2) 1/3 Final Flash Card 53 - 100

Question 1

Which of the following would not be a service the property manager would provide to a property owner?

a. Rent collection, b. property maintenance,
c. market analysis for adjusting rents, d. appraising the property for resale

Answer 1

appraising the property for resale

Question 2

Jones is renting units in a 12-unit apartment building which was built in 1985. Which of the following is true?
a. Jones would be exempt from fair housing laws if he is not using the services of a broker,
b. Jones does not have to comply with fair housing laws protecting handicapped and Familia Status as the property was built before 1988 amendments were passed,
c. Jones must make all units accessible to the handicap and make changes as necessary in compliance with the Americans with Disabilities Act,
d. Jones does not have to make a lead-based paint disclosure as the property was built after 1978

Answer 2

d. Jones does not have to make a lead based paint disclosure as the property was built after 1978

Question 3

Upon the purchase of a property the buyer finds that an heir of a previous owner is making a claim on the title rights to the property. Which of the following would not be used to clear the title?

a. A quit claim deed from the heir,
b. A quiet title suit against the heir,
c. Title insurance, d. the defeasance clause in the deed from the seller

Answer 3

d. the defeasance clause in the deed from the seller

Question 4

Of the following which would not usually be recorded?

a. A mortgage on the property.
b. A warranty deed from the seller.
c. A rental Agreement.
d. Option to purchase.

Answer 4

c. A rental agreement

Question 5

A written summary of recorded documents against a property is known as:

a. a certificate of title.
b. Abstract of title. c. Option of the title.
d. insurance policy.

Answer 5

b. An abstract of the title

Question 6

Legal documents which affect the transfer of real property are recorded in:

Answer 6

The county where the property is located

Question 7

Under the terms of a mortgage, the mortgagee is the

Answer 7

the lender

Question 8

A loan which provides for the entire principal borrowed to be paid in one payment at the end is:

a. a package mortgage.
b. A graduated payment mortgage. c. A term loan.
d. Budget Mortgage.

Answer 8

c. A term loan.

Question 9

When government statistics show that the economy is growing at a rate higher than expected, which of the following is most likely?

a. Unemployment is going to rise.
b. The economy is in a recession.
c. Interest rates are going to decrease as a damper on inflation.
d. Interest rates are going to increase as a damper on inflation.

Answer 9

d. Interest rates are going to increase as a damper on inflation

Question 10

A property similar to the subject property sold for $180,000. The comparable property was in better condition than the subject but had two and one half baths where the subject has three baths. After researching data, it is believed that an appropriate condition adjustment is $2000, and a $4000 adjustment should be made for the half bath. What is the estimated value of the subject property?

Answer 10

$182,000

Question 11

An appraisal of a property by the cost approach would include

a. depreciation of the land.
b. Estimate of the value of the land as though vacant.
c. the Cost of the building when built. d. Income on the building but not the land

Answer 11

b. An estimate of the value of the land as the vacant

Question 12

A home in a residential neighborhood is a good quality and condition, but suffers from a poorly designed floor plan would be an example of:

Answer 12

Incurable depreciation

Question 13

Broker Reed obtains an exclusive right to sell listing on property owned by Mr. Lane. Which of the following would be true concerning his agreement?

a. Seller Lane is allowed to list the property with other licensed brokers.
b. If Lane sells the property himself broker Reed is not do a commission.
c. Broker Reed is due a commission regardless of procuring cause.
d. Exclusive agency and exclusive right to sell listings are the same

Answer 13

c. Brooker Reed is due a commission regardless of procuring cause

Question 14

When a broker acts as agent for both purchaser and a seller in the same transaction this is known as

Answer 14

Dual agency

Question 15

Government gains the ownership of privately held property by

Answer 15

Eminent domain

Question 16

Allen drives across the property of a neighbor, Barns, for an extended period of time, even though Barnes has repeatedly told Alan to stop. Barnes has even put his objection in writing, mailed the notice by certified mail, return receipt requested and posted the property with no trespassing signs. Alan ignores all requests and continues. Which of the following is most likely?
a. This constitutes an adverse possession, and the court will transfer ownership to Allen. b. Allen is the trespasser and as such may never have a right to the property because Barnes made lawful notice to Alan.
c. This hostile use of property would create a life estate to the benefit of Allen after 20 years of continuous use. d. If Alan continues to use the property for the statutory. And easement may be created

Answer 16

d. If Alan continues to use the property for the statutory. An easement may be created

Question 17

A sales contract is created with the terminology “Legal description to be attached and made a part of within three days of the binding agreement date”. Which of the following best describes this contract:

a. If the illegal description is attached within three days stipulated, the contract is valid.
b. As long as the contract has a street address the contract is valid.
c. The contract is void, even if the legal description is attached within three days.
d. The contract is void unless the legal description is attached within three days

Answer 17

c. The contract is void, even if the legal description is attached within three days.

