writing, that the licensee holds an Ohio real estate license.

placing a For Sale sign on a property without the owner's consent. advertising in the local newspapers.

All Ohio real estate brokers must be bonded. display the licenses of their salespeople. post the equal housing poster in a prominent place in their office. be either Realtists or REALTORS®.

post the equal housing poster in a prominent place in their office.

Which of the following allows a mortgagee to proceed to a foreclosure sale without going to court first? Waiver of redemption right Power of sale Alienation clause Possession rights

power of sale

In general, when the supply of a certain commodity increases, price tends to rise price tends to drop demand for it tends to rise demand for it tends to drop

price tends to drop

What helps lenders reduce the risk on a conventional mortgage loan with a high LTV? Private mortgage insurance Flood insurance Sale-and-leaseback arrangement Home equity

private mortgage insurance

A real estate broker was responsible for a chain of events that resulted in the sale of a client's property. This is called pro forma. procuring cause. private offering. proffered offer.

procuring cause.

A woman buys a small house in a highly desirable neighborhood consisting of large homes and pays $390,000. A man buys a nearly identical house in a neighborhood of similarly sized homes and pays $290,000. What economic principle BEST describes the reason why the woman paid more than the man? Plottage Substitution Regression Progression

progression

A document that indicates that a loan has been made is called a promissory note. mortgage deed. deed of trust. satisfaction.

promissory note

What does private mortgage insurance cover? Pays the lender if the borrower dies Reimburses the cosigner if the borrower defaults Protects the top 20 to 30% of the loan against borrower default Pays the borrower if the borrower loses the house to a title claim

protects the top 20 to 30% of the loan against borrower default

To protect the public from fraudulent interstate land sales, a developer involved in interstate land sales of 25 or more lots must provide each purchaser with a printed report disclosing details of the property. pay the prospective buyer's expenses to see the property involved. provide preferential financing. allow a 30-day cancellation period.

provide each purchaser with a printed report disclosing details of the property

The buyers purchased a residence for $195,000. They made a down payment of $25,000 and agreed to assume the seller's existing mortgage, which had a current balance of $123,000. The buyers financed the remaining $47,000 of the purchase price by executing a mortgage and note to the seller. This type of loan, by which the seller becomes a mortgagee, is called a wraparound mortgage. package mortgage. balloon note. purchase money mortgage.

purchase money mortgage

A woman refinanced her house and used the proceeds to purchase two rental properties. This method of increasing her holdings is called exchanging. pyramiding. syndicating. depreciating.

pyramiding

Purchasing a property ,using leverage, refinancing it after it has appreciated, and using the cash from the refinancing to purchase additional property is one form of plottage. pyramiding. consolidation. contribution.

pyramiding

The type of deed that imposes the least liability on the grantor is a special warranty deed. bargain and sale deed. quitclaim deed. general warranty deed.

quitclaim deed

Zoning ordinances affect all of these EXCEPT lot sizes. building heights. style and appearance of buildings. racial composition of neighborhood.

racial composition of neighborhood.

Growing trees, fences, and buildings are all considered chattels. land. fixtures. real estate.

real estate

Someone looking for a tax-advantaged investment similar to a mutual fund would probably invest in a real estate investment trust. general partnership. limited partnership. corporation.

real estate investment trust

When the population of a town suddenly increases, which of these is MOST likely to occur? Rental rates will fall due to increased competition Demand for housing will decrease New housing starts will decrease Real estate prices will increase

real estate prices will increase

A mechanic's lien would be available to all of the following EXCEPT subcontractors. contractors. surveyors. real estate professionals.

real estate professionals

All of these liens must be recorded to be effective EXCEPT money judgment. mechanic's lien. real estate tax lien. voluntary lien.

real estate tax lien

Generally, in a court-ordered sale, which of these is paid first? First mortgage Mechanics' liens Child support liens Real estate taxes

real estate taxes

A mechanic's lien claim arises when a contractor has performed work or provided material to improve a parcel of real estate on the owner's order and the work has not been paid for. Such a contractor has a right to tear out the work. record a notice of the lien. record a notice of the lien and file a court suit within the time required by state law. have personal property of the owner sold to satisfy the lien.

record a notice of the lien and file a court suit within the time required by state law.

