RELE 1311 Final

A real estate licensee was responsible for an uninterrupted chain of events that resulted in the sale of one of his client's properties. This is referred to as A) pro forma. B) procuring cause. C) private offering. D) proffered offer.

B) procuring cause.

A property manager is usually considered to be what kind of agent of the owner? A) Secret agent B) Universal agent C) General agent D) Special agent

C) General agent

A tenant agrees to rent on a month-to-month basis after the termination of the original lease. This is known as an A) estate for years. B) estate from period to period. C) estate at will. D) estate at sufferance.

B) estate from period to period.

In the cost approach to value, the appraiser makes use of the A) owner's original cost of the building. B) estimated replacement cost of the building. C) sales prices of similar buildings in the area. D) assessed value of the building.

B) estimated replacement cost of the building.

Rosie real estate is renewing her Nevada real estate salesperson's license for the second time. How long will her license be valid? A) One year B) Two years C) Three years D) Four years

D) Four years

Express agency

Express agency is created by either an oral or a written agreement between the principal and the agent. It indicates their express intent for this representational status.

Brokers can buy a property listed with them under which of the following conditions?

Only if full disclosure is made to the seller of the broker's involvement as a purchaser.

A material fact is one that

a reasonable person might feel is important.

Agency

a relationship created when one person (the principal) delegates to another person (the agent) the right to act on his behalf.

Personal property is defined as ....

a right or interest in things of a temporary or movable nature; anything not classed as real property. NOT ATTACHED

Certificate of Deposit

a saver's committment to leave funds on deposit for a specific period of time

What is a title report and what is the purpose of the report?

a snap shot of title at the time the report is made and obligates the title insurance company to issue a policy of title when any curative requirements have been met.

Define Prepayment Clause.

a statement in a mortgage that the mortgagor can pay the entire amount or the stated amount prior to the due date in the NOTE.

Buffer Zone

a strip of land that separates one land use from another

Abstract

a summary of all recorded documents affecting title to a given parcel of land.

inquiry

a systematic investigation of a matter of public interest

What is another name for 'discount point'?

another name for 'discount point' is 'PRE-PAID INTEREST' and they ARE tax deductible. They raise the return or yield to the lender.

What is another name for an open end mortgage?

another name of an open end mortgage is a Credit Card Mortgage or Home Equity Line of Credit mortgage (HELOC).

Encumbrance

any impediment to a clear title, such as a lien, lease or easement.

Define 'Subrogation clause' as it applies to a title policy.

Subrogation Clause allows the title company to assume the rights of a buyer with respect to any claim against the seller, if the title company has made payments to that buyer to satisfy that claim.

Accelerated Depreciation

any method of depreciation that achieves a faster rate of depreciation than a straight line

additional consideration

combined with promise or performance of a preexisting legal duty

Qualifications for VA

obtain certificate of Eligibility from VA,VA loan interest rates are set by mkt conditions, O down payment

Adverse Possession (Squatters rights)

occurs when property is acquired from the rightful owner through the State of Limitations

lapse of time

offer remains open for the time period specified or, if no time is stated, for a reasonable period of time

Beneficiary

one for whose benefit a trust is created; the lender in a deed of trust arrangement

Allodial System

one in which individuals are given the right to own land

Agency is

one person acting on behalf of another.

Assignee

one to whom a right or property is transferred (also called an assign)

Broad Market

one wherein many buyers and many sellers are in the market at the same time

Attorney-in-Fact

one who is authorized by another to act in his (her) place

Buyer's Market

one with few buyers and many sellers

A salesperson owes all of the following fiduciary duties EXCEPT

prepare a power of attorney for the buyer.

Market Value

price a willing seller will sell for, and price willing buyer will pay

Lead Based Paint Disclosure

prior 1978

Special agency

sometimes known as a limited agency, authorizes the agent to perform only those acts permitted by the principal.

Conversion

spending commingled funds

addendum for backup contract

states that it backup offer does not take effect until termination of the pending sales contract

Equity of Redemption

the borrower's right prior to foreclosure to repay the balance due on a delinquent mortgage loan.

A customer is entitled to all of the following

the broker's opinion of value.

Assume the loan

the buyer obligates himself to repay an existing loan as a condition of the sale

Estate

the extent of one's rights in land.

Capital Gain

the gain (profit) on the sale of an appreciated asset

Block Busting

the illegal practice of inducing panic selling in a neighborhood for financial gain

Alluvion

the increase of land when waterborne soil is gradually deposited -- (tidal waters, rivers and streams)

When is the insurance policy delivered?

upon payment, at closing.

Assessed Value

value of property for tax purposes

Texas Constitution

very detailed, amended 7 times. Executive is divided, legislative has low paid legislatures and infrequent legislative sessions, and judiciary has divided court system and judges are elected.

The terms Riparian, Littoral and Appropriative all refer to __________ rights.

water

True or False: The ADA also includes language stating that employment of qualified job applicants, regardless of the disability is mandatory.

True (TEST)

Define DEMAND.

Demand is a value characteristic and there must be a demand for the item and the purchasing power to acquire it.

Characteristics of Value

Demand, Scarcity, Transferability and Utility

4 Characteristics of Value (DUST)

Demand, Utility,Scarcity,Transferability

What does S7 Ts R2 mean?

Section 7; Township 3; Range 2

Easement appurtenant

Dominant estate uses driveway of servient estate to access their property

How is personal property transferred?

Using a Bill of Sale

Blanket Mortgage

a mortgage that is secured by more than one real property

illegality

unlawfulness by virtue of violating some legal statute

At closing the amount of the buyer's equity is = to his down payment. True of False?

True

Police Power also has the right to regulate environmental hazards.....True or False?

True

Police power provides the government with the rights to establish building codes....True of False?

True

True or False: Unlike other types of insurance, title insurance protection is for the PAST not the FUTURE.

True

Association

a not-for-profit organization that can own property and transact business in its own name

Which of the following is NOT one of the unities required to create a joint tenancy? A) Property B) Interest C) Title D) Possession

A) Property

What is the maximum civil penalty, for a single violation of the law?

$110,000 (TEST)

If a property in a residential neighborhood is valued at $175K and charges $1000/month rent, then the GRM on that property is?

$175k/$1000 = 175 GRM

Agent

(1) A broker who represents a seller, a landlord, a buyer, or a tenant. (2) Salespersons or broker licensees who represent the broker with whom they are associated. (All references in the text to the broker's duties and responsibilities to the principal also apply to salespersons or broker associates in the firm.)

Elements not essential for agency:

(1) compensation; (2) writing; (3) contract; and (4) license.

The federal law that has the greatest impact on agency is _______?

(Sherman) Anti-Trust Act

acceptance

(contract law) words signifying consent to the terms of an offer (thereby creating a contract)

What is and EIS?

Environmental Impact Statement (E.I.S.) which is done to determine the effect a project will have on a community.

sources of contract law

-constitutional law -statutory law -agency rules and regulations -case law

A Nevada real estate licensee has a duty to conduct an investigation of the condition of the property that is the subject of the real estate transaction. A) True B) False

B) False

In addition to valid and enforceable contracts can also be:

1. Void or invalid: no binding effect on the parties who made it. (eg. a person who is documented as insane); 2. Voidable: one party has the right to withdraw (eg. a minor who signed under duress or under the influence of drugs/alcohol); 3. Unenforceable: will not be enforced by the courts (oral, violates the Statutes of Fraud).

Begin with the Letter F

...

State the formula for the

...

An encumbrance is?

1. A limitation on an owner's rights to the use of all the land; 2 An encumbrance is also any CLOUD on the title including LIENS, RESERVATIONS, ENCROACHMENTS, LEASES, EASEMENTS, DEED RESTRICTIONS, LICENSES, and ADVERSE POSSESSION.

Seller's option is a BUYER defaults:

1. hold the other party to his duties through a 'suit for specific performance'; 2. sue for money damages; 3. accept liquidated damages (the seller chooses to keep the earnest money); 4. decide on mutual rescission.

Explain the major points of how an ARM works or is calculated.

1. An arm is subject to changes in the market; 2. The 2 cap rates --- annual and lifetime --- limit the amount of change in the interest rate every year and over the life of the loan; 3. the rate is tied to a readily available index such as Treasure Bills; 4. the rate will be stated as the index (rate) + a fixed percent; 5. an example would be Treasury Bills + 2%; 6. the MARGIN on an ARM is the % which is added to the index rate; 7. when it is time for the rate to be adjusted the lender must do two calculations; 8. the calculations would be, Index + Margin and current rate + cap; 9. The lower rate would be the new rate.

What are the basic components of the Rectangular or Government Survey System?

1. Base Lines, Meridians, Townships, Sections and Ranges

What are some basic rules to remember about a brokers commission that could result in losing or suspension of his license if ignored?

1. Commissions are always negotiable. 2. Price Fixing is against the Anti - Trust Act; 3. Broker to Broker discussions of commissions is not allowed; 4. Listening to Broker to Broker commission discussions is not allowed (if you stick around you could also be accused). 5. Any efforts to price-fixed is a violation; 6. Any agreement to limit competition by assigning market areas is a violation of the Anti-Trust Act; 7. An agreement of brokers to confer with one another regarding their commissions is a violation; 8. Boycotting of discount brokers is a violation. 9. Any MLS requirement of a minimum commission is a violation.

Define COLIC as it applies to a valid and enforceable contract.

1. Competent Parties; 2. Offer and Acceptance; 3. Legal Purpose; 4. In Writing; 5. Consideration

What are the four Lease Hold Estates which gives possession without ownership?

1. Estate for Years; 2. Periodic Tenancy; 3. Estate at Will; 4. Tenancy at Sufferance

There are many types of deeds. Name the 3 most common.

1. Special Warranty Deed; 2. Bargain or Sale Deed; 3. Quitclaim Deed. (memorize all of these as they are on the test)

What are monuments and how are they applied within a legal description for a parcel of land?

1. Monuments are permanent surveyors markers and a property is described as being a certain distance and direction from a marker or markers; 2. Monuments are rarely used alone to describe property; 3. Monuments are often the starting points for a metes and bounds description and be essential to the accuracy of that description; 4. Monuments can be man-made (iron pipe) or natural, a stand of timber.

There are 4 types of listings. What are they?

1. Open Listing; 2. Exclusive Agency; 3. Exclusive Right to Sell; 4. Net Listing.

When a property is foreclosed upon and their are back ad valorem taxes, IRS lien and a mortgage. The encumbrances are paid in what order?

1. Property Taxes are always paid first; 2. then all remaining encumbrances are paid in the order they were recorded at the court house.

There are many terms that are directly related to wills and the creation of wills. List the 8 main terms and then define.

1. Testator; 2. Testate; 3. Executor; 4. Title by Devise; 5. Intestate; 6. Administrator; 7. Attorney - in - Fact; 8. Probate. (NOTE, MEMORIZE ALL INCLUDING THE DEFINITION BELOW AS THESE TERMS WILL BE USED IN OTHER QUESTIONS)

What are the consequences if a broker/sales person fails to advise a buyer client to obtain title insurance and/or have the abstract examined by an attorney?

1. he can forfeit his commission if this fact is disclosed to the proper authorities; 2. his license can be suspended and revoked.

What are the three advantages to an FHA loan?

1. The qualifying ratios for the borrowers are slightly more lenient AND 2. The Loan to Value (LTV's) ratios are very high, allowing buyers with little money for a down payment to purchase a property. 3. Points on an FHA loan can be paid by either seller or the borrower. (NOTE: LTV = percentage of the CONTRACT PRICE that the buyer is borrowing. For example a 95% LTV = 95% of the contract price. The borrower is putting down 5% as a down payment and borrowing 95%)

What three parties are included in a Deed of Trust?

1. Trustor AKA the Mortgagor, Buyer or the Borrower; 2. Beneficiary or the lender; 3. Trustee or a third party, selected by the beneficiary

The three categories that Agencies are divided into are?

1. Universal Agency; 2. General Agency; 3. Special or Limited Agency.

Name the Public Controls and Public Utilities to be disclosed:

1. Zoning and planning guidelines; 2. School Districts, Utility Districts, Tax Districts, Flight Paths; 3. HOA's memberships.

List the common criteria for the sales comparison or market data approach that an appraiser uses when pulling data from the market.

1. a minimum of 3-5 sales are pulled; 2. data is typically 6 months old or LESS; 3. adjusting for amenities is used; 4. and the best choice of a sold home will be the one with the LEAST amount of adjustments, regardless of cost. (this last statement is a TEST question).

What conditions must be met for a broker to make a claim for a commission or to be successful in a suit for a commission?

1. be the procuring cause of the sale or produce a buyer who is ready, willing and able to buy; 2. Have a compensation/employment agreement in writing to enforce it (no verbal agreements will stand up in court); 3. be licensed by TREC; 4. Advise the buyer in writing to have the abstract examined by an attorney or to obtain title insurance.

Owners are forbidden to discriminate or use discriminating practices in connection with LEASING or SELLING of real estate. What other groups are also held to obedience to these fair housing laws?

1. lenders; 2. investors; 3. builders; 4. brokers; 5 and real estate organization and services.

Salesman education requirements

180 hrs w/min 180 core real estate courses, 60 hrs prin, 60 hrs contracts, 30 hrs law of agency,30 hrs finance

TREC was created

1949

Investment Advantage #2 for real estate is? ON TEST

2. another advantage is the 1031 exchange where investors can defer taxation of capitol gains by making a property exchange. If the exchange is between 2 properties that are not equal in value then additional Capitol or property is included in the transaction to even out the exchange. This additional property or money is call BOOT which is taxed when the exchange occurs. The investor MUST hold the property for a minimum of 1 year with a 1031 exchange.

Township

36 Sections

One township contains how many sections?

36 sections

Acre

43,560 square feet

One acre is defined as how many square feet?

43,560 square feet makes up how many acres?

Section

640 Acres 1 square mile

Each section in the Rectangular Survey System contains how many acres?

640 Acres make up how many sections and is 1 square mile.

A brokerage agreement is defined as a contract between a broker and a real estate licensee. A) True B) False

B) False

List 8 sources in the primary market that a buyer can look to borrow money to buy a home.

8 sources for borrowers to get a loan $: 1. Mortgage Companies (most common source): 2. Savings & Loans; 3. Commercial Banks; 4. Mutual Savings Banks; 5. Life Insurance Companies; 6. State Bonds; 7. Credit Union; 8. Owner Assisted Financing -- least common source of loan monies

TREC consist of

9 3 represent general public and 6 are RE Brokers

Renewal Sae

90 core hrs in the nxt 2 years

Brokers edu requirements

900 classroom hrs 30hrs in RE Brokerage 4yrs active sales licensee

Define a BOV or BPO.

A Broker Opinion of Value or Broker's Price Opinion is similar to a CMA but is used by a relocation firm, or is commissioned by a Bank or and attorney handling a divorce or estate issues.

How does a CMA determine a PRICE for a property?

A CMA compares the subject property to current actives, in contract, solds, and expired/withdrawn/terminated properties resulting in a price range of value for a property rather than an EXACT price.

Define CMA.

A CMA is a comparative market analysis and is a tool used by licensees to help sellers determine a realistic PRICE for their property.

Define a 'lease with option to buy' or 'Lease-Purchase Agreement'.

A Lease-Purchase agreement gives the tenant occupancy now with the right to purchase at a future date. The price is set when the agreement is negotiated. It is advantageous to the tenant-buyer. Only an attorney may create this type of agreement.

How can a lender protect himself from a loss of interest which is part of the note (ie. sub prime loan which is a greater risk because the borrower is typically NOT 'A' paper) and how is it calculated?

A Lender can use a prepayment penalty to discourage a borrower from paying off a note early. (NOTE: this is a test question). The prepayment penalty is often calculated as a percent of the loan balance.

Define Lis Penden's.

A Lis Penden's gives constructive notice that a lawsuit affecting a particular property has been filed and is pending.

An easement is what?

A RIGHT of limited use of and/or enjoyment of a particular parcel of land and should be created in WRITING and RECORDED to be enforced.

What is important for us to remember with a lease with the 'right of first refusal' by the tenant who has the right to match or better any offer before the property will be sold to someone else?

A Realtor/Broker MAY NOT write these as we are using legal language and practicing law.

Define Testator.

A Testator is one who makes a will.

Explain what a Title-Theory' state is.

A Title-Theory State is where the lender keeps the title to a property until the FULL LOAN AMOUNT is satisfied. In Texas the lender get the lien and the borrower get the deed or title to the property.

A copy of a written brokerage agreement must be delivered to a client: A) at the time of signing. B) within three days after the client has signed. C) delivery of a copy to the client is only required when the client requests it.

A) at the time of signing.

A person who holds a real estate license in another state can obtain a Nevada real estate license without showing any further qualifications. A) True B) False

B) False

Which is required to create an agency relationship?

A belief that the relationship exists.

What is a "Bi-Weekly" Amortized loan?

A bi-weekly amortized loan is a variation of the 30 year fixed amortized loan where 1/2 of the monthly payment is paid every two weeks. The benefit to the borrower is that this loan payment will reduce the 30 year to a 25 year payback timeline which will reduce the amount of total interest paid by the buyer back to the lender as well as increase the buyer's equity in the home significantly faster.

Broker associate

A broker associated with and conducting business as an agent of another broker who accepts responsibility for the broker associate's brokerage activities.

Landlord's agent

A broker representing a landlord in a real estate transaction.

Tenant's agent

A broker representing a tenant in a real estate transaction.

Buyer's agent

A broker representing the buyer in a real estate transaction. Also called buyer's broker, selling broker, selling agent, cooperating broker, or other broker.

Seller's agent

A broker representing the seller in a real estate transaction. Also called seller's broker, listing broker, or listing agent.

What is a buffer zone as it relates to zoning?

A buffer zone is an area of land separating one land use from another, such as residential from commercial. The buffer zone is located between two INCOMPATIBLE uses. The buffer zone is a TRANSITIONAL use area.

Customer

A buyer or a seller in a real estate transaction being assisted by a broker, but without the benefits of agency relationship.

What is acceptable consideration with a contract?

A buyer's promise to pay and a seller's promise to deliver a deed. Money is not necessarily the consideration.

A property manager renting units in an office building should be careful to comply with the federal Fair Housing Act. A) True B) False

B) False

Define "Alienation".

A change of ownership of real property.

A real estate brokerage business must be operated as a corporation. A) True B) False

B) False

A borrower has been making periodic payments of principal and interest on a loan, but the final payment will be larger than the others. This is a(n) A) balloon payment loan. B) fully amortized loan. C) FHA loan. D) straight loan.

A) balloon payment loan.

Some lenders charge a fee for processing the paperwork necessary for a loan. The fee is called a: A) loan origination fee B) discount point C) vigorish D) rip off

A) loan origination fee

A real estate licensee can legally give a non licensee a gift certificate to express appreciation for a referral. A) True B) False

B) False

Define 'Contingency' in a contract.

A contingency is a condition or agreed upon term(s) in a contract which have not been met.

What would make a contract but NOT enforceable?

A contract can be verbal and valid but if it is NOT in writing then it is no enforceable.

Which statement is TRUE regarding termination of agency for time?

A contract for seller or buyer agency.

express contract

A contract in which the terms of the agreement are fully and explicitly stated in words, oral or written.

Define contract.

A contract is a promise to pay by a buyer and a written promise to deliver a deed by the seller. A properly prepared contract commits both parties to its terms.

Define 'Unilateral Contract".

A contract that binds only one party. If ....then ..... An option contract is an example of a unilateral contract.

Define a Implied Contract.

A contract that by actions or evidence is created. (eg. ordering food at a restaurant implies that the patron will pay for food that is delivered).

Define 'Counter Offer'.

A counter offer is really a rejection of an offer and the presentation of a new offer. The purpose of a counter offer is to continue the negotiation process and to work towards an agreement.

Define 'Deed'.

A deed is a written legal instrument that when executed and delivered, conveys title to or an interest in real estate.

A real estate licensee can sell her own house with a yard sign that says: "For Sale by Owner" A) True B) False

B) False

A real estate licensee must deliver to his/her client completed copies of all purchase agreements, but not necessarily offers and counter offers. A) True B) False

B) False

When using the sales comparison approach to determine markert value an appraiser will: A) make adjustments to the comparable properties. B) make adjustments to the subject property. C) subtract to account for depreciation. D) make a wild guess and hope she is right.

A) make adjustments to the comparable properties.

Why does an appraiser charge a FLAT or HOURLY fee when doing an appraisal?

A flat or hourly fee is charged when doing an appraisal because there would be an ethical conflict if he was paid on the basis of the appraised value of the property. Other rules that an appraiser must follow are: 1. he should not have any personal interest in the property, either present or in the future; 2. he should only reveal his appraisal to his client. If the appraisal is for the purpose of securing financing, then the appraiser client is the LENDER.

The plat for a proposed subdivision is submitted to the A) municipality. B) property owners. C) developer. D) state.

A) municipality.

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

A) must promote and safeguard the seller's best interests.

By law the Seller's Real Property Disclosure form must be delivered to the buyer: A) not less than 10 days before close of escrow. B) before the close of escrow. C) within 3 days after the acceptance of an offer. D) immediately upon a buyer's request.

A) not less than 10 days before close of escrow.

Investment Advantage for real estate #5 is?

A home owner can deduct his property taxes and the interest on his mortgage. He can also deduct discount points and prepayment penalties on loans.

Property manager Mack wants to ensure that the owner of the building is protected against lawsuits that might be brought against the owner. Mack will recommend that the owner: A) obtain liability insurance B) fire insurance C) health insurance D) automobile insurance

A) obtain liability insurance

Disclosure

A key point related to loyalty is the obligation of the agent to make a full, fair, and timely disclosure to the client of all known facts relevant or material to the transaction.

Define 'Latent Defect'.

A latent defect is issues that cannot be readily seen by the eye. Examples would be encroachments or zoning and deed restrictions.

Define EMF's and the responsibility of the licensee if selling a property with this issue.

A licensee in regards to Electromagnetic Fields and seen most often as high tension power lines, should disclose the location.

What agreement is an exception to the Statute of Frauds and does not have to be in writing to be valid and enforceable?

A lease agreement that is one year or less does not have to be in writing. However, we need to recommend that they be in writing.

What is the exception with real estate contracts in regards to be in writing.

A lease for 1 year or less does not need to be in writing.

What is a lien?

A lien is a charge against property as security for a debt.

Subagent

A license holder not sponsored by or associated with the client's broker but who is representing the client through a cooperative agreement with the client's broker. Also called the other broker.

A homestead exemption protects against judgments A) of unsecured creditors. B) that result from unpaid taxes. C) that result from foreclosure of a mortgage. D) that result from the costs of improvements.

A) of unsecured creditors.

An advertisement that states "ideal for a handyman" is legally acceptable because it does not actually exclude any protected class. A) True B) False

B) False

Any real estate licensee can legally engage in business brokerage. A) True B) False

B) False

Investment Advantage #4 for real estate and married couples or married couples filing separately is? ON TEST

A married couple (or married filing separately) can also have tax free capital gains if they sell their primary residence in which they have resided for 2 of the last 5 years with a limit up to $500,000 for a couple. A tax payer can do this unlimited times!

"Fee-for-service" means A) offering real estate services in a piecemeal fashion. B) allowing nonlicensees to conduct real estate transactions. C) working only with for-sale-by-owners. D) providing consumers all the same services for a discounted price.

A) offering real estate services in a piecemeal fashion.

Normally, the priority of general liens is determined by the A) order in which they are filed or recorded. B) order in which the cause of action arose. C) size of the claim. D) court.

A) order in which they are filed or recorded.

Licensee (inactive)

A person licensed by the Texas Real Estate Commission (TREC) but not authorized to conduct business as a broker or salesperson until the license is converted to active status.

Licensee (active)

A person licensed by the Texas Real Estate Commission (TREC) to act as a broker or a salesperson in a real estate transaction.

Minimum Service Requirements

A party's agent has a fiduciary duty to provide certtain defined minimum services to their client, services that cannot be passed to the other broker in the transaction.

James, a 16 year old high school sophomore, entered a written agreement to buy 30 acres of land from Farmer Frank. Which of the following statement is TRUE about this contract? A) It is a voidable contract as to James. B) Farmer Frank does not have to sell because James is underage. C) The contract is void. D) This is a unilateral contract that Farmer Frank must honor but James, because he is underage, is not obligated to buy.

A) It is a voidable contract as to James.

If you have ever been arrested for a felony, you can kiss your chances for a real estate license good bye! A) True B) False

B) False

client

A person using the services of a professional person or organization.

Customer

A person who receives limited brokerage services without establishing an agency relationship. Specifically, advice, advocacy, and fiduciary relationships are not included in customer services.

All of the following would affect supply EXCEPT A) population. B) construction costs. C) governmental controls. D) the labor force.

A) population.

In Nevada a brokerage agreement must be in writing. A) True B) False

B) False

Client

A person, sometimes called a principal, who engages the professional advice or services of another, called an agent, and whose interessts are protected by the specific duties and loyalties of an agency relationship.

Client

A person, sometimes called a principal,who engages services that include the professional advice and advocacy of another, called an agent, and whose interests are protected by the specific duties and loyalties of an agency relationship.

time of the essence

A phrase included in contracts to require punctual performance of all obligation.

In Nevada an automatic extension clause is legally permissable in an exclusive right to sell agreement. A) True B) False

B) False

With a broker's agreement a client can waive a licensee's duty to A) present all offers B) exercise reasonable skill and care. C) disclose all material facts concerning the transaction. D) advise the client to seek expert advice where appropriate

A) present all offers

gratuitous consideration

A promise to make a gift or moral consideration, insufficient consideration

The instrument which sets forth the terms and conditions of a loan is called the: A) promissory note B) deed of trust C) mortgage D) thing with terms and conditions

A) promissory note

Although there are some exemptions to the Fair Housing Act, there is never an exemption based on: A) race B) religion C) familial status D) sex

A) race

Annexation

Process of attaching personal property to real property making it a fixture

This question is also multiple select. Choose all answers that are correct.Which of the following are required for an exclusive brokerage agreement? A) It must be in writing. B) It must be signed by the parties. C) It must have a definite termination date. D) It can not have an automatic renewal clause.

A) It must be in writing. B) It must be signed by the parties. C) It must have a definite termination date. D) It can not have an automatic renewal clause.

Define reservation and give an example.

A reservation withholds title to a PART of the land described in the deed. An example of a reservation in a deed would be an EASEMENT or MINERAL RIGHTS.

Sally is a real estate broker. She is behind on some court ordered child payments, but since she already has her license she can renew it. A) True B) False

B) False

Sales associate

A salesperson licensee associated with and conducting business as an agent of the sponsoring broker.

What is a set back of a property?

A set back is the amount of space required between the lot line and the building line. The set back is usually determined by zoning or deed restrictions. (This is a test question)

Define "Shared Participation Loan".

A shared participation loan is a loan which allows two or more lenders to share in the profits of the property as they collect the principle and interest payments of the loan.

Sex offenders are regarded as being "sick" and therefore are protected by the handicap status of the Fair Housing Act. A) True B) False

B) False

What is the impact of a short sale on a borrower?

A short sale will result in a negative impact (loss of 200 points or more) on the credit report of the defaulting borrower; 2. the borrower may be sued by the lien holder for the balance of the money that is owed.

The source of compensation is a factor in determining who represents whom in a real estate transaction. A) True B) False

B) False

To be enforceable a brokerage agreement in Nevada must be in writing. A) True B) False

B) False

To prove a violation of the Fair Housing Act requires proof of intent to discriminate against someone based on his or her status in a protected class. A) True B) False

B) False

Explain the difference between a specific and general lien.

A specific lien attaches to one OR more specific or named properties such as mortgage/blanket mortgage. A general lien attaches to ALL property of the debtor that is not exempt from a forced sale. An example of this is an IRS lien) (remember the IRS was going to attaché a lien to 916 S Virginia and the home on San Jacinto and any other property we owned....example of a general lien)

Define agency that is set up orally. (very important on test)

A spoken or oral agreement can result in Oral Agency. Oral Agency will not be held up by the courts against the prinicipal/client BUT it will be BINDING on the AGENT. (test)

Define 'Stigmatized' as it relates to real property.

A stigmatized property is a property that the consumer would want to avoid. Examples could be murder, an alleged haunting, or a location near a registered sex offender.

When a broker obtains a listing, to help find buyers, the broker will often place the listing in an A) MLS B) NBA C) MMS D) LMNOP

A) MLS

When two or more parties join together to create and operate a real estate investment it is called?

A syndicate.

Which of the following is NOT a protected class under the Fair Housing Act but IS a protected class under the Equal Credit Opportunity Act? A) Marital status B) Sexual orientation C) Handicap or disability D) Familial status

A) Marital status

A lender will take certain factors into consideration when deciding whether to grant ta borrower a mortgage loan. Which of the following if taken into consideration is a violation of the Equal Credit Opportunity Act (ECOA)? A) Marital status of the borrower B) Creditworthiness of the borrower C) Amount of the borrower's income D) Ability of the borrower to make the payments

A) Marital status of the borrower

Define "Term Loan".

A term loan is an INTEREST ONLY until the end of the loan term, when the entire principal is repaid. This is a "0 AMORTIZATION LOAN.

The Civil Rights Act of 1866 prohibits discrimination in real estate transactions based on a person's: A) Race B) Religion C) National origin D) Sex

A) Race

RESPA is the: A) Real Estate Settlement Procedures Act. B) Real Estate Securities Procedures Act. C) Real Estate Sales Procedures Act. D) Real Estate Exchange and Process Act.

A) Real Estate Settlement Procedures Act.

When a property is held by one party for the BENEFIT of another than the property is said to be held in?

A trust.

Which of the following is a voluntary lien? A) Mortgage lien B) Estate tax lien C) Real estate tax lien D) Judgment lien

A) Mortgage lien

The distance from the Northeast corner to the Southeast corner of a section is: A) 5,280 feet B) One mile C) A & B D) None of the above

C) A & B

unenforceable contract

A valid contract rendered unenforceable by some statute or law.

A father conveyed the family home to his daughter by will as a pur autre vie estate for the life of her mother. If the daughter should die before the mother, who gains possession of the property? A) Daughter's heirs B) Remainderman C) Mother D) Father's other children

A) Daughter's heirs

Which section is immediately to the South of section 6 in a township? A) Section 1 B) Section 12 C) Section 7 D) It depends on the township

C) Section 7

If a party wins a judgment and is UNABLE to collect, how can he enforce payment of the judgment?

A winning party to a judgment can force a judgment to be paid by securing a 'WRIT OF EXECUTION' from the courts.

Which of the following does NOT terminate a listing agreement? A) Death of the real estate salesperson. B) Expiration of the term. C) Mutual agreement of the parties. D) Transfer of the property by operation of law.

A) Death of the real estate salesperson.

Which of the following is a private restriction on the use of land? A) Restrictive covenants B) Zoning ordinance C) Environmental protection laws D) City or county master plan policies

A) Restrictive covenants

What is the preferred method of creating an agency?

A written agreement is the preferred method which can include a listing, a buyer rep or a property management agreement.

special power of attorney

A written instrument whereby a principal confers limited authority upon an agent to perform certain prescribed acts on behalf of the principal.

Which of the following is true about radon? A) It is a naturally occurring gas B) It is usually found in liquid form C) It is used as fuel for most automobiles D) Exposure to high doses of radon will increase a person's IQ by at least 25 points.

A) It is a naturally occurring gas

Deed restrictions are a type of: A) Private restrictions on the use of land B) Public restrictions on the use of land C) Governmental use of police powers D) Unenforceable attempt to restrict the use of land

A) Private restrictions on the use of land

The maximum fine the real estate commission can impose is: A) $10,000 B) $5,000 C) $2,500 D) $1,000

A) $10,000

A parcel of land described as "the NW¼ and the SW¼ of Section 6, T4N, R8W of the Third Principal Meridian" was sold for $2,500 per acre. The listing broker will receive a 5 percent commission on the total sales price. How much will the broker receive? A) $5,000 B) $2,500 C) $12,800 D) $15,000

A) $5,000

The current market value of a property is $35,000. For tax purposes, it is assessed at 40 percent of market value. The tax rate is $4 per $100 of assessed value. What is the amount of the tax due? A) $560 B) $625 C) $705 D) $740

A) $560

The property described as the NW1/4, NW1/4, SW1/4 of Section 12 of T13N, R5E of the Mt. Diablo principal meridian contains how many acres? A) 10 acres B) .10 acres (one-tenth of an acre) C) Cannot be determined from the facts given D) None of the above

A) 10 acres

Brad lives in a building in which he has a proprietary lease and he owns stock in the corporation that owns the building. Brad most likely lives in a(n): A) Cooperative development B) Condominium development C) Apartment building that leases residential units D) Planned Unit Development

A) Cooperative development

Harry lives in an apartment building owned by a corporation of which Harry is a shareholder. What type of development is this? A) Cooperative development B) Condominium development C) Time share development D) Corporate development

A) Cooperative development

The unit-in-place method is used in which approach to value? A) Cost approach B) Sales comparison approach C) Index approach D) Income approach

A) Cost approach

Which of the following is a variance? A) Exception to a zoning ordinance B) Court order prohibiting certain activities C) Reversion of ownership D) Nullification of an easement

A) Exception to a zoning ordinance

The "tandem plan" is a joint effort implemented by: A) Fannie Mae and Ginnie Mae B) Fannie Mae and Freddie Mac C) Fannie Mae and FHA D) FHA and VA

A) Fannie Mae and Ginnie Mae

After receiving an SRPD how many days does a buyer have to rescind the purchase contract without penalty? A) Four working days B) Four calendar days C) Five working days D) Ten days

A) Four working days

The parties to a buyer representation agreement are the A) broker and the buyer B) the salesperson, broker, and buyer C) salesperson and buyer D) salesperson and the broker

A) broker and the buyer

Mary entered an oral contract to buy an apartment building from Carrie. In most states this contract is A) unenforceable B) implied contract C) voidable D) unilateral

A) unenforceable

Barack borrowed $100,000 from Joe and signed a promissory note as evidence of the debt. Barack did not sign any other documents related to the loan. This is a(n): A) unsecured loan. B) secured loan. C) hypothecated loan. D) assigned loan.

A) unsecured loan.

After receiving a resale package a buyer has _______ to rescind the purchase contract. A) until midnight of the 5th calendar day B) four working days. C) until anytime before the close of escrow. D) one week.

A) until midnight of the 5th calendar day

Which of the following is listed as a protected class under Nevada's Fair Housing Act but not the federal Fair Housing Act? A. Ancestry B. Sexual orientation C. Age D. None of the above

A. Ancestry

There are 7 basic clauses found in a mortgage. Name them.

Acceleration Clause, Alienation Clause, Assumption Clause, Escalation Clause, Prepayment Clause, Subordination Clause, are the 7 basic clauses found in a Mortgage.

What is the easiest duty of a dual agent?