Question 18

A buyer purchases a property and closes in May, before the tax bill is issued by the county. The parties agree to prorate based on the previous year’s billing. When the tax bill arrives later, it shows a substantial increase in property taxes and the pro-ration is incorrect. What is the next step for either the buyer or the seller?

Answer 18

The buyer and the seller will re-prorate the new bill and adjust

Question 19

Johnson purchases property from Stone. The warranty deed from Stone provides a legal description of the parcel but makes no mention of any other improvements or rights. Which of the following is true concerning this transfer:
a. The deed will transfer all rights and improvements belonging to Johnson, regardless of whether they are specifically mentioned in the deed.
b. The deed will transfer all improvements belonging to Johnson but not the associated property rights.
c. The deed will only transfer what is specifically mentioned.
d. The deed will also transfer all property rights regardless of mention or reservation.

Answer 19

d. The deed will transfer all rights and improvements belonging to Johnson, regardless of whether they are specifically mentioned in the deed

Question 20

Which of the following must be in writing to be valid and enforceable?

a. An estate for years in excess of one year.
b. A periodic lease in excess of 6 months.
c. An estate at will, regardless of term. d. An estate at sufferance

Answer 20

a. An estate for years in excess of one year

Question 21

A tenant has the right of uninterrupted use of a leased property, what right is that referring to

Answer 21

The right of quiet enjoyment

Question 22

Which of the following would not typically be prorated at closing:

a. prepaid property taxes.
b. Title insurance
c. Rents on income producing property.
d. Assumed Homeowners insurance policy.

Answer 22

b. Title insurance

Question 23

The priority of most leans on a property is based on

Answer 23

The date of recording

Question 24

A seller enters into a contract to sell a property for $260,000 with a closing date of October 8th. The seller’s current loan balance is $192,400 as of the October first payment and the interest rate is 4.5%. The seller will be required to pay a brokerage commission of 4% in addition to contributing $3500 to costs to close the transaction. What will be the seller’s approximate net at closing

Answer 24

$53,508

Question 25

Commercial banks have historically been most involved in what type of lending to consumers

Answer 25

Short term financing

Question 26

A mortgage contains a provision that if any promises made by the borrower are defaulted upon, the lender has the right to call the loan due and payable on demand. What is that clause called?

Answer 26

An acceleration clause

Question 27

Which of the following are commonly collected by a lender at the time of a loan application?

a. The origination fee and the transfer fee.
b. The transfer tax and tangible tax.
c. The appraisal fee and credit report fee.
d. The wood infestation report fee and the discount points.

Answer 27

c. The appraisal fee and credit report fee

Question 28

Money for lending is made available and banks maintain liquidity to them through the actions of:

a. The stock market,
b. the conciliatory market,
c. the secondary market,
d. the primary market.

Answer 28

c. The secondary market

Question 29

The legal description is as follows: “from a point of beginning at the intersection of highway 319 and Coffee Road, go north 245 feet to a pine tree. From the pine tree, go east 180 feet to a pile of rocks. From the pile of rocks go south 316 feet to an oak tree. From the oak tree go West 114 feet.” Is this a legal description?

Answer 29

This legal description is invalid as it does not end at the point of beginning.

Question 30

What is a defect in property which is concealed or hidden?

Answer 30

A latent defect

Question 31

Larry owns a property with a value of $480,000. For the current year, the county mileage rate is 34.5 and the county uses an assessment rate of 40%. What is the expected tax bill on this property of Larry’s

Answer 31

$6,624

Question 32

A four-bedroom house with only one bathroom is said to suffer?

Answer 32

Functional obsolescence

Question 33

People purchasing a home built prior to which year must sign a lead-based paint disclosure

Answer 33

1978

Question 34

Agent Mary presents an offer from the buyer Lisa to the seller who accepts all provisions except one. This situation: a. Would require additional consideration as it is a new contract.
b. Constitutes a counteroffer and a rejection of the original offer.
c. Makes Mary the Offeror and Lisa the offeree.
d. It allows the seller to accept the original offer if the change is not acceptable to Lisa.

