Simulated Test 5
It is a good idea for a listing interview to be: Personalized for each property The same for every property Focus on the licensee Focus on the commission terms
Correct answer is (a). A broker should ask at least as many questions from the property owner as he answers, fostering the consultative approach that works best for acquiring and servicing a listing.
A(n) _____________ is a voluntary conveyance of the right to maintain land in its natural state: Conservation easement Solar easement Easement in gross Zoning variance
Correct answer is (a). Conservation easement is indicated as the right answer, based on the question's reference to keeping land in its "natural state."
It is required that a recorded lease be acknowledged by: County clerk Lessee Lessor Building superintendant
Correct answer is (c). Leases with a term of one year or more must be in the form of a signed writing.
Which of the following is the standard real estate settlement form for federally-related mortgage loans? a. good faith estimate settlement statement b. Truth in Lending disclosure statement c. HUD -1 settlement statement d. Regulation Z settlement statement
c The HUD -1 Settlement Statement is a standard form in used to itemize services and fees charged to the borrower by the lender or broker when applying for a loan. A final HUD -1 statement must be given to buyers one day prior to the signing of the documents. The HUD -1 settlement statement also contains a good faith estimate (GFE) which specifies the estimated loan costs.
A valid bill of sale must contain: (a) a date (b) an acknowledgment (c) the seller's signature (d) a verification.
(c) is correct. A bill of sale is an instrument which has been executed (signed) and delivered to convey title to personal property.
Under no circumstances may a broker: (a) receive a commission from both buyer and seller (b) appoint a subagent (c) misrepresent material facts (d) sell the principal's property to a relative.
(c) is correct. A material misrepresentation is a violation of law.
Henry is securing a home equity line of credit on his residence. His property appraised at $175,000 and he has a loan balance of $80,000. The lender will negotiate a loan of 80% of the appraised value, minus the first loan. Harry's line of credit will be A. $50,000 B. $60,000 C. $70,000 D. $80,000
. B $175,000 x .80 = $140,000 $140,000 - $80,000 = $60,000 HELOC
All of the following are included in the bundle of legal rights EXCEPT A. right of control of the property. B. right of enjoyment. C. right of exclusion. D. right of survivorship.
1. D - The right of survivorship is a right found in joint tenancy and tenancy by the entirety, but it is not a part of the bundle of legal rights. The bundle of legal rights include the right of possession, control, enjoyment, transfer, exclusion, and disposition (lease, sell, leave to someone in a will, gift, etc.)
Emblements are A. real property/fructus industriales. B. real property/fructus naturales. C. personal property/fructus industriales. D. personal property/fructus naturales.
2. C - Emblements are annual crops that are classified as personal property of the person who grew them. (Potatoes, tomatoes, tobacco, and corn) They are also known as fructus industralies, or fruits of industry (work). Trees, grasses, and perennials that do not require annual planting are classified as real property. They are also classified as fructus naturales, or fruits of nature.
3. Nonhomogeneity describes a/an A. physical characteristic of real estate and refers to uniqueness of the property. B. physical characteristic of real estate and refers to the indestructibility of the property. C. economic characteristic of real estate and refers to the scarcity of land in a given area. D. economic characteristic of real estate and refers to the permanence of the investment.
3. A - Heterogeneity, or nonhomogeneity, is describes a physical characteristic of real estate. Every parcel of land is physically different from another parcel of land.
How many acres in a section of a township
36 sections in a township and each section is equal to 640 acres
4. A transaction broker is NOT known as a/an A. nonagent. B. facilitator. C. intermediary. D. fiduciary.
4. D - A transaction broker is not known as a fiduciary. A transaction broker is a facilitator, intermediary, or nonagent, because neither party in the transaction is a client. The parties are customers. A fiduciary is a person placed in a position of trust and confidence.
5. A real estate licensee who has listed a property is a/an A. general agent of the broker and a special agent to the seller. B. general agent of the broker and a general agent to the seller. C. universal agent of the broker and a special agent to the seller. D. universal agent of the broker and a general agent to the seller.
5. A - A general agent is expected to be involved in an on-going business relationship. A special agent in limited to a specific transaction. A universal agent is acting on behalf of a person, as if he/she was the person. (Guardian) A licensee who has listed a property is a general agent to the broker, because they are expected to be in an on-going business relationship; and the licensee is a special agent to the seller, because the agency relationship is limited to that transaction.
The borrowers negotiated a $125,000 for 20 years at 7% interest. Their monthly principal and interest payment is $969.12. How much interest will the buyers pay of the life of the loan? A. $107,588.80 B. $232,588.80 C. $175,000.80 D. $107,885.80
A - $969.12 per month x 12 x 20 years = $232,588.80 Principal and Interest $232,588.80 P&I - 125,000 Loan = $107,588.80 Interest paid over 20 years
A lot that measures 475' x 525' sold for $275,000. What was the cost per acre? A. $48,036 B. $48,238 C. $48,568 D. $48,976
A - 475 x 525 = 249,375 ÷ 43,560 = 5.7248 acres $275,000 ÷ 5.7248 = $48,036
Two brothers owned a property and decided to list it with Agent Tejasi. Thirty minutes before the listing appointment, one of the brothers was called out of town on an emergency. So, a friend signed the listing contract for him. Tejasi had no idea that the person signing was not the owner. The status of the listing contract is A. void. B. valid. C. unenforceable. D. voidable.