Accounting (test) For all other duties, the buyer and seller can have opposing interests.

In Nevada proof of marketable title is provided by: A) A certificate of title B) Title insurance C) Abstract of title and attorney's opinion D) The county recorder

B) Title insurance

Define 'Accretion'.

Accretion is the build up soils resulting in a boundary change. Internet -- Increase in land area due to the permanent retreat of the high-water mark of a water front property or by soil deposition by river, stream, or sea waters. .

Name all terms that explain involuntary alienation.

Accretion, Reliction, Erosion, Alvulsion

Accession means?

Acquiring title to additions or improvements to real property as a result of the annexation of Fixtures. Can also refer to the accretion of alluvial deposits along the banks of streams.

Accesion

Acquiring trade fixtures by non removal prior to termination of lease

Another word for property taxes are ________?

Ad Valorem or 'According to Value'. NOTE, unpaid taxes create an AUTOMATIC LIEN on a property and with a Foreclosures, property taxes are always paid first!

List the 5 ways that agency can also be created other than a written document.

Agency can also be created 1. Orally; 2. Implied; 3. Ostensibly; 4. through Ratification; 5. Through Estoppel.

What is a major concern with a Open Listing and why?

Agent Loyalty from the seller because these listings are NOT placed in the MLS and only the broker who brings the buyer will be paid.

Loyalty

Agents must always act in the best interest of their clients and must be loyal to the trust placed in them.

Define Net Listing and what are the negatives to this kind of listing?

All money over the amount that the seller wants from the sale of his property is treated as the broker's commission. Some negatives of this listing are 1. the seller can be at risk if the broker is not completely honest and 2. this type listing is where the broker is MOST LIKELY to be sued. (test)

Which of the following statements is FALSE?

All of these are false statements: (1) A licensee who is not compensated for services is not liable; (2) the broker and a consumer must enter into a written agreement to establish an agency relationship; and (3) The buyer must be personally notified of a property defect or the seller is liable for failure to disclose.

Who is liable for its decisions and actions in a General Partnership?

All partners share responsibility and liability.

One term, 'Alluvion', is sometimes associated with involuntary alienation which it is NOT! Define.

Alluvion = DIRT. The internet defines as a legal term describing the increase in the area of land due to sediment (alluvium) deposited by a river. This changes the size of a piece of land (a process called accession) and thus its value over time. (internet def....per instructor, alluvion = dirt)

Define Alienation Clause.

Also known as 'Due On Sale' clause meaning that the full balance of the secured debt is due and payable if the property is sold by the Mortgagor WITHOUT the Mortgagee's approval. (NOTE: there is NO assumption clause in a NOTE because of the alienation clause in the Mortgage).

A real estate salesperson can only receive compensation from the A) client B) broker C) escrow officer D) real estate division

B) broker

Define "Fixed Rate Amortized" loans.

Amortized loans are loans where the Mortgagor pay equal, regular payments of principle and interest until the loan is paid in full. Interest is paid in arrears.

The term "caveat emptor" means A) everything belongs to the King B) let the buyer beware C) let the seller beware D) Nothing, your instructor just made it up

B) let the buyer beware

Fill in the blanks:A salesperson who receives an earnest money deposit must deliver it to the _____ or deposit it with escrow within _____ business day after receiving a fully signed contract. A) client five B) broker one C) real estate division one D) IRS one

B) broker one

Define Executor.

An Executor is the person NAMED in the will to settle the estate.

Define abstract of title.

An abstract of title is a condensed history, taken from public records or documents, of the ownership of a piece of land. or, an abstract of title, or title abstract, briefly summarizes the various activities affecting ownership of a parcel of land.

The purpose of recording a deed is to: A) Obtain title to the property B) Give constructive notice, to the world, of the grantee's interest in the property C) Give constructive notice, to the residents of the county in which the property is located. D) Provide jobs for people who work at the recorder's office.

B) Give constructive notice, to the world, of the grantee's interest in the property

Define Administrator.

An administrator is appointed by the court to settle the estate of an intestate. The property will be divided according to the Laws of Descent and heirs will have Title by Descent.

Intermediary

An agency alternative permitting the broker to act as an agent for both a buyer-client and a seller-client in the same transaction.

Define APPRAISAL.

An appraisal is an opinion. It is an ESTIMATE of VALUE.

How accurate is an appraisal?

An appraisal is only as accurate as the integrity and skill of the appraiser along with the availability of market data.

Why do appraisers reconcile?

An appraiser must reconcile because the appraisal process will and can result in up to 3 different values using the various approaches. Reconciliation completes the process by determining an exact number rather than a range of value (a range is usually what a Realtor will provide versus an exact number/value).

Define Attorney-in-Fact.

An attorney-in-fact is someone who has power of attorney to act for another. An attorney in fact MAY NOT act for another AFTER the person has died.

When should an encroachment be disclosed and how is an encroachment recognized or confirmed?

An encroachment should be disclosed asap by a seller or the listing agent. The buyer agent should recommend a survey to confirm the encroachment.

What can a seller use to limit the length of time a buyer has to fulfill a contingency?

An escape clause (test question and answer)

Define 'Executory Contract'.

An executory contract is a contract that has been signed and dated but all terms of the paperwork have not been fulfilled.

What type of deed is most commonly used in Nevada? A) Warranty deed B) Grant, bargain, and sale deed C) General warranty deed D) Special warranty deed

B) Grant, bargain, and sale deed

Broker licensee

An individual holding a broker's license issued by TREC. Brokers may act independently in conducting real estate transactions or may engage other broker or salesperson licensees to represent them in the conduct of their real estate business.

Salesperson licensee

An individual holding a salesperson's license issued by TREC, an agent of the sponsoring broker. Salesperson licensees may conduct business only through their sponsoring broker.

In regards to holding accounts or trust accounts, why does a Broker need to avoid an interest bearing account?

An interest bearing account can possibly put the consumers money at risk.

The reversion of real estate to the state because of the lack of heirs or other people legally entitled to own the property is called A) eminent domain. B) escheat. C) attachment. D) estoppel

B) escheat.

Asbestos, now banned, was used for insulation because: A) it is very inexpensive B) it is very fire resistant C) it conducts electricity very efficiently D) it is easy to transport

B) it is very fire resistant

Which of the following includes a right of survivorship? A) tenancy in common B) joint tenancy C) community property D) Separate property

B) joint tenancy

The permit which allows a developer to sell timeshares in Nevada is included in a report prepared by the Real Estate Division called the: A) Property Report B) Public Offering Statement C) Timeshare Disclosure Report D) Timeshare Authorization Report

B) Public Offering Statement

mutual assent

An offer and acceptance which together form the terms of a contract.

When does an offer become binding on the buyer and the seller?

An offer becomes binding when 1. all terms are agreed to by both parties; 2. all paperwork is signed and dated as appropriate and; 3. the acceptance is communicated once the last party has signed.

How can an offer be communicated and when is it considered valid?

An offer can be presented by phone, fax, email, letter, in person but is only valid if it is in writing and signed by the buyer.

Define 'Offer' as it relates to purchasing a property.

An offer is a properly completed form, signed by a purchaser, which includes a price or bid which is less than, equal to, or more than the seller's asking price.

backup offer

An offer submitted to the property owner with knowledge that the owner is already under contract; a secondary offer.

counteroffer

An offeree's response to an offer in which the offeree rejects the original offer and at the same time makes a new offer.

Define 'Open Listing'.

An open listing is where the owner reserves the right to list with as many brokers as he chooses. He also reserves the right to sell the property himself and avoiding paying commission.

When a governmental entity exercises its power of eminent domain this is considered a type of: A) Adverse possession B) Public restriction on the use of land C) A transfer in trust D) A tax sale

B) Public restriction on the use of land

The owner of real estate who leases it to another is called the A) vendor. B) lessor. C) grantor. D) trustor.

B) lessor.

Mary is buying a house for $250,000. She will make a $50,000 down payment and is paying 2 points on her loan. How much does Mary owe in points? A) $5,000 B) $4,000 C) 0 points are illegal D) It depends on the appraised value of the house.

B) $4,000

The section of land reserved for school purposes in the rectangular survey system is Section A) 12. B) 16. C) 20. D) 36.

B) 16.

"PETE" represents A) Private restrictions on the use of land B) Public restrictions on the use of land C) All restrictions on the use of land D) A common cowboy name

B) Public restrictions on the use of land

The process of attaching personal property to land or other improvements is called?

Annexation

"Beginning at the SE corner of the NE¼ of the section, then due west 5,280 feet more or less to the SW corner of the NW¼, then north along the west line of the section 2,640 feet, more or less, to the NW corner of said NW¼, then in a straight line to the point of beginning." How many acres does this parcel contain? A) 80 B) 160 C) 240 D) 320

B) 160

What is the benefit for the Sub Chapter S Corporation in regards to taxing of profits?

Any corporation with less than 35 shareholders, ONLY the SHAREHOLDERS pay the tax on the profits NOT the Corporation.

valuable consideration

Anything of value offered as an inducement. (Money, ring, boat, etc.)

How many parcels of land trigger Nevada's Subdivided Land Law? A) 25 B) 35 C) 50 D) 100

B) 35

The assessment rate in Nevada is: A) 25% B) 35% C) 45% D) 50%

B) 35%

On a HUD 1 statement how does the buyer's loan amount and earnest money show?

As a credit to the buyer

Fiduciary

As defined by the rules of the Texas Real Estate Commission (Section 531.1), the duties of a fiduciary include (1) representing the interests of the agent's client; (2) being faithful and observant to the trust placed in the agent; (3) being scrupulous and meticulous in performing the agent's functions, and (4) placing no personal interest above that of the agent's client.

Define Asbestos and how is relates to improved property.

Asbestos was used to insulate pipes, in chimneys, in roofs and siding as well as flooring materials. Problems are in the removal of the material as the dust can be cancerous. To remove the area must be sealed off and the material can be moved. Protective covering and ventilators is recommended as is a sealed container to safely remove the material from the building site.

Define 'Assignment'.

Assignment occurs when there is substitution of a new party in an existing contract.

Define 'Avulsion'.

Avulsion occurs when soil is washed repositioned leading to a change in direction of a river. (Mississippi). Internet -- Sudden and abrupt change in the boundary between two pieces of land due to flood waters or a change in a river's course. Avulsion does not change the ownership of the removed land which remains the property of the original owner.

A property manager's chief concern should be that the A) property is seldom vacant because it is consistently rented at the lowest possible rents. B) property is managed to achieve the highest overall rate of return possible on the owner's investment. C) property manager's time is maximized in his or her management of the property. D) property exhibits the proper amount of the owner's pride of ownership.

B) property is managed to achieve the highest overall rate of return possible on the owner's investment.

A registered representative employed by a developer selling subdivided land in Nevada: A. must pass an examination to become registered. B. is authorized only to induce attendance at promotional meetings and hand out literature. C. can sell parcels under the close supervision of the broker of record. D. must take a course on subdivided land to become registered.

B. is authorized only to induce attendance at promotional meetings and hand out literature.

The Real Estate Division's disclosure document for time-shares being offered for sale in Nevada is called the A. property report. B. public offering statement. C. disclosure report. D. disclosure and analysis report.

B. public offering statement.

A resale package, when applicable, must be delivered to the buyer: A. no later than five days after a contract has been entered. B. whenever the parties agree, otherwise before close of escrow. C. at least ten days before the close of escrow. D. immediately upon entering a contract.

B. whenever the parties agree, otherwise before close of escrow

To obtain a permit to sell subdivided land or time-shares in Nevada, the developer must submit a marketing plan that specifies how buyers will be procured, how parcels will be sold, and how buyers will be retained. This is called the: A. marketing plan. B. written plan. C. property report. D. public offering statement.

B. written plan.

What is the difference between a mortgage bankers and a bank in originating a loan?

Banks rely on deposits to originate loans. Mortgage Bankers have their own money or other investor pools.

Full disclosure of information

Because the licensee's relationship with the client is that of a fiduciary, licensees must always place the interest of the client above that of their own interest.

Full disclosure of contract provisions.

Before executing any document that is intended to be legally binding the licensee is obligated to discuss the provisions of the contract with the client.

When should a licensee advise a client to seek the advise from an attorney?

Before the client signs any document he/she does NOT understand.

Define Blockbusting.

Blockbusting AKA Panic Peddling -- utilizing illegal marketing, tactics or representations to convince homeowners to sell at a loss to avoid having their property lose value due to demographic changes or prospective demographic changes.

In a contract for deed who must sign to make the contract valid and enforceable?

Both the seller and the buyer

What is another name for a BOV?

Broker Price Opinion

Define Brokerage.

Brokerage is the aspect of real estate business that pertains to the overseeing the needs of the parties and completing the transaction. (TEST -- MEMORIZE THIS)

Define a "Budget Loan".

Budget loan is another name for a loan that includes PITI inside the monthly payment. Many FHA, VA, Conventional loans are budget loans. Taxes and insurance are placed within in an escrow account until paid.

Specific construction requirements are set by ______?

Building Codes

How is square footage determined by an appraiser?

By measuring the exterior walls of a property an appraiser can determine square footage. Unfinished spaces are not included. Price per square foot is the properties sales price divided by the square footage of the home.

How are easements terminated?

By merger (acquiring the adjacent land), a release or by abandonment.

How are Deed Restrictions imposed?

By the Grantor (TEST)

Which type of development combines office space, stores, and residential units in a single, vertical community known as a A) planned unit development. B) manufactured housing park. C) mixed-use development. D) time-share community.

C) mixed-use development.

After real estate has been sold by the state or county to satisfy a delinquent tax lien, the defaulted owner usually has a right to A) have the sale canceled by paying the back taxes and penalties. B) pay his or her creditors directly and have their liens removed. C) redeem the property within the time specified by law. D) record a notice of nonresponsibility for the unpaid taxes.

C) redeem the property within the time specified by law.

The collective name for the documents that a seller of residential property located in a common interest community must give to a buyer is: A) CIC documents B) NRS 116 documents C) resale package D) governing documents

C) resale package

All of the following are examples of public land-use control EXCEPT A) zoning ordinances. B) building codes. C) restrictive covenants. D) city planning requirements.

C) restrictive covenants.

Carla owns property in Nevada and has defaulted on a loan that is secured by the property. Yesterday she received a Notice of Default and Election to Sell from the trustee on the deed of trust. Which of the following statements is TRUE? A. It is too late for Carla to do anything; the property is going to be sold. B. Carla can stop a sale of the property but she must pay off the entire loan. C. Carla can stop the sale if she reinstates her loan at least 5 days before the sale. D. Carla cannot stop the sale but she has a statutory right of redemption after the sale takes place.

C. Carla can stop the sale if she reinstates her loan at least 5 days before the sale.

The security instrument most commonly used in Nevada to secure a promissory note for the purchase of real estate is a: A. True mortgage B. Mortgage and deed of trust C. Deed of trust D. Financing statement

C. Deed of trust

Which of the following is required to become a registered owner‐developer in Nevada? A. Completion of certain education requirements B. Passing a test C. Nevada state contractor's license D. Association with a licensed real estate broker

C. Nevada state contractor's license

Before buying a home or improved lot adjacent to open range the seller must provide to the buyer a(n): A. survey. B. disclosure of the zoning for the open range land. C. Open Range Land Disclosure form. D. indemnification agreement for damages caused by grazing animals.

C. Open Range Land Disclosure form.

In Nevada, specifying the term of a property management agreement is: A. advisable but not required by law. B. required if the term of the agreement exceeds one year. C. required for an enforceable agreement. D. required if the term of the agreement exceeds one year and there is no renewal clause.

C. Required for an enforceable agreement.

In an agency relationship, there are certain duties...for a PRINCIPAL the duties are?

CRIP or Compensation, Reimbursement, Indemnification, Performance

What is another term for the Income Approach?

Capitalization Method

What is another name for RATE OF RETURN on an income producing property?

Capitalization Rate

Define "Chain of Title".

Chain of Title is a list of all owners of the property or succession of conveyances whereby the present owner obtained title.

True or False: We debit the SELLER and credit the BUYER for unpaid taxes, unearned rent and tenant security deposits.

True

Two other names for Personal Property is ....

Chattel and Personalty.

Define 'Chronological Age' of a property.

Chronological age is the age of the property in years or YEAR BUILT.

contract clause

Clause of the Constitution (Article I, Section 10) originally intended to prohibit state governments from modifying contracts made between individuals; for a while interpreted as prohibiting state governments from taking actions that adversely affect property rights; no longer interpreted so broadly and no longer constrains state governments from exercising their police powers.

The fair housing law of Civil Rights Act of 1866 prohibits discrimination based on what?

Color__note there are NO exceptions or exemptions for this law

Why is commingling NOT allowed?

Commingling is not allowed because if the Broker and the clients monies are in the same account and the broker has his account seized by the IRS or creditors, then the client monies are also seized. If it is a clients account ONLY, then the creditors cannot seize the account.

Give two examples of a Statutory Estates in Texas

Community Property and Homestead

Principals duties (CRIP)

Compensation, Reimbursement, Indemnification, Performance

Home Owners Associations regulations are like deed restrictions but usually apply to __________ complexes.

Condominimum

past consideration

Consideration that took place in the past or that is given for something that has already been done

Define 'Contract For Deed'.

Contract for deed is seller financing that does not transfer legal title until the final payment for the property is made. Like buying a car. Title retention protects the seller in that if the buyer defaults, then the seller can evict the buyer. Eviction is faster and cheaper than foreclosure. All money up to that point is considered rent.

Define COST.

Cost is an estimate of PAST EXPENDITURES.

What should someone do to create a security interest in personal property? A) Publish a notice in the newspaper B) Advertise on the radio C) Put a sticky note on the personal property D) File a financing statement, also known as a UCC-1.

D) File a financing statement, also known as a UCC-1.

Blanket loan

Covers one than one piece of property

Damage from which of the following is NOT covered in a basic homeowners' policy? A) Fire and lightning B) Explosion C) Windstorm and hail D) Flood

D) Flood

A township contains A) six square miles. B) 640 acres. C) 23,040 square feet. D) 36 sections.

D) 36 sections.

To determine the value of an office buidling, an appraiser will generally give the greatest weight to which approach? A) Demographic approach B) Cost approach C) Sales comparison approach D) Income approach

D) Income approach

A broker must keep records for: A) one year. B) two years. C) three years. D) five years.

D) five years.

Alice borrowed some money from Jill. But hey, there's no such thing as a free lunch, Jill is charging Alice for the use of the money. The charge for the use of the money is called A) percentage B) usury C) a fee D) interest

D) interest

A written contract is required: A) to create an enforceable listing agreement B) to create any brokerage agreement C) to create an enforceable buyer broker agreement D) to create an enforceable brokerage agreement that includes a provision for exclusive agency representation

D) to create an enforceable brokerage agreement that includes a provision for exclusive agency representation

A Nevada real estate licensee owes a duty to all parties to a transaction: A) to disclose all known material facts concerning the transaction B) to disclose the amount of his or commission C) to maintain the party's confidentiality D) to disclose all material facts, known or which should be known, relating to the property.

D) to disclose all material facts, known or which should be known, relating to the property.

In Nevada, a security deposit for residential property CANNOT be used: A) to remeday a default in rent B) to pay for damages to the premises C) to pay for cleaning the premises D) to pay a penalty for violation of a rule

D) to pay a penalty for violation of a rule

Danielle wants to install an 8 foot fence around the perimeter of her property. The applicable zoning ordinance does not allow a fence in excess of 6 feet. To install her fence Danielle will need a(n) A) declaration of non conforming use B) special use permit C) conditional use permit D) variance

D) variance

All of the following would cause a high vacancy rate EXCEPT A) inept management. B) poor location. C) excessive rent. D) very desirable amenities.

D) very desirable amenities.

Deed Restrictions are found in a recorded document called ______________.

Declaration of Restrictions (TEST)

Define 'Default'.

Default is non-performance of a duty under a contract.

Define 'Deferred Maintenance.

Deferred Maintenance is a type of depreciation (ordinary wear and tear) that results from postponing maintenance of the property.

What is the responsibility of a licensee if selling a property that uses Farming Herbicides and Pesticides?

Disclose and recommend water testing

Full disclosure of property value.

Disclosure of property value is a very important part of an agent's fidcuciary duty to the client. Real estate agents provide a broker price opinion (BPO) or a comparative market analysis (CMA) to a consumer.

How can a licensee avoid misrepresentation in their marketing?

Do not use exaggerated adjectives, strive to use numbers, data and facts that can be confirmed and verified.

Alienation Clause

Due on sale clause states balance is due if sold w/o mortgagee's approval

executory period

During the period between the signing of the purchase and sale agreement and the closing, many arrangements have to be made: inspecting the property, Financing, possibly arranging for the buyer to sell his old house, and researching the tile of the premises to make sure the seller owns it free of encumbrances.

What is the purpose of E & O?

E & O is to protect a broker if the seller misrepresents property condition AND if the broker is NOT aware of the misrepresentation AND if the broker could not have detected it by visual inspection.

Is earnest money consideration? How is the amount of earnest money decided?

Earnest money is NOT consideration and is not necessary to have a executory contract. The amount of earnest money is negotiated between the buyer and the seller.

Define economic Obsolescence and give an example.

Economic Obsolescence is a loss of value due to OUTSIDE forces. Also called EXTERNAL and/or ENVIRONMENTAL Obsolescence, is INCURABLE and an example is air pollution, noise, traffic, jobs etc..

Define 'Effective Age of a property.

Effective Age tells the condition of the property.

The right of the government to private property for public use through the ACTION of CONDEMNATION is?

Eminent Domain which is the only time a government MUST compensate property owners (NOTE, there is NO compensation for DOWN-ZONING; ie changing an area zoned commercial to residential).

When a structure or improvement overlaps onto another's property, this is called an?

Encroachment

4 leasehold estates

Estate for years, periodic Tenancy, Estate at will, tenancy at sufferance

T or F: All contracts must be in writing?

False. All contracts that relate to the transfer of ownership and interest in Real Estate must be in writing to be enforceable. (Test)

Special assessment tax

Ex. Govt provides new side walk in neighborhood can charge the owner's of neighborhood this tax

How are easements created?

Express (meaning in writing or verbally) OR Implied (by actions or evidence) Grant, Agreement, Reservation, Limitation or Prescription, Necessity, or Condemnation. An example of easement by condemnation is when the government takes a parcel of land to create a RR line or utility area.

True or False: Death by natural causes or suicide must also be disclosed to the buyer?

False

True or False: apartment complexes are also included under RESPA?

False

True or False: a licensee is required to disclose the location of a convicted sex offender to the buyer?

False, Licensee's are not required to disclose this information but should refer buyers to the local authorities or information sources if they the buyers ask about it.

True or False: Death due to HIV/aids must be disclosed to the buyer?

False; We can NEVER disclose this as it is a protected class.

Define Family Status.

Family status can mean a minor living with a parent or guardian.

Give example of statutory liens.

Federal Tax Lien, Ad Valorem (according to value) Tax Lien, Judgment Liens and Mechanics & Materialmens' Lien or M&M lien. NOTE STATUTORY LIENS ALWAYS TAKE PRECEDENCE OVER COMMON LAW LIENS.

Investment Advantage for real estate #7 is?

First time home buyers may withdraw up to $10,000 from an IRA (individual retirement account) without penalty (BUT NOT WITHOUT TAX) for the down payment on a home.

Characteristics of Land

Fixity, Immobility, Indestructibility, Modification, Nonhomegeneity, Scarcity, Transferability and Utility

Improvement to rental property by a tenant is called a ___ or part of the property, and remains at the end of the lease?

Fixture

Define Foreclosure.

Foreclosure is the legal process instituted by a Trustee, Lien Holder, or Creditor, after a debtor's default on his payments.

What kind of estate does the Remainderman inherit?

Freehold Estate with Fee Simple or Fee Simple Absolute ownership with all the bundle of rights.

Define Functional Obsolescence with examples.

Functional Obsolescence is one type of depreciation used by and appraiser when using the cost approach and is brought about by factors in the property, it is often or mostly curable. Examples of this would be inferior building materials to cut costs, curb appeal or not enough baths or bedrooms.

The suffix 'or' typically means what?

GIVES -- For example, the mortgagor gives the mortgage to the lender as a pledge to pay back the borrowed money.

What is a GPM loan or mortgage?

GPM stands for GRADUATED PAYMENT MORTGAGE --1. payments rise over a period of time; 2. they usually level off for the remaining term of the loan; 3. they are attractive to those starting their careers and anticipating an increase in their earnings over the next few years; 4. please note: sometimes in year one and two the payments will result in a NEGATIVE amortization which is an increase in debt due to payments less then the interest owed. In other words, not paying the interest every month will result in an increase in debt.

What is the difference between GRM or Gross Rent Multiplier and GIM or Gross Income Multiplier as it applies to the Income Approach used by appraisers for rental property.

GRM IS used for residential properties and is based on the MONTHLY RENT. GIM is used for commercial properties and is based on the ANNUAL RENT.

True or False: Historical buildings that serve a public purpose, like a court house, MUST be modified for ADA?

True (TEST)

The legal method of removing an encumbrance is?

Get a release or release it.

Violations of the ADA may face __________ and _____ ___________ up to $_____________ for the first violation and up to $_____________ for subsequent violations.

Injunctions and Civil Penalties; $50,000; $100,000

Rectangular Survey System is AKA?

Government Survey System

What is a GIM and how does it apply to the income approach used by an appraiser?

Gross Income Multiplier is a back up procedure, used by an appraiser to get a starting point rather than a value on a COMMERCIAL PROPERTY and, is based on the ANNUAL RENT. It works just like the GRM. GIM x Price = Rent

Define 2 backup procedures that an appraiser uses to give him a starting point, rather than a result (determining the value of a property) when using the income approach on a property.

Gross Rent Multiplier

Residential Warranties are available to buyers for their protection to cover such items as the HVAC system, electrical, plumbing and appliances. What is the equivalent for builders and new construction?

Home Owners Warranty Corporation or HOW program which is a 10 year warranty plan covering defects in material, faulty workmanship and structural problems.

HOW program

Home owners warranty corporation for new construction 10 yr plan covering defects in material, faulty workmanship, and structural problems

Define Hypothecation.

Hypothecation is the action of pledging real property as security for a debt.

Which is NOT a fiduciary obligation owed to a client?

Inspection

When is partial performance of a contract a possibility?

If a contract is not a contract of sale, for example, in a long term lease, either the lessee or lessor may be willing to accept partial performance upon default by the other party.

Agreement of Sale

Installment contract or a method of selling and financing property whereby the seller retains title but the buyer takes possession while he makes his payments

Define 'Implied Agency'.

Implied Agency is typically set up due to customs in an area or industry or what is 'normally done'. Implied Agency also typically accompanies a written agreement but is not included in writing because it is considered to be understood. An example of implied agency -- when an Realtor takes a listing, it is implied that the house can be show 7 days a week. This is typical in residential sales. (test may be a story question)

Disclosure by a seller and a licensee of landfills or waste disposal sites is important because of what reasons?

Improperly constructed landfills or waste disposal sites can lead to ground water contamination. A licensee and the seller must disclose the locations and recommend water testing.

Where would an assignment be used?q

In a contract where one of the principals wishes to remain anonymous. They may use a different name or a business name for example.

Do Deed Restrictions expire?

In most cases they DO NOT expire and are permanent and control the present and future owners and tenants.

Agency

In real estate, agency is normally created by either a written listing agreement with a seller, or a buyer agency agreement with a buyer. Some states allow verbal agreements, but most do not. An agency relationship can exist without regard to who pays the fee: the seller, the buyer, both, or neither. Texas law, like most state agency disclosure alws, confirms the common-law rule that paymnent of the fee does not determine agency.

Package loan

Includes real and personal property ex. furnished condo

Dual agency same as

Intermediary only a broker can be one

When a property owner forces the government to buy their property, this is called?

Inverse Condemnation (example of a owner near a run way of an airport that is newly constructed)

What steps need to be taken to make a mortgage effective?

It MUST be recorded, creating a lien to be effective.

What is another name for Redemption?

It is also called a borrower's 'equity of redemption or equitable redemption'. Note, a lender would almost prefer equity of redemption to deed in lieu of foreclosure.

Which statement is TRUE regarding the determination of whom the broker represents?

It is important to decide whether the buyer or the seller is the broker's principal because the broker will owe the principal a higher standard of care and more extensive duties.

What does a physical description of land tell us?

It specifies land and building size and types of construction. It can include land and building area which are measured by square feet, acres, square miles, townships, sections, ranges, rods, chains and links.

Ownership of two or more with rights of survivorship is AKA?

Joint Tenancy

If a complaint is filed against a licensee...what is the licensees best defense?

Keeping accurate notes and written records of his interaction with his clients and prospects. (TEST)

Littoral rights

Lakes, Oceans, large bodies of water

What is the formula used by an appraiser when using the Replacement Cost approach when there are NO comparable sales in an area?

Land Value + Building Replacement Cost - Depreciation = Value

What is the formula used by an appraiser when using the Reproduction Cost approach when there are NO comparable sales in an area?

Land Value + Building Reproduction Cost - Depreciation = Value

Real Property is defined as...

Land plus the improvements attached to the land and the rights to use them.

What is the risk of Lead in a home and what is the responsibility of the licensee to the consumer?

Lead can be found in paint, pipes, soil -- and can be toxic if ingested or inhaled. A seller is required to disclose lead base paint especially if the property is built before 1978. This disclosure will allow a buyer to waive his rights to a lead inspection. Older homes may have lead pipes and the licensee may recommend a licensed plumber to inspect the home as well as a TREC inspector.

Estate at will

Lease can be terminated by either party at will without notice

Tenancy at Sufferance

Lease expires and tenant refuses to move out

ECOA Equal Credit Opportunity ACT

Lenders can deny traditional financing if income is commission based.Child support is most likely reason for denial.

The use of borrowed money to make money is also known as?

Leverage -- An example of using leverage would be putting a low down payment on an investment property.

What are the two levels of agency relationships that licensees must adhere to?

Licensees have a PUBLIC responsibility and a FIDUCIARY responsibility.

Another name for Straight Assumption is?

Loan Novation

Conforming loans

Loans qualified to be purchased in the secondary market

Define "Conventional" loans.

Loans that are not insured or guaranteed by the government but backed by private investors through the Fannie Mae and Freddie Mack pool.

Define 'Megan's Law'.

Megan's Law is a federal law requiring all states to release information to the public about known convicted sex offenders in order to protect the public's safety.

Another name for a property site is?

Lot or parcel.

What is the most common legal description used in a residential listing agreement?

Lot, Block and Subdivisions recorded maps or plats

What is the most common approach used, when rendering an opinion or estimate of value for a residential property?

Market Data Approach

Another definition of market value is?

Market value is also defined as the most probable price a property will sell for. This is a test question.

Define market value.

Market value is the price a willing seller will sell for, and the price a willing buyer will pay, when neither party is acting under exceptional pressure.

MAI designation

Member, Appraisal Institute

What does MAI stand for?

Member, Appraisal Institute

Name the 3 legal methods of describing a parcel of land?

Metes and Bounds; Lot, Block and Subdivision; Rectangular Survey System.

Accounting

Money received by a broker as a result of transactions such as purchase contracts or property management agreements are trust funds and are frequently held by the broker for the benefit of the principal.

Is the option fee in an option contract refunded if the buyer decides to NOT purchase the property?

NO....the option fee is never refunded because the money is buying the seller's time.

What is MIP?

Mortgage Insurance Premium -- this is the lender insurance on an FHA loan and is paid by the borrower.

Is age a protective class and why?

NO...age is not a protective class to allow for senior housing where at least one person over the age of 55 must be living in 80% of the units. Senior housing communities may refuse to sell or rent to those under 55 years of age or families with children. TEST QUESTION

Is a Deed of Trust a true DEED?

NO; A Deed of Trust is a Mortgage or a pledge to pay back the debt. The Trustor (Mortgagor, Borrower, Buyer) must sign the Deed of Trust as a pledge to pay back the debt.

Define 'Mutual Recission'.

Mutual rescission is when all principals to a contract mutually agree to terminate a contract. It could be because a contingency could not be met, such as a buyer getting a loan or a buyer who needed to sell their home could not get it sold. Regardless, the mutual rescission needs to be in writing.

Are siblings or parents of the vet eligible for a VA loan?

NO

Are there criminal penalties in regards to discrimination charges?

NO

Does HUD mandate radon testing for an FHA loan?

NO

Does the seller have a duty to the buyer to remediate lead found in a home?

NO

In regards to the lender notice of pending foreclosure sale or court house sale....must the borrower/debtor received the certified letter to make it valid and enforceable?

NO

Is Joint Tenants in common an estate of inheritance?

NO

Is TRUST a duty of either an agent or the principal?

NO

Is a CMA an appraisal?

NO

Is a unrecorded lien enforceable or effective?

NO

If a property owner is given permission to use his property in a different way that is prohibited by zoning or deed restrictions (HOA) does the permission go with the land like and easement?

NO, the permission to use the property in a different way GOES WITH THE PERSON, NOT THE PROPERTY and does NOT pass on to the new owner if the property sells.

Does a seller have a duty to remediate asbestos if the seller disclosure or inspections finds it on the property?

NO, the seller only has to disclose the presence of the material

Define Subagent.

NOT IN TEXAS -- a subagent is an agent for a person who is already acting as an agent for a principal. For example, the listing salesperson sponsored by the listing broker is the subagent of the listing broker.

Is Brokerage also agency?

No

Are single family homes also included under the ADA of 1990?

No (TEST) -- However, new construction must meet higher standards of accessibility than existing structures, Churches and historical buildings have SOME exceptions which state that if built BEFORE 1990, the church is exempt. However, if older churches are being renovated as well as new construction must follow the ADA guidelines.

Would an ARM be a good loan product for someone that is on a fixed income?

No (this is a test question)

In 1974 an amendment was issued that added what to the Federal Fair Housing Act.

No discrimination based on Sex

Nonhomogeneity is a physical characteristic of land and means?

No two pieces of land are exactly alike.

Does a seller have to sign the Deed of Trust?

No, only the Trustor (Mortgagor, Borrower, Buyer) must sign the Deed of Trust.

Is the note or promissory note recorded? What does the note contain as its terms?

No....a note has the terms of the loan rate and the amortization schedule.

The three physical characteristics of land are?

Nonhomogeneity; Immobility; Indestructibility

What if the Life Tenant sells his interest in the property...what effect will the sale have on the Remainderman?

Nothing, in other words, the buyer of the Life Estate would have to vacate the property upon the death of the original Life Tenant and would not receive a refund of his purchase price. Not a good purchase for the buyer....bad deal!

Another name for communicating acceptance of an offer is?

Notification.

Define 'Novation'.

Novation is the substitution of a new contract for an existing one.

indirect revocation

Offeror engages in conduct indicating he changed his mind AND offeree is aware of the conduct

direct revocation

Offeror indicates directly to offeree that he has changed his mind about the deal

When will the policy actually be issued?