Answer 34

b. Constitutes a counteroffer and a rejection of the original offer

Question 35

Code which requires minimal acceptable material and constructions standards are:

a. building codes.
b. Fire Codes.
c. health Codes.
d. Development codes

Answer 35

a. Building codes

Question 36

Buyer Smith has just entered into a contract to purchase property located on Longfellow Trail. A friend from Smith’s work said he was familiar with the property and had heard a rumor that the neighbor to the north of the property had a dispute with the owners about a fence encroachment. What would be the most appropriate advice for the agent to give to the buyer client?

Answer 36

Smith should be advised to get a survey of the property since this is the most definitive way to discover an encroachment

Question 37

When considering a budget for an income producing property which is an operating expense?
a. Vacancy and collection losses.
b. Insurance.
c. Debt Service.
d. Depreciation.

Answer 37

b. Insurance

Question 38

A document signed at closing which is the evidence, and the creation of debt is called the:

a. Security deed. b. Mortgage.
c. Note.
d. Warranty Deed.

Answer 38

c. Note

Question 39

A quick claim deed may be used in a real estate transaction

Answer 39

To convey any tidal interest held by the owner

Question 40

The real estate settlement procedure act would not apply in which of the following situations?
a. A buyer obtains a $95,000 conventional loan on a $110,000 sale. b. A buyer obtains a 100% VA loan.
c. A buyer purchases a property with a 3% down payment and an FHA loan for the remainder.
d. A buyer assumes a $150,000 loan by paying $25,000 down payment.

Answer 40

d. A buyer assumes $150,000 loan by paying $25,000 down payment

Question 41

Mary purchases a property to be used as an automobile dealership. Years after opening the dealership, the city changes the zoning to one which would not allow automobile sales. Which of the following best describes Mary’s situation?

a. Mary can continue to use the property as an automobile dealership in that it is a legal non-conforming use.
b. After a public hearing Mary may continue to use the property as a legal non-conforming use.
c. Continued use of the property would require a variance. d. This use of the property is an encroachment and will not be allowed to continue

Answer 41

a. Mary can continue to use the property as an automobile dealership in that it is a legal conforming use

Question 42

Smith has told Mitchell that he can use Smith ‘s property to create an access to a property owned by Mitchell which of the following is most likely:
a. This is an appurtenant easement.
b. Smith has given a license to Mitchell c. Has granted an easement to Mitchell.
d. Is an easement in gross.

Answer 42

b. Smith has given a license to Mitchell

Question 43

Which of the following is true in regard to water and mineral rights?

a. Then never pass with a transfer of the land.
b. May pass with a transfer of the land but only if specifically mentioned.
c. The rights are separate from each other and dividable.
d. They are always mentioned by name in the deed.

Answer 43

c. The rights are separable from each other and dividable

Question 44

Broker Pam listed the property of Greg. What is the client-level of duties owed to Greg

Answer 44

Loyalty, confidentiality, full disclosure, and obedience

Question 45

A property inspection reveals that a home has a leaking roof, soiled carpet, new kitchen appliances, central heating and air conditioning, a recently finished basement but is affected by traffic from a nearby highway. The property suffers from:
a. Physical and functional depreciation only. b. Physical and economic depreciation only. c. Physical functional and external depreciation only. d. Physical, functional, economic, and external depreciation.

Answer 45

b. Physical and economic depreciation only

Question 46

The property is located in a subdivision. An owner has not paid the annual dues requested by the homeowner’s association in two years. What can the homeowner’s association do about the collection of association dues?

Answer 46

The homeowner’s association can lien the property if the dues are mandatory

Question 47

An Asian buyer has asked the real estate agent if there is an area of the city which would be receptive of her culture and family. Can her agent give her information regarding this issue?

Answer 47

To answer the question would be illegal steering and a violation of state and federal law

Question 48

The parties to a contract wish to increase the price by $3500 and then have the seller make a contribution to pay costs for the buyer. Which of the following is true? a. this would be mortgage fraud, even if disclosed on the closing statement.
b. This change does not have to be disclosed to the lender.
c. Such a change would be handled with an amendment.
d. Such a change does not require additional consideration

Answer 48

c. Such a change should be handled with an amendment