1) 1/3 FINAL STUDY DECK 1 - 52

Question 1

The city of Homer requires that all new residential buildings have a minimum insulation factor of R-30 in the ceilings and have tempered glass in any windows closer than 18 inches above the floor. This is most likely the result of:

a. zoning
b. fire codes
c. building codes
d. Health codes

Answer 1

c. Building Codes

Question 2

The seller wishes to list the property with a broker for $125,000. The broker knows that the property is worth much more, but the seller disagrees with the broker’s value assessment. What is the best action for the broker?

Answer 2

Suggest the seller hire an appraiser

Question 3

A property which has deferred maintenance is said to have

Answer 3

Physical obsolescence

Question 4

In 1998 Bob purchased an investment property for $200,000. In 2002 Bob makes $40,000 of capital improvement to the property. If Bob decides to sell the property in 2008, he will have to pay capital gains taxes on what amount?

Answer 4

The difference between the sales price and $240,000

Question 5

A property owned and used as a primary residence is known as

Answer 5

A homestead

Question 6

Mary leases a property for three months while she is looking for a home to buy. This type of lease is best defined as a/an

Answer 6

Tenancy for years

Question 7

Property tax for sidewalks and streetlights is referred to as

Answer 7

Special Assessment taxes

Question 8

A young couple Brett and Mary are trying to purchase their first home but have limited sources of cash for down payment. The seller has agreed to increase the purchase price by $5000 and make a payment to a program which will make this purchase for Brett and Mary possible. This type of transaction is known as:

Answer 8

Down payment Assistance

Question 9

Jones owns property which was received from order of the Probate Court. Jones is concerned about the possibility of a claim being made on the property in the future from an heir to the deceased. If Jones desires to sell the property, he would be wise to give:

Answer 9

A special warranty deed as this will only warrant Jones’ ownership from the time, he took title

Question 10

For which types of loan would a lender typically require an escrow account

Answer 10

For all new VA loans, FHA loans, and Conventional Loans above 80% LTV

Question 11

A property which has 485 feet of road frontage and is 1467 feet deep which sell for $4500 per acre what is the approximate value of this property

a. $73,500
b. $50,026
c. $96,800
d. $87,200

Answer 11

a. $73,500

Question 12

A straight up 2-story home measures 68 feet by 36 feet and has a full unfinished basement. What is the living area of this home?

Answer 12

4,896 Square Feet

Question 13

Leary and Martha Willis are going to add an additional bedroom to their home in anticipation of their first child being born. No one in the neighborhood has ever added on to their home before. To make this improvement the Willis’s must first obtain:
a. a variance
b. permission from the zoning board
c. a building permit
d. approval from the planning commission

Answer 13

c. A building permit

Question 14

Which of the following would terminate an agency agreement:
a. The property in question is in disrepair
b. The seller lies to the broker about the amount of det on the property
c. the salesperson of the broker dies
d. The broker dies

Answer 14

d. The broker dies.

Question 15

A broker sold a property which was listed with another broker when would the commission be due and payable?
a. When all parties sign the contract
b. Upon Closing
c. Upon producing a ready, willing, and able buyer
d. Upon the recording of the deed and title transfer.

Answer 15

c. Upon Closing

Question 16

Franklin paid $2000 to owner Simpson for a six-month option. Can Simpson Sell the property to another during the option period?

Answer 16

Yes. Simpson may sell the property to another during the option period, subject to Franklin’s option rights.