Once payment for the policy has been received...usually at closing.

Define Intestate.

One without a will is intestate.

What is another name for a residential warranty?

One year renewable policy.

Define 'Reverse Annuity Mortgage'.

Owners 62+ years may borrow against their homes equity without making any payments on the amount borrowed during their life time or per the terms of the loan. The lender makes periodic payments to the owner based on the equity in the property. The loan will come due at a specific date, upon the sale of the home or the death of the owner.

What are loan processing fees also known as?

Origination Points. Please note, they are NOT tax deductible. All points are paid at closing.

Define 'Ostensible Agency'.

Ostensible Agency is created through ACTIONS which lead others to ASSUME authority. This type agency is created when a licensee ACTS like an agent for a principal and others respond to those actions. (test could be a story question)

Ostensible Agency

Ostensible means "for all appearances."

In addition to the 'Principles of Value', list six other factors that can affect property values.

Other factors that can affect value of a property other than the 9 Principles of Value are: Market Cycles; Political Actions; Economic Forces; Physical Forces; Environmental Forces and Sociological Forces.

Estate in Severalty is AKA?

Ownership by One Person, or Sole Ownership

Estate in severalty or Sole ownership

Ownership by one person

Joint Tenancy

Ownership by two or more with rights of survivorship goes to other owners overrides a will

Tenancy in common

Ownership by two or more without rights of survivorship goes to your heirs not the other owners

a freehold estate is.....

Ownership of real property which includes all the legal rights that attach to owning real property including but not limited to the right to sell, lease, encumber, use, enjoy, exclude and will to heirs etc.

Government Restrictions - Governmental Rights in Land

PETE OR POLICE POWER, EMINENT DOMAIN, TAXATION, ESCHEAT

Define PMI.

PMI or Private Mortgage Insurance is an insurance policy that protects the lender in the event the buyer defaults on the loan. It is required if the borrower has less than 20% invested in the property and allows a smaller down payment in the event that cash flow is tight for a buyer also known as higher LTV. Finally, PMI protects or insures the lenders exposer to risk, usually the top 20-25% of the loan. (test question: Low down payment = high LTV ....and.... Large down payment = low LTV)

Define 'Patent'' as it pertains to title transfer.

Patent is when the government transfer title to an individual.

The rate that banks charge their preferred customers is called?

PRIME RATE

What is the procedure to divide the co-tenant's interest in a joint tenancy.

Partition which can be court ordered or voluntary. Partition would divide the property into pieces and end the joint tenancy.

What is a periodic lease with a FIXED period that is AUTOMATICALLY renewed unless the tenant or the landlord acts to terminate it?

Periodic Tenancy ...an example is a month to month lease where a 30 notice is generally required to terminate. This form of lease also survives death of the landlord and/or sale of the property. eg. month to month lease

Fixture

Personal Property attached in such a way to make it real property.

Define Fixture....

Personal property that has been attached in such a way to make it real property. The word 'installed' often indicates a permanent attachment.

Define Physical Deterioration and give an example.

Physical Deterioration is one type of depreciation used by an appraiser when using the cost approach and is considered the ORDINARY wear and tear on a property, it is curable and has the least impact on an appraisal because ALL buildings have it. Examples of this would be chipped paint and worn flooring.

3 types of depreciation in cost approach

Physical deterioration,Functional obsolescence, Economic obsolescence

Police Power

Power given to a municipality to regulate and control the character and use of property for the health,safety,and general welfare of the public

Government rights in land (PETE)

Police Power, Eminent Domain,Taxation, Escheat

What is another name for Joint Tenancy? Why?

Poor Man's Will. This form of co-ownership can avoid the need for a will as the deceased property goes immediately to the co-owners. PLEASE NOTE: Joint Tenancy will override a will. This is what John and Tony were trying to do with Joint Tenants with Rights of Survivorship -- this would have defeated Dad's will.

Prepayment Clause

Prepayment of mtg there is fee

Define PRICE.

Price is generally what one must PAY for a property. This is a test question.

Define the principle of value called "Principle of Conformity" and site an example.

Principle of Conformity states that MAXIMUM VALUE is found when there is a reasonable degree of SIMILARITY or sameness. Properties in the same neighborhood tend to conform in price. (Please note: A test question might be presented as "Maximum Value is seen with the principle of comformity. True or False. Apparently there will be several questions on this value.)

Escheat

Property reverts to the state dies with no will,no heirs, no kindred. Also property is abandoned

Taxation

Property taxes are the highest priority lein on real property

Assessment District--See Improvement District

Property(s) in a community receiving special benefits such as improvements to streets, curbs, gutters, drainage lines and so on and where the property(s) that do benefit directly from the improvements bear the cost of the improvements through a special assessments on the property. This is different from a 'public improvement' which benefits the public at large and which are typically financed through ad velorem property taxes.

List the 5 areas that title insurance will provide protection.

Protection will be given for 1. forged deeds, 2. illegal acts of trustees, guardians or trustees; 3. false claims of ownership; 4. human error in copying and recording; 5. loss or destruction of records and for additional money, survey or boundary issues.

Define a licensee's 'Public Responsibility' or the 'Duties' to a customer or third party in a transaction.

Public Responsibility or Duties to a Customer or Third Party includes 1. honesty; 2. fairness, 3. disclosure all material facts, 4. the use of fair business practices, 5. handle all funds with care and 6. be responsible for all written or verbal statements.

Define "Puffing".

Puffing is marketing using adjectives and opinions rather than details or facts and figures and is NOT considered misrepresentation because it is usually the opinion of the licensee or seller.

Give two examples of a 'Executory Contract'.

Purchase Agreement that is in pending status and a Contract for Deed contract

What is another name for a bilateral contract?

Purchase agreement

A property whose value has been diminished in a murder occurring on the property has suffered which of the following?

Purely psychological stigma.

What is the Qualifying Ratio or Debt Ratio's as it relates to borrowing money?

Qualifying or Debt Ratio's state the percent of MONTHLY GROSS INCOME that can be used to pay PITI payment on a mortgage loan AND the percent of MONTHLY GROSS that can be used to cover all debt including PITI. Compare conventional debt ratios (typically 28-36% of the GROSS INCOME OF THE BORROWER).

the suffix 'ee' typically means what?

RECEIVES -- For example, the mortgagee, receives the mortgage from the borrower or mortgagor as a pledge to pay back the money he has borrowed.

What law places restrictions on requirements for tax and insurance escrow accounts -- no more than 2 days in advance?

RESPA

What law requires lenders to supply buyers with a good faith estimate of closing costs within 3 business days of loan application?

RESPA

RESPA covers 5 main areas which are:

RESPA allows: 1. any party to the transaction to choose the title company, and any party can pay for the policy; 2. prohibits kickbacks; 3. Places restrictions on requirements for tax and insurance escrow accounts -- NO MORE THAN 2 MONTHS IN ADVANCE; 4. Requires landers to supply the borrower with a good faith estimate of closing costs within 3 business days of loan application; 5. requires use of the HUD Uniform Settlement Statement form aka HUD1.

The Federal Fair Housing Act aka Title VIII of the Civil Rights Act of 1968 forbids discrimination based on what?

Race, Color, National Origin and Religion

Define 'Radon' and how it relates to improved property.

Radon is a naturally occurring odorless and colorless gas produced by the decay of radioactive materials in rocks under the ground.

Townships and Sections are part of the Rectangular Survey system and are located in what?

Ranges

Define RESPA.

Real Estate Settle Procedure Act regulates closings on 1-4 family residential property with federally related financing

Property ownership includes classes of property which can be grouped into four areas ...

Real Property; Personal Property; Fixtures; Trade Fixtures

Reasonable care and diligence

Real estate agents are held to a standard of care that requires, among other things, that they be knowledgeable concerning the land, the title, and the physical characteristics of the property being sold.

Severed or Severance

Real property being removed becoming personal property

Define 'Redemption'.

Redemption is the time period up to the day of foreclosure where the borrower has the option to reclaim the title to a property if he has the ability to pay what he owes.

Define 'Reliction'.

Reliction is when a river dries up. Internet -- Increase in the land area due to the gradual recession or shrinkage of a body of water such as a lake or sea, or change in the boundaries of a land due to a change of course by a river or stream.

Define Replacement cost:

Replacement cost is the cost to build a building of SIMILAR size and usefulness using todays methods and materials.

Define Reproduction cost:

Reproduction cost would be the cost to exactly DUPLICATE a building.

What is the most expensive HELOC available to a home owner?

Reverse Annuity Mortgage or Reverse Mortgage

What is another name for a Reverse Annuity Mortgage?

Reverse Mortgage

T or F -- in order for zoning or HOA rules to be changed, public hearings must be held but the ultimate decision rest with the zoning committee?

True

What is another name for the Market Data Approach process?

Sales Comparison. This is a test question and this term is what is used on the test for market data approach but know and understand both terms.

Sally, as an agent for the seller, listed and subsequently sold George's town house. She did not tell George that a major zoning change in progress would allow business use in the area, thus increasing property values. Which statement is TRUE?

Sally was required to disclose the change because it was a material and pertinent fact.

Define SCARCITY.

Scarcity is a value characteristic and there must be a LIMITED supply.

True or False: We debit the seller with NO entry for the buyer for accrued interest and existing loan payoff and fees necessary to furnish marketable title (commission).

True

Who is eligible to pay the VA funding fee?

Seller or the Buyer at the closing or it can be included in the loan.

The process of REAL PROPERTY becoming personal property can be described as?

Severed or Severance

Give an example of a buffer zone.

Single Family, Apartments, Retail. The Apartments is the buffer zone.

What is another name for 'Deed in Lieu' of foreclosure?

Sometimes called a 'Friendly Foreclosure' or Voluntary Deed.

When the government provides a benefit to a LIMITED number of property owners such as curbs or sidewalks in a neighborhood a ________ ________ _____ may be levied against those owners who benefit directly from the improvement.

Special Assessment Tax which is typically paid by the seller in the event there is an UNPAID BALANCE when the property is sold. The balance could also be prorated at closing too.

What are the other names for a property sales tax?

Stamp Tax, Transfer Tax, Deed Tax

Uniform Vendor and Purchaser Risk Act

States that the seller bears any loss that occurs before the title passes or the buyer takes possession.

All listings must be in writing to satisfy the __________?

Statutes of Frauds

Define Steering.

Steering AKA Channeling is the illegal practice whereby buyers are directed to or away from certain areas because of the race, color, religion etc..

Which assumption has the LEAST negative effect on the seller's credit? (choices are FC, SS, Straight Assumption, Subject To Assumption) Test question.

Straight Assumption or Loan Novation

What is another name for a term or interest only loan?

Straight Line Loan (Test Question) which is used a lot by builders and investors.

On the issue of AIDS-related disclosures,

TREC rules prohibit disclosure.

True or False...Only a broker can earn a commission and/or sue for a commission?

TRUE

True or False...Only a broker can sue a seller if he defaults on a listing agreement or a buyer if they default on a buyer rep agreement?

TRUE

True or False? An agent is liable for all of the professional acts he performs for his principal and, a principal is liable for all the acts of his agent?

TRUE

True or False: Discrimination in advertising is also a violation of the Fair Housing Laws.

TRUE __ for example a tiny home can be advertised as "cozy for two" but not as "perfect for a couple". It is OK to use terms to describe the PROPERTY such as master down, 2 br. It is NOT OK to describe or imply the type of person who might live on or in the property...example No Irish, No Wheel Chairs etc.

True or False: A broker would be considered guilty of discrimination if he does not have the Equal Housing Opportunity Poster displayed in his office.

TRUE!!! Furthermore Judges may award BOTH economic and non-economic damages, issue injunctions, assess attorney fees and assess civil penalties.

Lien Theory state

TX the lender has a lien and the borrower has title

True or False: a Title Policy may contain a subrogation clause.

True

When a lease expires and the tenant refuses to move out, this is called what type of leasehold estate?

Tenant at Sufference is when the landlord is typically NOT receiving rent and the holdover tenant has NO rights to be there. If the holdover tenant pays his rent in full and the landlord accepts it, then a HOLDOVER TENANCY is created.

What is another name for an interest only loan?

Term Loan

Define Testate.

Testate is one who has a VALID will.

Title insurance companies in Texas are regulated by the

Texas Board of Insurance.

Deed of trust

Texas uses instead of traditional mtg contains "Power of Sale" Clause that allows for "Non-judicial foreclosure" quick foreclosure

What is the STRAIGHT LINE METHOD of depreciation?

The 'Straight Line Method' of depreciation is a method of depreciation of EQUAL ANNUAL INSTALLMENT AMOUNTS. Example: $100,000 depreciated over 10 years would be $10,000 per year. Using this method, you can calculate the depreciation of a property (depreciation is gone) OR the depreciated value of a property (depreciated value remains after depreciation is deducted).

What are the 3 basic approaches to appraisal?

The 3 basic approaches to appraisal are the 1. market data approach; 2. the income approach; 3. the cost approach.

What are the 3 types of depreciation when using the cost approach to determine value of a property?

The 3 types of depreciation are PHYSICAL DETERIORATION; FUNCTIONAL OBSOLESCENCE and EXTERNAL OBSOLESCENCE.

True or False: a licensee can be held financially responsible for any loss a client suffers if it is determined that the loss was a result of the licensee practice of law.

True

What are the 5 steps of the appraisal process?

The 5 steps of the appraisal process are 1. state the purpose of the appraisal; 2. Collect and verify information about the property; 3. Estimate value using all 3 approaches, or as many approaches as needed to get the best result; 4. Reconcile the estimates by determining weighted averages; 5. Prepare the report.

Define a licensee's 'Fiduciary Responsibilities'.

The Fiduciary Responsibility of a licensee for a client includes the following: 1. put the interest of the client first, 2. give full disclosure to the client which will include ADVISE & OPINION plus all material and other facts about the property, 3. exhibit trust and honesty, 4. exercise good business judgment when working on behalf of the principal, 5. be loyal and competent to the client. (test)

Define the ADA.

The ADA or Americans with Disabilities Act was passed in 1990 to prohibit discrimination against individuals with disabilities.

Define CAPITALIZATION METHOD.

The Capitalization Method is the conversion of an income stream into an INDICATION OF VALUE of a property OR, Net Annual Income divided by Cap Rate or ROI x Market Value (better check this formula out, may not be correct).

What IS the Capitalization Rate of a property?

The Capitalization Rate is the rate of return of a property.

Explain why the capitalization rate or ROI and MARKET VALUE are an inverse relationship.

The Capitalization Rate or ROI have an inverse relationship with Market Value because when there is an INCREASE in one, there is a DECREASE with the other. So, when the ROI is HIGH, a SMALL investment gives a good rate return but when the ROI is low, a larger investment is needed to get a good return.

What is the difference between a DEED OF TRUST and a traditional MORTGAGE?

The Deed of Trust contains a 'power of sale' clause that allows for NON-JUDICIAL foreclosure. The power of sale results in quick foreclosure. This non-judicial forclosure is preferred by lenders. A traditional mortgage does not include the language for power of sale and must go through the lengthy process of judicial foreclosure. (through the courts)

How is the GRM calculated?

The GRM or Gross Rent Multiplier is calculated by taking the subject property's value and dividing it by the monthly rent. This number is generally fairly uniform per neighborhood.

Who imposes a reservation in a deed?

The Grantor or seller of the property.

Who is the Mortgagee?

The Lender is the mortgagee.

Define "LIFE CYCLE" of a neighborhood.

The Life Cycle of a neighborhood is defined as the stages of growth and development consisting of the following stages: Growth, Stabilize, Decline, Revitalize.

What is the owner of a life estate called?

The Life Tenant who has all the rights and duties of an owner EXCEPT the right to choose who will get the property upon his death.

Who is the Mortgagor?

The Mortgagor is the borrower and gives the Mortgage as a pledge to the Lender.

Define the 'Revitalization' stage of a neighborhood.

The Revitalization Stage of a neighborhood means that the area is up and coming. EX the Heights in Houston, older homes now being improved making them more desirable.

True or False: anything that might influence a decision by the buyer should be disclosed?

True

What government entity sets the title policy premiums?

The State Board of Insurance (many states including Texas)

A VA loan and an FHA are different because?

The VA GUARANTEES the top 25% of the loan amount will be repaid (Lenders call this a 75/25 ratio), the guarantee is FREE to the vet and protects the LENDER NOT THE VETERAN). An FHA loan is INSURED by the government for the whole borrowed amount.

Obedience

The agent has an obligation to follow the lawful instructions of the client.

Define 'Accession'.

The accretion of alluvial soil deposits along the banks of a stream.

Define APR.

The annual percentage rate or APR is the effective rate of interest -- what a borrower actually pays. It is usually higher than the interest rate the buyer is locked into because it includes ALL the charges or closing cost for the lender....not just the interest being paid the first full fiscal year.

How are VA loan interest rates determined?

The are set by Market Conditions.

Who has the responsibility to decide how a commission is divided once the commission rate has been agreed upon by the principals to the agreement?

The broker

Define the 'Exclusive Right To Sell' listing and why is this the best kind of listing for a broker?

The broker is the exclusive agent and will receive a commission even if the seller brings a buyer first. This is the best kind of listing because it eliminates most procuring cause issues, it gives the most protection to the broker in regards to being paid for his work.

Sponsoring broker

The broker through whom the salesperon's active license is issued and who assumes responsibility for the real estate brokerage activities of that salesperson.

What is the difference between a BOV and CMA?

The broker who produces a BOV is usually PAID. A CMA is usually done for FREE. This is test question.

What are the buyer's options in a foreclosure sale if the Trustees Deed IS NOT delivered on time?

The buyer may use a vendees lien to protect his interests

Full disclosure regarding status of earnest money deposits.

The buyer, not the broker, is responsible for depositing the earnest money with an escrow agent on final signing of the contract by all parties.

What is the maximum loan amount a vet can get?

The certificate amount (this certificate will note the vets ability to pay a certain amount) X 4 = approved maximum loan amount.

Agency by Estoppel

The concept of agency by estoppel arises where one person acts in such a way that the other believes that a third person is authorised to act on his behalf and enters into a transaction with the third person, the person whose act induced him to do so, is liable for that agreement as if the third person acted on his behalf. It is based on the principle of natural justice and equity.

What happens if one of the principals to a contract dies?

The contract will be binding on the heirs of that principal.

The cost approach is also used by an appraiser for other kinds of properties such as:

The cost approach can be used by unique properties such as 1. churches; 2. government buildings; 3. historical buildings; 4. for other buildings when there is NO other comparables out in the current market.

True or False: title insurance will defend title at its own espense, as well as pay any claims against the property, if the title proves to be defective.

True

True or False: we debit the buyer and no entry to the seller for prepaid interest and charges associated with the loan, such as points.

True

True or False? All seller and buyer listings are taken in the name of the broker?

True

TRUE OR FALSE. If a property is located in a MID (municipal improvement district), the property owner will receive a tax bill, similar to a special assessment tax, until the improvement is paid in full OR the improvement district designation is removed.

True

Confidentiality

The duty of loyalty requires that the agent keep confidential any discussions, facts, or information about the principal that should not be revealed to others.

Define 'Effective Date' in a contract.

The effective date in a contract is when the last party signs.

The Certificate of Reasonable Value or (CRV or VA appraisal) must meet or exceed the sales price on a contract....True or False?

True

US constitution

The government of the United States. A set of principles (guidelines) that describe the duties and powers of the government.

What happens if the Life Tenant is leasing the Life Estate and they die?

The lease expires.

What happens to the junior liens in the event there are any with the Deed in Lieu of Foreclosure?

The lender must accept responsibility of all junior liens.

In a foreclosure, what happens if the property sells for more than what is owed?

The lender will give the excess to the debtor.

Who is responsible to verify statements in marketing information, such as the age of the improvements, size of the lot and building, Ag or any other type of exemptions, property tax amounts?

The licensee is responsible for accuracy and can reduce risk by using builder numbers or tax records as sources.

If the property is sold by the lender and garners LESS than what is owed by the debtor, what are the lenders options at this point?

The lien holder can sue the debtor for a Deficiency Judgement.

Who begins the foreclosure process?

The lien holder or lender.

Full disclosure of commission split.

The listing agent must disclose to the seller the existence of any fee-sharing arrangement with a cooperating broker.

What is a brief summary of the purpose of 'Regulation Z'?

The main purpose is so buyers understand what the total cost of borrowing money is which is express in the APR. Another purpose is that Regulation Z controls all ads in all marketing venues.

What is a major advantage and disadvantage of a balloon loan?

The major advantage of a balloon loan is that the interest rate is usually lower than other loan products. A major disadvantage of this type of loan is the high cost of refinancing. (test question)

List the nine 'Principles of Values' used by appraisers to help them arrive at a final opinion of value on a property.

The nine principles of values are 1. Highest and Best Use; 2. Principle of Substitution; 3. Principle of Conformity; 4. Principle of Increasing and Decreasing Returns; 5. Principle of Contribution; 6. Principle of Regression; 7. Principle of Competition; 8. Principle of Change; 9. Principle of Anticipation.

What does a NOTE or PROMISSORY NOTE signify?

The note or promissory note is the INSTRUMENT FOR THE DEBT and is the borrowers personal promise to pay it back.

When the mortgage is recorded, and it is the first recorded claim, it will be the first priority lien...T or F.

True

What is considered the BEST COMP by an appraiser ?

The one that fits into a certain time line and which has the LEAST amount of adjustments.

Under a VA assumption, who is liable for the loan?

The original vet borrower and will not be release from the liability until he receives a release from the VA. NOTE: release of liability DOES NOT result in restoration of entitlement.

True or False: A buyer with a signed and dated sales contract, who has not yet gone to closing, has equitable title in the property he is buying.

True

True or False: A licensee should practice within his area of competence.

True

True or False: A licensee that is sponsored by a broker is considered a General Agent for that broker.

True

Define the principal of value called "Principle of Substitution" and site an example.

The principle of value called 'Principle of Substitution is a principle that truly sets an upper limit on a price on a property. Why? Because a buyer can not justify in paying more for a property when a similar substitute property can be purchased for less with similar risks and yield.

True or False: A time limit is placed on the seller when an offer is made by a buyer?

True

What is a the purpose of an offer?

The purpose of an offer is to open negotiations between the buyer and the seller.

Define the 'Federal Interstate Land Sales Full Disclosure Act as it applies to unimproved land sold interstate.

The purpose of this law is to avoid fraud in marketing land and mandates that developers must file reports with the Consumer Financial Protection Bureau before offering land for sale. The property report should disclose all information about the property and must be provided to the consumer BEFORE signing any paperwork or else he may void or cancel his contract or lease. (test, the answer is 'property report')

Full disclosure of relationship

The real estate agent must disclose to client any special relationship that might exist between the broker and any of the broker's associates and the other parties in the transaction.

True or False: All written offers must be presented to the seller?

True

Eminent Domain

The right of the government to take private property for public use through the action of condemnation

Explain who the secondary market is and how they apply to the loan process.

The secondary market is where lenders go for money. Three main secondary market warehouse agencies purchase loans, assemble them into packets and then sell them to investors.

Where do the lenders go for their monies to loan to a buyer?

The secondary market...Fannie Mae, Freddie Mac and Ginnie Mae. Lenders use Freddie Mac forms to ensure that the loans can be sold in the secondary market.

Who typically pays for the property sales tax?

The seller at closing and can be expressed as mills or rate per hundred.

Define 'Exclusive Listing.

The seller is competing with the broker to bring a buyer. The brokerage is the exclusive agent and will receive a commission unless the seller brings the buyer first.

Who is responsible for the accuracy of the seller disclosure?

The seller is to fill it out to the best of his knowledge and is completely liable for its accuracy.

Full disclosure of buyer's financial condition.

The seller's agent must disclose to the seller all information, good or bad, regarding the buyer's financial condition.

True or False: An offer may be accepted, countered or rejected?

True

True or False: An offer may be withdrawn ANY TIME prior to acceptance from the seller?

True

True or False: Death on the property due to a material defect should be disclosed to the buyer?

True

What are the two basic functions of the Trustee in a Deed of Trust and who does he have a fiduciary responsibility too?

The two basic functions of a Trustee would be 1. Release the lien when the note is paid in full; and 2. Foreclose in the event of default. The Trustee has a fiduciary responsibility to the Beneficiary.

True or False: Death on the property due to a murder or other violent crime should be disclosed to the buyer?

True

True or False: Even though a licensee is an independent contractor, the broker will be liable for the acts for the licensees.

True

Define "Principle of Contribution" and give an example.

The value principle of "Principle of Contribution" states that the value of a part, is determined by its contribution to the TOTAL value of the property rather than by its cost.

Define 'Erosion'.

The washing away of soil leading to a boundary change. Internet - Eating away of a coastline or land by the action of water, ice, and/or wind, or wearing away of a surface by corrosion or traffic.

What are market data approach, the income approach, and the cost approach defining?

These are the 3 basic approaches to doing an appraisal or estimating or rendering an opinion of value of a property.

True or False: Historical buildings preserved to demonstrate the past are exempt from the ADA?

True

True or False: A general agent status between a broker and a licensee must be in writing according to law.

There is no law that requires this but it is recommended to have all in writing.

When or how is Dual Agency or an Intermediary relationship permitted?

These agencies may only exist if both the buyer and the seller agree in writing. Disclosure of the relationship should be done BEFORE any confidential information is shared.

What are conforming loans?

These are loans that can be sold in the secondary market, are standardized conventional loans, written on uniform documents that meets the purchase requirements of Fannie Mae and Freddie Mac. Both the loan amount and the borrowers characteristics are factors in determining whether a loan is conforming or non conforming. A non-conforming loan DOES NOT meet the guidelines of the secondary market.

Define 'Sub Prime Loan'.

These are loans with risk based pricing - the rates ARE NOT published. Borrowers are rated A-F where a prime buyer is an A. A- to F will one to five % higher than those with good credit because the lender cannot sell the note to an investor pool/secondary market and must service the loan. This loan product typically has a pre-payment penalty to protect the lender from loss of interest.

Why are Home Equity Loans popular?

They are popular because they have lower rates than unsecured debt such as a credit card. (this is a test question)

What happens to all junior liens upon the sale of a foreclosed property?

They are wiped out with the sale.

Which statement is TRUE of listing agents?

They must present every written offer to the seller.

What should a licensee do if a seller suggests or even demands that they misrepresent the property condition?

They should not take the listing or fire the seller and refuse to work with them.

Define the Foreign Investment and Real Property Tax Act and its purpose.

This act was passed to ensure that nonresident aliens and foreign corporations pay US income tax on the gains from the sale of US real property. The title company will hold 10% from the seller's sale price over $300,000.

Define 'Universal Agency'.

This agency is very broad in scope -- the Principal gives the Agent the power to transact matters of ALL types in his behalf. This is rarely seen in real estate and more often seen in a husband and wife situation if the husband travel a lot and the wife has POA.

Define "Time is of the essence" clause as it relates to contracts.

This clause can be used in contract and is optional. It purpose is to allow each party to hold the other to strict performance on a specific date stated in the paperwork.

What does the GRM actually indicate?

This factor or number, when multiplied by the MONTHLY RENT gives an ESTIMATE OF VALUE for the property.

Define BOV

This is a Broker Opinion of Value.

Define "Abstract of Title".

This is a complete history of all recorded events affecting title to the property.

Define "Participation Loan".

This is a loan where 2 or more lenders own a share which allows the risk of the loan to be share as well.

True or False: If only one term that is presented within a buyer's offer is changed....this constitutes a rejection of the buyers offer.

True

What is Tenancy by the Entirety? What are the advantages of this type of ownership?

This is a specific type of Joint Tenancy where the co-owners' are husband and wife. One advantage of this type of ownership is that it avoids probate. Both signatures will be required on any sales documents and it is seen in 40 states in the US. This ownership comes from English law where community property comes from Spanish law.

What is a 'Partial Amortized Loan"?

This is another name for a balloon loan. (test question)

Define Modular of Module housing.

This is housing that is prefabricated off site.

Define 'General Agency'.

This is the Broker - Realtor relationship: this agency gives the agent the power to bind his principal in a particular trade or business. Power to bind a principal is the power to sign a legally binding agreement in the name of your principal. The general agent's signature binds or commits the client to the agreement. Limited Power of Attorney can be used to create general agency such as Owner - Property Manager or Broker - Sales Person. (memorize and know it...test question)

Why would a lender want to do a Deed in Lieu of Foreclosure?

This is the fastest way for a lien holder to get title to the property.

Define "Principle of Increasing and Decreasing Return" and give an example.

This principle states that an investor needs to invest in a property whenever each dollar invested will return a dollar OR more of increased value and then STOP when each dollar invested returns LESS than a dollar in value. Another way to say this is "Do not over-improve a property".

Define a Deed in Lieu of Foreclosure.

This process is when the lender accepts a deed from the borrower who is in default in lieu of beginning the foreclosure process.

Define Escalation Clause.

This provision in a mortgage allows a lender to raise the existing interest rate. Usually seen in an ARM product, it can be used to overcome an Alienation Clause. (NOTE: a lender might allow an assumption at an increase interest rate. Overcoming an Alienation Clause = Escalation Clause)

True or False: Premiums are paid ONE time. A NEW policy must be issued each time the property changes ownership, or is refinanced.

True

Define 'Option Contract".

This type of contract is the right to purchase a property within a definite time period and at a definite price. There is NO obligation to the buyer to purchase the property but the seller MUST sell. Only one party makes a promise....the seller. Only one party can be sued....the seller. The option fee goes directly to the seller. To extend the option, the buyer would have to pay an additional fee.

Define Quitclaim Deed.

This type of deed gives NO warranties or guarantees. It offers the LEAST protection. It is used to clear a cloud on the title or to cure a defect in title. If there is a cloud on the title and no one available to sign a Quitclaim Deed to cure that cloud, a court action called "Quiet Title Suit" or an "Action to Quiet Title" will correct the problem.

Define "Package Loans".

This type of loan includes real property + personal property such as selling a condo completely furnished.

True or False: Title insurance must compensate owners for defects missed by the title company in its search process.

True

True or False: Title insurance will NOT pay for defects known to the buyer PRIOR to the policy being issued.

True

Name 3 common contingencies found in a contract.

Three common contingencies in a contract could include financing, the sale of another property and inspections.

If a loan is made on a personal residence, the consumer has X day right of rescission.

Three days ... He can cancel the transaction up to midnight of the third business day following the transaction. This right of rescission does not apply to purchase mortgages (does this refer to investors?) or commercial property or agricultural loans more than $25K.

Natural causes can also lead to Involuntary Alienation. Please list how.

Through accretion, avulsion, erosion and reliction (memorize as this is a test question).

What are the FOUR UNITIES required for the estate of Joint Tenants?

Time, Title, Interest and Possession -- All owner's acquire their ownership at the same time, from the same legal documents, with equal undivided shares of the whole estate (each owns a PERCENTAGE of the whole NOT a PIECE of the whole).

Define 'Title Insurance'.

Title Insurance policy agrees to compensate or reimburse the insured against any losses sustained as a result of defects in the title, other than those exceptions listed in the policy.

True or False: Training and supervision is in the best interest of the broker and salesperson.

True

What are the purposes of Deed Restrictions?

To control land use such as development and methods & materials for construction as well as style and appearance requirements for non-real property.

Why do lenders require an appraisal?

To demonstrate COLLATERAL or SECURITY of the property.

What is the purpose of escheat?

To ensure that NO LAND remains unowned hence no property taxes can be collected.

Why do local governments collect property taxes?

To help pay for services, amenities, expenses because real property cannot be hidden. This practice began around 1200 AD in Britain

What was the main purpose of the ADA of 1990?

To increase accessibility to public buildings through removal of barriers including but not limited to installation of ramps, levered door handles, wheel chair access, lowering telephones, use of Braille Markers on elevators and flashing lights in addition to sirens for the hearing impaired.

The purpose of the Anti-Trust Act is?

To preserve business competition by prohibiting monopolies, monopolistic practices and restraint of trade.

What types of transactions require an appraisal?

Transactions involving any kind of financing and those involving the courts such as divorce, settling an estate, challenges to Eminent Domain awards and cases of Partition and properties valued over $250K must use an appraisal. Note: In partition cases ONLY AN APPRAISAL may be used NOT a CMA

Define TRANSFERABILITY.

Transferability is a value characteristic and the item must be able to be sold. In other words, the ownership rights must be transferable to another.

A change in zoning can result in a non-conforming use...True or False?

True

A sellers equity is the sales price of the home minus the debt on the property. True or False?

True

What is a trigger term as is pertains to ad and financing?

Trigger terms are ad words that tell a buyer financing is available without giving them enough information. They TRIGGER the need for FULL DISCLOSURE. Examples are monthly payment, interest rate, term

Define UST's and what a licensee's responsibilities are.

UST's or Underground Storage Fuel Tanks can cause groundwater contamination. A licensee and seller should disclose the locations and recommend water testing by the buyer.

Define UFFI.

UFFI or Urea Formaldehyde Foam Insulation is pumped into walls as foam, it then hardens and insulates the property. Moisture softens the hardened material and causes the release of hazardous gas.

unilateral contract

a one-sided agreement whereby you promise to do (or refrain from doing) something in return for a performance (not a promise)

What does USPAP stand for and what does it refer to?

Uniform Standards of Professional Appraisal Practice. The USPAP refers to the rules governing the appraisal process.

Full dislcosure of other offers

Unless instructed otherwise by the Seller, the listing agent should continue to present all offers until the transaction is closed.

How long do the victims of alleged discrimination have to file a complaint?

Up to one year (TEST)

Define Legal and Equitable Title.

Upon the creation of a binding offer to buy , the seller holds legal title for the buyer who has equitable title. Legal Title transfers at closing.

Define Usury.

Usury is charging an interest rate that is higher than the legal limits.

Define UTILITY.

Utility is a value characteristic and the item must be NEEDED OR WANTED.

Define VALUE.

Value is an estimate of the FUTURE BENEFITS to be derived from the property. This is a test question.

Another name for the contract for deed seller and buyer is?

Vendor and vendee

Who is eligible for a VA loan?

Veterans must prove that they have served 181+ days of active duty AND/OR vets must provide discharge papers OR DD 214 to be eligible. Others that are eligible are the spouse and the children of the vet.

What is consider a violation of the Fair Housing laws by a landlord or property owner?

Violations could include charging a higher security deposit; segregating any one category from another or refusing to permit a tenant to modify a rental space to meet his needs better.

Anticipation, Principle of

What a person will pay for a property depends on the expected benefits from the property in the future

Define 'Dedication' as it applies to title transfer.

When a developer turns over the streets in a subdivision to the local government, this is called Dedication.

lis pendens

a pending lawsuit

Define 'Predatory Lending'.