A - A contract is void when it is missing an essential element or it it entered into for an illegal purpose. At this point there really isn't a listing contract. The listing must be signed by the parties who have the authority to sell.
In most states which of the following situations would MOST LIKELY be grounds for suspension or revocation of a real estate license? A. Failure to specify a definite termination date in a listing contract B. Failure to find a buyer for a listed property C. Failure to determine the correct list price in a comparative market analysis D. Failure to include a broker protection clause in a listing agreement
A - Most states do not allow a listing contract to "automatically renew." There must be definite beginning and ending dates in a listing.
If a person has complete control over their property, and the ownership in the property is not defeasible, what interest does the person have in the property? a. fee conditional estate check b. fee simple estate c. life estate d. defeasible fee estate
A fee simple estate is ownership that gives a person or entity complete control (subject to standard governmental restrictions). A life estate gives a person ownership or control of a property only for the duration of his/her natural life. Defeasible estates (estates which can be defeated) give a person or entity control over a property only so long as certain conditions are met or avoided.
Personal property that, by its attachment to real property, is regarded as real estate is called _____________. a. an emblement b. personalty check c. a fixture d. an appliance
A fixture When personal property is attached to real property to such an extent that a person cannot extract the item from the real property without damaging the real property, the item is a fixture. Another test to determine whether an item is a fixture is whether the item is so adapted to the real property, that to remove the item will diminish the value or utility of the real property. Of course, if the purchase contract specifically includes a certain item with the sale of the property, that item must be regarded as a fixture, whether it meets the legal definition of fixture or not. Likewise if the purchase contract specifically excludes an item from the sale, it must be regarded as personal property, and should be removed.
7. Agent Carrie received $937.50 as commission for a referral fee. The listing agent paid 25% of her commission for the referral. The total commission paid was 6%, which was split equally between the listing and selling brokerage firms. If the listing agent was paid 50% of her firm's commission. What was the sale price of the property? A. $150,000 B. $250,000 C. $300,000 D. $350,000
B T Formula
6. The total commission paid a brokerage firm was $33,500. The firm was paid 7% on the first $200,000, 6% on the next $200,000 and 5% on the remainder. What was the sales price of the property? A. $450,000 B. $550,000 C. $650,000 D. $750,000
B $200,000 x 7% = $14,000 $200,000 x 6% = $12,000 $14,000 + 12,000 = $26,000 $33,500 - $26,000 = $7,500 $7,500 divided by 5% = $150,000 $150,000 + $200,000 + $200,000 = $550,000
A lot that measures 475' x 525' sold for $275,000. What was the cost per front foot? A. $523.80 B. $578.95 C. $592.35 D. $597.98
B - $275,000 ÷ 475 = $578.947
Agnes, Zelma and Jayne are sisters and own a property as joint tenants. Jayne sold her share to Maggie. Upon closing, Maggie is a A. joint tenant with Agnes and Zelma. B. tenant in common with Agnes and Zelma. C. tenant by the entirety with Agnes and Zelma. D. tenant at will with Agnes and Zelma.
B - Joint tenancy requires the unities of time, title, interest and possession. When Jayne sells her property to Maggie, the unity of time and title is breached. Agnes and Zelma are still joint tenants, but Maggie would be a tenant in common with them.
An agent received a thank you note from a lender for the referral of a buyer. The note included a $35 gift card to a local restaurant. The law that makes this kickback illegal is A. Regulation Z B. RESPA C. CRA D. ECOA
B - The Real Estate Settlement Procedures Act (RESPA) prohibits kickbacks from service providers.
If state law permits, the unities of time, title, interest, possession and person would be created when A. John, Peggy and George buy a cottage on the lake. B. Mr. and Mrs. Jones buy real estate. C. a corporation purchases investment property. D. Carrie buys her first house.
B - The unities of time, title, interest, possession and person are found in tenancy by the entireties, when two people are married to each other. Joint tenancy only has the unities of time, title, interest and possession
The market value of a property is$140,000. The owners pay $144.375 in monthly property taxes, or $2.75 per $100. What is the assessment rate? A. 45 mills B. 4.5% C. 45% D. .45%
C
The sale price of the property is $150,000 and borrower has a 20% down payment. The mortgage rate chart indicates that the monthly payment on a 30 year loan at 4% is 4.775 per $1,000. How much is the monthly payment? A. $716.25 B. $644.63 C. $573.00 D. $480.00
C $150,000 x .80 = $120,000 Loan $120,000 divided by $1,000 = 120 120 x 4.775 = $573 Monthly P and I payment
When Branham brought his property he had a 20% down payment and secured a 30 year loan at 7% interest. If his first month's interest was $787.50, how much did he pay for the property? A. $135,000 B. $140,625 C. $168,750 D. $158,250
C $787.50X12 = $9450 annual interest Now apply T formula 9450 ____________ This gives 135000 total interest ? I 7% Now use this total interest to find the price of home 135000 __________ ? I 80%
he seller accepted the buyer's offer of $375,000 and the buyer had a 10% down payment. If the property appraised at $373,000, what was the loan amount? A. $340,000 B. $337,500 C. $335,700 D. $338,500
C The loan is based on the sale price or appraised value, whichever is less. Since the buyer had a 10% down payment, it means the loan to value ratio is 90%. $373,000 x 90% = $335,700 Loan
Which of the following would be future interests in a fee simple defeasible estate? A. Remainder/ Reversion B. Reconveyance/Redemption C. Possibility of Reverter/Right of Re-Entry D. Dower/Curtesy
C - A fee simple defeasible estate means that the title may revert upon the occurrence or non-occurrence of a specified event. The two types of fee simple defeasible estates are special limitation with the possibility of reverter and condition subsequent with the right of re-entry.
n 1969 Carmel purchased a condo for $15,000. Today she sold the property for $85,000 and agreed to finance the loan for the buyer. This transaction is known as a/an A. conventional loan. B. unconventional loan. C. land contract. D. blanket mortgage.