Question 17

Which of the following is not required to have a binding real estate sales contract?
a. An agreement between the parties,
b. at least limited competency,
c. earnest money, d. lawful purpose

Answer 17

c. Earnest Money

Question 18

A tenant pays rent monthly of $825. The prepaid rent is due and paid on the first day of each month. If a closing occurs on September 8th, what is the rent proration between the buyer and the seller on the closing statement?
a. $605 credit to the seller; $605 debit to the buyer.
b. $220 credit to the seller; $220 debit to the buyer.
c. $605 credit to the seller; $220 debit to the buyer.
d. $605 credit to the buyer; $220 debit to the buyer

Answer 18

a. $605 credit to the buyer; $605 debit to the seller

Question 19

Sue is interested in purchasing an income producing property. Which of the following is true concerning the property’s income?

a. Net income is gross income minus vacancy and collected losses,
b. net income plus gross income equals operating expenses,
c. gross income minus income taxes is net income d. gross income minus operating expenses is net income

Answer 19

d. gross income minus operating expenses is net income

Question 20

When a property is sold and a deed is recorded, which of the following must be paid?
a. An intangible tax,
b. a gross receipts tax,
c. a document tax,
d. a transfer tax

Answer 20

d. a transfer tax

Question 21

Baker County is buying property to build a high school. Mark owns 15 acres in the area where Baker County is assembling property for the school. The county has been negotiating with Mark to buy the 15 acres, but negotiations have come to a deadlock. Which of the following is true concerning this situation?
a. The property can be taken by the county using the power of escheat ,
b. baker County may file for condemnation and obtain the property by paying a fair compensation to Mark,
c. Baker County may not force the sale of the property this must be done by the state ,
d. the property may be taken by Baker County using police powers

Answer 21

b. Baker county may file for condemnation and obtain the property by paying a fair compensation to Mark.

Question 22

Upon the filing of a successful claim with a title insurance company, a claimant may be required to:
a. Sign a subrogation agreement,
b. file a lien on behalf of the title insurance company,
c. provide a subordination document,
d. executes a writ of certiorari

Answer 22

a. Sign a subrogation agreement

A right your insurance company claims after they have paid a covered claim. This is a request for reimbursement from the at-fault party. Usually comes from the at-fault’s insurance company

Question 23

Sam purchases a property and uses the property, his tractor, and his motorcycle as security for the loan. This type of loan is known as:

Answer 23

A Package mortgage.

Question 24

When a borrower has been delinquent in making payments and the lender has the right to change the interest rate reflecting the additional risk, this right is obtained through which mortgage clause?

Answer 24

Escalation Clause

Question 25

When there is a dispute between two real estate companies involving a Commission or rights to a prospect, this dispute is best handled:

Answer 25

Between the brokers

Question 26

Salesperson Johnson writes an offer on a property he has listed on Main Street at 10:00 AM. Johnson immediately calls the seller and makes an appointment to present the offer at 7:00 o’clock PM. At 2:00 PM and at 4:30 PM, Johnson receives subsequent offers from agents with other companies. What is Johnson’s best course of action regarding these three offers?

Answer 26

Johnson must present all offers and do so in the manner which Johnson deems will be best to help the seller client to understand the options

Question 27

Johnson owns an unimproved property in the town of Mishap. Zoning In Mishap requires that all new commercial construction, the type of which is contemplated by Johnson, must have a minimum of 15 parking spaces. The size and shape of the lot will only yield 13 parking places. Which of the following is most correct?
a. A Johnson will have to get the property rezoned to use which will require less parking b. Johnson will apply for a variance from Millsap
c. as a non-conforming use Johnson must do nothing
d. this use cannot be allowed as Federal Fair Housing law requires that all commercial properties have a minimum of 15 parking spaces to accommodate the physically handicapped.

Answer 27

b. Johnson will apply for a variance from Mishap

Question 28

A property is in an area of the city which has become very popular because of its proximity to quality shopping, schools, and transportation. This situation is best defined as:

Answer 28

Situs

Question 29

John and Bill, both married men, purchasing investment property together as joint tenants. Which of the following is not true of this situation?
a. John dies, Bill will receive John’s interest in the property, not John’s wife.
b. John may sell his interest in the property to another person without Bill’s permission or knowledge.
c. John and Phil’s interest must be 50/50.
d. John and Bill as married men cannot own property together as joint tenants because of the right of survivorship.

Answer 29

b. John may sell his interest in the property to another person without Bill’s permission or knowledge.