When a lender takes advantage of a borrower's lack of knowledge regarding lending practices. Actions considered predatory would be: steering borrowers to higher rate loans, falsifying loan documents, forging signatures, changing terms at closing and requiring credit insurance. All these actions are violating the Truth In Lending or the Consumer Credit Act, Regulation Z. (all these terms on the test)

Define agency by Estoppel.

When a principal fails to maintain due diligence over his agent and as a result the COURT prevents the principal from denying that agency....Agency By Estoppel is created. (test could be a story question)

When a note is paid in full before the due date, is the buyer responsible for the interest up to and including the closing date?

YES

At what point is the commission considered earn if agents are involved?

When acceptance is communicated and/or the other party is notified of the acceptance.

Define 'Executed Contract'.

When all terms of the contract have been fulfilled and carried out by all parties to the contract.

Define 'Ratification Agency'. (very important on test)

When an agent does something without permission and the seller hears about it....after the fact....and then accepts those actions, or ratifies them, that creates agency by ratification. (test may be a story question) (example - when I call a contractor to do work on a listing without stating that that the client is responsible, I could possibly end up paying for the bill....(example Barretts AC) because I am acting with authority for the seller and if the seller accepts the repairs, my actions have been accepted or ratified by the seller.

True or False...when an agent is also the seller or buyer in a transaction, what is this called and should this interest be disclosed?

When an agent is a principal, this is called agency coupled with an interest. Yes and ASAP.

Inverse Condemnation

When an individual forces the govt to buy his property

implied contract

actions or evidence

Equity Mortage

a loan made against the appreciated value of the borrower's property.

Define Mortgage Brokers.

a mortgage broker acts as an intermediary between the borrower and a lender. A mortgage broker brings buyers and lenders together for a fee.

When does a judgment become a lien?

When it is recorded at the county courthouse in the county where the property is located.

When does the mortgage become a true lien and enforceable?

When it is recorded in the county courthouse where the property is located.

Asset Integrated Mortgage

a mortgage designed to create a savings from the down payment

Mtg Brokers

acts as intermediary between the borrower and lender

Define Loan Processor.

a loan processor usually coordinates the loan application process. Lenders will typically require at least the following: an appraisal to make sure the property meets the lenders criteria, a complete credit report, job history, list of debts, bank statements, W-2's or 1099's.

Nonhomogeneity

no to pieces are exactly alike

When does the Deed of Trust for the property being foreclosed upon officially come to an end in a foreclosure sale?

When the buyer receives the Trustee's Deed and/or receives a receipt showing proof of payment/sale at the courthouse steps.

When does the unilateral option contract become a bilateral contract?

When the option is exercised and the seller delivers the deed and the buyer pays the agreed to price.

When using the cost approach, what method will he use to place a value on the land and why?

When using the cost approach, the appraiser will use the MARKET DATA approach because the value of land is heavily dependent on the location.

Amortized Loan

a loan requiring periodic payments that include both interest and partial repayment of principal

Can a conditional use or special use be granted by a zoning committee or by deed restrictions monitored by an HOA? What is a PUD?

YES -- 1. A public utility district reserves land for common use among the property owners; 2. by allowing zoning for higher population densities with homes clustered closer together (smaller lots and easements) leaving more greenspace for parks and recreation areas; 3. a non-profit community association is organized to provide maintenance of the common areas; 4. an extra tax may apply to property owners in a PUD. TEST!!

Can a landlord refuse to lease to a handicap person who appears to be a danger to himself and others?

Yes

Can a state refuse to grant Riparian Rights if there is a scarcity of water?

Yes

Must title companies and attorneys have trust accounts for holding clients funds?

Yes

Can a broker refuse to work with a person?

Yes, as long as he is not doing so for reasons prohibited by the Fair Housing Acts.

Can all clients monies be kept in the same, special escrow account set aside for that purpose?

Yes, as long as records are kept and all money is accounted for.

Can a handicap tenant modify, at his own expense, his living arrangements to better meet his needs?

Yes, provided he is willing to restore the dwelling before moving out, at his own expense, if the landlord requires it.

Is marketing "no alcohol and/or drugs allowed' permissible by a landlord?

Yes. Marketing must however avoid the term Alcoholics

How is zoning and master planning related?

Zoning can include Master Planning where a master plan is a comprehensive guideline for the long-term physical development of a particular area. Mixed land use is designed to meet the needs of future residents. TEST QUESTION: Master Planning is a PROCESS and zoning can be used to IMPLEMENT the plan.

What is the most common example of Police Power?

Zoning regulations which are local laws to control land use.

Give an example of a non conforming use...

a 6 unit multi family apartment building in a neighborhood zoned R-1 (Residential - 1 Family) note: no violation of zoning here -- TEST QUESTION

Explain what a 'Lien-Theory' state is.

a Lien-Theory State is where the lender has a LIEN and the borrower has TITLE.

Alienation of Title

a change in ownership of any land

Abstract of Title

a complete historical summary of all recorded documents affecting the title of a property.

Define 'Construction Loan'.

a construction loan is a short term loan with funds advanced periodically during the stages of construction. This loan is an interest only loan. The interest rate is usually higher than the rate on a permanent loan.

CMA Comparative Market Analysis

a tool licensee use to determine price for their property using current listings,recent sales and expired listings

Acre

a unit of land measurement or 43,560 square feet

Beneficial Interest

a unit of ownership in a real estate investment trust

Appraisal Letter

a valuation report in the form of a business letter

Assessed Value

a value placed on a property for the purpose of taxation

What is a voluntary lien?

a voluntary lien is created by the lienee's or borrower's actions, such as taking out a mortgage or home improvement loan.

Bill of Sale

a written agreement by which one person transfers his personal property to another

Equitable Mortgage

a written agreement that is considered to be a mortgage in its intent even though it may not follow the usual mortgage wording.

Easement by Prescription

acquisition of an easement by prolonged use.

Chronological age

age of property in years

Agency by Ratification

agency that is established after the fact

Agency coupled with an interest

agency that results when the agent holds an interest in the property he is representing

Ratification

agent acts w/o permission

Truth in Lending Regulation Z

allow consumers understand the true cost of borrowing, must be giving within 3 business days

Senate Bill 489

allows broker to act as intermediary, must give IABS at first substantive dialogue, must disclose representation oral or written

Subordination Clause

allows lender to move or take a lower lien position

Escalation Clause

allows lender to raise existing interest rate

Acceleration Clause

allows the lender to demand immediate payment of entire loan if the borrower defaults.

Cost approach

also know as summation approach how much it would cost to reproduce or build examples are churches or govt buildings,new construction

Appraisal

an estimate of value

Fiduciaries

are held to the highest amount of good faith, are required to exclude all selfish interest, are prohibited from putting themselves in positions where personal interest and representative interest will conflict. The most important obligations a fiduciary owes to a principal can be remembered by using the "OLD CAR" memory device: (1) obedience, (2) loyalty, (3) disclosure, (4) confidentiality, (5) accounting, and (6) reasonable care and diligence.

Buffer zone

area of land separating one land use for another

On a HUD 1 statement, the sales price shows up how?

as a credit to the seller

When does the buyer received the deed?

at closing

General lein

attaches to all property of the debtor example tax lien

Specific lein

attaches to one or more specific properties ex mortgage

Easement in Gross

belongs to a person or corporation example would be utility easement

Unilateral contract

binds only one party example an option

Estoppel

court prevents the principal from denying that agency, agency by estoppel

CC&R's

covenants, conditions and restrictions by which a property owner agrees to abide

Involuntary lein

created by law ie. ad valorem tax lein

Statutory Estate

created by law,vary from state to state, in TX community property and homestead are statutory estate

Lein

created by recording a judgement

Voluntary lein

created by the borrowers actions such as taking out a mortgage

Not required to disclose

death by natural causes or suicide. Never disclose death due to HIV/Aids

A seller states that he will list his home with you only if you do not reveal to prospective buyers that the police have twice raided the house next door for suspected drug activity. You should

decline the listing and refuse to work with this seller.

One of the BEST ways a broker might protect against agency problems is to

develop a clear, written office policy regarding agency issues.

indestructibility

durability - it will always be there

destruction of subject matter

during the stage between offer and acceptance, if the subject of the offer is destroyed without knowledge of either party, the offer is terminated

pre-contractual liability

duty to negotiate in good faith and a duty to proceed with negotiations in accordance with prior representations and promises

Implied authority is

not specifically given to an agent.

Define Equity.

equity is the difference between the market value of a property and the outstanding debt.

Unenforceable

ex oral contract

Void/Invalid contract

ex. with a person who is documented as insane

Bilateral contract

exchange promises which binds two birds ex sales contract

Breach of Contract

failure without legal excuse to perform as required by a contract

Licensed appraiser is required

for any property worth 250,000 or more

Assumption clause

if loan is assumed new buyers obligated to pay off loan

minors

individuals under the age of 18

The listing agent tells the buyer that the seller installed a new air conditioner as agreed in the contract, when in fact the seller only refurbished the existing air conditioner. Under TRELA, the licensee is

liable.

Reversion

life estate is setup so that at the end of the life estate the property goes back to the original owner

Encumbrance

limitation on your rights. It may also called cloud on a title.

easement

limited use or enjoyment of another's land written or verbal or implied

Chain of title

list of all owners of the property

Exclusive Authority to Purchase

listing utilized by buyer's broker's

Affordable Housing Loan

loans targeted to first-time home buyers or low income to medium income borrowers.

Building Codes

local and state laws that set minimum construction standards

Appraisal Review Board

local governmental body that hears and rules on property owner complaints of over assessment of real property

Situs

location preference location,location,location

Economic Obsolescence

loss of value due to external forces or events

direct communication

made directly to intended party

ratification

making something valid by formally ratifying or confirming it

Construction TYPES can include (on and off site)

manufactured, modular and prefabricated buildings. Materials can also include brick, stone, wood, man made siding and stucco.

Plat

map of a town, section, or subdivision

Plot

map or layout of improvements on a property site. The property site is also called a lot or parcel

3 Basic approaches to Appraisals

market data or sales comparison,income or capitalization method, and replacement cost or summation approach

mental capacity

mental ability

Income approach

or capitalization method used for income producing properties GRM x rent = Price or use GIM

Agency based on a third party's being led to believe that a licensee was acting as an agent of another party is

ostensible agency.

Life Estate

ownership for the duration of someone's life. Owner called Life tenant. Remainderman person getting the estate after owner dies

Blockbusting

panic selling

Mtg Banker

person or firm not otherwise in banking that normally provides his/its own funds for mortgage

offeree

person to whom the offer is made

customer

person who is working with the real estate licensee to complete transaction

Bequest

personal property received under a will

communication

something that is communicated by or to or between people or groups

Title Report

preliminary report the current condition of title

Lot,Block, and Subdivision

recorded map or plat, it is the most common description in residential listing agreements

rejection

refusal by the offeree to accept the terms of the offer

Full disclosure relating to the property

regardless of whether the fact is favorable or unfavorable, i.e. property defects, defects in the title, ... .

RESPA

regulates closing on 1-4 family residential property w

Agency by Estoppel

relationship that results when a principal fails to maintain due diligence over his agent and the agent exercises powers not granted to him.

Defeasance clause

release of lein when debt is repaided

FHA Loan

require occupancy, assumable, insures the loan, the insurance on a FHA loan MIP- mtg ins. Premium

Trade Fixtures

required to carry out a business example would be commercial cooking equipment in a restaurant

Alienation Clause

requires immediate repayment of the loan if ownership transfers; also call 'a due on sale clause'.

Bilateral Contract

results when a promise is exchanged for a promise

Personal Property

right or interest in things of a temporary or movable nature chattel personalty. Ownership transferred by a BILL OF SALE

Appurtenance

right or priviledge or improvement that belongs to and passes with the land but is not necessarily part of the land

Riparian rights

rights for rivers,streams, small bodies of water

Bylaws

rules that govern how an owner's property association will be run

"As Is"

said of property offered for sale in its present condition with no guaranty or warranty of quality provided by the seller

An example of a general agency relationship would be one that exists between the

sales associates and the broker.

Land 4 economic characteristics

scarcity, modification, fixity, situs

Amount Realized

selling price less expenses

scarcity

short supply where demand is great example lot in Manhattan v. a lot in upstate NY

letters of guardianship

similar to letters testamentary; expire after 1 year 4 months, renewable; within 30 days after letters issued guardian must publish solicitation of claims against the estate; then 30 days for the guardian to file a memo to accept of deny the claim

offeror

someone who presents something to another for acceptance or rejection

encroachment

structure or improvements overlaps onto another's property

A licensee NOT associated with the listing broker is known as a(n)

subagent.

Rectangular/ Government Survey

takes into consideration base lines, meridians, townships and sections.Townships and Sections are located in Ranges. Example S7T3R2 means Section 7 Townships 3 Range 2

Escrow acct

taxes and insurance placed also called impound, trust, or reserve acct

Ad Valorem Taxes

taxes charged according to the value of the property.

Radon mitigation

term used to describe methods used to lower levels of radon in homes and other buildings HUD does not require radon testing for FHA loans

How is the Limited Partnership different from the General Parnership?

the Limited Partners have limited liability and usually are not involved in the day to day operation of the partnership.

A Remainderman, as it pertains to Life Estate is whom?

the Remainderman is the person who inherits the Life Estate once the owner passes.

restitution

the act of restoring something to its original state

Accession

the addition to land by man or nature.

Cash Value

the amount of money a policyholder would receive if the policy were surrendered

At-Risk

the amount of money an investor stand to lose

Economic Rent

the amount of rent a property could command in the open market.

Equity

the market value of a property less the debt against it.

Balloon Payment

the name given to the final payment of a balloon loan

Cash Flow

the number of dollars remaining each year after an investor collects rents and pays operating expenses and mortgage payments

Investment Advantage for real estate #6 is?

the owner of a single family property can depreciate the property IF it is used for rental property.

Agent

the person empowered to act by and on behalf of the principal; see also Agent or Broker

Escrow Agent

the person placed in charge of an escrow.

Basis

the price paid for a property; used in calculating income tax

Special agency occurs when

the principals give an agent a limited authority to act on their behalf.

Assemblage

the process of combining two or more parcels into one

Accretion

the process of land build up by waterborne rock, sand and soil

Define Discount Rate,

the rate banks pay when borrowing money from the Federal Reserve. Raising the interest rate by the Federal Reserve tightens the money supply. Raising the reserve requirement also tightens the money supply. The Federal Reserve controls the money supply.

Redlining

the refusal to lend in a particular geographic area only lenders can be guilty of this

The buyer should only rely on measurements furnished by

the registered professional land surveyor.

Avulsion

the removal of land by the action of water

guardianship

the responsibility of a guardian or keeper

Escheat

the reversion of a person's property to the state when he/she dies and leaves no will or heirs.

Who reviews the abstract of title and renders an opinion of title?

the title company attorney

What is GROSS AREA of a property?

the total area of a building measured from the exterior walls excluding uncovered areas such as patios and courtyards. The area under the roof including unfinished spaces such as the attic and garages. (This is a test question.)

Assignment

the transfer of one's rights under a contract to another

Encroachment

the unauthorized intrusion of a building or other improvement onto another person's land.

Adjusted Market Price

the value of a comparable property after adjustments have been made for differences between it and the subject.

How long is a Non-Freehold estate or lease-hold estate?

there is a negotiated termination date.

Define Mortgage Bankers.

these are persons or firms, not otherwise in banking, that provide their own money for mortgage financing as opposed to banks that rely on deposits to originate a loan.

Adverse Possession is one way a person can get title to a parcel of land WITHOUT a deed. Describe adverse possession.

this occurs when a property is acquired from the rightful owner through the STATUTE OF LIMITATIONS. Occupancy must be HOSTILE, VISIBLE, ACTUAL, CONTINUOUS and DISTINCT for the Statutory Period which can differ from state to state (3-25 years). In Texas it is 10 years and must be able to be proved when property was taken over (utility set up, neighbors testimony, moving companies receipt.

Define 'Voluntary Alienation'.

this occurs when an owner transfers title to another typically using a written document such as a deed, or a will, or a power of attorney.

Who does the lender or mortgagees policy protect and for how much value?

this title insurance policy protects the LENDER/Mortgagee up to the loan balance.

Capitlize

to convert future income to current value

Implied Agency

when a licensee who is working with a buyer-customer with no intended representation makes statements or performs actions that lead the customer to believe the licensee has become the customer's agent.

Escheat is?

when a property reverts back to the state when the owner dies leaving NO Will and has NO heirs or kindred. Escheat can also be used if the property is abandoned.

Syndicate

when two or more parties join together to create and operate a real estate investment

How is a contract modified?

with an amendment

reservation

withholds title of part of the land Ex. easement or mineral rights

Boycotting

two or more people conspiring to restrain competition

Deferred Maintenance

type of physical depreciation (ordinary wear and tear)

A listing agent tells a buyer-customer that the seller is under pressure to sell because of a pending divorce and possible foreclosure. Such disclosure is

unacceptable because of the fiduciary duty owed the owner.

Defeasible Fee, Conditional Fee, Qualified Fee, Qualified Defeasible Fee

ownership with conditions or terms which if violated could cause the ownership interest to be defeated or terminated.

Freehold estate

ownership, Bundle of Rights, for indeterminate length,Ownership with the greatest bundle of rights Fee Simple or Fee Simple Absolute

writ of execution

party wins and is unable to collect,he can secure a writ of execution from the courts to enforce payment.

CERCLA

passed 1980 est. superfund to clean up hazardous waste

GPM Graduated pmt loan

payments rise over years and then level off remaining term

nominal consideration

token amount identified in a written contract when parties either cannot or do not wish to state the amount precisely

power of attorney

a legal instrument authorizing someone to act as the grantor's agent

Land 3 physical characteristics

nonhomogeneity, immobility, indestructibility

What is an asbestos abatement plan?

this is a plan that outlines the method to handle the control of asbestos found in a property.

invitation to offer

"An expression of willingness to negotiate. A person making an invitation to treat does not intend to be bound as soon as it is accepted by the person to whom the statement is addressed."

Some covenants associated with general warranty deeds are?

(not on test but good to know) 1. The Covenant of Seizen -- the owner has the right to sell the property; 2. The Covenant Against Encumbrances: all known limits to the title are stated; 3. The Covenant of Quiet Enjoyment: uninterrupted use of the property is granted.

A void contract is one that was A) not in writing. B) never legally enforceable. C) rescindable by agreement. D) voidable by only one of the parties.

B) never legally enforceable.

In Nevada the most commonly used type of foreclosure on real property is a(n) A) judicial foreclosure B) non judicial foreclosure C) strict foreclosure D) equitable foreclosure

B) non judicial foreclosure

For a property to be held in tenancy by the entirety, which of the following is required? A) The cotenants must be husband and wife. B) The property in question must be Torrens property. C) Upon the death of a cotenant, the decedent's interest must pass to his or her heirs. D) In the event of a dispute, the property must be partitioned.

A) The cotenants must be husband and wife.

Which statement is TRUE about land taken for public use? A) The owner must be justly compensated. B) The health, safety, and welfare of the government must be the reason. C) The local use will benefit the residents in the immediate area. D) The property is then established as a fee simple determinable estate for a particular use.

A) The owner must be justly compensated.

The two principle documents in a real estate financing transaction are A) The promissory note, and a security instrument B) The promissory note and deed C) The security agreement and security instrument D) The mortgage and deed of trust

A) The promissory note, and a security instrument

For land to be taken by the government under its right of eminent domain, which of the following must apply? A) The taking must be for a public purpose. B) There must be a statutory dedication. C) This must be an adverse action. D) There must be constructive notice.

A) The taking must be for a public purpose.

In a non judicial foreclosure under a deed of trust who performs the sale? A) The trustee B) The trustor C) The beneficiary D) The Secretary of State

A) The trustee

Homer wants to use his property to raise and sell spider pigs. Where would he look to see if he can use his property for this purpose? A) The zoning ordinance. B) Buidling code C) State statutes D) The TV Guide

A) The zoning ordinance.

Referring someone to a real estate licensee for compensation, or the expectation of compensation requires the person making the referral to have a license. A) True B) False

A) True

Special disclosures are required in the sale of new homes. A) True B) False

A) True

The National Association of REALTORS Code of Ethics generally imposes upon its members a higher standard than real estate statutes and regulations. A) True B) False

A) True

When a home or improved lot is adjacent to open range, Nevada has a special form that must be given to the buyer. A) True B) False

A) True

Dr. Cuddy sued her homebuilder alleging several construction defects. At trial the court found that none of the conditions were defects and she lost her case. Dr. Cuddy is now selling her house to Dr. Wilson. Is Dr. Cuddy required to disclose the construction defect litigation? A) Yes. B) No, since there are no defects, there is nothing to disclose. C) Only if Dr. Wilson asked for a disclosure of construction defect litigation. D) No, Dr. Wilson should get all of his information from Dr. House.

A) Yes.

The federal Fair Housing Act of 1968 is administered by A) the Department of Housing and Urban Development B) the federal judicial system C) each state individually D) the Federal Fair Housing Council

A) the Department of Housing and Urban Development

The manager of a commercial building has many responsibilities in connection with the operation and maintenance of the structure. The manager would usually be considered the agent of: A) the building's owner. B) the building's tenants. C) both the owner and the tenants. D) neither the owner nor the tenants.

A) the building's owner.

This question is multiple select. Select all answers that are correct. Brokers are required to teach the licensees associated with them: A) the fundamentals of real estate B) ethics C) personal hygiene D) Greek philosophy

A) the fundamentals of real estate B) ethics

The "discount rate" refers to A) the interest rate charged by the Federal Reserve to member banks for short term loans B) The interest rate charged by banks to each other for short term loans. C) The amount a lender charges to sell a loan D) The bargain rates available to buy notes from the Federal Reserve.

A) the interest rate charged by the Federal Reserve to member banks for short term loans

A Nevada real estate license can be revoked by a court of law or: A) the real estate commission B) the real estate division C) the real estate administrator D) the National Association of REALTORS

A) the real estate commission

Nevada's real estate license law is administered by: A) the real estate division B) real estate commission C) a consortium of real estate brokers D) your instructor

A) the real estate division

All of the following are correct about contingencies EXCEPT A) they create a contract that is unenforceable. B) they must specify what is required to satisfy the contingency. C) they must identify who will pay for any costs involved. D) common contingencies include mortgage and inspection contingencies.

A) they create a contract that is unenforceable.

Which of the following would NOT disqualify a person from receiving a Nevada real estate salesperson's license?: A. Having been arrested for a crime punishable as a felony B. Having had his or her license in Idaho suspended three years ago C. Making a false statement about a material fact on his or her application D. Having a judgment entered against him or her for failure to comply with a court child support order

A. Having been arrested for a crime punishable as a felony

A buyer has entered into an agreement to purchase property registered under Nevada's Subdivided Land law and has no problems with the property or the purchase price. Can the buyer rescind the contract? A. Yes, a buyer has five days to rescind the contract no matter what the reason. B. Yes, because escrow has not closed. C. No, because the buyer has already signed a binding contract. D. No, because he must first have a reasonable reason for rescinding.

A. Yes, a buyer has five days to rescind the contract no matter what the reason.

In the sale of time-shares in Nevada, all sales must be supervised by the: A. Project broker B. Broker of record C. Registered representative D. Sales agent

A. Project broker

The Condominium Hotel Act is administered by the: A. Real Estate Division. B. Division of Financial Institutions C. Condominium Hotel Division. D. Hotel Division.

A. Real Estate Division.

In most residential transactions the seller must disclose defects in the property on a form called: A. Seller's Real Property Disclosure. B. Duties Owed by a Nevada Real Estate Licensee. C. Resale Package. D. Defect Disclosure form.

A. Seller's Real Property Disclosure.

A Nevada real estate broker advertised a client's house for sale and included in the advertisement "Buyers without children are preferred." Which of the following statements is TRUE? A. The advertisement probably violates federal and state fair housing laws. B. The advertisement probably violates the federal fair housing law but not the Nevada's fair housing law. C. The advertisement probably violates the Nevada's fair housing law but not the federal fair housing law. D. The advertisement is probably acceptable because it only says "preferred" it does not prohibit buyers with children.

A. The advertisement probably violates federal and state fair housing laws.

Which of the following is TRUE about a judicial foreclosure in Nevada? A. The trustor has a one-year statutory right of redemption. B. The beneficiary has a one-year statutory right of redemption. C. The trustee has a one-year statutory right of redemption. D. There is no statutory right of redemption.

A. The trustor has a one-year statutory right of redemption.

In Nevada, an original real estate salesperson's license is valid for: A. one year. B. two years. C. three years. D. four years.

A. one year.

The Real Estate Division's disclosure document for subdivided land being offered for sale in Nevada is called the: A. property report. B.public offering statement. C. disclosure report. D. disclosure and analysis report.

A. property report.

A mechanic's lien would be properly classified as a(n) A) equitable lien. B) voluntary lien. C) general lien. D) specific lien.

D) specific lien.

Investment Advantage #3 for real estate is? ON TEST

an individual can have a tax-free capital gains on the sale of real property up to $250,000 IF the property was his principal residence for at least 2 years of the last 5 years.

An option A) requires the optionee to complete the purchase. B) gives the optionee an easement on the property. C) binds the optionor for a specified time. D) makes the seller liable for a commission.

C) binds the optionor for a specified time.

The form used by a Nevada real estate licensee, in all transactions, to disclose his or her duties is called the: A) Agency Disclosure B) Consent to Act C) Duties Owed by a Nevada Real Estate Licensee D) Residential Disclosure Guide

C) Duties Owed by a Nevada Real Estate Licensee

A buyer took delivery of the deed to his new house but neither recorded the deed nor took possession of the property. Under these circumstances, the A) transfer of the property from the seller is ineffective. B) buyer's interest is not fully protected against third parties. C) deed is invalid after 90 days. D) deed in invalid after six months.

B) buyer's interest is not fully protected against third parties.

The condemnation of private property for public use is allowed under the state's right of A) police power. B) escheat. C) eminent domain. D) confiscation.

C) eminent domain.

A portion of building was inadvertently built on someone else's land. This caused an A) accretion. B) avulsion. C) encroachment. D) easement.

C) encroachment.

Which of the following gives the BEST evidence of the buyer's intention to carry out the terms of the real estate purchase contract? A) "Subject to" clause B) Agreement to seek mortgage financing C) Earnest money deposit D) Provision that "time is of the essence"

C) Earnest money deposit

FCRA Fair Credit Reporting ACT

an individual who has been denied credit is entitled to a free credit report to determine reason for denial

Which of the following deeds provides the most protection to the BUYER? A) Quitclaim deed B) Special Warranty deed C) General Warranty deed D) Bargain and sale deed

C) General Warranty deed

general power of attorney

an instrument in writing authorizing one person to do anything for the principal. In other words, one party has full power of attorney for another party.

This is a multiple select question. Choose all answers that are correct.Which of the following duties owed by a real estate licensee can be waived by a client? A) The duty to disclose material facts concerning the transaction. B) The duty to present all offers made by or to the client. C) The duty to refer a client to an expert where needed. D) The duty of confidentiality.

B) The duty to present all offers made by or to the client.

An Estate is....

an interest in real property

A promissory note is a negotiable instrument. That means A) The borrower and the lender negotiate the terms of the loan B) The note can be bought and sold. C) The lender must negotiate with the Federal Reserve to determine the maximum interest rate that can be charged. D) That a promissory note is a legally enforceable contract.

B) The note can be bought and sold.

What will happen to real estate when its deceased owner did not write a will and has no heirs? A) The ownership will pass by devise. B) The ownership will escheat. C) The courts will seize the ownership. D) The ownership will revert to the previous owner.

B) The ownership will escheat.

Blind Pool

an investment pool wherein properties are purchased after investors have already invested their money

Advertising created by a Nevada real estate salesperson must: A) be approved by the Real Estate Division B) be approved by the Real Estate Commission C) be done under the direct supervision of a broker D) include the salesperson's license number

C) be done under the direct supervision of a broker

A lessee is in possession of property under a tenancy at will. Which of the following is TRUE? A) The lessee has not received the consent of the landlord to possess the property. B) The tenancy will terminate if the lessee dies. C) The tenancy was created by the death of the lessor. D) The tenancy has a definite termination date.

B) The tenancy will terminate if the lessee dies.

Define "Open End Mortgage".

an open end mortgage permits additional borrowing on the SAME note.

The "Waiver Form" is used A) by a licensee to waive a client's duty view property. B) by a client to waive a licensee's duty to present all offers. C) by a client to waive a licensee's duty of confidentiality. D) by a client to waive an agent's requirement to have a license.

B) by a client to waive a licensee's duty to present all offers.

It is the duty of a licensee to disclose to the principal every material step taken in the transaction of the principal's business. This is because the A) commission can be adjusted up or down according to the licensee's efforts. B) agent has fiduciary obligations to the principal. C) terms of the listing contract require the licensee to do so. D) terms of the purchase contract require the licensee to do so.

B) agent has fiduciary obligations to the principal.

The amount of earnest money deposit is determined by A) real estate licensing statutes. B) agreement between the parties. C) the listing broker's office policy on such matters. D) meeting the acceptable minimum of 5 percent of the purchase price

B) agreement between the parties.

Base Line

and east-west or geographer's line selected as a basic reference in the rectangular survey system

Which of the following parcels of land is the smallest? A) Two sections B) 5 percent of a township C) Two square miles D) 1,280 acres

B) 5 percent of a township

It is necessary to calculate a dollar value for depreciation when using which of the following? A) Sales comparison approach to value B) Cost approach to value C) Income approach to value D) Gross rent multipliers

B) Cost approach to value

Which of the following is required in every transaction where one of the parties is represented by a real estate licensee? A) Consent to Act form B) Duties Owed by a Nevada Real Estate Licensee form C) The resale package D) Seller's Real Property Disclosure Form

B) Duties Owed by a Nevada Real Estate Licensee form

Which of the following would be considered lawful practice in real estate brokerage? A) Deceitful or dishonest practices B) Exaggerated statements about the property C) Omitted statements of material fact D) Misstatements about the property

B) Exaggerated statements about the property

A broker-salesperson can act independently and is not required to be associated with a broker. A) True B) False

B) False

A client can waive the duties of a real estate licensee. A) True B) False

B) False

Emblements

annual plantings that require cultivation.

If a real estate broker in Nevada does not have a property management permit, but wants to engage in property management activities, the broker must: A. obtain a property management permit. B. designate someone in his office who has a property management permit and will be responsible for supervising property management activities. C. associate with a broker who has a property management permit. D. engage only in residential property management.

B. Designate someone in his office who has a property management permit and will be responsible for supervising property management activities.

Provided other conditions are met, which of the following would be exempt from needing to obtain a permit to offer subdivided land for sale in Nevada? A. The subdivision has only 40 parcels. B. Every parcel in the subdivision is greater than 80 acres in size. C. The subdivision is not located in Nevada. D. Every parcel in the subdivision is less than 80 acres in size.

B. Every parcel in the subdivision is greater than 80 acres in size.

In Nevada which statement is TRUE about a renewal clause in a property management agreement? A. Renewal clauses are not allowed. B. Renewal clauses are allowed if the renewal provision clearly sets forth the circumstances under which the agreement may be renewed and the term of the renewal. C. Renewal clauses are only allowed if the renewal period does not exceed one year. D. A renewal clause is required in a property management agreement.

B. Renewal clauses are allowed if the renewal provision clearly sets forth the circumstances under which the agreement may be renewed and the term of the renewal.

If the sale of Carla's property, in the non-judicial foreclosure resulted in a deficiency, which statement is TRUE? A. The beneficiary cannot obtain a deficiency judgment. B. The beneficiary can obtain a deficiency judgment if the loan was obtained before October 1, 2009. C. The beneficiary can obtain a deficiency judgment for one-half of the amount of the deficiency. D. The sale must be confirmed by a court before it is valid.

B. The beneficiary can obtain a deficiency judgment if the loan was obtained before October 1, 2009.

Which of the following is exempt from providing a seller's real property disclosure form? A. Property owned by a financial institution B. The first sale of a residence that was constructed by a licensed contractor C. The sale of any residence less than five years old D. Whenever the property is owned by two or more people

B. The first sale of a residence that was constructed by a licensed contractor

In the sale of registered subdivided land in Nevada, all sales must be supervised by the A. project broker. B. broker of record. C. registered representative. D. sales agent.

B. broker of record.

Is a park in a neighborhood a good example of a buffer zone?

BE CAREFUL----Maybe BUT maybe NOT because a buffer zone separates two or more INCOMPATIBLE USES. TEST QUESTION

Fill in the blank; A Listing Agreement obligates the _____ to act as a _________ to the ___________.

BROKER, FIDUCIARY, SELLER (TEST)

A Management Agreement obligates a ________ to act as a ____________ to the ____________.

BROKER/PROPERTY MANAGER; FIDUCIARY; OWNER/LANDLORD (TEST)

Fill in the blank: A Buyer's Representation Agreement obligates a __________ to act as a _________ to the ________.

BROKER; FIDUCIARY; BUYER (TEST QUESTION)

All of the following are true about asbestos EXCEPT: A) it was commonly used as insulation. B) removal can cause further contamination of a building. C) HUD requires all residential buildings be tested for asbestos-containing materials. D) it is most dangerous when airborne.

C) HUD requires all residential buildings be tested for asbestos-containing materials.

Which of the following is an example of involuntary alienation? A) Selling a property to pay off debts B) Giving a piece of land to the zoo C) Having a piece of land sold for delinquent taxes D) Letting another person plant crops on an unused portion of a piece of land

C) Having a piece of land sold for delinquent taxes

What type of insurance would cover a building owner for injuries sustained by someone on the property? A) Medical and hospitalization insurance B) Fire and hazard insurance C) Liability insurance D) Consequential loss insurance

C) Liability insurance

A property description that relies on the use of monuments and linear measurements is known as: A) The rectangular survey method B) Recorded plat map description C) Metes and bounds description D) American Association of Surveyors description

C) Metes and bounds description

A real estate licensee is not required to disclose A) a leaky roof if instructed by the client to keep it confidential B) any personal interest he or she has in a transaction if the parties waive that duty C) a registered sex offender lives or will live in the community. D) all sources from which compensation will be received.

C) a registered sex offender lives or will live in the community.

Tonya made an offer buy Emily's house for $200,000. Emily said no, but offered to sell the house for $210,000. Tonya said no thank you. Emily then told Tonya she would accept her original offer for $200,000. All communications took place in writing and neither of them has had an appraisal conducted. Do Tonya and Emily have a contract? A) Yes, Emily accepted Tonya's offer for $200,000. B) Yes, both parties have clearly expressed a willingness to buy and sell for $200,000. C) No, there is no accepted offer. D) No, without an appraisal it cannot be determined if the price is fair.

C) No, there is no accepted offer.