C - A land contract is also known as an installment sale. The seller agrees to finance the property in a land contract.
An appraiser is going to estimate the market value of a library. Which appraisal method will he/she most likely use? A. Gross Rent Multiplier B. Gross Income Multiplier C. Cost Approach D. Market Approach
C - The Cost Approach is used to appraise special purpose properties such as houses of worship, libraries, post offices and new buildings where there are no comparable properties.
A habendum clause would be found in a/an A. mortgage. B. note. C. deed. D. sales contract.
C - The habendum clause is found in a deed. The seller is transferring the rights to the new owner "to have and to hold." It is sometimes called the granting clause.
8. Negligent misrepresentation occurs when A. there is intentional misrepresentation of a material fact by a broker in order to take financial advantage of another. B. the agent showing the property exaggerates the property's benefits. C. a broker should have known that a statement about a material fact was false. D. the broker or agent tells the seller to intentional lie about a property defect so they can get a quick sale.
C - There are many definitions of the word misrepresentation. The basic definition is that a party made a decision based on information he/she/they thought was true, but it was not. Was it a mistake and no one could have reasonably known? Was it intentional? Was it fraud? Negligent misrepresentation occurs when it is determined that this is information that the licensee "should have known and did not know."
A valid deed must contain all of the following, except: (a) the signature of the grantor (b) a granting clause (c) an adequate description of the property (d) an acknowledgment of the grantor's signature.
C- is the incorrect statement. An acknowledgment is necessary for recordation but is not required to make the deed valid
The law in all states provides that contracts for the sale of real estate or an interest in real estate are unenforceable unless they are in writing and signed by the parties. What law is this? wrong a. Statute of Limitations b. Statute of Estoppel c. Statute of Real Estate d. Statute of Frauds
Contracts for the sale or purchase of real estate are unenforceable in a court of law unless they are in writing and signed by the parties to be charged. The purpose of the statute of frauds is to prevent fraud by a person seeking to enforce a contract that was never made. The statute was not designed to prevent oral contracts. One exception to this rule is oral leases for a period not exceeding one year. Such leases are enforceable if the intent of the parties can be established in court.
A will that is dated, written, and signed in the testator's own handwriting is: A holographic will Non-binding A parol will Admissible if a majority of the decedent's immediate family agrees
Correct Answer is (a). A holographic will includes all material provisions and the handwritten signature of the testator; it is valid even if not signed in the presence of witnesses. Printed or typewritten parts of a holographic will are not acceptable, however.
A contract breach will excuse the wronged party's duty to perform under the contract depending on whether or not the breach is: Minor or material Compensatory or punitive Practical or theoretical Monetary or non-monetary
Correct answer is (a). A material breach is substantial enough to excuse the innocent party from performing and provide him with the right to sue for damages. A minor breach, also referred to as partial breach, gives the non-breaching party the right to seek damages but does not usually excuse him from performance.
An easement created by use of property without the permission of the owner is called a __________________. prescriptive easement implied easement involuntary easement statutory easement
Correct answer is (a). An implied easement occurs when a property owner divides it and sells a smaller piece to another person, retaining a right to enter that portion of of land.
Lewis and Maria are single people who own real property as joint tenants. Unbeknownst to Lewis, Maria uses her interest as security to borrow $25,000 to pay for a new car. A few months later, before paying off the debt, Maria is killed in a car accident. Regarding the joint tenancy, Maria's death means: Lewis owns all of the property free of the encumbrance entered into by Maria Lewis and the lender are tenants in common for the property, each owning a half interest. Lewis owns all of the property free of the encumbrance entered into by Maria, but is liable for the remainder of Maria's loan Lewis and Maria's heirs own the property as tenants in common, each liable for the remainder of Maria's loan
Correct answer is (a). If a joint tenant dies, the surviving tenant(s) obtain the deceased's property interest without having to pay unforeclosed liens.
If a party to a contract unintentionally provides false information that leads the other party into agreeing to the contract, it is called: Misrepresentation Fraud Dereliction of duty If the mistake is unintentional, then the contract will be enforced.
Correct answer is (a). If proven, misrepresentation renders the contract voidable; it can be rescinded by the wronged party. If the false information was provided intentionally, then the contract is voidable also, and the wronged party can sue for damages.
A subordination clause in a trust deed usually benefits ______ the most. The trustor The beneficiary The trustee All the parties benefit equally.
Correct answer is (a). The borrower (trustor) is the party who benefits the most from a subordination clause, because such a clause makes it easier to obtain another loan on their property.
The term "unearned increment" could refer to: An increase in value due to a rise in population An increase in value due to the construction of a shopping mall An infusion of capital from a new investor None of the above
Correct answer is (a). This term describes an increase in property value without any labor or expenditure by the owner; a rise in value owed to a population boom is just such an unearned increment.