Question 30

Mark, the owner of a property which was severely damaged by wind and water five years ago, now wishes to sell. The damage has been repaired and Marquez has instructed the listing broker not to disclose the prior damage or repair. Which of the following is true of this situation?
A since the property has been repaired, no disclosure is warranted or recommended.
B if Mark has repaired the damage, no disclosure is required of the repair with the damage must be disclosed.
C To best protect the owner and broker, the damage and repair should be disclosed. capital
D selling a property “as is “Relieves the seller from disclosure requirements under the law of caveat emptor.

Answer 30

C. To best protect the owner and broker, the damage and repair should be disclosed

Question 31

Recently there has been the announcement of a factory closing in a small town. As a result, the inventory of homes for sale has increased about 20% but there are limited buyers. This is best referred to as a/an:

Answer 31

A buyer’s market

Question 32

Which of the following is not a right contained in the bundle of rights?
A. The right to convey
B. the right to transfer
C. the right to lease
D. the right to encroach

Answer 32

The right to Encroach

Question 33

When is the best time to have a buyer qualified financially?

Answer 33

Before showing them the property

Question 34

For a person to have a legal capacity to contract they must be
A. at least 21 years old
B. mentally competent
C. Literate
D. A resident of the United States

Answer 34

B. Mentally Competent

Question 35

A tenant obtained a lease for four months. What would happen to the lease at the end of that period?

A. The lease automatically renews
B. the lease automatically renews unless the tenant gives notice to terminate
C. The lease will terminate
D. The lease will terminate but the tenant’s rights of occupancy continue

Answer 35

C. The lease will terminate

Question 36

A lease which is indefinite in duration and requires notice from either party to terminate is most likely:

Answer 36

An estate at will

Question 37

A tenant with a physical handicap is interested in leasing an apartment in a four-story apartment building. Which of the following is FALSE concerning this tenant?
a. The landlord must allow the tenant to make modifications to the property
b. The landlord must show this tenant property on the upper floors if desired.
c. The landlord may require the tenant repair damage caused by changes.
d. The landlord may charge a higher security deposit to the tenant.

Answer 37

D. The landlord may charge a higher security deposit

Question 38

A buyer would be most protected by receiving which of the following deeds?
a. Quit claim deed b. bargain and sale deed
c. Special Warranty Deed.
D. General warranty deed

Answer 38

D. General Warranty Deed

Question 39

The property owner has a $100,000 judgment filed against them by a former business partner. Which of the following would protect the assets in the family home?
a. Homestead protection,
b. Homestead Exemption,
c. statutory redemption,
d. equitable redemption

Answer 39

a. Homestead protection

The intent behind homestead laws is to allow debtors to retain at least a basic level of interest in their home, providing a roof over their family’s head even in bankruptcy. However, homestead exemptions have limits - they usually don’t apply to debts like mortgages, property taxes, mechanic’s liens, etc. tied directly to the home itself.

Question 40

When the seller finances a property for the purchaser this is known as:

a. a package mortgage,
b. a purchase money mortgage, c. a participation mortgage, or
d. a shared appreciation mortgage.

Answer 40

B. Purchase money mortgage

Question 41

The owner of the property on Albercom Ave has been foreclosed. If they owner retains the right to repurchase the property for a period after the foreclosure, this right is called:
a. equitable redemption,
b. statutory redemption,
c. the right of quiet enjoyment,
d. the right of seizen

Answer 41

b. Statutory Redemption - not recognized in Georgia

Question 42

Which of the following would not typically trigger the acceleration clause in a mortgage?

a. The borrower does not pay the property taxes,
b. the borrower falls behind in their monthly payments because of catastrophic illness, c. The borrower cannot pay a personal debt to an employer,
d. the borrower is unable to maintain the property in good repair

Answer 42

The borrower cannot pay a personal debt to an employer

Question 43

Able contracts to purchase property from Baker. The contract makes no mention of the gas log set installed in the fireplace. The day before closing, able makes a walkthrough inspection and finds the gas log set has been removed. Which of the following is most true?

a. The gas log set is personal as it was annexed to the house gas supply. b. Or the gas log set is personal because it can be simply removed, or c. the gas log set is real property because of its connection to the permanent gas supply or
d. The gas log set should have been mentioned one way or the other in the contract.