Which of the following is a disclosure that is required in a common-interest community? A) CC&Rs B) Common-Interest Community Disclosure C) Resale Package D) Statement of Record

C) Resale Package

How far apart are range lines? A) One mile B) Four miles C) Six miles D) Eight miles

C) Six miles

How far apart are township tiers? A) One mile B) Four miles C) Six miles D) Eight miles

C) Six miles

Agent Gibbs has taken a listing from Ducky who has instructed him to show the house only to people over 75 years old. Agent Gibbs has agreed. Has agent Gibbs violated the Fair Housing Act? A) No, he is only following his client's directions. B) No, because age is not a protected class. C) Yes, because this could have the effect of discriminating based on familial status. D) Yes, because Agent Gibbs is an NCIS agent, not a real estate agent.

C) Yes, because this could have the effect of discriminating based on familial status.

Define "Title Report".

this is a preliminary report - current condition of the title - the basis for the title policy which includes current owner's type of title (fee simple for example), owner's rights, easements, taxes, liens

When applicable a seller must disclose on the SRPD property defects. A "defect" is defined as: A) something that is broken or does not work properly B) something that is broken, and would cost more to repair than to replace C) a condition that materially affects the value or use of residential property in an adverse manner D) verb, going to the other side as in "he defected"

C) a condition that materially affects the value or use of residential property in an adverse manner

When Marie sold her house she was surprised to learn that the entire balance on her loan became due because of a clause in her deed of trust called the: A) redemption clause B) power of sale clause C) alienation clause D) pay us now clause

C) alienation clause

The members of the real estate commission are: A) elected by the public B) selected by the real estate administrator C) appointed by the Governor D) determined by a secret auction. The highest bidders win.

C) appointed by the Governor

Define Short Sale.

this is a sale of secured (with a lien on it) real property that produces less money then is owed to the lender.

Which of the following is a type of unilateral contract sometimes used in large real estate transactions? A) Purchase contract B) A reward contract C) An option to purchase contract D) Any contract between a single buyer and a single seller.

C) An option to purchase contract

An FHA-insured mortgage loan would be obtained from which of the following? A) The Federal Housing Administration B) The Department of Housing and Urban Development C) Any FHA-approved lending institution D) Any FHA-approved insuring institution

C) Any FHA-approved lending institution

A loan which is described "amortized over 30 years, due in 10 years" would be a(n) A) fully amortized loan B) adjustable rate mortgage C) balloon payment loan D) interest only loan

C) balloon payment loan

A complaint alleging a violation of the Civil Rights Act of 1866 must: A) Not be litigated because the Civil Rights Act of 1866 was replaced by the Civil Rights Act of 1968 B) Be prosecuted by HUD C) Be filed in a federal district court D) Be heard by the EEOC (Equal Employment Opportunity Commission)

C) Be filed in a federal district court

Tim transferred some property to Mary to hold and manage on behalf of Bernie. Who is the beneficiary in this transaction? A) Tim B) Mary C) Bernie D) Oprah

C) Bernie

What could the Federal Reserve do to increase the supply of money? A) Pay the President of the United States less money making more available for other people. B) Sell treasury notes C) Buy treasury notes D) Print more money

C) Buy treasury notes

Which of the following is an involuntary alienation of property? A) Quitclaim B) Inheritance C) Condemnation D) Gift

C) Condemnation

For a real estate licensee to act on behalf of more than one party to a transaction both clients must sign the: A) Agency Representation form B) Dual Agency Authorization form C) Consent to Act form D) Acting for More Than One Party form

C) Consent to Act form

The buyer agreed to purchase certain property, if he could first sell some property he already owned. This is known as a(n) A) Covenant B) Illusory promise C) Contingency D) Void contract

C) Contingency

Which of the following BEST describes a voidable contract? A) Contract that has no legal effect and never had any B) Oral contract with no witnesses to the agreement C) Contract that may be either enforced or declared void by one of the parties D) Contract that has been accepted but the acceptance has not been communicated to the offeror

C) Contract that may be either enforced or declared void by one of the parties

Which of the following is a warranty by the grantor that he or she will obtain and deliver to the grantee any documents necessary to make the title good? A) Covenant of seisin B) Covenant of quite enjoyment C) Covenant of further assurances D) Covenant of quiet enjoyment

C) Covenant of further assurances

Which of the following is NOT a category of depreciation? A) Physical deterioration B) Functional obsolescence C) Date of sale D) External obsolescence or depreciation

C) Date of sale

A man owns a one-quarter undivided interest in a parcel of land, and he wants his interest transferred to his sister. As a general rule, which of the following actions will transfer the man's undivided interest out of his name? A) Redemption from foreclosure sale B) Making and signing a will C) Delivery and acceptance of a deed D) Signed acceptance of offer to purchase

C) Delivery and acceptance of a deed

The legal term that is used to describe the situation where someone dies without a will is known as: A) Dieing without a will B) Dieing testate C) Dieing intestate D) Dieing without succession.

C) Dieing intestate

Which of the following could result in negative amortization? A) A fully amortized loan. B) A baloon payment loan. C) An ARM with a payment cap. D) An interest only a.k.a straight loan.

C) An ARM with a payment cap.

If a landlord and tenant want to share the risk of changing economic conditions, what kind of lease would they enter? A) A gross lease. B) A net lease. C) An index lease. D) A reciprocal lease.

C) An index lease.

To assign a contract for the sale of real estate means to A) record the contract with the county recorder's office. B) permit another broker to act as agent for the principal. C) transfer one's rights under the contract. D) allow the seller and the buyer to exchange positions.

C) transfer one's rights under the contract.

A trust is a legal arrangement in which title to property is held for the benefit of a third party by a(n) A) beneficiary. B) trustor. C) trustee. D) attorney-in-fact.

C) trustee.

What are the most common private controls of land use?

C, C&R's or deed covenants, conditions and restrictions and commonly referred to as DEED RESTRICTIONS OR DEED COVENANTS.

Nevada's time-share sales law does NOT apply to which of the following? A. A developer selling time-shares that are not located in Nevada B. A time-share project that does not have an exchange program C. An owner selling a single time-share he or she owns D. A time-share project with fewer than 50 units

C. An owner selling a single time-share he or she owns

A listing salesperson is showing property to an interested buyer. The buyer asks him to write an offer. Which statement is TRUE? A. The salesperson cannot write the offer unless he or she also agrees to represent the buyer. B. The salesperson must first ensure that the buyer is represented by a real estate licensee. C. The salesperson can write the offer and present it to the seller. D. The salesperson cannot write the offer unless the buyer agrees to an assigned agency.

C. The salesperson can write the offer and present it to the seller.

For the initial sale of property located in a common-interest community the developer must provide to the buyer: A. the SRPD. B. a copy of an approved subdivision map. C. a public offering statement. D. a resale package.

C. a public offering statement.

Members of the Nevada Real Estate Commission are: A. elected to office. B. appointed by the Administrator. C. appointed by the Governor. D. chosen by the Legislature.

C. appointed by the Governor.

Nevada's Fair Housing Act: A. includes sexual orientation as a protected class. B. prohibits some activities that would otherwise be allowed under the federal Fair Housing Act. C. does not prohibit any activities that are not prohibited by the federal Fair Housing Act. D. includes some, but not all of the protected classes included in the federal Fair Housing Act.

C. does not prohibit any activities that are not prohibited by the federal Fair Housing Act.

The Seller's Real Property Disclosure form is required: A. in all real estate transactions. B. for new home sales. C. in most residential real estate transactions. D. only if the property is located in a common‐interest community.

C. in most residential real estate transactions.

A seller must disclose zoning classifications and designations: A. in all real estate transactions. B. in all residential real estate transactions. C. only in the sale of a new home. D. only in the sale of property located in a common-‐interest community.

C. only in the sale of a new home.

The application and exhibits submitted by a developer to obtain a permit to sell subdivided land in Nevada is called the A. application and exhibits. B. written plan. C. statement of record. D. property report.

C. statement of record.

When property is being resold in a common‐interest community the seller must provide a variety of documents to the buyer known collectively as: A. covenants, conditions and restrictions. B. The Common‐Interest Community Disclosure. C. the resale package. D. the property report.

C. the resale package.

RESPA used to be administered by HUD. That is no longer correct. What organization is now responsible for managing RESPA?

Consumer Financial Protection Buereau which is actually over HUD.

Common interest communities are regulated in part by the: A) Commission on Common-Interest Communities, and Cooperative Developments, and Condominium Hotels, and Mega Resorts. B) Gaming Commission C) Common-Interest Community Division D) Commission on Common-Interest Communities and Condominium Hotels.

D) Commission on Common-Interest Communities and Condominium Hotels.

In the real estate profession the initials "CMA" refer to A) Conditional Management Analysis B) Certified Master Accountant C) California Medical Association D) Competitive market analysis

D) Competitive market analysis

Which of the following is the BEST definition of actual eviction? A) Right of a landlord to use the rental premises B) Enforcement of a court order to remove a lessor C) Landlord's reversionary right in the rental premises D) Enforcement of a court order to remove a lessee

D) Enforcement of a court order to remove a lessee

Which of the following buys loans in the secondary market? A) Ginnie Mae B) FSA C) FCC D) Fannie Mae

D) Fannie Mae

How many acres are within the following description...NW1/4, NW1/4 of Section.... A) It cannot be determined with knowing the section number. B) It cannot be determined without knowing the location of the township C) The description does not make any sense. D) Forty (40) acres.

D) Forty (40) acres.

To whom can an agent assigned by his or her broker under NRS 645.253, to represent a buyer disclose confidential information? A) The buyer's mother. B) The listing agent. C) The seller. D) His/her broker.

D) His/her broker.

Broker A and Broker B agree that they will not longer show any house listed by Broker C. Is this legally permissible? A) Yes it is merely competition B) Yes, but only if it will not unreasonably restrain trade C) No, it violates the Fair Housing Act D) No, it violates anti trust statutes

D) No, it violates anti trust statutes

Two brokers in town were tired of knocking heads with each other. To avoid a fight they agreed they would each charge a standard fee of 5% for a listing and no less. Is this legal? A) No, it violates fair housing laws. B) Yes, if no one else knows or participates in the agreement. C) Yes, it facilitates cooperation and harmony. D) No, it violates antitrust laws.

D) No, it violates antitrust laws.

By law the seller's real property disclosure form must be delivered to a buyer no later than: A) the day before escrow closes B) three days before escrow closes C) five days before escrow closes D) ten days before escrow closes

D) ten days before escrow closes

A man conveys the ownership of his house to his mother and stipulates that upon her death he will recapture ownership. The interest the man has in the property is a A) remainder interest. B) curtesy estate. C) legal life estate. D) reversionary interest.

D) reversionary interest.

When a prospective buyer makes a written purchase offer that the seller accepts, then the A) buyer may take possession of the real estate. B) seller grants the buyer possessory rights. C) buyer receives legal title to the property. D) buyer receives equitable title to the property.

D) buyer receives equitable title to the property.

Three years ago, a couple moved from the house they had owned for 20 years but did not sell it. They decided to travel and bought a mobile home to live in. They now sell the house. How much of their capital gain on the house will be taxable? A) 15 percent, depending on their tax bracket B) 28 percent, depending on their tax bracket C) All of it, if it is over $500,000 D) None of it, if it is less than $500,000

D) None of it, if it is less than $500,000

The real cost of owning a home includes certain costs/expenses that many people overlook. Which of the following is NOT such a cost/expense of home ownership? A) Income lost on cash invested in the home B) Interest paid on borrowed capital C) Maintenance and repair expenses D) Personal property taxes

D) Personal property taxes

Which of the following deeds does not include any warranties? A) Bargain and sale deed B) Grant, bargain and sale deed C) Special warranty deed D) Quitclaim deed

D) Quitclaim deed

A wooded area with biking and hiking trails is situated between old cotton mills and a housing development. This area is considered a A) designated park required under federal guidelines. B) variance to the existing zoning. C) utility easement. D) buffer zone.

D) buffer zone.

An owner divides a parcel into several lots, one of which is completely surrounded by other lots and has no street access. Which of the following is TRUE? A) The municipality must construct a street to create access. B) The owner must create an easement by condemnation to provide access. C) An easement by prescription should be granted. D) An easement by necessity could be created for the landlocked parcel.

D) An easement by necessity could be created for the landlocked parcel.

Which of the following is listed as a protected class in Nevada's Fair Housing Act, but not in the Federal Fair Housing Act? A) Race B) Religion C) Sex D) Ancestry

D) Ancestry

A man applies to the municipality for permission to open an adult day-care facility in his neighborhood. He may be granted a(n) A) variance. B) nonconforming use permit. C) amendment to the zoning ordinance. D) conditional-use permit.

D) conditional-use permit.

Which of the following is NOT a physical characteristic of land? A) Indestructibility B) Uniqueness C) Immobility D) Scarcity

D) Scarcity

A tenant's lease has expired, but the tenant has not vacated the premises or negotiated a renewal of the lease. The landlord has declared that the tenant is not to remain in the building. This situation is an example of A) an estate for years. B) an estate from year to year. C) tenancy at will. D) tenancy at sufferance.

D) tenancy at sufferance.

A family's apartment lease has expired, but their landlord has told them that they may remain on the premises until a sale of the building is closed. They will be charged their normal monthly rental during this period. The estate held by the family is called a(n) A) year to year holdover. B) estate for term. C) estate at sufferance. D) tenancy at will.

D) tenancy at will.

In receiving a gift of a parcel of real estate, one of the two new owners was given an undivided 60 percent interest and the other received an undivided 40 percent. They now hold their interests as A) cooperative owners. B) joint tenants. C) community property owners. D) tenants in common.

D) tenants in common.

When a salesperson causes harm to a client who is liable? A) the client B) the broker only C) the salesperson only D) the broker and the salesperson

D) the broker and the salesperson

A suit to quiet title refers to A) a title insurance company's search of the title. B) a mortgagor relinquishing title after foreclosure. C) the deposit of a title with an escrow agent. D) the removal of a cloud on the title by court action.

D) the removal of a cloud on the title by court action.

Which of the following is NOT part of the resale package? A) CCRs B) the "information statement" C) the operating budget D) the unit floorplans

D) the unit floorplans

After charging or collecting an advance fee an accounting must be sent to the client within A) one year B) nine months C) six months D) three months E) the day before (it requires time travel)

D) three months

A document that protects against hidden risks such as forgeries and loss due to defects in the title, subject to specific exceptions, is called a(n) A) chain of title. B) abstract of title. C) certificate of title. D) title insurance policy.

D) title insurance policy.

Obtaining a property management permit in Nevada requires: A. no additional education beyond that required for a real estate salesperson's license. B. at least a high school degree. C. at least a two-year college degree. D. a 24-hour course in property management.

D. A 24-hour course in property management.

After receiving the Seller's Real Property Disclosure form a buyer has how many days within which to rescind purchase contract? A. Five days B. Five working days C. Four days D. Four working days

D. Four working days

Define Community Reinvestment Act and Redlining.

This law states that banks must meet the needs of the community in which they are chartered to do business. Redlining is prohibited where lenders refuse to loan money to purchase property in certain neighborhoods. Only lenders can redline (insurance companies cannot redline (test)).

Who has the authority to revoke a Nevada real estate license? A. The Real Estate Division B. The Attorney General C. The National Association of REALTORS® if the licensee is a member D. The Real Estate Commission

D. The Real Estate Commission

In Nevada a complaint for violation of the Civil Rights Act of 1866 must be filed: A. with the Nevada Equal Rights Commission. B. with HUD. C. in the United States Supreme Court. D. in a federal district court.

D. in a federal district court.

When the Nevada Equal Rights Commission receives a complaint alleging illegal housing discrimination, it: A. Fully investigates the complaint. B. refers the complaint to the Attorney General's Office. C. refers the complaint to the Federal Housing Administration. D. refers the complaint to the federal Department of Housing and Urban Development (HUD).

D. refers the complaint to the federal Department of Housing and Urban Development (HUD).

What is the ancronym for the four basic characteristics of VALUE and what does each letter stand for?

DUST

Gross Rent Multiplier is used primarily for what type of property and is an example of what approach?

GRM is used by an appraiser on RESIDENTIAL properties and is a factor based on location and rent or PRICE/RENT

What is the formula used by an appraiser to determine the GRM or Gross Rent Multiplier?

GRM x Rent = price

What is considered the best and strongest deed?

General Warranty Deed because it guarantees and protects against defects, it offers the buyer the best protection, warrants title to the sovereignty of the soil, it is the most common deed mentioned in sales contracts. A buyer who wants to ensure that the seller is conveying good title should demand a general warranty deed.

What happens if a discriminatory complaint is made to HUD?

HUD will try to mediation and conciliation to resolve the problem before pursuing the matter in a court of law. (BROKERS TEST)

What happens if a owner violates the deed restrictions in a neighborhood?

Other property owners can bring a civil court action against the violator and the court can impose an INJUNCTION to enforce the restriction. (TEST)

Rule P53

Title companies are not permitted to provided food and beverages for a picnic or party for a single firm may have annual party

The four Economic Characteristics of land are?

Scarcity, Situs, Fixity and Modification

How are tax rates expressed?

Tax Rates are typically stated as dollars/$100 of valuation. In some cases a MILL RATE is used which is a tax rate per $1000. Example of a mill rate 25 mills or the property owner will pay $25 of tax/$1000 of taxable value.

Define the "Principle of Anticipation" and give an example.

The "Principle of Anticipatation" states that the purchase price is affected by the expectations of future appeal and benefits.

Define the "Principle of Change" and give an example.

The "Principle of Change" states that change is constant and is reflected in values. Please note that appraisers must make adjustments for changes in market conditions, and for time. An appraisal is only considered to be accurate for six months or less.

Define "Principle of Competition" and give an example.

The "Principle of Competition" states that an increase in competition will result in decreased profits for current providers. The more competition there is, the lower the final sales price.....Supply and Demand

Define "Principle of Regression AND Principle of Progression" and give examples.

The "Principle of Regression" states that the presence of lowered valued properties in the neighborhood lead to a decline in the value of my property. Conversely, the presence of higher valued properties will increase the value of my property and this is called PROGRESSION.

What is the broker's role in regards to the seller disclosure and condition of the property?

The broker's are responsible as it relates to condition of the property in the following manner: 1. encourage the seller client to always be honest and do a complete and full disclosure; 2. visually inspect the property only in the areas that are accessible and then review any concerns with the seller.

True or False: We debit the buyer and credit the seller for homeowner association fees, prepaid taxes and fuel in the tank.

True

What is the Assessed Value of a property?

This is the value of the property for tax purposes only and the value is found in the taxing districts assessments rolls.

Define commingling.

This is when a broker deposits clients money in his company or personal bank accounts.

True or False: Both the Landlord of a commercial building and the tenants within that building are liable for failure to provide access to the disabled?

True (TEST) Both the Landlord and the tenants can be fined making it more difficult for the owners of the non-compliant building to find tenants.

True or False: Deeds need not be dated, signed by the GRANTEE, or recorded.

True (memorize this, test)

True or False: Individuals with a history of mental impairment, who have been declared recovered, continue to be protected by the ADA.

True -- They are protected for life.

A MID tax can be permanent or temporary, True or False?

True -- example, the Galleria special Christmas decorations -- someone had to pay for them...

The Principle and Agent relationship is a fiduciary relationship...True or False?

True plus, this relationship is based on trust and the Law of Agency governs the relationship between a BROKER & his PRINCIPAL/CLIENT.

True of False: there are exceptions to the Fair Housing Rules for owners, landlords and so on BUT never for a Real Estate Licensee.

True!

True or False: A plat is a map of a town, section or subdivision?

True...Now define a plat.

Can the word Tenants indicate an owner of real property such as in Joint Tenants or Tenants in Common.

Yes...Tenants does NOT always indicate a Lease Hold Estate.

Can commissions differ from client to client?

Yes...because all commissions are negotiable.

durable power of attorney

a legal agreement that allows an agent or representative of the patient to act on behalf of the patient

Define a Mortgage.

a Mortgage is a pledge of REAL PROPERTY as security for a PROMISORY NOTE.

What is a Straight Assumption?

a Straight Assumption is where the new borrower is approved and takes over the payments and the liability of the current owner.

Define "Balloon Loan".

a balloon loan is a PARTIALLY AMORTIZED loan with a FINAL payment substantially larger than the others.

contract

a binding agreement between two or more persons that is enforceable by law

What is the best example of agency?

a broker and his principal or client

Buyer's Broker

a broker employed, and therefore loyal to, the buyer

Define 'Buy Down'.

a buy down is a up front payment of points to reduce the borrower's monthly payment. By paying points at closing a buyer may secure a lower rate on a loan. A buyer or a seller can pay for a buy down if negotiated.

Call Clause -- aka "due on sale clause"

a clause in a note or mortgage that gives the lender the right to call the entire loan balance due if the property is sold or otherwise conveyed

Certificate of Occupancy

a government-issued document that states a structure meets local zoning and building code requirements and is ready for use.

What is an involuntary lien?

a involuntary lien is created by law and can be statutory or equitable.

Estate at Will

a leasehold estate that can be terminated by the lessor or lessee at any time.

What is a license and give an example.

a license is permission to do a particular act upon the land or property of another. An theater or sports ticket is a license. It grants one seat for a performance on a certain day and at a certain time. A license is similar to an easement but of more limited duration, it is NOT a RIGHT of the land and is often given verbally and is easily revoked.

MLS

a licensee has 5 days to enter new listing into MLS

Assessment Role

a list or book, open for public inspection, that shows assessed values for all lands and buildings in a taxing district

Exclusive Right to Sell

a listing that gives the broker the right to collect a commission no matter who sells the property during the listing period.

Exclusive Agency Listing

a listing wherein the owner reserves the right to sell his property himself, but agrees to list with no other broker during the listing period.

Balloon Loan

a loan in which the final payment is larger than the preceding payments

Define "Blanket Loan".

a loan that covers more than one piece of property such as several lots on one note. This loan type may allow for a release clause allowing a borrower to obtain partial release of a specific lot(s) by making require lump sum payments. This type loan is used by developers of subdivisions for example, where they build a home on a lot or lots and then sell the property.

Straight line method

a method of depreciation of equal annual installment amounts.

Adjustable Rate Mortgage

a mortgage on which the interest rate rises and falls with changes in the prevailing interest rates

Administrator (Administratrix)

a person appointed by a court to carry out the instructions found in a will or to oversee the probate or an estate that has no will.

Executor (Executrix)

a person named in a will to carry out its instructions.

Broker

a person or legal entity licensed to act independently in conducting a real estate brokerage business.

mortgage

a pledge of real property as security for a promissory note

Define 'Point'.

a point is 1% of the LOAN AMOUNT.

promissory estoppel

a promise enforceable without consideration

What is another name for 'an offer'?

a purchase agreement

Define 'Wraparound Loan'.

a wraparound loan is a method of refinancing when a NEW LOAN is created but is placed in second or a subordinate position to the first or original loan. The new loan includes both the unpaid balance of the first mortgage, plus the additional amount being borrowed. The first mortgage is NOT paid off with the creation of the new loan. If the lender is a seller, such sum is NOT advanced but rather carried back as a part of the mortgage in which another lender refinances a borrower by lending an amount over the existing first mortgage without disturbing the existence of the first mortgage. (this is an Reine question)

A key distinction between the services given to clients versus those given to customers is that

a. advice, opinions, and advocacy are given to clients, not customers.

Adverse Possession

acquisition of real property through prolonged and unauthorized occupation of another's land.

Amount Financed

amount of credit provided to the borrower

Define ARM or adjustable rate mortgage.

an ARM is a loan with an interest rate SUBJECT TO change as conditions in the market change.

Chattel

an ariticle of personal property

Easement in Gross

an easement given to a person or business.

option contract

contract to hold an offer to make a contract open for a fixed period of time

void contact

contract which is unenforceable from the time it was formed, possibly because it requires the performance of an illegal act

You entered into an agency agreement with and successfully found a home for a buyer. To terminate the agency, you

need take no action.

straight assumption

new buyer responsible, can not impact seller's credit score

good faith

having honest intentions

Property taxes are the ________ priority _______ on real property.

highest and lien

Holdover Tenancy

holdover tenant pays rent and it is accepted

The Texas Real Estate Commission

holds the broker accountable for the professional actions of sponsored associates.

Define Acceleration Clause.

if a mortgagor defaults on a loan, the lender can call in the entire debt or accelerate the debt to be due and payable.

Trust

if a property is held by one party for the benefit of another

Actual Notice

knowledge gained from what one has seen, heard, read or observed

fixity

land and buildings and other improvements to land are consideration fixed or permanent investments- they are not liquid assets

Immobility is a physical characteristic of land and means?

land cannot be moved -- a person must go to the land.

modification

land use and value are greatly influenced by improvements made by man to land and to surrounding parcels of land

Real Property

land, Improvements attached to the land, and the rights to use them

Estate for years

lease with specific starting and ending date EX.12 Month lease on a Apt.

Metes and Bounds

legal description of land that always has a point of beginning that is also the end. The oldest used in 13 original colonies

Predatory lending

lender takes advantage of a consumers lack of knowledge regarding lending practices

Caveat Emptor

let the buyer beware

Puffing

marketing use adj. and opinions rather than facts ex. Best water in the world

easements can be terminated

merger of adjacent property, release, or abandonment

pecuniary consideration

money is the consideration

Earnest Money Deposit

money that accompanies an offer to buy as evidence of good faith.

Paid out by the RE Trust Acct

100,000 per license and 50,000 per transaction

Acknowledgement

a formal declaration by a person signing a document that he or she, in fact, did sign that document

Effective July 1, 2011 an initial real estate license will be effective for: A) six months. B) 12 months. C) 18 months. D) 24 months.

D) 24 months.

A standard rectangular survey system section contains A) 36 townships. B) 160 government lots. C) 160 acres. D) 640 acres.

D) 640 acres.

There are 6 main criteria to ensure a deed is VALID. What are they?

1. Competent parties (Grantor and Grantee); 2. Consideration (legal consideration can be 'good' or 'valuable'. Love and affection is an example of 'good' consideration. Money is 'valuable' consideration; 3. Words of Conveyance or the granting clause -- a written statement that indicates transfer of some interest in real property from one person to another. The Habendum Clause or 'to have and to hold' clause usually follows words of conveyance; 4. Execution: the GRANTOR must sign the deed; 5. Delivery: title does not pass until the deed is DELIVERED AND ACCEPTED. Delivery can be into escrow and must be made during the lifetime of the Grantor; 6. Legal Description of the property.

List four criteria that are important in a lease but are NOT required but are strongly recommended!

1. Description of the property (a legal description is not required, a street address is sufficient) [check this, I was taught that if the lease was more than one year a legal was mandatory]. 2. Execution in that the lessor and lessee must sign; 3. stated term or length of the lease; 4. delivery or communication/notification of the lease.

As agents in real estate transactions, licensee's must observe a STANDARD OF CONDUCT. List the basic standards the agent must follow.

1. Enter all Broker - Client relationships and/or Show property to all equally; 2. Receive all formal offers and communicate them to owners; 3. Exert your best efforts to conclude all transactions; 4. Provide equal opportunities for employment; 5. There is no right or responsibility to reveal all information on protected categories (all the categories protected by the Fair Housing Laws); 6. Never induce panic selling AKA blockbusting; 7. Never discriminate in advertising; 8. Brokers MAY share their commissions with their salespersons or other brokers; 9. Blind Ads are prohibited. Ads MUST disclose the licensed status; 10. Dual Agency is still practiced in some states where the broker represents BOTH seller and buyer with written permission. A dual agent broker may appoint a designated agent to represent the buyer or the seller. This is similar to Texas's appointed associate under our Intermediary Agreement; 11. A single agency broker is one who does not act as a dual agent when one of the broker's buyer clients wants to purchase an in-house listing. Instead, the broker recommends that one of the parties (usually the buyer) either find another broker or continue in the transaction unrepresented. Therefore, single agency is the practice of representing either the buyer or the seller but never both in the same transaction.

Some exceptions to the Fair Housing laws apply. List and explain why these exception are applicable.

1. FSBO's of a single family home and when the owner owns NO MORE than 2 properties at a time and no discriminatory language is used may refuse to rent to the protected classes EXCEPT based on color; 2. Rental of an owner occupied 1-4 family home when the services of a broker ARE NOT USED and no discriminatory advertising is NOT used may refuse to rent or sell to all protected classes EXCEPT COLOR; 3. Churches owning rental property may restrict occupancy to members of the congregation, as long as the membership to the congregation is open to all; 5. Private clubs owning lodgings may restrict occupancy to members as long as the units are not operated commercially and may have to be a member to stay.

Listings and Buyer Rep agreements have a termination date stated within the contract. These agreements can also be terminated by?

1. Fulfillment of all terms of the contract; 2. Abandonment or cancellation by the broker; 3. Revocation by the principal or client; 4. Mutual Consent; 5. Acts of Law, including a. bankruptcy of the seller or broker, b. death - service contracts are terminated upon death of either party, c. destruction of the property, d. a change in property use by outside forces, such as zoning.

Define Tenancy in Common.

1. Ownership by two or more WITHOUT rights of survivorship; 2. the most common form of ownership of two or more or joint ownership; 3. it is an estate of inheritance where your share may be willed to your heirs at probate 4. unequal shares are permitted; 5. you may sell your share without permission of the other owners; 6. in the absence of instructions, a title company will always assume tenancy in common with EQUAL SHARES. 7. THINK ABOUT CONDO OWNERS WHO ARE TENANTS IN COMMON, WHERE THEY OWN THEIR UNIT OR MANY UNITS BUT SHARE THE COMMON AREAS. THEY CAN SELL OR LEASE ETC TO ANYONE. THEY CAN HOLD ONE SHARE/UNIT OR MANY.

Recording Title has certain main steps or facts that apply. List the 7 ideas and then define if necessary.

1. Recording is not a requirement of a valid deed; 2. Recording gives 'Constructive Notice' of ownership which is notice to the world and protects against fraudulent sale. Taking possession of a property is also 'Constructive Notice' of ownership; 3. Recording is always done in the county where the property is located; 4. A document must always be ACKNOWLEDGE before a notary before it can be recorded and must be in ENGLISH; 5. An acknowledgement is a declaration to a notary authorized to take oaths that the signature is a free and voluntary act. An acknowledgement VERIFIES THE SIGNATURE; 6. TIME and DATE of recording establishes PRIORITY. Recording is done at the county clerk's office on Monday-Friday from 8am to 4:30pm; 7. please note that just because a deed is acknowledge in from of a notary DOES NOT make it constructive notice.

What are the 7 facts that govern 'non conforming use' that a Realtor should remember?

1. a non-conforming use usually results when zoning laws change over time (example residential changing to commercial or light retail); 2. The use was allowed under previous rules, but new rules now prohibit it; 3. A non conforming use is allow to continue as it is considered GRANDFATHERED IN; 4. the non conforming use is AUTOMATIC; 5. NO HEARING OR APPLICATION PROCESS is required; 6. CANNOT BE ALTERED OR EXPANDED WITHOUT PERMISSION but can be SOLD to a party who wishes to continue the existing use; 7. If the property is destroyed, the non conforming use may not be rebuilt without permission.

List the material facts that should be questioned by the broker and disclosed by the seller.

1. any issues with land/soil conditions (contamination for example); 2. Pest infestation, toxic mold and other interior environmental hazards; 3. Structural issues such as roof, foundation, doors and fixtures; 4. Location within the Natural Hazard or Specially Regulated areas such as nuclear power plants, landfills, flood plains, wetlands, endangered species etc.; 5. potentially uninsurable property such as flood ways/ground level homes; 6. known alterations and additions.

List general areas that a written sponsorship agreement should include.

1. compensation; 2. training; 3. hours; 4. company identification; 5. fees and dues; 6. expenses; 7. fringe benefits; 8. territory; 9. withholding; 10. termination of sponsorship; 11. general office policies and procedures.

List four requirements to have a valid lease agreement.

1. competent parties; 2. let and take agreement; 3. adequate consideration; 4. legal purpose.

What is a legal description and why is it important?

1. created and determined by a surveyor, 2. Is a necessary part of a contract or conveyance such as a deed, listing, sales contract etc.) in order for the document to be enforceable; 3. it enables a person to locate the exact parcel of land simply based on the accurate description used.

When financing involved in a closing there are two processes that are mandatory, name them.

1. first step is closing of the loan between the buyer and the lender which will provide the funds for the second step which is; 2. the closing o the property and the execution of the sales contract. All is called closing and funding...the contract is now fully executed.

List examples/violations by a licensee in regards to practicing law.

1. giving legal interpretations of documents involved in a transaction, preparing legal documents such as wills or deeds, deed in trusts, advising a client on how to take title, and discouraging clients from seeking advise from an attorney in negotiations which involve special terms and conditions

If the appraised value is less than contract price, what are the Veterans options?

1. he can cancel the contract, 2. pay the difference between price and appraisal, 3. ask the seller to renegotiate the contract price. He cannot force the seller to renegotiate the price.

Buyer's options if a SELLER defaults:

1. hold the other party to his duties through a suit for specific performance; 2. sue for money damages; 3. decide on mutual rescission and recover the earnest money.

List the criteria that outlines a licensee's independent contractor status.

1. independent contractor status MUST be established in writing between the parties; 2. an associate must have a licensee; 3. an associates must earn 90% or more of his income from production rather than hours worked; 4. a broker cannot require a sales associate to work strictly scheduled hours without jeopardizing the independent contractor status with the IRS; 5. a broker cannot require set hours BUT can demand full time commitment; 6. an independent contractor must pay ALL of his own payroll taxes; 7. The broker WILL NOT withhold any payroll taxes from any payments that he receives; 8. independent contractors income is reported to the IRS via 1099's.

Regulation Z FAQ's.

1. it covers consumer credit for all RE loans regardless of value and for non RE loans up to $25K; 2. It discloses the true costs of borrowing money; 3. It regulates all print, internet advertising. 4. ads that state only the cash price or APR is permitted; 5. If any other credit terms are stated -- FULL DISCLOSURE -- of all credit terms must be made; 6. a borrower must be given a full disclosure statement showing the full cost of borrowing within 3 BUSINESS DAYS of LOAN APPLICATION.

In addition to a sales contract, what other agreements must follow the real estate contract guidelines?

1. listing agreement; 2. management agreements; 3. buyer representation agreements; 4. lease and lease purchase agreements; 5. option agreements; 6. right of first refusal; 7. cancellation and rescission agreements. (test for broker, memorize the list)

List the legal guidelines that a lender must follow in regards to notices to the debtor/borrower and the foreclosure process.

1. notice of foreclosure must be sent by CERTIFIED MAIL , 21 days before the court house sale/foreclosure sale; 2. the notice must also be posted at the door of the county court house and filed in the county clerks office; 3. with a TRADITIONAL MORTGAGE (not a deed of trust) the foreclosure will be recorded as a Lis Penden's at the county court house clerks office.