The following statements regarding a broker's trust account are true, except: Trust funds received by a broker must be deposited in a trust account Trust funds can not be deposited into an interest-bearing account A minimum balance is not mandatory Trust funds can not be deposited into an account also containing rental income and security deposits from broker-owned properties
Correct answer is (a). Trust fund amounts do not have to be deposited into a trust account, they may also be paid directly to the seller or deposited into escrow or another neutral account. The buyer and seller together may also provide alternate instructions for deposit.
A transaction involving the sale of a property is considered a transfer of title by: Voluntary alienation Involuntary alienation Eminent domain Bequest
Correct answer is (a). Voluntary alienation is an act committed by the party; involuntary is by act of law, as is a property transfer via eminent domain. A bequest by will is not a sale.
land contract can be viewed as an alternative for a trust deed or promissory note because a land contract is a(n): Security instrument Option agreement Bilateral contract Mortgage
Correct answer is (a). When used as a financing arrangement, a land contract is like a security instrument because the buyer takes possession of the property, but title is conveyed only after the full price of the property is paid.
The kind of tenancy that occurs when there is an agreement to lease, but without a specific term of duration, is called a(n): Tenancy at will Tnancy at sufferance Uncertain tenancy Tenancy of indefiniteness
Correct answer is (a). With a tenancy at will, either party can terminate the lease at any time. A tenancy at sufferance refers to when the tenant remains on a property after the lease term has expired.
To be enforceable, a buyer representation agreement does NOT have to: Be written Include a legal description of the property Be signed by the buyer Include a termination date
Correct answer is (b). A buyer representation agreement is between a buyer and a broker, through which a buyer looking to purchase a property employs a broker to find a suitable one. Per the Statute of Frauds, to be enforceable the buyer representation agreement should be in writing and signed by the buyer. According to the Real Estate Law, the agreement should mention a termination period.
A party makes an offer to buy a property, which is accepted by the owner. Before the commencement of the escrow period, the fact comes out that the the seller is a single minor. Therefore, the contract is: Illegal Voidable by the minor Enforceable by the buyer Valid, but the escrow period cannot commence until the minor reaches the age of 18
Correct answer is (b). A contract between a minor and another party is seen as voidable by the minor. The minor may elect to carry out the contract or void it at any time during their minority or for a reasonable period after coming of age. A contract made by a minor is considered voidable by the minor. A minor can only void a contract during his minority status and only for a reasonable time after he reaches the age of majority. After a reasonable period of time, the contract is deemed to be ratified and cannot be voided.
In order to be valid, the following agreements would be required by the Statute of Frauds to be in writing, except: An agreement to sell a parcel of land Two real estate brokers' agreement to split a commission for the sale of their co-listed property A tenant's two-year lease for an apartment An agreement authorizing a broker to earn a commission for procuring a buyer for a client's home
Correct answer is (b). A court will enforce an oral agreement for a brokers' commission split.
Although not authorized to do so, Agent Andrew acts on behalf of Seller Stan by showing Stan's home to a potential buyer. Later, after the buyer makes an offer, Stan approves of Andrew's action. This is an example of: Rescission Ratification Implication Covering up
Correct answer is (b). A principal can ratify something that has been done on her behalf by another individual who assumed the authority to act in the capacity of an agent.
To satisfy the Statute of Frauds, a listing agreement must: Be in writing and signed by the seller and broker Be in writing and signed by the seller Be notarized Does not have to be in writing, because it can be accomplished in less than a year
Correct answer is (b). According to the Statute of Frauds, a listing agreement must be in writing and signed by the seller, although the broker's signature is not required and nor must it be notarized.
A person with a spouse and three children dies intestate; her separate property would be divided: Equal shares between her spouse and their children One third to her spouse and two thirds to their children The spouse inherits all the property, then can decide what to transfer to the children. An intestate person's assets all go to the state.
Correct answer is (b). An intestate person dies without having made a will. In such cases, the spouse and children split separate property as stated. If someone without a will dies without a family, only then will property "escheat" into the state's Treasury.
Leases with rent based on the gross sales of a business are called: Gross lease Percentage lease Sales lease Total receipts lease
Correct answer is (b). In a percentage lease, rent is calculated according to a percentage of a business's gross receipts.
Net income shows up in which kind of statement: Escrow closing statement Profit and loss statement Capital expenditures statement Loan application statement
Correct answer is (b). Net income is also referred to as net profit or net earnings.
Gift deeds conveying title to real property can sometimes by voided by: The grantor's debtors The grantor's creditors Holders in due course The state
Correct answer is (b). To evade creditors from attaching their assets, sometimes debtors will convey real property to friends or relatives by gift deed. Under these circumstances, there are legal safeguards which can enable creditors to have such gift deeds invalidated in court.
Which of the following does not describe a fiduciary relationship: Attorney to client Trustor to beneficiary Broker to seller Employee to employer
Correct answer is (b). Trustor to beneficiary is borrower to lender, not like the others' fiduciary and consensual relationships between two persons where one person acts on behalf of the other.
The income capitalization approach looks at "return" of an investment, referring to: Returning to the property being appraised by the income capitalization method Re-capturing the initial investment Giving up the initial investment None of the above
Correct answer is (b). When re-capturing assets, you regain them, usually due to the provisions of a contract or legal doctrine.
An easement appurtenant exists between two separately-owned parcels of property; Bart owns the dominant tenements and Dave owns the servient tenement. If Bart sells his parcel to someone else, then: Dave, the owner of the servient tenement, automatically assumes the rights of the dominant tenement The new owner of Bart's property assumes the rights of the dominant tenement The easement lapses with the sale of one of the properties None of the above
Correct answer is (b). With an easement appurtenant, the benefits of the easement run with the land, and will pass to the new owner. If it had instead been an easement in gross belonging to Bart, or personal easement, the benefit would indeed have ended with the sale of Bart's property to a new owner.