All of the following will terminate an easement EXCEPT when the need no longer exists. nonuse of a prescriptive easement. abandonment of easement. release of the right of easement to the dominant tenement.

release of the right of easement to the dominant tenement.

If, upon the receipt of an offer to purchase a property, the seller makes a counteroffer, the prospective buyer is bound by the original offer. bound to accept the counteroffer. bound by whichever offer is lower. relieved of the original offer.

relieved of the original offer

An owner conveys ownership of his residence to his church but reserves for himself a life estate in the residence. The future interest held by the church is a pur autre vie. remainder. reversion. leasehold.

remainder

Which of the following is NOT an example of governmental power? Remainder Police power Eminent domain Taxation

remainder

The primary purpose of the Uniform Electronic Transactions Act (UETA) is to facilitate the use of social media. protect consumers against unwanted email. remove barriers in electronic commerce that would otherwise prevent enforceability of contracts. allow brokers to close more deals.

remove barriers in electronic commerce that would otherwise prevent enforceability of contracts.

When communicating with clients or consumers via email, all of these are examples of professional email etiquette EXCEPT using spell check. providing useful information in the subject line. avoiding sending large attachments. responding to emails within one week.

responding to emails within one week

A property owner's land is located along the banks of a river. This owner's water rights are called littoral rights. prior appropriation rights. riparian rights. hereditaments.

riparian rights

When the supply of a commodity decreases while demand remains the same, price tends to rise. drop. be unaffected. go in the direction of supply.

rise

Avoid, control, transfer, or retain are the four alternative techniques of tenant relations. acquiring insurance. risk management. property management.

risk management

Which appraisal approach would be BEST to appraise a 25-year-old owner-occupied house in a 30-year-old neighborhood? Sales comparison Income approach Cost approach GRM

sales comparison

Which of these approaches is given the greatest weight in reconciling the appraised value of a two-bedroom, owner-occupied home? Income approach Sales comparison approach Cost approach Market value approach

sales comparison approach

The person who prepares an abstract of title for a parcel of real estate... searches the public records and then summarizes the events and proceedings that affect title. insures the condition of the title. inspects the property. issues title insurance.

searches the public records and then summarizes the events and proceedings that affect title.

A woman would like to operate a business in her home, but she lives in an area zoned for residential use only. What should she do? Request that the zoning board declare her home to be a nonconforming use Ask a court to grant an injunction against the zoning board Seek a conditional-use permit from the zoning board, if it is defined as allowable Apply to the zoning board for a variance

seek a conditional-use permit from the zoning board, if it is defined as allowable

Property management, appraisal, financing, and development are all specializations directly linked to state and federal government financial policies. separate professions within the real estate industry. real estate brokerage professions. demographic factors that affect demand for real property in a commercial market.

separate professions within the real estate industry

A lender who collects payments, processes them, and follows up on loan delinquencies is said to increase the yield to the lender. service the loan. insure loan payments. underwrite the loans.

service the loan

Your neighbors use your driveway to reach their garage, which is on their property. Your attorney explains that ownership of the neighbors' real estate includes an easement appurtenant giving them the right to do this. Your property is the leasehold interest. dominant tenement. servient tenement. license property.

servient tenement.

The relationship between real estate broker and seller is generally what type of agency? Special General Implied Universal

special

The broker was hired to represent the seller, to market the property, and to solicit offers to purchase. The broker is called a general agent. special agent. facilitator. nonagent.

special agent

A town wants to construct new concrete curbs in a residential neighborhood. How will the town most likely raise the money necessary for the improvement? Ad valorem tax Special assessment Equalized assessment Utility lien

special assessment

Schools would be considered part of which real estate classification? Special-purpose Industrial Commercial Residential

special-purpose

Property management, appraisal, financing, and development are all examples of factors affecting demand. specializations within the real estate industry. non-real estate professions. activities requiring broker management and supervision.

specializations within the real estate industry

All of these are requirements for independent contractor status used by the Internal Revenue Service EXCEPT a current real estate license. specific hours stated in a written agreement. a written agreement that specifies that the individual will not be treated as an employee for tax purposes. a substantial portion of the individual's income is based on sales production rather than hours worked.

specific hours stated in a written agreement.