Investors have many advantages when it comes to real estate and the tax code. List and explain what those advantages are. Memorize This Information --TEST

1. one major advantage is the ability to depreciate their investment on their income returns. Keep in mind the following info: a. with income producing property LAND can NEVER be depreciated, b. only the improvements can be depreciated; c. the straight line method is used; d. the economic life of a property is defined as the period during which improvements contribute to value or are being depreciated and e. when the improvements are fully depreciated, that is the end of the economic life

List the pros of a short sale for the lender.

1. the lender can adjust the commission of the real estate brokers; 2. the lender saves the delay and expense of a foreclosure.

Define Comprehensive Environmental Response Compensation and Liability Act or CERCLA.

1. this law was passed in 1980; 2. it established the Superfund to clean up hazardous waste and respond to spills; 3. the law sets guidelines for liability which includes strict, joint and several, and retroactive.

What is the escrow agents responsibilities?

1. to close the transaction per terms on the sales contract; 2. to not close if there are any terms not agreed to and get them resolved before closing; 3. the seller's deed and the buyer's money are deposited with the escrow company; 4. the escrow agent records the deed once all title conditions and other requirements of the agreement are met; 5. once all title conditions are met the buyer receives the deed, the seller receives his funds and the sale is executed or closed.

Define the major critera of the metes and bounds system.

1. uses terminal points and angles and always has a point of beginning or POB; 2. uses compass directions, degrees and minutes; 3. the point of beginning is always the end point too so the land is completely defined; 4. this system might also use street names within the legal description; 5. this is the oldest and most common method of land description and was used in the original 13 colonies.

Steps in Appraisers process (5)

1.Purpose 2. Collect and Verify info 3. Est. value using as many approaches as needed 4. Reconciliation 5. Prepare report

A statute which requires certain contracts to be in writing to be enforceable is called a A) Statute of Frauds. B) Statute of Writings. C) Statute of Memorandum. D) Statute of limitations.

A) Statute of Frauds.

valid contract

A contract that complies with all the essentials of a contract and is binding and enforceable on all parties to it.

Another term for 'Executed Contract is?

A contract that has been 'Discharged' or 'Performed'.

executed contract

A contract that has been completely performed by both parties.

executory contract

A contract that has not as yet been fully performed.

Define a Express Contract.

A contract that is written or stated (= oral or verbal).

voidable contract

A contract that may be legally avoided (canceled, or annulled) at the option of one of the parties.

When can a contractor place an M&M lien on property. Give an example.

A contractor can place a M&M lien on a property when materials have been delivered and not paid for AND/OR when the work has begun. A good example is new construction, when the contractor delivers the materials, begins the work and then is not paid because the builder has gone bankrupt or refuses to pay.

How can the licensee reduce their risk of lawsuits when taking a listing?

A licensee should do everything they can to be knowledgeable about the condition of a property using checklists, questionnaires, seller disclosures, pre-inspection reports w/repairs by seller, improvement lists with dates made out by the seller along with a disclaimer notice.

Maureen owns 1.25 acres of land. How many square feet of land does Maureen own? A) 54,450 square feet B) 60,000 square feet C) 800 square feet D) 640 square feet

A) 54,450 square feet

Seller Sam entered an exclusive right to sell listing agreement with Broker Bob. After the expiration of the listing agreement Sam sold his house. Although the listing agreement had expired Sam still owed a commission to Bob. This would most likely be the result of: A) A broker protection clause in the listing agreement. B) Bob being the procuring cause of the sale. C) The premise is wrong. Sam cannot owe a commission if the listing has expired. D) Entering a open listing agreement.

A) A broker protection clause in the listing agreement.

What the heck is an "habendum clause" in a deed? A) A clause that describes any limitations on the estate being granted. B) The clause that provides a legal description of the property. C) There is no such thing as an "habendum clause". D) It is simply another phrase for the granting clause.

A) A clause that describes any limitations on the estate being granted.

Which of the following would NOT be part of the land as defined in the textbook? A) A fence firmly attached to the land. B) The air above the surface of the earth. C) Minerals beneath the surface of the earth. D) An owner's right to possess the property.

A) A fence firmly attached to the land.

Which of the following is a basic component of the rectangular survey method of describing land? A) A principal meridian B) A point of beginning C) Compass measurements D) Monuments

A) A principal meridian

Client Clyde was referred to Broker Bob by a former client, Tiny Tim. To thank Tiny Tim Broker Bob gave Tim some tickets to a concert. A) Bob cannot legally give Tim concert tickets to show his appreciation for the referral. B) Broker Bob cannot compensate Tiny Tim for a referral, but concert tickets are not compensation. C) Since Bob is a Broker this is legal conduct. D) This legally acceptable if Tiny Tim is a Nevada resident.

A) Bob cannot legally give Tim concert tickets to show his appreciation for the referral.

The power of eminent domain is a government's power to: A) Take private property for public use B) Regulate for health, safety, and general welfare C) Take property when someone dies intestate without heirs D) Punish people for the improper use of land

A) Take private property for public use

The local school district wanted to use Marshall's property to build a school. Marshall, however, refused to sell his property to the school district. To compel Marshall to sell his property the school district could: A) File an action for condemnation B) File an action for escheat C) Use the school district's police powers. D) Put Marshall in jail until he agrees to sell.

A) File an action for condemnation

Which of the following has an indeterminable duration? A) Freehold estate B) Less-than-freehold estate C) Estate for years D) License

A) Freehold estate

Which of the following is NOT required for a valid deed? A) Grantee's signature B) Grantor's signature C) Legal description of the property D) A granting clause

A) Grantee's signature

Heather is the broker for Are You Kidding Me? Realty. She has just sent a memo to all of her salespeople telling them that they must charge at least 5% for a listing. Which of the following is true? A) Heather can legally establish a minimum commission rate within her own office. B) This is probably an antitrust violation. C) This would violate the right of her salespeople to set their own fees. D) Heather can do this legally if she has agreed with at least one other broker to establish the same minimum.

A) Heather can legally establish a minimum commission rate within her own office.

A capitalization rate is used in which of the following approaches to value? A) Income B) Cost C) Sales comparison D) Guessing

A) Income

Which pair of terms is synonymous? A) Interim financing and construction loan B) Construction loan and pass-through loan C) Pass-through loan and takeout loan D) Takeout loan and construction loan

A) Interim financing and construction loan

Aaron and Janet are married and live in Nevada. Last year Janet's mother died and left to Janet a house located in Nevada. The house would be properly characterized as: A) Janet's separate property B) Community property C) Property held by Aaron and Janet as tenant by the entirety D) Property held by Aaron and Janet as joint tenants

A) Janet's separate property

The largest trade organization serving the real estate business is the A) National Association of REALTORS® B) American Society of Appraisers C) Real Estate Educators Association D) Institute of Real Estate Management

A) National Association of REALTORS®

Which Supreme Court case established what has become known as the "separate but equal doctrine"? A) Plessey v. Ferguson B) Jones v. Mayer C) Shelley v. Kramer D) Brown v. Board of Education

A) Plessey v. Ferguson

Fox, a former client of Goose, referred Duck to Goose. Duck and Goose entered a listing agreement. Shortly thereafter Goose gave Fox some tickets to a basketball game along with a note saying "Thanks for referring Duck to me." All of this took place in Nevada. Which of the following is true? A) Pursuant to an Attorney General's opinion, this is illegal. B) This is a legally accepted way to conduct business. C) The legality of this depends on how much Goose paid for the tickets. D) Quack, quack.

A) Pursuant to an Attorney General's opinion, this is illegal.

The term "information statement" is applicable in which context? A) Residential sales of property located in a common-interest community. B) All residential sales. C) All real estate sales. D) When a licensee will be acting for more than one party to the transaction.

A) Residential sales of property located in a common-interest community.

Sam-I-Am has agreed to help Rhianna market and sell her house. Although Rhianna has a real estate license Sam-I-Am does not have a real estate license. They agree that Rhianna will not pay Sam, but after close of escrow she will take Sam-I-Am out to dinner. Escrow closed successfully but Rhianna refused to take Sam to dinner. Which of the following statements is TRUE? A) Sam needs a real estate license to do this legally. B) Sam was not compensated so he does not need a real estate license. C) Rhianna is legally obligated to take Sam to dinner. D) Sam does not need a license because Rhianna has one.

A) Sam needs a real estate license to do this legally.

or a Nevada real estate licensee to legally act for more than one party to a transaction, i.e. dual agency both clients must A) Sign the Consent to Act form B) Sign the Waiver Form C) Sign the Residential Disclosure Guide D) be unaware that the licensee is acting for more than one party.

A) Sign the Consent to Act form

Hilary has been an active real estate salesperson in Nevada for three years. How many college credits has she earned by her experience that can be applied toward a broker's license? A) Sixteen B) Twenty-four C) Fourty-eight D) It depends on whether her experience is in residential or commercial real estate.

A) Sixteen

Which of the following is NOT a major responsibility of a property manager? A) Social management B) Physical management C) Administrative management D) Financial management

A) Social management

Darlene accepted an offer to purchase her house and pursuant to the terms of the offer delivered the acceptance by mail to the buyer. Later she changed her mind. Before the buyer received the the acceptance, she called the buyer and told her she was revoking her acceptance. What is the legal status of negotiations? A) The buyer has a binding contract to purchase Darlene's house. B) There is no contract because the buyer did not receive the acceptance yet. C) There is no contract because Darlene did not revoke the acceptance in writing. D) There is no contract, because Darlene revoked the acceptance.

A) The buyer has a binding contract to purchase Darlene's house.

Which of the following is required to create an enforceable, exclusive brokerage agreement in Nevada? A) The contract must be in writing B) The contract must be an oral agreement C) The must not have a definite termination date D) The contract must include an automatic renewal provision.

A) The contract must be in writing

In a residential lease who is responsible, in most states including Nevada, for maintaining the premises in a habitable condition? A) The landlord B) The tenant C) The landlord and tenant are equally responsible D) The local government

A) The landlord

Which of the following is true about several licensees working together as a team? A) They must all be associated with the same broker. B) They cannot all be associated with the same broker. C) At least one of them must be a broker. D) They cannot use a team name that includes the name of a team member.

A) They must all be associated with the same broker.

A broker is the salesperson's boss. A) True B) False

A) True

A corporation can be a real estate broker. A) True B) False

A) True

A pregnant woman is protected under the familial status class of the Fair Housing Act. A) True B) False

A) True

A property management agreement should include the term i.e. time period, of the agreement. A) True B) False

A) True

A real estate licensee must deliver, to his or her broker, any paperwork within five calendar days after it has been signed by all parties. A) True B) False

A) True

A real estate licensee must disclose all sources of his or her compensation to all parties the parties to the transaction. A) True B) False

A) True

A real estate salesperson acts on behalf of his or her broker. A) True B) False

A) True

A salesperson's advertisement must disclose the name of his or her brokerage firm. A) True B) False

A) True

If you help someone with a real estate transaction, and you provide that help for compensation, or the expectation of compensation, then you are engaging in an activity that requires a license. A) True B) False

A) True

In Nevada a property management agreement must be in writing. A) True B) False

A) True

Most seller disclosure requirements in Nevada apply to residential but not commercial property. A) True B) False

A) True

A principal element of the income approach to determining value is: A) a capitalization rate B) income tax rate C) amount for which similar properties have sold D) the expense necessary to construct the improvements on the property

A) a capitalization rate

discrimination suit may be filed in federal court by: A) a person aggrieved by racial discrimination. B) the county nondiscrimination officer. C) the state nondiscrimination officer. D) the Federal Housing Administration.

A) a person aggrieved by racial discrimination.

A lease should contain all of the following provisions EXCEPT A) a sale-and-leaseback clause. B) use of the premises. C) possession of the premises. D) the term of the lease.

A) a sale-and-leaseback clause.

To insure against employee theft a property manager will obtain: A) a surety bond. B) liability insurance. C) casualty insurance. D) a gun.

A) a surety bond.

When a salesperson tells homeowners that minorities are moving into the area in order to get those homeowners to sell their properties, this activity is: A) called blockbusting. B) called power selling. C) discriminatory advertising. D) legal as long as it is true.

A) called blockbusting.

The history of all owners of a specific parcel of real estate is the property's A) chain of title. B) certificate of title. C) title insurance policy. D) abstract of title.

A) chain of title.

Depreciation is considered to be: A) curable or incurable B) good or bad C) physical or functional D) avoidable

A) curable or incurable

The Residential Disclosure Guide A) describes disclosures that are commonly required in residential transactions. B) is useful but Nevada Real Estate licensees are not required to distribute it. C) must be given by a seller to a buyer in a residential transaction. D) is poorly titled because it must be used in all transactions, not just residential transactions.

A) describes disclosures that are commonly required in residential transactions.

Documents affecting real estate are recorded or filed in the county in which the property is located to A) enable interested parties to know where to look to discover the various interests of other parties to the transaction. B) give actual notice of the grantee's interest in the property. C) comply with the terms of the statute of frauds that all transfers for more than one year be in writing and signed. D) prove the validity of the execution of the document.

A) enable interested parties to know where to look to discover the various interests of other parties to the transaction.

Effective January 1, 2011 a new disclosure form will be required in residential transactions. The new form is related to: A) energy consumption. B) Carbon dioxide emissions. C) solar energy. D) wind energy.

A) energy consumption.

The right of a deliquent taxpayer to redeem his or her property before it has been sold at a tax sale is known as a(n) A) equitable right of redemption B) statutory right of redemption C) common law right of redemption D) statutory forgiveness

A) equitable right of redemption

The right to redeem property in foreclosure at anytime before the sale is called the: A) equitable right of redemption B) statutory right of redemption C) general right of redemption D) specific right of redemption

A) equitable right of redemption

The most commonly used listing agreement is a(n) A) exclusive right to sell a.k.a. exclusive authorization to sell. B) exclusive agency listing. C) open listing D) reciprocal listing agreement

A) exclusive right to sell a.k.a. exclusive authorization to sell.

The sales comparison approach to value would be MOST important when estimating the value of a(n) A) existing residence. B) apartment building. C) retail location. D) new residence.

A) existing residence.

The record retention time period for a Nevada real estate broker is: A) five years B) four years C) two years D) one year

A) five years

Personal property which is attached to rented real estate for use in a trade or business is called a(n) A) fixture. B) attachment. C) trade fixture. D) fixture if it is firmly attached

A) fixture.

A property manager is hired to manage a property while the owner is overseas for two years. The property manager is a(n) A) general agent. B) special agent. C) universal agent. D) attorney-in-fact.

A) general agent.

When a client signs a brokerage agreement the salesperson should: A) give the client a copy of the agreement at that time B) take measures to ensure that the client does get a copy because it is against the regulations for a non-licensee to have a brokerage agreement. C) place the agreement in a safety deposit box D) get his/her broker to sign the agreement and then give a copy to the client.

A) give the client a copy of the agreement at that time

In order for a deed to be valid, the A) grantor must be legally competent. B) signature of the grantor must be witnessed. C) deed must be recorded. D) grantee must sign the deed.

A) grantor must be legally competent.

A deed must be signed by the A) grantor. B) grantee. C) grantor and grantee. D) grantee and two witnesses.

A) grantor.

A Nevada Real Estate licensee owes a duty of confidentiality to A) his/her client. B) his/her client and any unrepresented party to the transaction. C) all parties to the transaction. D) his/her broker.

A) his/her client.

When discount points are added to a loan it will A) increase the yield on the note B) decrease the yield on the note C) increase the interest rate on the loan D) decrease the interest rate on the loan

A) increase the yield on the note

When someone buys money, the price of the money is called the A) interest B) principal C) fee D) yield

A) interest

A transactional broker A) is not an agent of either party to the transaction. B) is an agent for both parties to the transaction. C) is an agent for the buyer in the transaction. D) is an agent for the seller in the transaction.

A) is not an agent of either party to the transaction.

Lindy transferred her property to her daughter, Sally, for the life of Sally's father. This is called a A) life estate pur autre vie B) life estate C) fee simple subject to a condition subsequent D) fee simple determinable.

A) life estate pur autre vie

An important distinction between real property and personal property is that A) real property is considered immovable and personal property is considered movable. B) real property can be owned by a natural person or a business entity but personal property is owned by a natural person and cannot be owned by a business entity. C) real property always has a greater value than personal property. D) real property actually exists but personal property is only imaginary.

A) real property is considered immovable and personal property is considered movable.

Refusing to grant a mortgage loan to anyone who lives in a certain area is known as: A) redlining B) blockbusting C) steering D) reverse appraising

A) redlining

Among other things the Federal Reserve: A) regulates the supply of money in the United States B) regulates the demand for money in the United States C) sets the allowable interest rates on home loans D) investigates allegations of counterfeiting

A) regulates the supply of money in the United States

Which of the following refers to ownership by one person? A) severalty B) joint tenancy C) tenancy in common D) reciprocal ownership

A) severalty

Meg lost her property in foreclosure, but was able to reacquire it 6 months after the sale. Meg was exercising a(n) A) statutory right of redemption B) equitable right of redemption C) right of reinstatement D) grace period

A) statutory right of redemption

Under CERCLA liability for the cost of cleaning a contaminated site is: A) strict, joint and several, and retroactive. B) based on who caused the contamination. C) lies with the federal government only. D) lies with state governments only.

A) strict, joint and several, and retroactive.

Under the Torrens system A) title passes when the grantee's application for registration has been approved and the real estate has been registered. B) the Torrens official performs exactly the same functions as the recorder of deeds. C) the original deed is mailed to the buyer after it has been registered. D) the registration of a title can be canceled by the owner at any time.

A) title passes when the grantee's application for registration has been approved and the real estate has been registered.

A Nevada real estate licensee owes all the following duties to all the parties to a transaction EXCEPT the duty A) to disclose all material facts concerning the tranasaction. B) to disclose each source of compensation. C) the duty to disclose material fact relating to the property. D) todisclose whether to licensee is acting for more than one party to the transaction.

A) to disclose all material facts concerning the tranasaction.

Carla's property, in the previous question, was sold through a non-judicial foreclosure at a trustee's sale. Which statement is TRUE? A. Carla does not have a statutory right of redemption. B. Carla has a one-year statutory right of redemption. C. Carla has a two-year statutory right of redemption. D. Carla has a statutory right of reinstatement.

A. Carla does not have a statutory right of redemption

To legally engage in property management activities in Nevada a person must have: A. a real estate license and a property management permit. B. only a property management permit. C. only a real estate license. D. a real estate broker's license

A. a real estate license and a property management permit

Even though Assemblage and Plottage technically mean the same thing, how are they used and define in real life life situations?

Assemblage is more often used to DESCRIBE THE ACTION of combining several parcels of land. Plottage is more often used to describe the INCREASE USABILITY AND PRICE.

Define Assemblage and give an example of why this process is important.

Assemblage or PLOTTAGE is when several parcels of land are combined into one unit. The result is often times increased usability and increase value altogether.

Megan's law

federal law requiring all states to release info to public about known sex offenders

Most homeowners' insurance policies contain which of the following clauses? A) Property improvement clause B) Coinsurance clause C) Co-ownership clause D) Property devaluation clause

B) Coinsurance clause

The form used for a real estate licensee to act for more than one party in a transaction is called the: A) Duties Owed by a Nevada Real Estate Licensee B) Consent to Act C) Dual Agency Authorization D) Waiver of Conflict

B) Consent to Act

A real estate licensee must disclose to all parties all material facts concerning the transaction. A) True B) False

B) False

General real estate taxes are also known as A) special assessments. B) ad valorem taxes. C) appropriation funds. D) general, voluntary liens.

B) ad valorem taxes.

Contamination from underground storage tanks is: A) found only in petroleum stations. B) addressed by EPA regulations. C) only caused by tanks currently in use. D) easily detected and eliminated.

B) addressed by EPA regulations.

The chief executive officer of the Nevada real estate division is called the: A) director B) administrator C) manager D) boss

B) administrator

A building is valued at $215,000 and contains four apartments that rent for $470 each per month. The owner estimates that the net operating income is 65 percent of the gross rental receipts. What is the capitalization rate? A) 3.7 percent B) 6.8 percent C) 10.5 percent D) 14.2 percent

B) 6.8 percent The income would be calculated by multiplying the income from the four apartments based on a year; 65 percent of that sum would be the NOI. NOI divided by the value of the building would provide a capitalization rate. The calculation would be: $470 × 4 × 12 × 65% (0.65) ÷ $215,000 = 6.8-percent cap rate.

How many acres are in a standard section? A) It varies B) 640 acres C) 43,560 acres D) 5,280 acres

B) 640 acres

A property manager is getting bids for the construction of a new swimming pool. Construction of the pool would be classified as what kind of maintenance? A) Corrective maintenance. B) A capital improvement. C) Routine maintenance. D) A good way for the property manager's brother-in-law to make a few bucks.

B) A capital improvement.

Which of the following would be considered community property? A) Gift of property to a wife during her marriage B) A motor home bought during the marriage C) Property inherited by a husband during marriage D) Rental property owned by either husband or wife prior to the marriage

B) A motor home bought during the marriage

Rhonda bought some property from Alan, subject to an existing loan on the property. Rhonda was unable to keep up with the payments and the property was sold in foreclosure for $20,000 less than the balance owed on the loan. Who is liable for the $20,000? A) Rhonda only B) Alan only C) Rhonda and Alan D) No one

B) Alan only

A woman owns 50 acres of land with 500 feet of frontage on a desirable recreational lake. She wishes to subdivide the parcel into salable lots, but she wants to retain control over the lake frontage while allowing lot owners to have access to the lake. Which of the following types of access rights would provide the greatest protection for a prospective lot purchaser? A) Easement in gross B) Appurtenant easement C) Easement by necessity D) License

B) Appurtenant easement

A violation of the Fair Housing Act could result in a penalty of: A) $27,500 for the third offense. B) $11,000 for the first offense. C) $100,000 for any offense. D) whatever the administrative law judge determines is fair.

B) $11,000 for the first offense.

If the potential gross rental income from a property is $20,000, the vacancy rate is 5 percent, and the additional income from the laundry facilities and extra storage is $700, what is the effective gross income? A) $19,000 B) $19,700 C) $20,000 D) $20,700

B) $19,700 Effective gross income is the result of all incomes minus any losses due to vacancy, bad checks, etc.: $20,000 potential gross income + $700 other income - $1,000 vacancies at 5% (0.05) = $19,700.

Denise borrowed money to buy a house for $200,000. She made a $100,000 down payment and paid two discount points on her loan. How much did she pay in points? A) $4,000 B) $2,000 C) None, because it is illegal to charge points. D) It depends on the interest rate.

B) $2,000

A salesperson working for Broker A sells a $150,000 home listed with another brokerage. The listing commission is 6.5 percent of the selling price. Of this amount, 5 percent is payable to the referral network that referred the buyer, 35 percent goes to the listing broker, and 60 percent belongs to the cooperating broker. Broker A and the salesperson agreed that she would receive 55 percent of any commission that she generated for their office. For this transaction, she is entitled to receive A) $2,632.50. B) $3,217.50. C) $3,412.50. D) $5,850.00.

B) $3,217.50.

How long does a real estate salesperson have to deliver paperwork to his or her broker? A) 5 working days B) 5 calendar days C) 10 working days D) 10 calendar days

B) 5 calendar days

Bridget has hired Joan to help her sell her house. One of the first things Bridget wants to know is the amount for which she should list the house. Which of the following is most likely to happen to determine the listing price? A) Joan will prepare a CMA and the house will be listed at whatever price Joan determines is best based on the CMA. B) Joan will prepare a CMA that will help Bridget decide the listing price for the house. C) Joan will consult with her broker and she and her broker will decide the listing price. D) Joan will order an appraisal and the listing price will be based on the appraisal.

B) Joan will prepare a CMA that will help Bridget decide the listing price for the house.

The constitutionality of the Civil Rights Act of 1866 was upheld in: A) Plessy v. Ferguson (1896) B) Jones v. Mayer (1968) C) Brown v. Board of Eduction (1954) D) Shelley v. Kraemer (1948)

B) Jones v. Mayer (1968)

Which of the following statements is TRUE? A) Mold requires a dry climate to grow. B) Mold requires moisture to grow. C) The use of urea-formaldehyde is banned in the United States. D) Mold is always harmless.

B) Mold requires moisture to grow

Crystal rents property from Tiffany. (Get it? Crystal and Tiffany, yuck, yuck) Crystal operates a small antique shop on the premises. Pursuant to their lease Crystal must pay $1,000 per month plus a specified portion of her monthly income derived from the antique shop. What type of lease does Crystal have? A) Gross B) Percentage C) Net D) Index

B) Percentage

Which of the following would be classified as external depreciation? A) Leaking roof that needs to be completely replaced B) Poorly maintained properties in the neighborhood C) Poorly designed floor plan that could be modified D) Convenient access to schools and recreational facilities

B) Poorly maintained properties in the neighborhood

What is the underlying principle of the sales comparison and cost approaches to value? A) Principle of supply and demand B) Principle of substitution C) Principle of contribution D) Principle of highest and best use

B) Principle of substitution

Who holds the hearing when a licensee is accused of misconduct? A) Real estate division. B) Real estate commission. C) Supreme Court. D) Alice in Wonderland.

B) Real estate commission.

A man has defaulted in the payment of several of his debts, and the court has ordered his property be sold to satisfy them. A title search revealed several outstanding liens against the property. Which of the following liens has highest priority? A) Outstanding first mortgage lien dated and recorded one year ago B) Real estate tax lien for the current year C) Judgment lien rendered and recorded last month D) Mechanic's lien for work started two months before the mortgage was recorded

B) Real estate tax lien for the current yea

Which of the following is true about a state with a Torrens property registration system? A) Registering the deed in a Torrens system has exactly the same effect as recording B) Registering the deed is necessary to transfer title. C) Nevada uses a Torrens system D) The Torrens system is actually a method of describing property.

B) Registering the deed is necessary to transfer title.

What action returns a contract's parties to their positions before the contract, including return of any deposit? A) Cancellation B) Rescission C) Substitution D) Subordination

B) Rescission

In a residential real estate transaction the seller must provide a property condition disclosure form called the: A) Property Condition Disclosure form B) Seller's Real Property Disclosure form C) Duties owed by a Nevada Real Estate Licensee D) Property Inspection Report

B) Seller's Real Property Disclosure form

Which of the following is NOT a protected class under the federal Fair Housing Act but is a protect class under Nevada's Fair Housing Act? A) Color B) Sexual orientation C) Handicap D) Familial status

B) Sexual orientation

Which of the following is not used to determine whether there is an agnecy relationship in the real estate profession A) The existence of an agreement between the parties. B) Source of compensation. C) The conduct of the parties.

B) Source of compensation.

Sponge Bob bought some property from Gary but Sponge Bob did not record the deed. Which of the following statements is TRUE A) Sponge Bob does not own the property because recording is necessary. B) Sponge Bob owns the property. C) Gary owns the property until Sponge Bob records his deed. D) Sponge Bob has equitable title to the property but will not have legal title until he records his deed

B) Sponge Bob owns the property.

The priority of liens is usually determined by A) The date the lien was created B) The date the lien was recorded C) The amount of the lien D) The type of lien

B) The date the lien was recorded

Sally owns property next to Bob and has an easement to cross over Bob's property. The property owned by Sally is known as A) An easement in gross B) The dominant tenement C) The servient tenement D) The easement property

B) The dominant tenement

Tom continued to occupy an apartment after the expiration of his lease and without the landlord's permission. What type of estate, if any, does Tom have? A) Tom does not have an estate because he does not have a right to occupy the apartment. B) Tom has an estate at sufferance. C) Tom has an estate at will. D) Tom has a month to month estate

B) Tom has an estate at sufferance.

Rosie real estate agent has just obtained her first Nevada real estate salesperson's license. How long will her license be valid? A) One year B) Two years C) Three years D) Four years

B) Two years

In most states would an oral lease for 365 days, be legally enforceable? A) No, a lease for one year or more must be in writing. B) Yes C) Yes, but only if there is a witness to the lease. D) Yes, but only if the judge is bribed.

B) Yes

In the income approach, the appraiser makes use of A) reproduction cost. B) a capitalization rate. C) depreciation schedules. D) replacement cost.

B) a capitalization rate.

A deed of trust is: A) a contract that sets forth the terms and conditions of a loan. B) a security instrument. C) sometimes used instead of title insurance. D) is a document used by secret cults.

B) a security instrument.

A woman bought acreage in a distant county, never went to see it, and did not use it, although she regularly paid the real estate taxes on it. Without her knowledge, a man moved his mobile home onto the property, drilled a well for water, and lived there for many years. The man might have become the owner of the acreage if he has complied with state laws regarding A) intestate succession. B) adverse possession. C) the statute of frauds. D) the statute of limitations.

B) adverse possession.

The seller's real property disclosure form is required in: A) all real estate transactions B) all residential real estate transactions C) only residential real estate transactions where the property was built before 1978 D) only residential real estate transactions where the buyer will not have an inspection done

B) all residential real estate transactions

The primary survey line running east and west in the rectangular survey system is the A) township line. B) base line. C) range line. D) principal meridian.

B) base line.

A residential real estate closing will: A) not be reported to the IRS. B) be reported to the IRS on a 1099-S form. C) be reported to the Federal Reserve. D) be reported to Homeland Security.

B) be reported to the IRS on a 1099-S form.

A licensed real estate professional acting as a point of contact between two or more people in negotiating the sale, rental, or purchase of a property is known as a(n) A) sales affiliate. B) broker. C) property manager. D) appraiser.

B) broker.

All of the following loans to individuals are affected by the truth-in-lending law under Regulation Z EXCEPT A) household use. B) business use. C) room additions. D) swimming pools.

B) business use.

The broker receives an earnest money deposit with a written offer to purchase that includes a ten-day acceptance clause. On the fifth day, before the offer is accepted, the buyer notifies the broker that she is withdrawing the offer and demands the return of her earnest money deposit. In this situation, the A) buyer cannot withdraw the offer because it must be held open for the full ten days. B) buyer has the right to revoke the offer at any time until it is accepted and recover the earnest money. C) seller and the broker have the right to each retain one-half of the deposit. D) broker declares the deposit forfeited and retains it for his services.

B) buyer has the right to revoke the offer at any time until it is accepted and recover the earnest money.

Fannie Mae A) makes FHA loans. B) buys FHA loans. C) services FHA loans. D) insures FHA loans.

B) buys FHA loans.

All of the houses in Don Quixote Estates have been using septic tank systems but now must hook into the public sewage system. It will cost approximately $5,000 per hour for the hook up. The county will probably recover this cost by A) raising taxes on the houses in Don Quixote Estates B) charging a special assessment C) using an equalization factor D) holding several bake sales

B) charging a special assessment

To renew his or her first (initial) salesperson's license, the licensee must provide proof of: A) completing 30 hours of continuing education B) completing 30 hours of postlicense education C) completing at least three transactions D) completing at least 24 hours of postlicense or continuing education

B) completing 30 hours of postlicense education

The process by which government can acquire ownership of private land for public use is A) escheat. B) condemnation. C) eminent domain. D) doctrine of public acquisition.

B) condemnation.

All of the following reasons are valid bases for terminating a listing agreement EXCEPT A) sale of the property. B) death of the salesperson. C) agreement of the parties. D) destruction of the premises.

B) death of the salesperson

If the demand for housing remains constant and the supply increases, the price of houses tends to: A) rise B) decline C) remain constant D) it depends primarily on local weather patterns

B) decline

An "acceleration clause" is found in a: A) promissory note B) deed of trust C) contract for the purchase of a car D) listing contract

B) deed of trust

In a real estate financing transaction the security instrument most commonly used in Nevada is a(n) A) mortgage B) deed of trust C) promissory note D) warranty deed

B) deed of trust

Detailed information about the age, education, behavior, and other characteristics of members of a population group is called A) population. B) demographics. C) family lifestyles. D) households.

B) demographics.

The federal Interstate Land Sales Full Disclosure Act provides that A) sales of lots in subdivisions consisting of more than 25 lots are exempt from regulation. B) developers file with HUD before selling certain properties interstate. C) sales of lots in subdivisions of ten acres or more are exempt from regulation. D) potential purchasers be issued a written report with detailed information about the subdivision before closing.

B) developers file with HUD before selling certain properties interstate.

All of the following are categories of the uses of real property EXCEPT A) residential. B) developmental. C) agricultural. D) industrial.

B) developmental.

For a number of years Nerali has been crossing over Petra's property, as a convenient short cut to the store. She has been crossing without Petra's permission. One day Petra told her to stop crossing her property and Nerali sued Petra to establish a right to cross the property. If the court awards Nerali a right to cross over Petra's property it would be called a(n) A) easement by necessity B) easement by prescription C) dominant easement D) servient easement

B) easement by prescription

A developer grants a local power company the right to install necessary transmission lines. This right is an example of a(n) A) license. B) easement in gross. C) easement by prescription. D) conditional use permit.

B) easement in gross.

A method of sealing off disintegrating asbestos is called: A) capping. B) encapsulation. C) containment. D) contamination closure.

B) encapsulation.

In determining rental amounts, a property manager considers the economic principle of A) marginal contribution. B) supply and demand. C) conformity. D) balance.

B) supply and demand.

The main purpose of police power is to A) demonstrate the authority of the state. B) ensure the health, safety, and welfare of the community. C) set limits on the amount and kinds of businesses in a given area. D) protect residential neighborhoods from encroachment by business and industry.

B) ensure the health, safety, and welfare of the community.

Andrew the appraiser subtracted from the estimated value of John's home, because it was located near a freeway. Andrew subtracted for: A) normal wear and tear. B) external, incurable obsolescence. C) external, curable obsolescence. D) functional obsolescence.

B) external, incurable obsolescence.

After paperwork has been signed by the parties, a Nevada real estate salesperson must deliver the paperwork to his or her broker within: A) five days B) five calendar days C) five working days D) five banking days

B) five calendar days

All of the following are generally exempt from paying real estate taxes EXCEPT A) cities. B) for-profit assisted living facilities. C) hospitals. D) schools.

B) for-profit assisted living facilities.

Maureen owns a home with a one car garage. In terms of depreciation the one car garage would be called: A) external obsolescence. B) functional obsolescence. C) a multiplier. D) an appurtenance.

B) functional obsolescence.

A home with its kitchen next to the master bedroom would be considered A) physically obsolete. B) functionally obsolete. C) economically obsolete. D) diminished.

B) functionally obsolete.

The recordation of a warranty deed A) gives actual notice of the grantee's rights. B) gives constructive notice of an individual's interest. C) prevents claims of parties in possession. D) provides defense against adverse possession.

B) gives constructive notice of an individual's interest.

A subdivision was developed, and one of the deed restrictions covering all of the properties in the subdivision sets aside the back six feet of each parcel as a combination green belt area and bicycle path. A homeowner plans to convert the back one-half of her yard, including this set-aside space, into an organic garden. Her neighbor can A) do nothing because individual homeowners have no authority in this matter. B) go to court in an attempt to obtain an injunctive relief. C) force the homeowner to sell her property. D) share in the bounty from the organic garden.