Property managers can be compensated in these ways, except: Commission for new tenants Gross receipts percentage Percentage of discount received on the purchase of building supplies Free room and board
Correct answer is (c). Any discounts granted for supplies or other materials by the provider are the owner's property; the property manager can not keep these funds.
A plaintiff can ask a court to issue a writ of attachment against the defendant's property to satisfy the judgment being sought. The resultant attachment liens are: Valid for for up to five years Not renewable Enforceable by the sheriff None of the above
Correct answer is (c). Attachment liens are valid for three years, and are renewable. A writ of attachment empowers the sheriff to seize enough of the defendant's property to cover the judgement being sought by the plaintiff.
A purchase agreement contract can be amended by a: Broker or a principal Broker or an escrow agent Principal only Broker only
Correct answer is (c). Contract revisions can only be made by a principal.
The following are sources of demand for mortgage funds, except: Home construction New business Federal Home Loan Banks Land development
Correct answer is (c). Federal Home Loan Banks represent the largest collective provider of home mortgages in the United States. The other answers all are sources of demand for loans.
Purchaser Pat made an offer through his broker to buy Owner Oscar's home. Oscar accepted the offer, but Pat died before this acceptance was communicated to him by the broker. The acceptance is: Binding on the estate of Pat, the deceased offeror, because the offer was accepted by Oscar, the offeree, establishing a contract Not binding because the the deceased offeror will be unable to enter into an escrow agreement Not binding because the deceased offeror died before the offeree's acceptance was communicated him, so no contract was established Not binding because the deceased offeror cannot pay a commission to the listing broker
Correct answer is (c). If an offeror dies before receiving an acceptance, his offer terminates.
After a trustee's sale in a non-judicial foreclosure, any proceeds left over after paying off liens and foreclosure expenses belong to the: Sheriff Trustee Foreclosed-upon owner Beneficiary
Correct answer is (c). In a trustee's sale, the costs of the sale and the debt owed to the foreclosing mortgagee are paid first. The surplus is distributed to owners of junior interests in order of priority. The mortgagor keeps any money that's left after paying the junior interests.
Most junior loans securing real property are procured from: S&Ls Credit unions Private lenders Commercial banks
Correct answer is (c). Most junior money loans are obtained through private investors with mortgage companies acting as the go-between. Savings and loans and banks mostly make first priority loans, and while credit unions are authorized to make both first and junior loans, they are currently not a major player in either field.
The Veterans Administration does not make loans; instead, it ___________ loans make by an approved institutional lender. Finances Assigns Guarantees Recovers
Correct answer is (c). The VA does not set a cap on how much eligible veterans can borrow to finance their home. There are, though, limits on the degree of liability the VA will assume, which impacts the amount of the loan that an institution will approve.
An executor of an estate is: Appointed by the Real Estate Commissioner Not authorized to make any decisions regarding the estate without the prior approval of a probate judge Named in the will of the deceased The eldest heir of the deceased
Correct answer is (c). The duties of an executor include making sure that debts and creditors of the deceased are paid, while any remaining money or property is distributed according to their expressed wishes.
Buyer Bruce purchases a home from Owner Orvil, paying in cash. However, there is a mortgage loan attached to the home, which Orvil is still paying off. Given these circumstances, what kind of deed will probably be recorded after Bruce's purchase from Orvil: deed of reconveyance to Buyer Bruce trust deed against Buyer Bruce deed of reconveyance to Owner Orvil bill of sale to Buyer Bruce
Correct answer is (c). The existing loan on the home is probably secured by a deed of trust. Upon receipt of Bruce's cash payment, Orvil can pay off the loan in full and receive a deed of reconveyance; when that reconveyance deed is recorded, it will release the loan. Note that since Bruce paid all cash there would be no trust deed involved since no second lien would need to be created. Also, a bill of sale is used in personal property transactions.
An offer can be be revoked before acceptance by the offeror, unless: At the time of the offer, the offeree stated it could not be withdrawn The offer is in regard to a property worth under $100,000 The offer is supported by consideration The offer was recorded
Correct answer is (c). Unless consideration accompanies the offer, an offeror is free to revoke it any time before it has been accepted. Express notice of withdrawal is not required; it is sufficient if the offeree learns of actions by the offeror inconsistent with the offer remaining on the table.
Express conditions include condition(s) such as: Condition subsequent Full performance Condition precedent Both A & C
Correct answer is (d). A condition precedent must be met before the performing party has a duty to perform. Then, once the condition is met, the duty to perform is triggered. A condition subsequent arises after the duty to perform has begun and, if satisfied, releases the performing party from the duty of performance.
The longest period of time during which a farm can be leased is: 10 years 25 years 51 years There is no limit on lease term duration for farms.
Correct answer is (d). A seller should not cancel her homeowner's insurance policy until the closing has occurred. Until then, the seller is responsible for the the property remaining in safe condition.
Which of the following is included in the bundle of rights: Right of possession Right of enjoyment Right of encumbrance All of the above
Correct answer is (d). All of these answers make up the bundle of rights.
Someone who is unable to swear an oath in a legal setting could choose instead to make a(n): Notarization Confirmation Declaration Affirmation
Correct answer is (d). An affirmation is the term for a statement made under the penalties of perjury by a person who declines to take an oath.