An example of personal property that a seller may leave with the property and, therefore, must be identified on the listing agreement is a built-in dishwasher. the door key. stacked firewood. a ceiling light fixture.

stacked firewood

All of these are ways for a broker to charge for services EXCEPT standard community rate. flat fees. hourly rate. commission based on a percentage of the selling price.

standard community rate.

The basic requirements for a valid conveyance are governed by state law. local custom. national law. the law of descent

state law

A map illustrating the sizes and locations of streets and lots in a subdivision is called a gridiron plan. survey. subdivision plat map. property report.

subdivision plat map

A man rents an apartment under a two-year written lease from a landlord. Three months after signing the lease, the man is transferred to another country for a year. During this period, he leases the apartment to a woman. The woman mails monthly rent checks to the man, who continues to make monthly rental payments to the landlord. In this situation, the woman has a lease. tenancy at will. sublease. periodic tenancy.

sublease

The seller's agent has certain duties to the client-principal. All of these are duties of the principal EXCEPT cooperating with the agent. compensating the agent. suggesting marketing strategies to the agent. dealing with the agent in good faith.

suggesting marketing strategies to the agent.

In most states, a broker's license can be suspended or revoked if the broker breaches the terms of the listing agreement. cancels the listing agreement without cause. takes a listing that does not include a date on which the listing expires. does not include an automatic extension clause in the listing agreement.

takes a listing that does not include a date on which the listing expires.

The death of either the landlord or the tenant will terminate the lease and the parties' heirs will NOT be bound by its terms under which of the following tenancies? Tenancy for years Periodic tenancy Tenancy at will Tenancy at sufferance

tenancy at will

A tenant farmer built a chicken coop and a tool shed. These buildings belong to the tenant. owner of real estate. owner, but the owner must reimburse the tenant. tenant, but the tenant must pay additional rent for them.

tenant

A person who has died without a valid will has died testate. in valid conveyance. intestate. under the acknowledgment clause.

testate

A mortgagee received a title insurance policy on the property a buyer is pledging as security for the mortgage loan. Which of the following is TRUE? The policy is issued for the benefit of the buyer. The policy guarantees that the buyer's equity will be protected. The amount of coverage is commensurate with the loan amount. The amount of coverage increases as the borrower grows older.

the amount of coverage is commensurate with the loan amount

Who is responsible for paying the broker or the broker's salesperson when one of them uses a computerized loan origination system to take the loan application from a borrower? The lender The borrower The seller Both the lender and the borrower

the borrower

The manager of a commercial building has many responsibilities in connection with the operation and maintenance of the structure. The manager would normally be considered the agent of the building's owner. the building's tenants. both the owner and the tenants. neither the owner nor the tenants.

the building's owner

One state is a lien theory state. A buyer purchases property from a seller and gives him a mortgage as part of the purchase price. Therefore, the buyer is the borrower, and the seller is the lender. Which of these statements is FALSE? The buyer retains equitable title to the property. If the buyer defaults on the loan, the seller must undergo a formal foreclosure proceeding to recover the security. The buyer has given legal title to the seller. The seller has only a lien interest in the property.

the buyer has given legal title to the seller

A buyer purchases property from a seller for $45,000 in cash and assumes the seller's outstanding mortgage balance of $98,500. The lender executes a release for the seller. The buyer fails to make any mortgage payments, and the lender forecloses. At the foreclosure sale, the property is sold for $75,000. Based on these facts, who is liable, and for what amount? The seller is solely liable for $23,500. The buyer is solely liable for $23,500. The buyer and the seller are equally liable for $23,500. The buyer is solely liable for $30,000.

the buyer is solely liable for $23,500

In evaluating rental applications, it is important for the property manager to establish consistent criteria for acceptable debt and income ratios in order to be in compliance with federal antitrust laws. the Americans with Disabilities Act. Regulation Z. the Equal Credit Opportunity Act.

the equal credit opportunity act

All of these are necessary to a valid deed EXCEPT recital of consideration. words of conveyance. the grantee's signature. delivery.

the grantee's signature

A landlord comes to a tenant's apartment on a daily basis "to make sure everything is okay" or to "make repairs." The apartment, however, is not in need of any repairs. The landlord generally lets himself into the apartment with his spare key. Which of these is TRUE? The landlord has the right to enter property that he owns. The landlord may only enter a tenant's apartment if the tenant is behind on paying rent. The landlord is violating the covenant of quiet enjoyment. The landlord is creating a tenancy at sufferance.