Answer 43

d. The gas log set should have been mentioned one way or the other in the contract.

Question 44

Salesperson Johnson lists for sale the property of Reynolds. 5 weeks after taking the listing, Johnson receives an offer which she presents to Reynolds. Reynolds is concerned about selling the property to a minority and asks Johnson to disclose the race of the buyer. Which of the following would be the best response for Reynolds question?
a. According to Fair Housing Laws I cannot answer that question or
b. According to Fair Housing Laws I can answer the question, but you cannot use the information to illegally discriminate against the buyer or
c. the buyers are Caucasian or according to Fair housing laws I can answer that question only if you own three or fewer family properties how many do you own?

Answer 44

a. According to Fair Housing Laws, I cannot answer that question.

Question 45

The Sammons’ have lived in the same home since 1962. While the home seems in good condition it does have small rooms and a carport rather than a garage. The Salmons property would suffer from: a. functional obsolescence,
b. economic obsolescence,
c. physical obsolescence,
d. no depreciation because it’s in good condition.

Answer 45

a. Functional obsolescence

Question 46

Of the following which group is the best example of deed restrictions one would expect to find in a subdivision?
a. Maximum square footage,
garages must not open to the front and no basements OR
b. Minimum square footage,
landscaping requirements and minimum roof pitch OR
c. Maximum building height, owner may not sell, and garages must be rear entry. OR
d. Minimum building height no basements and no wheelchair ramps in view from street.

Answer 46

b. Minimum square footage, landscaping requirements and minimum roof pitch

Question 47

The best place to obtain accurate property tax information is from

Answer 47

County tax assessor’s office

Question 48

A broker is showing property to a buyer client. The broker has shown the buyer multiple properties, and the buyer most likes a property listed by another broker. The broker working with the buyer most likely has which of the following relationships?

a. dual agency ,
b. broker represents neither the buyer nor the seller,
c. the broker would be a subagent of the seller ,
d. the seller would have a customer relationship with the broker

Answer 48

d. The Seller would have a customer relationship with the broker

Question 49

In 2008, Sarah and Michael purchased a home for $150,000. They finished the basement at a cost of $20,000 and replaced the roof at a cost of $10,000. Sarah and Michael lived in the home as a primary residence before they could sell it in 2016 for $300,000. Sarah and Michael will have to pay taxes on what amount of the gain?

Answer 49

Nothing

Question 50

A buyer client feels that a seller has breached a contract, and the breach has caused them financial damage. The client has asked for your advice. Which of the following would be the most appropriate? Tell them that you agree and join them in the suit for your commission. Tell them to consult with an attorney. To consult with your broker. They file a suit in small claims court if the damage is less than $25,000 .

Answer 50

Tell them to consult with an attorney.

Question 51

Which of the following is true concerning a seller’s property disclosure statement?
a. The disclosure statement may protect both the seller and the broker from liability for failure to disclose but is not required to be used by law.
b. The disclosure statement not only protects both the seller and broker, but its use is required by law.
c. The disclosure statement is not required when selling as is but is required in all other transactions.
d. The disclosure statement is mandatory in VA and FHA loans but negotiable when conventional loans are used

Answer 51

a. The disclosure statement may protect both the seller and the broker from liability for failure to disclose but is not required to be used by law.

Question 52

Broker Gill enters into a five-year verbal agreement to manage a four-unit apartment building for owner Stanley. The agreement stipulates a $250 a month management fee and gives Gill the authority to collect rent and pay bills. Which of the following is true?
a. This agreement is void as property management agreements must be in writing,
b. This agreement is void because of flat fee commission violates antitrust,
c. The agreement is valid so long as it is signed by all parties,
d. The agreement is valid because it is 4 units or less.

Answer 52

a. This agreement is void as property management agreements must be in writing