An escrow agent is empowered to: alter the escrow terms when asked to do so by one of the parties determine which financing offers the best terms to the buyer select which security system to be installed at the property call for the loan to be funded by the purchaser
Correct answer is (d). An escrow agent, or officer, is a neutral third party, whose role is to carry out the escrow instructions agreed to by the parties. Such instructions usually authorize the agent to call for the funding of the purchaser's loan. Escrow agents cannot make any changes to the escrow instructions or demonstrate any bias toward one party over the other.
Taxpayers can exclude up to $250,000 of the gain on the sale of their principal residence if they can meet the following requirement(s): Owned the home for at least two years Lived in the home as their main home for at least two years During the two-year period ending on the date of the sale, did not exclude gain from the sale of another home All of the above
Correct answer is (d). Answers (a) and (b) are termed the ownership test and use test, respectively.
Regarding the National Do Not Call Registry for consumers who wish to block calls from telemarketers, real estate agents can still legally call listed persons if the agent: Has had a previous business relationship with the listed person (within 18 months or less) Is calling within 90 days of an inquiry by the listed person Has received written consent from the listed person All of the above
Correct answer is (d). Businesses do not receive protection from calls by the Registry, while even listed residences can still be called by political organizations and bill collectors.
Listing agreements can be recorded with a title company if: Both parties agree The broker has a signed agreement with the title company The owner fails to file a written objection within 30 days of signing the listing agreement Listing agreements are not recorded
Correct answer is (d). Listing agreements can not be recorded at a title company, or other agency.
To establish an agency relationship between a principal and broker, the most important component is the: Offer Property description Commission agreement Written employment contract
Correct answer is (d). The primary requirement for creating an enforceable principal-broker relationship is a written employment contract
The type(s) of remedies for breach of contract: Specific performance Damages Lis pendens Either A or B
Correct answer is (d). The two kinds of remedies in contract law are damages, which are monetary awards and specific performance, when the court orders the breaching party to actually perform whatever it contracted to do.
Which of the following refers to deferred maintenance: An apartment building with a leaking roof An apartment building lacking good views from its windows An apartment building with poor WiFi reception A commercial building with newly-installed plumbing
Correct answers is (a). Deferred maintenance is an appraisal term relating to the physical deterioration of a building, not its lack of amenities. Failure to fix the roof could lead to water damage.
When a real estate broker sells a land contract, he must arrange for the contract to be properly assigned and recorded in the county where the real property is located within how long after escrow is closed: Five days 10 days One month It is not the broker's responsibility to have the land contract recorded
Correcta answer is (b). A land contract is an agreement between a seller and buyer in which the buyer obtains financing from the seller to purchase the property for an agreed-upon price and then repays the loan in installments. A broker who obtains a commission for a loan transaction such as a land contract must have the agreement recorded within 10 days of the close of escrow.
The S1/2 of the NE1/4 and the NW1/4 of the SE1/4 would contain A. 2,344,560 square feet. B. 3,484,800 square feet. C. 4,395,340 square feet. D. 5,277,200 square feet.
D - 640 ÷ 4 ÷ 2 = 80 640 ÷ 4 ÷ 4 = 40 120 acres x 43,560 = 5,227,200 square feet
An agent listed a property that was built in 1951. By federal law, the agent must have the sellers fill out A. a seller's property disclosure form. B. good-faith estimate of closing costs. C. certificate of insurance and a CLUE report. D. lead-based paint disclosure form.
D - By federal law, sellers are required to complete the lead-based paint disclosure form on properties that were built prior to 1978.
All of the following advertisements would be illegal EXCEPT the ad which reads, A. "Empty Nesters are perfect for this community!" B. "Great house for a man!" C. "No more than two children are allowed in the apartment." D. "This house has a wheelchair ramp."
D - Remember, describe the property, not the people! It is legal to say that a house has a wheelchair ramp.
Buyers met an agent at an open house. In order to buy the listed property, the buyers needed to sell their house. The agent wrote an offer to purchase with the following terms. "Purchasers shall list purchaser's property at 567 Main Street, Your Town, Your State with XYZ Realty within 24 hours of the acceptance of this offer, or this offer shall become null and void and the earnest money shall be refunded to the purchaser." Is this legal? A. Yes, this is exactly what the agent should do to secure the listing. B. Yes, if state law allows it. C. No, it is a violation of Regulation Z. D. No, it is a violation of the Sherman Antitrust Act.
D - The Sherman Antitrust Act does not allow tying (tie-in) agreements. To "tie" an offer to a listing agreement is not allowed.
A person died testate. After an extensive search, no additional heirs were found. The person's real property would transfer by A. escheat to the state. B. by descent and distribution. C. by demise. D. by devise.
D - When a person dies testate, it means the person died with a will. Real property is devised or transferred by the will. If a person dies intestate, or without a will, the laws of descent and distribution are followed. Demise is to give up the right of possession in a lease. (Yes, it also means someone has died.) Escheat means the property reverts to the state when it is classified as abandoned. This may happen when someone dies intestate and no heirs can be found.
What is escheat
Escheat means the property reverts to the state when it is classified as abandoned. This may happen when someone dies intestate and no heirs can be found.
What is demise
Give up a right of possession in a lease
How many acres is the S 1/2 of the NW 1/4 of any Section?