the landlord is violating the covenant of quiet enjoyment

Which of the following is TRUE about a holdover tenant? The landlord must accept additional rent if the tenant remains on the premises. The tenant must give the landlord a 30-day notice to vacate. The tenant may continue to occupy the premises without permission of the landlord. The landlord may evict the tenant.

the landlord may evict the tenant

When a deed of trust is the security instrument, which party usually chooses the trustee? The borrower The lender The devisee The county government

the lender

A purchaser went to the county building to check the recorder's records, which showed that the seller was the grantee in the last recorded deed and that no mortgage was on record against the property. The purchaser may assume which of the following? All taxes are paid and no judgments are outstanding. The seller has good title. The seller did not mortgage the property. No one else is occupying the property.

the seller did not mortgage the property

A buyer and a seller enter into a sales contract for the sale of a home. The seller changes his mind at the last minute, and the buyer suffers a financial loss of $1,500 and must rent a home in which to live. Unless the contract provides otherwise, all of these are legal actions that are likely to succeed EXCEPT the buyer may sue the seller for specific performance, forcing the sale of the home to the buyer. the buyer may sue the seller for damages to recover the $1,500 loss. the seller is not liable because the buyer should not have incurred the $1,500 cost before the sale. the buyer may sue the seller for the rent he paid.

the seller is not liable because the buyer should not have incurred the $1,500 cost before the sale

A man owned two acres of land. He sold one acre to a woman and reserved an easement appurtenant for entrance and exit over her acre to reach the public road. The woman's land is capable of being cleared of the easement if the woman sells to a third party. the servient tenement. the dominant tenement. subject to an easement in gross.

the servient tenement.

A woman rents space in a commercial building where she operates a bookstore. In the bookstore, she has installed large reading tables fastened to the walls and bookshelves that create aisles from the front of the store to the back. These shelves are bolted to both the ceiling and the floor. Which of the following BEST characterizes the contents of the bookstore? The shelves and tables are trade fixtures and will transfer when the property owner sells the building. The shelves and tables are trade fixtures and may properly be removed by the woman before her lease expires, and the tenant would be responsible to the landlord for any damage that their removal caused to the premises. Because the woman is a tenant, the shelves and tables are fixtures and may not be removed except with the building owner's permission. Because the shelves and tables are attached to the building, they are treated the same as other fixtures.

the shelves and tables are trade fixtures and may properly be removed by the woman before her lease expires, and the tenant would be responsible to the landlord for any damage that their removal caused to the premises

A woman defaults on her mortgage, and the lender forecloses. The lender's foreclosure suit is filed on March 15, and the sale is to be held on May 10. If the woman attempts to redeem the property on May 1, which of these statements applies? The woman is exercising her statutory right of redemption. The woman is exercising her equitable right of redemption. The woman's attempt to redeem the property is too early; by statute, she must wait until after the sale. The woman cannot redeem the property after a foreclosure suit is filed.

the woman is exercising her equitable right of redemption

Homeowners are frantic because they want to sell their property and the deed is missing. Which of the following is TRUE? They may need to sue for quiet title. They must buy title insurance. They do not need the original deed if it has been recorded. They should execute a replacement deed to themselves.

they did not need the original deed if it has been recorded

Which statement MOST accurately describes special assessment liens? They are general liens. They are paid on a monthly basis. They take priority over mechanics' liens. They cannot be prepaid in full without penalty.

they take priority over mechanics' liens

The term statute of limitations is BEST described as the limitation on the time period in which parties to a contract may bring a lawsuit to enforce their rights. parties' abilities to demand a "time is of the essence" clause in a sales contract. amount of damages that can be claimed in the event of breach. broker's right to a commission.

time period in which parties to a contract may bring a lawsuit to enforce their rights

The BEST reason for a buyer to obtain title insurance is that the mortgage lender requires it. to ensure that the seller can deliver marketable title. to ensure that the abstractor has prepared a complete summary of title. to pay future liens that may be filed.

to ensure that the seller can deliver marketable title

Which of the following would automatically terminate a residential lease? Total destruction of the property Sale of the property Failure of the tenant to pay rent Death of the tenant

total destruction of the property

All of these factors will tend to affect demand for real estate EXCEPT transfer taxes. employment levels. wage rates. demographics.