B) go to court in an attempt to obtain an injunctive relief.

If a deed includes a covenant of quiet enjoyment, the grantor A) promises that the owners of neighboring property will not interfere with the grantee's peaceful enjoyment of the property B) guarantees that if title for some reason fails in the future that the grantor will pay any damages caused by the failed title C) guarantees that the property does not have any encumbrances except for those stated in the deed. D) guarantees that she is the owner of the subject property and has the right to convey it

B) guarantees that if title for some reason fails in the future that the grantor will pay any damages caused by the failed title

A real estate salesperson can only be paid by: A) his or her client. B) his or her broker. C) the Nevada Real Estate Commission. D) It depends on whether the salesperson is working for the buyer or the seller. E) the buyer or lessee. F) the seller or the landlord.

B) his or her broker.

A Nevada real estate licensee must disclose material facts he or she knows concerning the transaction to: A) all parties to any transaction B) his or her client in any transaction C) to all parties in a residential transaction D) to his or her client in a residential transaction

B) his or her client in any transaction

Shelly and Nadine bought a store building and took title as joint tenants. Nadine died testate, and Shelly now owns the store: A) as a joint tenant with right of survivorship. B) in severalty. C) as a tenant in common with Nadine's heirs. D) in trust.

B) in severalty.

Urea formaldehyde is found in residential properties in: A) lead-based paints. B) insulating foam. C) home appliances. D) electromagnetic fields.

B) insulating foam.

When properly recorded in the county where the real estate of the defendant is located, a judgment becomes a(n) A) voluntary lien. B) involuntary lien. C) specific lien. D) statutory lien.

B) involuntary lien.

For someone to establish an easement by necessity, he or she must prove that the land to benefit from the easement A) has been used for at least 5 years B) is landlocked C) has a reasonably substantial value D) owned free and clear of any encumbrances

B) is landlocked

Evaluating the cost of equipment to be installed in a modernization or renovation over its entire useful life is called: A) depreciation analysis B) life cycle costing C) financial factoring D) normal wear and tear

B) life cycle costing

A specified sum of money that serves to compensate a seller in the event of a buyer default is known as A) actual damages. B) liquidated damages. C) escrow funds. D) earnest money.

B) liquidated damages.

The purpose of an appraisal is to estimate: A) sales price B) market value C) cost of reconstructing the improvements D) how the size of the subject property

B) market value

The method of describing land that uses degrees, feet, and monuments is known as the A) angular system. B) metes and bounds system. C) rectangular survey system. D) lot and block system.

B) metes and bounds system

The provision in a listing agreement that gives additional authority to the broker and obligates the broker to distribute the listing to other brokers is a(n) A) joint-listing clause. B) multiple-listing clause. C) net-listing clause. D) open-listing clause.

B) multiple-listing clause.

A lessee who pays his or her proportionate share of increases in the lessor's property expenses has a A) gross lease. B) net lease. C) percentage lease. D) sublease.

B) net lease.

A broker took a listing and later discovered that the client had been declared legally incompetent before signing the listing. The listing is now A) binding because the broker was acting as the owner's agent in good faith. B) of no value to the broker because it is void. C) the basis for the recovery of a commission if the broker produces a buyer. D) renegotiable.

B) of no value to the broker because it is void.

The covenant implied in a lease that ensures that the landlord will not interfere in the tenant's possession or use of the property is the covenant A) of seisin. B) of quiet enjoyment. C) of warranty forever. D) against encumbrances.

B) of quiet enjoyment.

When does Nevada real estate license expire? A) On the same day of the month it was issued. B) on the last day of the month. C) on the first day day of the month. D) on the 33rd day of the month.

B) on the last day of the month.

A salesperson who receives an earnest money deposit must deliver it to his or her broker, or deposit it in escrow within day(s) after receiving a fully signed contract. A) one banking B) one business C) two calendar D) one lunar

B) one business

The type of real estate loan that allows the lender to increase the outstanding balance of a loan up to the original sum in the note while advancing additional funds is a(n) A) wraparound mortgage. B) open-end loan. C) growing-equity mortgage. D) graduated-payment mortgage.

B) open-end loan.

Fannie Mae, Ginnie Mae, and Freddie Mac all A) originate residential mortgage loans. B) operate in the secondary market. C) insure residential mortgage loans. D) guarantee existing mortgage loans.

B) operate in the secondary market.

The principal distinction between the primary mortgage market and the secondary mortgage market is in the A) insuring versus the guaranteeing of mortgage loans. B) origination versus the purchase of mortgage loans. C) use of mortgages versus the use of deeds of trust. D) use of discount points versus the use of origination fees.

B) origination versus the purchase of mortgage loans.

The type of title insurance that will protect the owner and heirs is called a(n) A) lender's policy. B) owner's policy. C) leasehold policy. D) certificate of sale policy.

B) owner's policy.

A property manager's primary obligation is to: A) tenants. B) owners. C) bankers. D) government authorities.

B) owners.

Defined as a loss in value from any cause, depreciation is generally divided into three categories. The loss of value due to the normal wear and tear on a property is called A) external depreciation. B) physical deterioration. C) functional obsolescence. D) economic deterioration.

B) physical deterioration.

Paul bought two adjoining parcels of land for $100,000 each and then sold them as one parcel for $300,000. This is called the principle of A) assemblage B) plottage C) planning D) anticipation

B) plottage

When a city passes a zoning ordinance it is exercising its: A) power of eminent domain B) police powers C) powers of escheat D) takings power

B) police powers

In order to perform a non-judicial foreclosure, the security instrument must have a: A) defeasance clause B) power of sale clause C) default clause D) non judicial foreclosure clause

B) power of sale clause

A real estate licensee can help a seller determine a listing price by A) preparing an appraisal B) preparing a CMA C) by making a good guess D) by conducting a survey or surrounding property owners.

B) preparing a CMA

The road to a man's home is winding and long, and the shorter, more direct route is across a neighbor's land. The man has used the more direct route for years and has never seen the neighbor. He hopes to eventually gain an easement by A) necessity. B) prescription. C) condemnation. D) license.

B) prescription.

Strips of land six miles wide that run north and south are called A) tiers. B) ranges. C) latitudes. D) longitudes.

B) ranges.

To legally engage in property management activities in Nevada requires a A) real estate license only B) real estate license and a property management permit C) Property management permit only D) Community association management certificate

B) real estate license and a property management permit

NAC 645.605 is a(n): A) regulation adopted by the real estate division. B) regulation adopted by the real estate commission. C) statute passed by the legislature. D) executive order signed by the Governor.

B) regulation adopted by the real estate commission.

A woman conveys a life estate to her grandson and stipulates that upon her death the estate will pass to her son-in-law. The son-in-law has a(n) A) reversionary interest. B) remainder interest. C) estate for years. D) legal life estat

B) remainder interest.

When property is sold in a common-interest community, the seller must give a stack of documents to the buyer called the: A) stack of documents B) resale package C) common-interest community documents D) CC&Rs

B) resale package

In designated agency, all of the following apply EXCEPT the A) licensee could be a dual agent. B) same licensee may represent both the buyer and the seller at the same time. C) licensee can choose an agent in the office to represent the seller. D) licensee may appoint an agent to negotiate for the buyer.

B) same licensee may represent both the buyer and the seller at the same time.

The buyer/owner's title insurance is generally paid for by the: A) buyer/owner B) seller C) listing broker D) escrow holder

B) seller

The essential elements of a contract include all of the following EXCEPT A) offer and acceptance. B) signatures of the parties. C) competent parties. D) consideration.

B) signatures of the parties.

Priority of mechanics' liens is based on A) federal law. B) state law. C) common law. D) case law.

B) state law.

Deed restrictions are created by all of the following EXCEPT A) deed. B) statute. C) written agreement. D) general plan of a subdivision.

B) statute.

In Nevada the duties of a real estate licensee are governed by A) common law. B) statutory law. C) federal law only. D) real estate brokers.

B) statutory law.

Guiding someone to or away from a particular neighborhood because of that person's ethnic background is known as: A) blockbusting B) steering C) redlining D) reverse appraising

B) steering

Adaptations of property specifications to suit tenant requirements are A) tax-exempt improvements. B) tenant improvements. C) prohibited by most nonresidential leases. D) generally not a good idea.

B) tenant improvements.

After a hearing the Nevada Real Estate Commission fined Denise $100,000 and suspended her license for two years because she did a lot of bad stuff. Denise can appeal the commission's decision to: A) the Governor B) the District Court C) the Supreme Court D) The Director of the Department of Business and Industry.

B) the District Court

Tenancy with survivorship means A) the tenancy interest will be inherited. B) the tenancy interest will pass to the surviving tenants upon the death of one. C) the tenant's heirs are survivors. D) this is not a legal tenancy.

B) the tenancy interest will pass to the surviving tenants upon the death of one.

Kyle and Ursula owned a combination apartment building and restaurant. They shared their profits and losses on the venture equally, but they did not have any written partnership agreement. One day, Ursula died of a heart attack. If, after her death, Kyle continued to only own the same undivided interest in the real estate as he did before, then A) they were joint tenants. B) they were tenants in common. C) they were shareholders in their own corporation. D) Ursula died intestate.

B) they were tenants in common.

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

B) to ensure that the seller can deliver marketable title.

The primary purpose of a deed is to A) prove ownership. B) transfer title rights. C) give constructive notice. D) prevent adverse possession.

B) transfer title rights.

Charging interest on a loan in excess of the amount allowable by law is called: A) hypothecation B) usury C) negotiations D) mean

B) usury

At the time a buyer was negotiating the purchase of a lot on which to build a new home, the seller represented that the soil was firm enough to support the construction of a building when, in fact, he knew it was not. This contract is A) void. B) voidable by the buyer because of fraud. C) voidable by the seller because of the mistake. D) voidable by neither party because no harm was done yet.

B) voidable by the buyer because of fraud.

Grantee is to a deed as devisee is to a A) trust. B) will. C) estate. D) leasehold.

B) will.

After receiving the Seller's Real Property Disclosure form the buyer can cancel the transaction: A) within one week. B) within 4 working days. C) within 4 calendar days. D) anytime before close of escrow.

B) within 4 working days.

How is the process of 'Dedication' actually performed?

By recording the plat of the subdivision at the local court house.

That portion of the value of owners' property that exceeds the amount of their mortgage debt is called A) equality. B) escrow. C) surplus. D) equity.

D) equity.

ERRF! What are the limits on the recovery fund? A) $10,000 per judgment/ $20,000 per licensee. B) $10,000 per licensee/ $20,000 per judgment. C) $25,000 per judgment/ $100,000 per licensee. D) $25,000 per year/ $100,000 per licensee.

C) $25,000 per judgment/ $100,000 per licensee.

ERRF has limits on the amount that can be collected against it per judgment and per licensee. These limits are: A) $5,000/$10,000 B) $10,000/$25,000 C) $25,000/$100,000 D) $100,000/$250,000

C) $25,000/$100,000

Federal income tax regulations allow homeowners to reduce their taxable income by amounts paid for A) repairs and maintenance. B) hazard insurance premiums. C) real estate taxes. D) principal and interest.

C) real estate taxes.

A seller knew of a defect but did not disclose it on the SRPD. It cost the buyer $5,000 to repair the defect. How much can the buyer collect in damages from the seller? A) $5,000 B) 10,000 C) $15,000 D) $20,000

C) $15,000

Barack just discovered a defect in a house he bought, and he can prove the seller was aware of the defect but did not disclose it. It cost Barack $5,000 to repair the defect. In addition to attorneys fees and costs, how much can Barack recover from the seller? A) $5,000 B) $10,000 C) $15,000 D) $20,000

C) $15,000

To help someone sell a business in Nevada the person must have a: A) real estate license B) real estate license and a business brokerage certificate. C) real estate license and business brokerage permit. D) lot of money

C) real estate license and business brokerage permit.

Broker A earned $8,920 on the sale of house with a 5% commission. For how much did the house sell if Broker A does not have to share the commission with anyone? A) There are not enough facts to determine the sales price. B) $1,784,000 C) $178,400 D) It depends on the location of the property.

C) $178,400

Federal income tax law excludes gain realized on the sale of a primary residence for individuals filing separately and for couples filing jointly. The amount of this exclusion is (separately/jointly) A) $100,000/$200,000. B) $125,000/$250,000. C) $250,000/$500,000. D) $300,000/$600,000.

C) $250,000/$500,000.

If a seller needs to net $50,000 after the sale, how much must the real estate sell for if the selling costs include a 7 percent commission and $1,200 in other expenses? A) $54,700 B) $54,963 C) $55,054 D) $55,633

C) $55,054

In a residential transaction a disclosure regarding lead based paint is required if the property was built before: A) 1964 B) 1968 C) 1978 D) 1988

C) 1978

How many acres are in a parcel described as, "The NW¼ of the SE¼ and the S½ of the SW¼ of the NE¼ of Section 4"? A) 40 B) 50 C) 60 D) 80

C) 60

Jason borrowed $385,000 to buy a $450,000 house. What is his LTV ratio? A) It depends on the interest rate of the loan. B) 117% C) 85% D) It depends on the type of loan.

C) 85%

What is the difference between a general lien and a specific lien? A) A general lien cannot be enforced in court, while a specific lien can be enforced. B) A specific lien is held by one person, while a general lien is held by at least two persons. C) A general lien affects all of a debtor's property, while a specific lien affects only a certain piece of property. D) A specific lien covers real estate, while a general lien covers personal property.

C) A general lien affects all of a debtor's property, while a specific lien affects only a certain piece of property.

n a federally related loan transaction residential loan transaction RESPA requires a lender to give a potential borrower: A) Title insurance B) Homeowner's insurance C) A good faith estimate of closing costs D) A good faith estimate of the monthly payment

C) A good faith estimate of closing costs

A mechanics lien would be properly classified as A) Voluntary, statutory, general B) Involuntary, statutory, general C) Involuntary, statutory, specific D) Voluntary, statutory, specific

C) Involuntary, statutory, specific

When applicable, by law, when must a seller deliver a resale package to a buyer? A) No later that 10 days before the close of escrow. B) No later than 5 days after it is requested by the buyer. C) It depends on the agreement of the parties. D) On the first day of the next full moon.

C) It depends on the agreement of the parties.

Which of the following is True about a property management agreement in Nevada? A) It can be oral or written B) It cannot have an automatic renewal clause C) It must be in writing D) It cannot have a property management fee that exceed 25% of collected rents.

C) It must be in writing

Maria died intestate and with no heirs and no property held with a right of survivorship. What will happen to her property? A) It will pass to whomever is named in her will B) It will pass to her nearest relatives C) It will escheat to the state D) It will be held in trust for future heirs

C) It will escheat to the state

Jose, Erin and Corey own property as joint tenants. Corey sold his share of the property to Laura. Then Erin died, and in her will left her portion of the property Sharon. Who owns the property? A) Jose, Laura and Sharon, in equal shares, as joint tenants B) Jose, Laura and Sharon, in equal shares as tenants in common C) Jose owns a 2/3 interest as a tenant in common with Laura who owns a 1/3 interest. D) Jose, Sharon and Corey own the property, in equal shares, as tenants in common.

C) Jose owns a 2/3 interest as a tenant in common with Laura who owns a 1/3 interest.

Under which of the following types of liens can both the real property and the personal property of the debtor be sold to pay the debt? A) Real estate tax lien B) Mechanic's lien C) Judgment lien D) Assessment lien

C) Judgment lien

Bahima, the buyer, had equitable title to the property he possessed. He will not obtain legal title until he makes the last payment on an installment contract he has with the seller. What type of contract is this? A) Typical purchase sale contract B) Unenforceable contract C) Land contract D) Illusory contract

C) Land contract

Which of the following about regulation of print advertising and advertising on the Internet is true? A) advertising on the Internet is not regulated B) advertsing on the Internet is regulated exclusively by the federal government C) Nevada regulations applicable to print advertising are also applicable to advertising on the Internet D) Nevada regulates advertising on the Internet but does not regulate print advertising.

C) Nevada regulations applicable to print advertising are also applicable to advertising on the Internet

The process to discipline a Nevada real estate licensee can begin with a "citizen's complaint" which is completed on a form called: A) Citizen's Complaint B) The Complaint C) Statement of Fact D) Specification of Errors

C) Statement of Fact

A tenant's lease does not terminate for five more years. The premises, however, have become too small to accommodate the tenant's growing business. Another business owner is interested in leasing the premises from the tenant for three years. Which of the following would the parties use for the tenant to lease the space to the business owner? A) Assignment B) Novation C) Sublease D) Tenancy at sufferance

C) Sublease

Which of the following is NOT a form of onwership available in Nevada? A) Joint tenancy B) Tenancy in common C) Tenancy by the entirety D) Ownership in severalty

C) Tenancy by the entirety

The 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? A) The policy is issued for the benefit of the buyer. B) The policy guarantees that the buyer's equity will be protected. C) The amount of coverage is commensurate with the loan amount. D) The amount of coverage increases as the borrower's equity increases.

C) The amount of coverage is commensurate with the loan amount.

If a real estate broker negotiates and receives a 40% commission, what will happen? A) The real estate commission will discipline the broker for charging an excessive fee. B) A judge will not allow the broker to receive such an excessive fee. C) The broker will receive a 40% commission. D) The broker will have to share half of it with his or her mother-in-law.

C) The broker will receive a 40% commission.

The construction of a family room, additional bedroom, and extra bath has been completed on the owner's home. Before the addition can be used, which of the following is TRUE? A) The municipality must issue a building permit. B) The bath must be inspected by the plumbing inspector. C) The municipality must issue an occupancy permit. D) The municipality must issue a conditional-use permit.

C) The municipality must issue an occupancy permit.

In Nevada how will the closing of a real estate transaction generally be conducted? A) At a scheduled time the parties will get together and exchange documents and money. B) Someone at the county recorder's office will conduct the closing. C) The parties will submit papers and money to an escrow officer or agent who will conduct the closing. D) Nevada does not have any generally accepted method for conducting a closing.

C) The parties will submit papers and money to an escrow officer or agent who will conduct the closing.

Which of the following is true about a reverse mortgage? A) It is a slang term for a loan with negative amortization. B) It is often an excellent choice for a first time homebuyer. C) The principal and interest on the loan are not due until the borrower sells the house securing the loan or dies. D) It is not available unless the borrower is at least 75 years old.

C) The principal and interest on the loan are not due until the borrower sells the house securing the loan or dies.

What happens with negative amortization? A) The interest rate decreases. B) The monthly payment owed on a loan increases. C) The principal on the loan increases even though payments are being made. D) Negative amortization is illegal and should not occur.

C) The principal on the loan increases even though payments are being made.

Pursuant to RESPA all of the following are required EXCEPT: A) A good faith estimate of closing costs B) A special information booklet for borrowers C) Title Insurance D) Use of a standard closing statement sometimes referred to as the HUD-1.

C) Title Insurance

After receiving a resale package, how long does a buyer have to rescind the transaction? A) Five working days. B) It is determined by the agreement of the parties. C) Until midnight of the fifth calendar day. D) Four working days.

C) Until midnight of the fifth calendar day.

A licensee may disclose a client's confidential information A) Never B) In the interest of public health and safety C) With the client's written permission D) With the broker's written permission.

C) With the client's written permission

Radon is: A) only found in the eastern United States. B) easy to detect because of its odor. C) a known human carcinogen. D) not found in older homes.

C) a known human carcinogen.

All of the following would be considered evidence of marketable title EXCEPT a(n) A) abstract of title with a legal opinion. B) title commitment or title insurance policy. C) certificate of title by a real estate broker. D) certificate of title by a real estate attorney.

C) certificate of title by a real estate broker.

A person who owns one unit in a multiunit structure together with a specified undivided interest in the common elements would own a A) cooperative. B) share in a real estate investment trust. C) condominium. D) time-share interest.

C) condominium.

A tenant leases a heated apartment, but the landlord fails to provide heat because of a defective central heating plant. The tenant vacates the premises and refuses to pay any rent. This is an example of A) abandonment. B) actual eviction. C) constructive eviction. D) lessor negligence.

C) constructive eviction.

John spent $50,000 building a swimming pool in his back yard. He was disappointed to learn that the swimming pool only increased the value of his property by $20,000. This illustrates the principle of A) regression B) substitution C) contribution D) increasing and diminishing returns

C) contribution

The purpose of bulk zoning is to A) ensure that certain kinds of uses are incorporated into developments. B) specify certain types of architecture for new buildings. C) control density and avoid overcrowding. D) set overall development goals for the community.

C) control density and avoid overcrowding.

A licensee shows properties listed for sale with her company to a prospective buyer. The buyer has refused buyer representation. The buyer is the licensee's A) client. B) principal. C) customer. D) fiduciary.

C) customer.

In the income approach, all of the following are considered when calculating net operating income EXCEPT A) real estate taxes. B) management fees. C) debt service. D) utilities.

C) debt service.

When a life estate is created, the name of the future interest A) is a remainder B) is a reversion C) depends on who holds the future interest D) depends on whether it is an ordinary life estate or a life estate pur autre vie.

C) depends on who holds the future interest

A woman held fee simple title to a vacant lot adjacent to a business. She was persuaded to make the lot available to the business. She had her attorney prepare a deed that conveyed ownership of the lot to the business "...so long as it is used for commercial purposes." After the completion of the gift, the business will own a A) life estate. B) tenancy for years. C) determinable fee estate. D) periodic tenancy.

C) determinable fee estate.

Real estate that is inherited from a person who died testate is referred to as a A) legacy. B) bequest. C) devise. D) demise.

C) devise.

The Beach Boys needed some help, so Rhonda rented an apartment to them beginning February 1, 2011 and ending June 30, 2011. The Beach Boys have a(n): A) estate at will B) periodic estate C) estate for years D) estate at sufferance

C) estate for years

The highest interest in land recognized by law is a A) fee simple determinable B) fee simple subject to a condition subsequent C) fee simple absolute D) life estate

C) fee simple absolute

The relationship of a licensee to his or her client is that of a(n) A) trustee. B) subagent. C) fiduciary. D) attorney-in-fact.

C) fiduciary.

In the event that it is necessary for a landlord to remove a tenant from the premises, he or she does it by A) refunding any rents paid. B) refunding any security or other deposits paid. C) filing a suit for possession. D) using the minimum amount of physical force necessary.

C) filing a suit for possession.

Electromagnetic fields: A) have been proven to cause serious health problems in humans and animals. B) are produced only by large electrical appliances. C) from high power transmission lines are suspected of causing cancer and other health problems. D) are a major national public health concern.

C) from high power transmission lines are suspected of causing cancer and other health problems.

All of the following are true regarding public records EXCEPT they A) give notice of encumbrances. B) establish priority of liens. C) guarantee marketable title. D) provide constructive notice about interests in the property.

C) guarantee marketable title.

The Veterans Affairs (VA) A) borrows money from veterans B) insures certain loans C) guarantees certain loans D) buys loans on the secondary market

C) guarantees certain loans

All of the following are alternative risk management techniques EXCEPT A) avoiding it. B) retaining it. C) ignoring it. D) transferring it.

C) ignoring it.

Upon discovering a latent defect in a property, the licensee should discuss the problem with the seller and then A) tell him or her that the defect must be repaired. B) arrange for the repairs himself or herself. C) inform any prospective buyers of the defect. D) contact the city building inspector about the defect.

C) inform any prospective buyers of the defect.

An "FHA loan" is a loan that is: A) issued by the Federal Housing Administration. B) issued by the Federal Housing Agency. C) insured by the FHA. D) bought on the secondary market by the FHA.

C) insured by the FHA.

In regulations regarding lead-based paints, HUD requires that: A) homeowners test for its presence. B) paint must be removed from surfaces before selling. C) known paint hazards must be disclosed. D) only licensed contractors may deal with its removal.

C) known paint hazards must be disclosed.

Capping is the method of: A) piling waste into a hill at surface level and covering with clay. B) compacting waste and sealing it in a container. C) laying soil over the surface of a landfill and planting vegetation. D) burying waste and covering with soil.

C) laying soil over the surface of a landfill and planting vegetation.

A recorded subdivision plat is used in the A) geodetic survey system. B) rectangular survey system. C) lot and block system. D) metes and bounds system.

C) lot and block system.

A metes-and-bounds legal description A) can be made only in areas excluded from the rectangular survey system. B) is not acceptable in court in most jurisdictions. C) must commence and finish at the same identifiable point. D) is used to complete areas omitted from recorded subdivision plats.

C) must commence and finish at the same identifiable point.

The amount of commission that is paid to a salesperson is determined by A) state law. B) the local real estate board. C) mutual agreement with his or her broker. D) mutual agreement with the client.

C) mutual agreement with his or her broker.

In a typical agency relationship between broker and client, the broker's commission is determined by A) state law. B) the local real estate board. C) mutual agreement. D) minimums based on the property type.

C) mutual agreement.

The amount of a broker's commission is A) established by statute B) determined by the real estate division C) negotiable between the broker and client D) determined by the local association of realtors

C) negotiable between the broker and client

In an exclusive right to sell, or an exclusive agency listing, the word "exclusive" means A) the subject property is probably very expensive B) the real estate broker is not allowed to represent any other sellers until the subject house is sold. C) no other real estate broker is authorized to act on behalf of the seller. D) the broker's authority is limited to the property identified in the listing.

C) no other real estate broker is authorized to act on behalf of the seller.

Construction defect litigation disclosure is applicable: A) in all real estate transactions. B) whenever property has a construction defect. C) only in residential transactions. D) only in lease transactions.

C) only in residential transactions.

he duty of confidentiality is A) owed by a real estate licensee to all parties in the transaction. B) owed by a real estate licensee to his or his broker. C) owed by a real estate licensee to his or her client. D) only owed in residential transactions.

C) owed by a real estate licensee to his or her client.

A face-to-face closing is also known as: A) a sit down closing B) an escrow closing C) passing papers D) passing gas

C) passing papers

Efforts to increase home ownership include all the following EXCEPT A) requiring lower down payments. B) offering adjustable-rate mortgages. C) penalizing first-time homebuyers for using funds from IRAs. D) lowering closing costs for first-time homebuyers.

C) penalizing first-time homebuyers for using funds from IRAs.

According to law, a trade fixture is usually treated as A) a fixture. B) an easement. C) personalty. D) a license.

C) personalty.

When responsible for maintaining a client's property and maximizing return on the client's investment, a broker is serving as a(n) A) rental agent. B) building maintenance specialist. C) property manager. D) investment counselor.

C) property manager.

In the first sale of residential property located in a common interest community, the developer must deliver to the buyer a: A) resale package B) SRPD C) public offering statement D) price list

C) public offering statement

In a land trust all of the following are true EXCEPT A) the beneficial interest can be transferred by assignment. B) the beneficiary is usually the trustor. C) public records list all the beneficiaries. D) the property can be pledged as security for a loan without recording a mortgage.

C) public records list all the beneficiaries.

The term "bundle of rights," as used in the real estate context, is associated with which of the following? A) The various documents that must be signed to buy property. B) The fifth and fourteenth amendments to the U.S. Constitution which prohibit government entities from taking property without due process of law. C) real property D) the surface rights to property

C) real property

The SRPD, when applicable, must be completed by the: A) buyer B) buyer and the seller C) seller D) seller and listing agent

C) seller

A property owner contracted to have a swimming pool installed on her property. When the pool was completed, she refused to pay for the improvement, and the contractor filed a lien for nonpayment. This lien was most likely a A) general lien. B) special lien. C) specific lien. D) voluntary lien.

C) specific lien.

If a buyer defaulted some time ago on a written contract to purchase a seller's real estate, the seller can still sue for damages if he is not prohibited from doing so by the A) statute of frauds. B) law of agency. C) statute of limitations. D) broker-attorney accord.

C) statute of limitations.

When a tenant holds possession of a landlord's property without a definite lease term but with the consent of the landlord, this is called A) tenancy in common. B) tenancy at sufferance. C) tenancy at will. D) trespassing.

C) tenancy at will.

By signing a listing agreement with a seller, a real estate broker and any salesperson acting on behalf of the broker becomes A) a procuring cause. B) obligated to open a special trust account. C) the agent of the seller. D) responsible for sharing commissions.

C) the agent of the seller.

In a limited partnership A) the number of investors is limited to ten. B) all the partners participate in running the business. C) the general partners run the business. D) investors may participate with only a small amount of capital but with unlimited liability

C) the general partners run the business.

The term "hypothecation" refers to: A) mixing chemicals. B) something which is not real C) the pledging of real property as security for a debt. D) nothing, it is a made up word.

C) the pledging of real property as security for a debt.

All of the following affect how quickly the forces of supply and demand work EXCEPT A) the uniqueness of a parcel of real estate. B) the immobility of a parcel of real estate. C) the price of a parcel of real estate. D) the local nature of real estate markets.

C) the price of a parcel of real estate.

In an open listing A) only one broker is authorized to act on behalf of the broker. B) only one salesperson is authorized to act on behalf of the seller. C) the seller retains the right to hire as many brokers as the sellers wants. D) the seller must pay every broker he/she employs.

C) the seller retains the right to hire as many brokers as the sellers wants.

Personal property which is attached to rented real estate for use in a trade or business is called a(n) A) fixture. B) attachment. C) trade fixture. D) fixture if it is firmly attached

C) trade fixture.

Zoning

Common example of Police Power, non conforming use still grandfathered in, Example Old Apartment building in a now all residential neighborhood

What is another name for a Comparative Market Analysis or CMA?

Competitive Market Analysis

What act is another name for Truth In Lending?

Consumer Credit Protection Act which is implemented by Regulation Z or Reg Z and is administered by the Consumer Financial Protection Bureau.

Double Taxation refers to what in regards to Corporation and their profit?

Corporations are subject to "double taxation". The corporation's profits are taxed and the when the profit is distributed to the shareholders, they are taxed on a personal level as well.

A tax lien on the property can hinder the sale of a property because it is a(n) A) monetary charge that the purchaser must satisfy. B) appurtenance that does not affect the title. C) encroachment. D) encumbrance.

D) encumbrance.

Association Dues

fees paid by a condominium or PUD unit owner to the owner's association for upkeep of the common elements

he parties to a brokerage agreement are: A) Any real estate licensee and a client. B) A broker, or a broker-salesperson and a client. C) A broker, a salesperson and a client. D) A broker and a client. E) A broker, the real estate division, and a client.

D) A broker and a client.

Apartment Locators

firms that specialize in finding rental units for tenants

Prior Appropriation Theory

first landowner to claim riparian rights exclusive rights

Which of the following, if it appeared in a advertisement, would be considered a trigger item under Regulation Z? A) "Low monthly payments" B) "FHA financing available" C) "A steal at only $175,000!" D) "Only $10,000 down"

D) "Only $10,000 down"

The maximum fine that the real estate commission can impose per violations is: A) $500 B) $1,000 C) $5,000 D) $10,000

D) $10,000

The recovery limits for ERRF are: A) $2,000/$5,000 B) $5,000/$10,000 C) $20,000/$50,000 D) $25,000/$100,000

D) $25,000/$100,000

Rocky rents some retail space from Apollo. Rocky pays $4,000 per month plus two percent of his gross receipts in excess of $40,000. In August Rocky had $65,000 in gross receipts. How much total rent does he owe to Apollo? A) $4,000 B) $5,300 C) $5,678,890 D) $4,500

D) $4,500

Socrates leases space to Plato for a restaurant, and Plato installs his ovens, booths, counters, and other equipment. When could these items become real property? A) They automatically become real property immediately after they are installed. B) Only if Plato defaults on his rental payments. C) After the lease takes effect. D) After the lease expires if Plato does not remove them.

D) After the lease expires if Plato does not remove them.

Which of the following is NOT a protected class under the Fair Housing Act of 1968 as amended in 1974 and 1988? A) Religion B) National origin C) Sex D) Age

D) Age

Hillary, a real estate salesperson entered a buyer representation agreement with Barack. Who are the parties to this brokerage agreement? A) Hillary and Barack B) Hillary's broker and Hillary C) Hillary's broker, Hillary and Barack D) Hillary's broker and Barack

D) Hillary's broker and Barack

Katie is representing a seller who refuses to disclose on the SRPD a known leak in the roof. What should Katie do? A) Turn in her license. This stuff is just too difficult. B) Nothing, it is the seller's obligation to disclose the leaky roof. C) Say or write nothing, but when buyers view the property jump up and down and point to the location of the leak. D) Katie should disclose the defect to any buyers.

D) Katie should disclose the defect to any buyers.

Katie, a real estate licensee with "Are You Kidding Me Realty" has published the following advertisement on her website: Crummy little house for sale. Seller has a serious drug problem and needs cash fast! Which of the following statements is MOST TRUE and precise? A) Because it is published on the Internet, her ad is not subject to the same rules as print advertising. B) The ad would be acceptable in print advertising, but it not acceptable on her website. C) Katie would need her client's permission to run this ad. D) Katie would need her client's written permission to run this ad.

D) Katie would need her client's written permission to run this ad.

The owner has a large parcel of land surveyed into lots and streets and files a subdivision plat. Each lot can be legally described by use of which of the following? A) Street address B) Government survey C) Metes and bounds D) Lot and block

D) Lot and block

In the real estate profession the initials "MLS" mean: A) Melanie Lyn Scheible B) Major Loan Services C) Minor Loan Services D) Multiple Listing Service

D) Multiple Listing Service

Which of the following is a voluntary alienation of the property? A) Adverse possession B) Condemnation C) Foreclosure D) Owner selling the property

D) Owner selling the property

An appraiser has just finished using all three methods of appraisal to determine the market value of an office building. She has arrived at three different amounts. What she do to arrive at the final amount? A) She will put the three numbers in a hat and use the number she draws from the hat. B) She will take the average of the three numbers. C) For an office building she will use the result derived from the income method. D) Reconcile the three results

D) Reconcile the three results

Bert is buying some property from Snuffy. Escrow is scheduled to close on March 30. Taxes for the calendar year, in the amount of $1,200 will be due on December 31. How should the closing agent prorate the taxes? A) Seller debit $900 and Buyer credit $900 B) Seller credit $900 and Buyer debit $900 C) Seller debit $300 and Buyer credit $900 D) Seller debit $300 and Buyer credit $300

D) Seller debit $300 and Buyer credit $300

To obtain a Nevada real estate broker-salesperson license, the candidate must have how many credits/units of college education: A) Zero, but must have 90 hours of prelicense education. B) Twelve C) Twenty-four D) Sixty-four

D) Sixty-four

Which statement is TRUE about VA-guaranteed mortgages? A) Discount points must be paid by the seller. B) The borrower may have a prepayment penalty clause in the loan. C) Funding fee amounts are negotiable. D) The borrower must apply for a certificate of eligibility.

D) The borrower must apply for a certificate of eligibility.