Our easy method of acreage calculation is multiply the denominators of the fractions then divide that total INTO 640 (enter 640 into your calculator first). 1. How many acres is the S 1/2 of the NW 1/4 of any Section? Solution: 640 divided by 8 (2 x 4) = 80 acres. 2. How many acres is the E 1/2 of the NE 1/4 of the NE 1/4 of any Section? Solution: 640 acres divided by 32 (2 x 4 x 4) = 20 acres.
An Unlawful Detainer action can be commenced by a landlord against a tenant when: The tenant fails to leave upon the expiration of his lease The property is sold There is a month-to-month lease, and the tenant does not move out after a 30-day, 60-day or 90-day notice to quit All of the above
The correct answer is (d). Other times an Unlawful Detainer action can be started include when the tenant does not pay rent and fails to move out after receiving a 3-day notice, or the tenant similarly does not leave after getting a 3-day notice for committing an illegal act.
Right of survivoship
The right of survivorship is a right found in joint tenancy and tenancy by the entirety, but it is not a part of the bundle of legal rights
What is township
Township is a square with 6 miles on each side, so it is 36 square miles. It is divided into 36 squares called Sections. Each side of a section is one mile, and therefore a Section is one square mile, totaling 640 acres. For the test you will have to convert fractions of Sections into acres. Other than remembering that 1 section = 640 acres, with our formula you do not have to commit all the acres per part of a Section below to memory. 1 Section = 640 acres. 5,280 x 5,280 feet. 1/2 Section = 320 acres. 5,280 x 2.640 feet. 1/4 Section = 160 acres. 2,640 x 2,640 feet. 1/8 Section = 80 acres. 2,640 x 1320 feet. 1/16 Section = 40 acres. 1,320 x 1,320 feet. 1/32 Section = 20 acres. 1,320 x 660 feet. 1/64 Section = 10 acres. 660 x 660 feet.T
here are no nationwide or statewide zoning laws. check a. True. b. False. There are no nationwide or statewide zoning ordinances but governments may regulate land use through special legislation such as national park regulations, wildlife preserves, coastal management, and environmental laws. Zoning laws, as implemented in cities and counties, identify the permitted use of each parcel of land.
True There are no nationwide or statewide zoning ordinances but governments may regulate land use through special legislation such as national park regulations, wildlife preserves, coastal management, and environmental laws. Zoning laws, as implemented in cities and counties, identify the permitted use of each parcel of land.
What is Verification
Verification means to confirm the correctness of an instrument by an affidavit or oath. Verification may be desirable but not required.
A broker collects a non-refundable fee from the seller when the listing is signed to cover the advertising of the property for sale. Such a fee is called an "advance fee" and is considered trust funds. check a. True. b. False.
a An advance fee given by the seller to cover advertising costs is considered trust funds. Most states have very strict rules governing the handling of trust funds. Generally the funds must be used only for their intended purpose; and an accounting of all expenditures must be provided to the principal. If the money is not used for its intended purpose, it must be returned to the principal.
nvesting can best be defined as _____________. a. giving up present spending in exchange for future benefits b. buying real estate for all cash c. saving for future consumption d. revenue exceeding costs
a Investing in real estate is the act of giving up money that could be spent elsewhere in exchange for the potential for profit in the future. The likelihood of a profit is called the risk. As a rule, the greater the risk, the lower the investment. Investment in vacant land is a low-risk investment because vacant land does not tend to depreciate as much or as fast as improved land; and the cost to purchase vacant land is usually lower than the cost to purchase improved land.
What is the difference between a specific lien and a general lien? a. A specific lien is secured by a specific piece of property, and a general lien is secured by the collective assets of the person against whom the lien is held. b. A general lien is secured by a specific piece of property, and a specific lien is secured by the collective assets of the person against whom the lien is held. c. Specific liens require collateral, and general liens do not. d. General liens require collateral, and specific liens do not.
a Specific liens are secured by a specific piece of property. General liens are secured by the collective assets of the debtor. Many borrowers are under the misguided impression that there is no collateral securing a general lien (such as a credit card lien or signature loan). While both types of liens require collateral, general liens are actually secured by more collateral than specific liens. A lienholder of a general lien is within its rights to foreclose on any of the assets of the debtor; whereas a lienholder of a specific lien may only foreclose on the specific collateral named in the lien.
What is the main purpose of police power? check a. To protect the health, safety, and welfare of the community. b. To prevent people from committing crimes. c. To put out fires. d. To make sure the property owners and citizens know their place.
a The U.S. Constitution limits government power, and requires that governmental actions and statutory regulations cannot take away property rights without due process, unless there is a compelling government interest to do so. Protecting the health, safety and welfare of the citizens of the community has long been accepted as such a compelling government interest. Police power is the power of the state to enforce laws and rules that protect the members of the community. Since owners take title to their property subject to zoning laws, enforcement of the zoning laws is constitutional.
The legal act of transferring ownership, or the intention to have a deed be operative and effective is manifested by _____________ of the deed. a. delivery b. acceptance c. notary d. recording
a The intent to transfer is manifested by delivery of the deed. Deeds become valid upon delivery, acceptance and notification to the deliverer of the acceptance. In most states, delivery happens when the grantor (seller) signs the deed. Notification to the deliverer that the deed has been accepted occurs when the deed is recorded. The method of legal acceptance of a deed varies by state.