transfer taxes

True or false? A broker can be held liable for antitrust violations by one of his agents even if the broker was unaware of the violation. True False

true

True or false? An MLS cannot require a minimum term for listings. True False

true

True or false? Two agents within the same firm can charge different commissions, if that's acceptable to the broker. True False

true

On March 7, a buyer and a seller execute a contract for the purchase of the seller's property. Closing is set for June 10. On April 15, the property is struck by lightning and destroyed by the resulting fire. If the Uniform Vendor and Purchaser Risk Act has been adopted by the state in which the property is located, which party bears liability for the loss? Under the act, the buyer and the seller share the loss equally. Under the act, the seller bears the loss alone. The act does not apply. The buyer bears the loss alone, by virtue of his equitable title. Under the act, neither the buyer nor the seller bears the loss. A state fund covers the loss.

under the act, the seller bears the loss alone

A person approaches an owner and says, "I'd like to buy your house." The owner says, "Sure," and they agree on a price. What kind of contract is this? Implied Unenforceable Void No contract

unenforceable

If a contract seems to be valid, but neither party can sue the other to force performance, the contract is said to be voided. breached. rescinded. unenforceable.

unenforceable

The idea that no two parcels of land are exactly alike is called immobility. subdivision. uniqueness. location.

uniqueness

The term nonhomogeneity refers to scarcity. immobility. uniqueness. indestructibility.

uniqueness

Which of the following creates a lien on real estate? Easement running with the land Unpaid mortgage loan License Encroachment

unpaid mortgage loan

Which of the following is NOT covered by a standard title insurance policy? Forged documents Incorrect marital statements Unrecorded rights of parties in possession Incompetent grantors

unrecorded rights of the parties in possession

Which situation would result in the highest degree of leverage? Using your own funds entirely Using more of your own funds than those you borrow Using more of the funds you borrow than your own funds Using borrowed funds entirely

using borrowed funds entirely

A contract that is entered into by a person who is under the age of contractual capacity is unenforceable. void. voidable. valid.

voidable

A l5-year-old boy recently inherited many parcels of real estate from his late father and has decided to sell one of them. If the boy enters into a deed conveying his interest in the property to a purchaser, such a conveyance would be valid. void. invalid. voidable.

voidable

A deed contains a guarantee that the grantor will compensate the grantee for any loss resulting from the title's failure in the future. This is an example of which covenant? Warranty forever Further assurance Quiet enjoyment Seisin

warranty forever

Under the ADA, existing barriers MUST be removed in all public buildings by the end of 2015. only on request from a person with a disability. even though reasonable alternative accommodation is more practical. when removal may be accomplished in a readily achievable manner.

when removal may be accomplished in a readily achievable manner

When is an offer considered to be accepted? When the broker notifies the buyer that the seller has accepted the offer When the buyer gives a signed receipt to the broker to show the buyer has received the acceptance The moment the seller accepts the buyer's offer One business day after the offer is accepted and signed by the seller

when the broker notifies the buyer that the seller has accepted the offer

Every state has mandatory agency disclosure laws that stipulate how an implied agency may occur. when, how, and to whom agents must reveal for whom they provide client-based services. restrictions on disclosure of confidential information. how a customer is differentiated from a client.

when, how, and to whom agents must reveal for whom they provide client-based services.

Which of these is NOT typically a factor in determining the amount of the earnest money deposit? Whether it is an amount sufficient to cover the broker fees Whether it is an amount sufficient to discourage the buyer from defaulting Whether it is an amount sufficient to compensate the seller for taking the property off the market Whether it is an amount sufficient to cover any expenses the seller might incur if the buyer defaults

whether it is an amount sufficient to cover the broker fees

In Ohio, the real estate license of a person who willingly disregards or violates any of the provisions of the Ohio Real Estate License Law will be suspended or revoked. may not be reissued for six months. will be suspended for six months. may be reinstated upon payment of a fine.

will be suspended or revoked

Which type of insurance coverage insures an employer against MOST claims for job-related injuries? Consequential loss Workers' compensation Casualty Surety bond

worker's compensation

Which of these would permit a law enforcement officer to seize and sell a debtor's property? Lis pendens Satisfaction of judgment Writ of execution Writ of attachment

writ of execution