Which statement is TRUE regarding a special warranty deed? A) The grantor is making additional warranties beyond those given in a warranty deed. B) The grantor retains an interest in the ownership. C) The grantor is warranting that no encumbrances exist against the property. D) The grantor's warranties are limited to the time the grantor owned the property.

D) The grantor's warranties are limited to the time the grantor owned the property.

Which of the following best characterizes the legal relationship between a broker and an associated salesperson? A) The broker and salesperson are generally good friends. B) The broker is employed by the salesperson. C) The broker represents the salesperson. D) The salesperson acts on behalf of the broker.

D) The salesperson acts on behalf of the broker.

Which of the following is NOT used to determine whether an item is personal property or a fixture. A) The manner in which the item is attached to the real property. B) The manner in which the item is adapted to the use of the real estate. C) Whether the parties have an agreement regarding the characterization of the item. D) The size of the item.

D) The size of the item.

A landlord's lease prohibits tenants from altering the property in any way. A young woman who uses a wheelchair cannot maneuver over the doorstep into the apartment by herself. In addition, she cannot access the bathroom facilities in her wheelchair. Which of the following is TRUE? A) The landlord is responsible for making all apartments accessible to people with disabilities. B) The tenant cannot remedy these conditions because of the terms of the lease. C) The landlord should not have rented this apartment to the tenant. D) The tenant is entitled to make the necessary alterations.

D) The tenant is entitled to make the necessary alterations.

A listing agreement includes the following, "seller shall receive $23,000 and broker shall receive any amount in excess of that." Which of the following statements is true? A) This is an option listing. B) This is an open listing. C) This is an exclusive agency listing. D) This is a net listing and illegal in some states.

D) This is a net listing and illegal in some states.

Which of the following is not a legally recognized real estate business model in Nevada? A) Single agency B) Acting for more than one party to a transation (dual agency) C) Assigned agency D) Transactional agency

D) Transactional agency

Under what circumstances would a lender consider waiving a prepayment penalty clause? A) When the promissory note has a reverse reciprocal adjustable interest rate on a sliding scale. B) When the promissory note is for less than $500,000. C) When prevailing interest rates are lower than the interest rate on the loan. D) When prevailing interest rates are higher than the interest rate on the loan.

D) When prevailing interest rates are higher than the interest rate on the loan.

When must a lender deliver a Good Faith Estimate (GFE) of closing costs? A) Within 5 business days before closing. B) Within 3 business days before closing. C) Within 5 business days after an application for a loan has been received. D) Within 3 business days after an application for a loan has been received.

D) Within 3 business days after an application for a loan has been received.

John is involved in a lawsuit. He owns a rental home that is free of any mortgage. What can a creditor obtain to prevent John from selling the rental home before the lawsuit is settled? A) Judgment B) Foreclosure notice C) Seizure notice D) Writ of attachment

D) Writ of attachment

Angelina has real property which has recently been appraised at $3,500,000. Misty has persuaded her to sell it in exchange for her broken down car. Is this legally sufficient consideration? A) No, it is obvious that the so called friend is taking advantage of Angelina. B) It depends on other circumstances not specified in the question. C) No a car is not legally sufficient consideration for the sale of real property. D) Yes

D) Yes

Jose and Conrad are associated with the same broker. Jose has a buyer who wants to make an offer on property listed by Conrad. If their broker does nothing else is this a dual agency? A) No, because there are separate licensees representing the parties. B) No, the broker is not representing any party. C) No, a dual agency only arises when one licensees represents both parties. D) Yes

D) Yes

Becky and Susan are salespeople associated with the same broker. Becky represents a buyer who wants to make an offer on property listed by Susan. Can this be done without creating a dual agency? A) No, because their broker will be representing both parties. B) Yes, if the buyer and seller sign the Consent to Act form C) Yes, but to be fair it is important that neither client know D) Yes, their broker can create an assigned agency.

D) Yes, their broker can create an assigned agency.

All of the following are prohibited under the antitrust laws EXCEPT A) competing property management companies agreeing to standardized management fees. B) competing brokers allocating markets based on the value of homes. C) real estate companies agreeing not to cooperate with a broker because of the fees that broker charges. D) a broker setting a company commission schedule.

D) a broker setting a company commission schedule.

A Nevada real estate broker must supervise the: A) activities of all associated licensees B) activities of all employees C) operation of the business D) all of the above

D) all of the above

The seller conveyed a quitclaim deed to the buyer. Upon receipt of the deed, the buyer may be certain that A) the seller owned the property. B) there are no encumbrances against the property. C) the buyer now owns the property subject to certain claims of the seller. D) all of the seller's interests in the property belong to the buyer.

D) all of the seller's interests in the property belong to the buyer.

Echo sold all of her rights under a lease to Nikki. This is called A) a sublease B) a breach of contract unless it is allowed by the lease. C) reciprocal alienation. D) an assignment.

D) an assignment.

Reconciliation is best described as A) selecting the highest value given by the three approaches to value. B) comparing comparable properties and identifying their amenities. C) determining the final value by selecting one value from those given. D) analyzing the results obtained from the three approaches to value.

D) analyzing the results obtained from the three approaches to value.

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

D) apply to and bind successive owners of the property.

The real estate division can deny an application to someone who has been convicted of any of the following crimes except: A) forgery B) embezzlement C) extortion D) armed robbery

D) armed robbery

By law, in a residential transaction, the seller must deliver the Seller's Real Property Disclosure form to the buyer: A) within 5 days after a contract is entered with the buyer B) no later than 10 days after receiving an offer C) before receiving an offer D) at least 10 days before the close of escrow

D) at least 10 days before the close of escrow

An abstract of title does NOT provide evidence of title unless it is accompanied by a(n) A) copy of the title insurance policy. B) letter of insurance coverage. C) letter of warranty. D) attorney's opinion of title.

D) attorney's opinion of title.

A valid will devises a decedent's real estate after payment of all debts, claims, inheritance taxes, and expenses through the A) administrator of the estate. B) law of testate succession. C) granting clause established in the will. D) court action known as probate.

D) court action known as probate.

After a loan has been repaid, what clause in a deed of trust requires the trustee to execute and deliver a deed of reconveyance? A) acceleration clause B) due on sale clause C) due on default clause D) defeasance clause

D) defeasance clause

Zoning ordinances normally define specific uses for land that are permitted within a municipality. All of the following are designated uses in such ordinances EXCEPT: A) industrial. B) commercial. C) residential. D) developmental.

D) developmental.

The federal Fair Housing Act does NOT expressly prohibit: A) blockbusting. B) discriminatory advertising. C) redlining. D) discriminating on the basis of marital status.

D) discriminating on the basis of marital status.

Water rights in Nevada are governed by the A) doctrine of riparian rights B) water and mineral act of 1865 C) federal government only D) doctrine of prior appropriation

D) doctrine of prior appropriation

The principal difference between an estate for years and an estate from year to year is that an A) estate for years is a life estate. B) estate for years cannot be terminated. C) estate from year to year must be in writing. D) estate from year to year does not have a specific expiration date.

D) estate from year to year does not have a specific expiration date.

All of the following should be a consideration in selecting a tenant for the property EXCEPT: A) size of the available space relative to the tenant's requirements. B) tenant's ability to make the rental payments. C) compatibility of the tenant's business with those of other tenants. D) ethnic background of the tenant and his or her employees.

D) ethnic background of the tenant and his or her employees.

The part of the title insurance policy that sets forth all of the encumbrances and defects that will NOT be insured against is called the A) schedule of defects. B) citation clause. C) nonexclusionary clause. D) exclusions.

D) exclusions.

When housing is set aside for older persons the federal Fair Housing Act provides an exemption for discrimination based on: A) race B) age C) religion D) familial status

D) familial status

All of the following would affect demand EXCEPT A) population. B) demographics. C) wage levels. D) fiscal policy.

D) fiscal policy.

Monique is renewing her salesperson's license for the second time. After it is renewed it will be valid for: A) one year B) two years C) three years D) four years

D) four years

A licensee finally concluded some extremely difficult negotiations that resulted in the sale of a listed parcel of land. For all of her extra efforts, she can legally receive a performance bonus from A) the seller. B) the buyer. C) no one. D) her broker.

D) her broker.

When compared with a 30-year payment period, taking out a loan with a 20-year payment period would result in A) slower equity buildup. B) greater impound requirements. C) lower monthly payments. D) higher monthly payments.

D) higher monthly payments.

A real estate professional who performs a visual survey of a property's structure and systems and prepares an analytical report for a purchaser or an owner is acting as a(n) A) educator. B) appraiser. C) property manager. D) home inspector.

D) home inspector.

An agency relationship that is created primarily by the conduct of the parties instead of through words is called a(n) A) express agency B) dual agency C) reciprocal agency D) implied agency

D) implied agency

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

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

A woman owns property next to property that the city has condemned to extend the runways at the municipal airport. Shefeels her property has diminished in value due to this public use. She may seek compensation by an action of A) taking. B) condemnation. C) confiscation. D) inverse condemnation.

D) inverse condemnation.

Because of the complexity of today's laws affecting properties, a property manager needs to be familiar with all of the following EXCEPT A) environmental hazards. B) accessible construction. C) nondiscriminatory practices. D) investment securities laws.

D) investment securities laws.

A tenant has an estate for years. According to the written one-year lease, the tenancy will expire on May 1. To obtain possession as of that date, the landlord A) must give the tenant 30 days' notice. B) must give the tenant 60 days' notice. C) must give the tenant notice before April 15. D) is not required to give the tenant any notice.

D) is not required to give the tenant any notice.

The "four unities" are necessary to create A) community property B) separate property C) tenancy in common D) joint tenancy

D) joint tenancy

Successful property managers do all of the following EXCEPT A) screen the tenants' ability to pay and their space needs. B) study rental rates in the area to get the best possible sense of supply and demand. C) consider the type of business the tenant has and how it will fit businesses already on the property. D) keep on good terms with tenants by overlooking infractions of building rules.

D) keep on good terms with tenants by overlooking infractions of building rules.

A lease that will terminate within one year of its inception A) is invalid. B) violates the provisions of the statute of frauds. C) must be in writing. D) may be oral.

D) may be oral.

When a company furnishes materials for the construction of a house and is subsequently not paid, it may file a(n) A) deficiency judgment. B) lis pendens. C) estoppel certificate. D) mechanic's lien.

D) mechanic's lien.

The system of legal description that defines a parcel of land by tracing its perimeter is the A) geodetic survey. B) rectangular survey. C) lot and block system. D) metes and bounds system.

D) metes and bounds system.

All of the following are true about radon EXCEPT: A) it is colorless, odorless, and tasteless. B) levels will vary in certain weather conditions. C) levels can be reduced by installing ventilation systems. D) modern home construction reduces the potential for radon gas accumulation.

D) modern home construction reduces the potential for radon gas accumulation.

Homeowners may deduct all of the following expenses when preparing their income tax return EXCEPT A) real estate taxes. B) mortgage interest on a first home. C) mortgage interest on a second home. D) mortgage interest on a third home.

D) mortgage interest on a third home.

One point, as used in real estate financing, is equal to A) one percent of the purchase price of the property B) one thousand dollars C) one percent of the taxes owed on the property D) one percent of the amount borrowed

D) one percent of the amount borrowed

All of the following are essential to the formation of a contract EXCEPT A) offer. B) acceptance. C) consideration. D) performance.

D) performance.

The three primary areas of responsibility of a property manager are: A) mental, physical and spiritual. B) physical, social and financial. C) maintenance, collecting rents and evicting tenants. D) physical, administrative and financial

D) physical, administrative and financial

All of the following are important functions of a property manager EXCEPT A) supervising the maintenance of the property. B) protecting the physical integrity of the property. C) meeting the functional requirements of the tenants. D) preparing the owner's income tax returns.

D) preparing the owner's income tax returns.

The purpose of the Fair Housing Act is to: A) ensure that everyone has a home regardless of his/her economic condition. B) ensure that real estate transactions are fair by prohibiting excessive pricing. C) prohibit all forms of discrimination. D) prevent discrimination based on certain protected classes

D) prevent discrimination based on certain protected classes

Control by zoning ordinances does NOT regulate the A) height of buildings in an area. B) density of population. C) use of the property. D) price of the property.

D) price of the property.

The primary survey line running north and south in any area described by the rectangular survey system is its A) township line. B) base line. C) range line. D) principal meridian.

D) principal meridian.

All of the following would be acceptable as evidence of marketable title EXCEPT a(n) A) Torrens certificate. B) title insurance policy. C) abstract and legal opinion. D) property owner's warranty deed.

D) property owner's warranty deed.

The purpose of a building permit is to: A) to raise revenue, there is no other purpose B) maintain control over the density in an area C) show compliance with any applicable CC&Rs D) provide evidence of compliance with local laws, for example a zoning ordinance.

D) provide evidence of compliance with local laws, for example a zoning ordinance.

If upon receipt of an offer to purchase subject to certain conditions the seller makes a counteroffer, the prospective buyer is A) bound by his or her original offer. B) bound to accept the counteroffer. C) bound by whichever offer is lower. D) relieved of his or her original offer

D) relieved of his or her original offer

All of the following are required for a deed to be valid EXCEPT the A) date. B) legal description. C) name of the grantee. D) signature of the grantee.

D) signature of the grantee.

Taxes levied on a property owner to pay for installation of sidewalks or sewers are called A) ad valorem taxes. B) general property taxes. C) special excise taxes. D) special assessments.

D) special assessments.

Periodic Tenancy

fixed period of time that automatically renewed EX. Month to Month

Give example of Equitable Liens.

Equitable liens come from common law and include seller (vendor) and buyer (vendee) liens. Contrast this type of lien with a Statutory Lien which is a lien created by laws or statutes.

The 1974 amendment was again expanded in 1988 to include what classes of the population that were to be protected against discrimination?

Family Composition aka Family Status and the Handicapped

Ownership with the greatest number of rights and is considered the best type of ownership is?

Fee Simple or Fee Simple Absolute where the owner has all of the available rights to the property and can always pass it to his heirs.

VA Loan

Guarantees repayment of loan, The guarantee is for the top 25% of the loan, assumable, require occupancy

The Fair Housing Laws are administered by what organization?

HUD.

Define Handicap.

Handicap refers to mental and/or physical impairment and can include: recovering Alcoholics or drug addicts and AIDS victims

How can a licensee reduce their risk with listing a commercial property that has history of tanks and under ground storage?

Have the seller do an inspection and then the buyer needs to hire a separate inspector representing them.

What can a property owner do if his property or use of the property violates zoning?

He may request a variance. A variance may also be requested prior to construction. The process to apply for a variance is to APPLY to a zoning committee. A HEARING will be set and ALL NEIGHBORHOOD PROPERTY OWNERS will be invited to the hearing to voice any objections.

Define the principle of value called 'Highest and Best Use' and give an example.

Highest and Best use is the legal use that gives the greatest return in money and/or amenities. An example is commercial parking is more valuable than residential parking.

Appraisers Principles to Value (9)

Highest and Best use, Principle of Substitution, Principle of Conformity, Principle of Increasing and Decreasing Returns, Principle of Contribution, The Principle of Regression, The principle of Competition, The Principle of Change, The Principle of Anticipation

Give an example of a DOMINANT and SERVIENT ESTATE

If a large piece of land is subdivided into 2 parcels with a road running across one parcel to access the other parcel--the OWNER who CROSSES OVER the OTHER'S land is dominant. The dominant estate would be LANDLOCKED, without the road easement, in most cases. The property WITH the ROAD is servient to the land locked dominant estate. The dominant estate benefits from the road easement while the servient estate is ENCUMBERED. The most common reason for this type of easement is ENTRY and EXIT from the landlocked estate. THIS EASEMENT IS CALLED EASEMENT APPURTENANT. It goes with the land and who ever owns the DOMINANT ESTATE owns the EASEMENT APPURTENANT.

preexisting legal duty

If you already have a legal duty to do something, promising to do it is NOT consideration.

List three other names that are used instead of contract for deed?

Installment Contract; Land Contract; Real Estate Contract

What is the minimum and maximum borrowed amount that is allowed in Texas?

Minimum is $4,000 and the maximum is 80% of the total equity owned by the owner.

What needs to be disclosed in relation to radon gas/

Mitigation plans, which is the term used to describe methods to lower levels of radon in a property which generally is through ventilation needs to be disclosed to the buyer.

May a broker/Realtor write a lease with option to buy?

NO

Does a landowner own the land that a pier that extends into a water source?

NO (test)

Is the client list, listing agreement or buyer rep agreement ever the sales persons property?

NO -- All belong to the broker even if the sales person leaves the company.

Is there a word such as "illegal tenancy"?

NO -- PSI testing tries to confuse the student

True or False? When a principal to the listing agreement or buyer rep agreement dies....the heirs of the decedent will be liable for the contract?

NO -- heirs do not inherit a listing or buyer rep agreement.

In an assumption "subject to" is the buyer liable for the loan?

NO .....he takes over the payments but the seller is still liable for the loan which can have an impact on his credit rating if the new borrower ever defaults.

Does the borrower using an assumption NEED to be a veteran?

NO but the new borrower will need to be approved by the VA and/or lender approval.

Does the USPAP require that a special promulgated form always be used by all appraisers?

NO however, it is usually a LENDER REQUIREMENT to us the FANNIE MAE appraisal form if the purpose of the appraisal is to secure RESIDENTIAL FINANCING. (PLEASE NOTE: Memorize the 3 facts above [lender requirement, Fannie Mae and Residential Financing] when this USPAP question is asked...definitely a test question).

Will a Loan Novation ever impact the sellers credit rating?

NO..... because a new loan is being created with new terms and conditions than the original owner.

Is there a federal standard to determine if a person is mentally handicap?

No -- a landlord would have to use back ground checks to be able to determine if the individual is handicap.

Where is the process of novation seen and used more often?

Novation is used more often in commercial than residential real estate.

In an agency relationship, there certain duties...for an AGENT the duties are?

OLD CAR or Obedience, Loyalty, Disclosure, Confidentiality, Accounting, (Reasonable) Care.

Agents duties (OLD CAR)

Obedience, Loyalty, Disclosure, Confidentiality, Accounting, Reasonable Care *Trust is not a duty

What is another name for an escrow account that is used with Budget Loans?

Other names for escrow accounts would be impound account, trust account, or reserve account. These can be checking accounts and never a savings account.

immobility

land cannot be moved - a person must go to the land

Define INCOME APPROACH.

The INCOME APPROACH is a form of appraisal and is used on INCOME PRODUCING properties.

If a property collects RENT, what approach will an appraiser use to determine the VALUE of that property?

The Income Approach OR the Capitalization Method.

Define conversion.

This is when the broker uses the clients money for something other than what was intended and/or for personal use.

Define FCRA or Fair Credit Reporting Act.

This law covers the following areas: 1. it allows individuals to inspect their file at a credit bureau, correct any mistakes and attach explanatory statements to supplement the file; 3. a person who has been denied credit is entitled to a free credit report to determine the reason for the denial.

Define ECOA or Equal Credit Opportunity Act.

This law covers the following areas: 1. prohibits discrimination by lenders on the basis of sex, marital status, race, religion, age or participation in a public assistance program; 2. Lenders can deny credit if income is from alimony, child support, or a pension plan; 3. Child support is the most likely reason for denial because it has an end date; 4. Lenders can deny traditional financing if income is commission based only.

How does the terms "strict, joint and several, and retroactive, apply to a seller?

This means and owner is personally responsible for the WHOLE clean up cost and liability also extend to PAST OWNERS. In a cash transaction without inspections the buyer, the seller, the broker and ALL who contributed to the problem could be held liable for clean up!!

Define Title by Devise.

Title by Devise is when an inheritance is transferred to another by a will.

True or False: A plot is a map or layout of improvements on a property site.

True....Now, define what a plot is.

Corporations and Partnerships can have Sole Ownership or Estate in Severalty....T or F?

True...Corporations and Partnerships often hold title this way. Note: if only one signature is required to sell a piece of property, then there is only ONE Owner!

True or False: a street address is not a legal description of a parcel of land?

True...Now define what a street address is useful for.

True or False: Sexual Orientation is not a protected class.

True...it is NOT

True or False: If the broker accepts the earnest money and/or deposits and ACTS like an escrow agent, the money must be deposited in a special, separate trust account set up specifically for this purpose.

True__clients monies should NEVER be commingled with the company's business monies or the brokers personal monies. No commingling or conversion is allowed

Can senior housing communities refuse to sell or rent to those under 55 years of age or families with children?

Yes (TEST QUESTION)

Is a VA loan assumable?

Yes PLUS the veteran puts $0 down, the loan is assumable and may be prepaid without penalty.

Can Deed Restrictions and Zoning exist in the same neighborhood?

Yes and if this true, which ever is the most stringent must be obeyed.

List examples of a governments right of Police Power.

Zoning, Establish Building Codes, Environmental Impact Studies or EIS, Regulate Special Land Types such as coastal properties, wet lands and flood plains....all for the good of the public safety and protection.

What is a DPA or Down Payment Assistance Program.

a DPA is often linked to a government agency. Some examples are the State and Federal Veterans Assistance Programs, Local Bond Programs and incentives from the Federal Government. However, the largest DPA is the Nehemiah Program founded by a Baptist minister. These programs are responsible for helping many buyers to become home owners.

When and how can a contract be terminated?

a contract can terminate for many reasons including: 1. bankruptcy or foreclosure; 2. new laws making it illegal; 3. destruction of the property.

implied contract

a contract in which the terms are not expressly stated but can be inferred from the actions of the people involved and the circumstances

bilateral contract

a contract involving mutual promises (each part is both promisor and promisee

Express Contract

a contract made orally or in writing.

mentally infirm

a contract with a mentally infirm person is voidable at the infirm person's option. cant do contract with mentally insane people

Bargain and Sale Deed

a deed that contains no covenants, but does imply that the grantor (bank, lender, owner) owns the property being conveyed by the deed

Executor's Deed

a deed used to convey the real property of a deceased person.

Air Lot

a designated airspace over a parcel of land

Estoppel Certificate

a document in which a borrower verifies the amount he still owes and the interest rate.

Americans with Disabilities Act or ADA

a federal law giving disabled individuals the right to access to commercial facilities open to the public

Buyer's Walk-Through

a final inspection just prior to settlement

misrepresentation

a misleading falsehood

Annual Percentage Rate or APR

a rate that is calculated per the the Truth-in-Lending Act by combining the interest rate with other costs of the loan (lenders closing costs) plus principal for one year--The cost of a loan expressed as a percentage rate (per Reine Ray with SWBC).

Bench Mark

a reference point of known location and elevation

Blended-Rate Loan

a refinancing plan that combines the interest rate on an existing morgage with current rates

Environmental Impact Statement

a report that contains information regarding the effect of a proposed project on the environment of an area.

Effective Yield

a return on investment calculation that considers the price paid, the time held, and the interest rate.

Escrow Account

a separate account for holding clients' and customer's money.

Equity Sharing

an arrangement whereby a party providing financing gets a portion of the ownership.

Easement Appurtenant

an easement that runs with the land.

What is fixity?

an economic characteristic of land where land and buildings and other improvements to land are considered fixed or permanent investments -- THEY ARE NOT LIQUID ASSETS.

What is modification?

an economic characteristic of land where land use and value are greatly influenced by IMPROVEMENTS made by man to land and to surrounding parcels of land.

What is situs?

an economic characteristic of land where the location is critical to a buyer from an ECONOMIC standpoint versus geographical. Commercial property has more value depending on the location. Note, this characteristic can change over time within the normal cycle of real estate.

What is a Statutory Estate? Are they the same state to state?

an estate created by law and which will differ from state to state.

Estate in Severity

an estate owned by one person, sole ownership.

What is the a Pur Autre Vie Life Estate?

an estate that is based on the life of another person other than the life tenant.

Abstractor (AKA Abstracter)

an expert in title search and abstract preparation.

Appreciation

an increase in property value

Estate for Years

any lease with a specific starting time and a specific ending time.

Federal interstate land sells Full Disclosure Act

applies to all unimproved land sold interstate. If a buyer or tenant does not receive this report before signing, he may void his contract or lease

What is an easement in gross and give an example.

belongs to a person or corporation such as a utility easement. NO MATTER who OWNS the land, the easement BELONGS to the utility company. It DOES NOT go with the land.

REAL ESTATE TRUST ACCT

below 1,000,000 access a fee 10.00 to bring balance to 1,700,000 invest in Treasury bills or notes,exceeds 3.5 million goes to state's general fund

Exclusive Agency

broker exclusive agent but owner can sell

Exclusive Right to sell

broker exclusive agent receives commission no matter who sells the property

subject to assumption

buyer not liable for loan can impact seller's credit score

How is an abstract of title created?

by examining PUBLIC records.

Borrower's Points

charges in one-percent units of a loan, paid by the borrower to obtain a loan

Usury

charging an interest rate higher than the legal limit protects consumers

A broker is representing Jim Smith, a buyer. In this transaction, Smith is considered a(n)

client.

People who engage an agent to represent their interests in a transaction are called principals, or

clients.

Police Power gives the government the right to regulate special land types for the public good such as _______ and _______ and _______?

coastal properties, flood plains and wetlands

Assemblage or plottage

combining several parcels of land into one

imputed communication

communication between agent and principal

indirect communication

communication made through a third party

Banks

companies that can work as a mortgage lender

To be a Valid and enforceable (COLIC)

competent parties, Offer and Acceptance, Legal Purpose, In writing, Consideration

Abstract of title

complete history of all recorded events affecting the title

Automated Underwriting Systems

computerized systems for loan approval communication between a loan originator and the investor

Building Codes set specific ____________?

construction requirements

Effective date

contract is the date on which the last party signs

Budget Mortgage

features loan payments that include principal, interest, taxes and insurance (often called PITI)

Trade Fixtures refers to?

fixtures that are needed to carry out a business, they may be removed from a lease property PRIOR to the termination of the lease. If the trade fixtures are not removed prior to the termination of the lease, they become real property and pass to the landlord

What is the difference between navigable and non-navigable waters in regards to ownership.

for NON-NAVIGABLE water, landowners may own to the MIDDLE of the body of water. For NAVIGABLE water, landowners may own to the VEGETATION LINE only, building piers WILL NOT extend the property line.

Universal agency

gives a very broad and general scope of power to the agent to act for the principal.

Amendatory Language

government-required clauses in FHA and VA contracts

Non-Freehold estate or lease-hold

has a termination date

Agents of a buyer should disclose information regarding a convicted child molester in close proximity to a subject property.

if they have actual knowledge.

Variance

if you violate zoning you can request this in order to fix or prevent a violation

Notice to an agent that is considered notice to the principal is known as

implied notice.

letters of intent

in negotiations, they summarize progress. NOT binding so not a contract

Scarcity, an economic characteristic of land can be defined as?

in short supply where demand is great. Scarcity is generally based on geographical consideration. Water Front property is more scarce and has more value than in a platted subdivision lot in Houston.

Acceleration Clause

in the state of default whole amt of principal is due

Budget loan

includes PITI examples are FHA,VA, and most amortized fixed rate loans are budget mortgages

consideration

information that should be kept in mind when making a decision

Estate

interest in real property

A property whose value or marketability has been affected by conditions or events related to the property

is considered stigmatized.

General agency

is more restricted than in universal agency. The agent is authorized to conduct an ongoing series of transactions for the principals and can obligate them to certain types of contractual agreements.

Express Agency

is the agency relationship created when principals engage or employ an agent to act for them. In legal terms, the word express means clear, definite, explicit, unmistakable, and unambiguous -- ORAL or WRITTEN.

TRELA

is the law that establishes the duties of real estate licensees.

How long is a Freehold estate? What is it's timeline?

it has NO end date or termination date

Title coverage for the lender is called

mortgagee's title insurance.

Market data approach

mostly residential properties compares sales to similar properties in the area 3-5 sales no more than 6 months old

Seller's Disclosure

must be given to a buyer before he signs an offer, not given has 7 days to terminate his offer

Under Megan's Law, individual states

must develop procedures for registering sex offenders.

Appraisers

must follow USPAP (Uniform standards of Professional Appraisal Practice) some lenders require Fannie Mae appraisal

Duties that continue after the termination of agency include the duty

not to disclose confidential information.

Voidable

one party has the right to withdraw (a minor, or under the influence)

Monuments

permanent surveyors markers often starting point for metes and bounds example Iron pipe, oak tree

License

permission to do a particular act , go fishing or ticket to Football game

Sherman Anti-Trust Act

prohibits monopolies

Stigmatized

property where there has been a murder or alleged haunting, or in vicinity of the residence of a known sex offender

offer

proposal of one party to another.

Errors and Omissions insurance

protects broker if the seller misrepresents property condition, the broker is unaware, and could not have detected by visual inspection

Escalation Clause

provision in a lease for upward and downward rent adjustments.

Canons

standard of conduct

Blue-sky Laws

state laws designed to protect persons from buying into dubious investment schemes

expression of intent

statement made by a person in which the person seeks to accomplish a specific goal

Who does the 'Owner's Policy' protect and for how much value?

the buyer up to the contract price

Cash-on-Cash

the cash flow produced by a property divided by the amount of cash necessary to purchase it

Assign

to transfer to another one's rights under a contract

An agent works on behalf of

the client.

When a owner in a Joint Tenancy dies...what happens to their shares?

the deceased shares goes IMMEDIATELY TO THE SHARING CO-OWNERS.

Escrow Closing

the deposit of documents and funds with a neutral third party along with the instructions as to how to conduct the closing.

Appropriation Process

the enactment of a taxing body's budget and sources of money into law

Equity Build-up

the increase of one's equity in a property due to mortgage balance reduction and price appreciation.

A key reason to study agency today is

the increased litigation against agents.

Define Probate.

the judicial process to prove or confirm a will, or to settle the estate of one who dies intestate. Title to real property transfer at probate. Probate MUST BEGIN within 4 years of death.

Chain of Title

the linkage of property ownership that connects the present owner to the original source of title

Eminent Domain

the right of government to take privately held land for public use, provided fair compensation is paid.

eminent domain

the right of the state to take private property for public use

Easement

the right or privilege one party has to use land belonging to another for a special purpose not inconsistent with the owner's use of the land.

Equitable Title

the right to demand that title be conveyed upon payment of the purchase price.

Air right

the right to occupy and use the airspace above the surface of a parcel of land

What are the bundle of rights of real property ownership?

the right to sell, lease, encumber, occupy and use the land, enjoy, exclude, will to heirs, to mortgage, give away or abandon or....

What is Riparian Rights?

the right to use water from a river or stream that borders a property and must only be used for DOMESTIC USE, may not be contaminated, may not be interrupted AND ARE TRANSFERRED by DEED or Conveyance

What is Littoral Rights?

the right to use water from large navigable lakes and oceans which border a property for DOMESTIC USE ONLY, may not be contaminated, may not be interrupted AND ARE TRANSFERRED by DEED or Conveyance.

Adjusted Sales Price

the sales price of a property less commissions, fix-up and closing costs

Contract for deed benefits who?

the seller

Who owns the water in rivers, streams or creeks?

the state

revocation

the state of being cancelled or annulled

What are Defeasible Fee/Conditional Fee/Qualified Fee/Qualified Defeasible Fee have in common?

these words describe the same kind of ownership with conditions or terms which if VIOLATED could cause the ownership interests to be DEFEATED or TERMINATED. For example a owner wills his land to a church as long as they use it for church purposes there is no termination date. If they sell the land to a builder, the original owner can take the property back.

necessaries

things minors need

Define Assumption Clause.

this clause allows a NEW borrower to take over the payments on an existing loan under specific terms and conditions.

Define Subordination Clause.

this clause allows a lender to move to OR take a lower lien position. You would see this clause in a second mortgage, home improvement loan or home equity line of credit or HELOC.

When is the agency disclosure to be presented to a principal?

this disclosure is usually presented at the time of the FIRST MEANINGFUL contact with the party or prospect.

What is the HUD1 for?

this form is presented to divide all closing costs, charges, expenses and commission (to the agents involved) to both the buyer and the seller. Another name is 'closing statement' and often includes the 'prorations' of property taxes, HOA fees, PID fees and so on. In our area, it is customary to prorate up to and including the closing day. If the fees are prorated UP TO closing day, then the fees for closing day are negotiable.

What is the primary purpose of the Federal Housing Administration?

this is a government insured loan with the main purpose of the administration to aid in home financing by insuring the WHOLE LOAN amount resulting in less risk to the lender. The insurance premium is paid for BY THE BORROWER; an appraisal is required, the loan is assumable and may be prepaid without penalty.

Define Estate at Will.

this is a lease hold estate AKA Tenancy at Will which can be terminated by either party at will, without notice. ex. hotel or B&B

Define Estate for Years....

this is a lease that has a SPECIFIC START AND END DATE; survives death and/or the sale of the property and no notice is required to terminate. This is a our typical lease agreement for one, two, three years etc..

What is Prior Appropriation?

this is a theory of water law based on the idea that 'FIRST IN TIME, IS FIRST IN RIGHT'. The first landowner to claim Riparian Rights has the EXCLUSIVE right to take all the water for specific domestic, beneficial uses. All the other owners must go to the first in line owner and negotiate their water usage.

Define 'Conveyance'.

this is any instrument or document that transfers an interest in real property. Ownership is most often transferred by DEED, PATENT or WILL.

What is police power?

this is one of the four governmental rights in land granting power to a municipality to regulate and control the character and use of property for the health, safety and general welfare of the public

Define Life Estate....

this is ownership for the duration of someone's life.

What is reversion as it applies to a Life Estate?

this is where the property goes back to the original owner once the Life Estate ends.

Define Special Warranty Deed.

this type deed guarantees title only against defects arising under the grantor's period of ownership. Defects existing prior to that time are not covered.

Define 'Special or limited Agency'.

this type of agency gives the agent the power to perform only SPECIFIC ACTS and no others. This agent DOES NOT have the power to bind his client/principal such as the Seller - Broker.

Define bilateral contract or purchase agreement.

this type of contract is an exchange of promises, which binds both parties. A sales contract is an example of this type contract. Both parties make promises and both parties can be sued.

Define Bargain or Sale Deed.

this type of deed has only one covenant and sheriff's, trustees, officers of the court, executors use this type of deed. This deeds provides NO warranties about the condition of the title. It only promises that the Grantor has the right to convey the title.

Define 'Involuntary Alienation'.

this usually happens in court as in a foreclosure, bankruptcy, condemnation, escheat, adverse possession or inheritance without a will.

How is a seller finance or loan assumption shown on a HUD 1 statement?

this would be a debit to the seller and a credit to the buyer -- REMEMBER - ALWAYS DEBIT FOR A DEBT and CREDIT FOR CASH ON THE HUD 1 STATEMENT

What is the best method to protect against contamination of asbestos?

to encapsulate it

Appraise

to generate an estimate of value

Broker Lawyer Committee

writes promulgated contracts 13 members 6 are brokers 6 lawyers and 1 public member

Express contract

written or stated