A lender is required under the Truth-in-Lending Act (Regulation Z) to furnish an applicant for a real estate loan with a copy of a _____________. This document must be given to the borrower before the borrower can be obligated to repay the loan. a. amortization schedule b. disclosure statement c. deed d. financial statement
b A property manager is obligated to stay informed about market rents in the area; and track vacancies in the building being managed. However, the property manager has no obligation to the principal to stay informed on market value of the building. Fairness and honesty are always a part of a property manager's responsibilities as a party of the duty of agency.
All of the following are agency relationships EXCEPT _____________. wrong a. the attorney-client relationship check b. the real estate salesperson-buyer relationship c. the real estate broker-buyer relationship d. the listing broker-seller relationship e. None of the above - they all have agency relationships
b Although a salesperson likely refers to himself/herself as an agent, the salesperson is not an agent. The broker is the agent. The salesperson owes all of the fiduciary duties to the client (principal) that an agent owes, but most all of the agent's real estate related activities must be supervised by a broker.
Selma lists her property with XYZ Realty, ABC Realty, and MNO Realty. In each listing agreement, Selma has agreed to pay a commission to the listing firm only if that firm finds a ready, willing and able buyer and a sale is consummated. This type of listing is _____________. a. an exclusive agency listing check b. an open listing c. an exclusive right-to-sell listing d. an MLS listing
b An open listing gives any real estate licensee who has a listing agreement with the seller the right to a commission if he finds the buyer for the home. An open listing gives the seller the right to establish many listing agreements with many brokerage firms and pay a commission only to the firm that finds the buyer. Sellers might be under the misguided impression that this type of listing gives them an advantage. However, in most cases, the listing agents in an open listing are not apt to market the property as aggressively if there is a possibility that another firm could find the buyer. Furthermore, most Multiple Listing Services (MLS) specifically prohibit the publication of open listings in the MLS listings, so all marketing of the property must be done through other less effective means.
The illegal and discriminatory practice of _____________ occurs when one person induces another to enter into a real estate transaction by insinuating that the real property values in neighborhood will decline as a result of a member of a protected class buying property in that neighborhood. a. blockbusting b. redlining c. boycotting d. neighborhood canvassing
b Blockbusting, for the most part, is no longer a common practice, although it may happen indirectly through inappropriate conversations and statements by real estate licensees. The purpose of the blockbusting scheme is to get the homeowners to sell out at a deflated price; then sell the vacated homes to minority group members at an inflated price. Involvement in a blockbusting scheme is grounds for criminal charges
The process that involves covering a landfill with two to four feet of clay-like soil and planting grass on the soil is the process of _____________. a. soiling b. capping c. chipping d. remediation
b Landfills and the toxins and chemical by-products of the refuse are a major cause of groundwater contamination because rainwater and snowmelt can filter through the refuse and dissolve a wide range of water soluble pollutants, which then seeps into the ground. The process of capping mitigates this process because the clay-like soil forms a barrier so that most of the water stays above the level of the refuse and less water filters through the refuse.
Robin rents a unit from owner Joaquin. Therefore _____________. a. Joaquin is the lessee and Robin is the lessor b. Joaquin is the lessor and Robin is the lessee c. Robin is a lessor and Joaquin is a landlord d. Joaquin is a lessee and Robin is a tenant
b The landlord or property owner is the lessor; or the person giving the lease rights. The tenant is the lessee; or the person receiving the lease rights.
A metes-and -bounds legal description _____________. wrong a. can be created only for areas excluded from the rectangular survey system b. is not acceptable in a court in most jurisdictions check c. must commence and finish at the same identifiable point d. is used only in extreme cases where there is no recorded subdivision plats
c A metes and bounds legal description begins at a well-defined point (point of beginning or POB) and follows the boundaries of a parcel of land, using directions and distances around the tract, and ends at the point of beginning. When properly written, it is acceptable and enforceable in all court jurisdictions, and can be created for any parcel of property. Oftentimes, a deed will contain two types of land description. Generally, a metes and bounds description is accompanied by a rectangular survey (or government survey) description or lot, block and tract description.
Your neighbors use a portion of your property to reach their guest apartment, which is on their property. As far as you can recall, you never gave them permission to use your property, and you discuss with your attorney the possibility of preventing the neighbors from using your property. Your attorney explains that the ownership of the neighbors' real estate includes an easement appurtenant giving them the right to use that portion of your property. Your property is the _____________. a. leasehold interest wrong b. dominant tenement check c. servient tenement d. license property
c An easement appurtenant allows the holder of one property to benefit from another's. In this case, your property is servient because it is the one burdened by the easement while your neighbor's is dominant since it is the one that benefits. If you would have given permission to the neighbors to use your driveway, you would have effectively licensed the neighbors, not the property. (The word "license" is not typically used as an adjective for the word property.)
Which of the following is the difference between the value of a property and the total amount of liens against the property? a. investment b. basis c. down payment check d. equity
d Equity is not directly affected by the purchase price for the property; nor is it directly affected by the amount of down payment put forth at the time of the purchase. Many owners are under the misguided belief that a high down payment will always result in high equity. This is only true if the market value of the property remains the same as it is when the down payment is given; or increases after the down payment is given. If the market value of the property decreases, the equity in the property will decrease also, regardless of the purchase price and down payment amount.
The principal of appraisal that dictates that home values tend to increase when demand increases is the principle of _____________. a. progression b. substitution c. regression d. supply and demand
d The principle of supply and demand is the oldest principle of economics; and it is also the most predictable principle. When demand for homes increase because of national economic influences (such as lower interest rates), values tend to increase. Also, when demand increases because of local changes, such as a new business coming to the area; or an influx of new residents, values will increase.