303 National Flashcards
1) The term “seisin” may refer to which of these?
c) General Warranty Deed
Executed” means that the Contract has been
d) Completed
A father dies and leaves a large piece of investment property (vacant land) equally to all of his children. During the probate proceedings, it is discovered that the father did not own the property alone; he had only 50% undivided interest with another investor as tenants in common. What will be the disposition of the property?
b) The children will each inherit their proportional shares but only of the father’s half.
D has adversely possessed a land parcel in Idaho for 25 years, which is the prescribed period for claiming the adverse possession in that state. D now wants to perfect ownership. What is the next step?
c) File a suit to quiet title
A history of all instruments on record affecting J’s land is called a(n):
b) Abstract of title
What is the value of a property where the gross rent multiplier is 170 and the annual rent is
$12,000?
$170,000
Which of these terms does NOT relate to condominiums?
a) Proprietary lease
As easement allowing access to one’s landlocked parcel over land between a road and the parcel would be an:
c) Easement by necessity
The power of a city to require permits and compliance with building code is:
c) Police Power
A state government has a department called the Bureau of Unclaimed Property to manage property for which no owner can be located. This is most closely related to the power called:
b) Escheat
Which use would NOT likely be able to claim eminent domain to obtain land?
c) Expansion of a plant facility by the largest employer in the city
If the owner of a commercial property makes major modifications to the interior structure of the property without obtaining the proper approval of the local building department, what is the WORST thing that could happen?
c) The local officials may require the modifications to be removed.
Which of these would appear in a title search of the property?
d) Deed restrictions
Which event will cause a tax-deferred exchange to become partially taxable?
c) Debt relief
A special type of zoning that allows a builder to use little or no traditional setback while still complying with density requirements (and often found in Planned Unit Development) is:
a) Cluster zoning
Which discrimination is allowed by the 1968 Fair Housing Law?
c) Source of income
A tax rate of 7 mills can be expressed as:
d) 0.007
If a seller is carrying the financing for a buyer for several years, the IRS wants assurance that the interest rate on that note is not below market rates. These rules are addressed under the concept of:
b) Imputed interest
A statement of compliance with fair housing laws is required in every broker’s office in the form of a:
d) Poster
Which term does NOT deal with taxation?
d) Prior appropriation
Which of these special assessments would not be assessed on an ad valorem basis?
c) A special assessment for sidewalks
Which of these brokerage functions would be performed by a broker when the brokerage is closing its own transaction?
a) Preparing a 1099-S for the sale of the seller’s property
Is a man who refuses to sell a home to a buyer because she is white violating the law?
a) Yes
Which of these is CORRECT regarding taxation?
b) A tax assessed to property according to its value is an ad valorem.
Which exchange will NOT qualify as like-kind IRS code section 1031?
b) Personal property
P wants to buy a home using VA eligibility, if any. Having a VA entitlement and wishing to buy a home, P may:
d) Obtain 100% financing for the new home
Which of these gives basic employment to an area?
b) A military base
Which appraisal approach is appropriate to estimate the repairs needed to a restaurant after a fire?
a) Cost
Which factor is most harmful to be used for a comparable?
a) The comp was sold 14 months ago.
The purchaser has made an earnest money deposit in the agreement, and the buyer and seller have agreed that the seller is to hold it until close of escrow. The proper entry on the closing statement is:
b) Credit buyer and debit seller
An appraisal represents:
b) An opinion of the value of the property on the date of the appraisal inspection
A property is encumbered by a first mortgage, a second mortgage, a third mortgage and tax lien. The second mortgagee forecloses and the third mortgagee buys the property at the foreclosure sale. Who owns the property subject to which, if any, remaining liens?
d) Owner - 3rd mortgagee. Remaining liens - 1st and tax
Regulation Z deals with disclosure of:
c) Costs of credit
An appraiser is examining the subdivision layout and proximity to shopping and schools. For which part of the appraisal is this relevant?
a) Neighborhood analysis
J has mortgage in which he received regular monthly payments from the mortgagee. What type of loan does J have?
c) Reverse annuity mortgage
An agreement between two lenders with the same property as collateral agree to change the priority of their lien is a:
b) Subordination agreement
Foreclosure by Mortgage Company Inc. would NOT be triggered by which event?
d) The borrower fails to pay income taxes on income derived
The seller has received prepaid rents on the property in the amount of $450. The closing date is the 15th of the month. Which of these is the property entry on the closing statement?
a) Debit seller $225, credit buyer $225
The buyer has agreed to assume the prepaid insurance on the property in the amount of
$382. The policy expires next June 30th, and the close of escrow is October 22, 1991. Using a 360-day year for prorating, what is the correct entry on the closing statement?
d) Debit buyer $263.16, credit seller $263.16
Four brokers meet to assign market segments so each can specialize in a certain price range. This is:
b) Illegal because of federal antitrust laws
J has offered property as collateral for a loan but maintains possession of the property.
This is an example of:
c) Hypothecation
What agency ensures compliance with the Real Estate Settlement Procedures Act?
a) HUD
A broker’s duties include:
a) A fiduciary duty to the principal
Which of these is NOT prorated at the closing of an assumption sale?
a) Mortgage impound (or escrow) account
The buyer and seller have agreed to an assumption of the existing first deed of trust, and the seller has agreed to carry back a second deed of trust. The proper entries on the closing statement are:
b) Debit seller for both loans, credit buyer for both loans
The seller has a 320-gallon fuel oil tank that is 70% full of the day of closing. The buyer had agreed to pay for the remainder of the oil in the tank. Current fuel oil prices are $1.12 per gallon. What is the amount of the adjustment at closing?
d) $250.88 debit to buyer
A new loan in the amount of $76,500 has an annual interest rate of 9.75% and a term of 30 years. The buyer wishes to make payments on the first of the month. The closing is set for September 23, with the first payment due on November 1. What entry is required on the closing statement to accomplish this? Use a 360-day year for prorating
a) Debit buyer $165.75. Logic 76,500.0975=7,458.75/360=20.718758 days= $165.75 Buyer makes payments so he debits.
In encouraging salesperson productivity, a strong broker would:
c) Provide programs to motivate associates, such as special classes and marketing strategy sessions
Which of these is NOT subject to compliance with the Real Estate Settlement Procedures Act (RESPA)?
a) A purchase money loan from the seller
A 15-year mortgage paid and released is:
d) Executed
A broker who employs more than 10 salespeople must:
c) Be responsible for the conduct of the sales people
Which of these is a specific statutory lien?
b) Mechanic’s lien
A vendee to a contract for deed assigns her interest in the contract to an assignee with the vendor agreeing to release the assignor of all liability on the contract. What term best describes what has happened?
d) Novation of the parties
Changes to a contract in escrow:
b) Should be signed or initialed by both parties
Under which circumstances is an agency terminated with no liability to either party?
b) Expiration of the contract
What is the commission rate on a sale of $129,750? The commission was $4,541.25.
a) 3.5%
If a parcel neighboring a listed property has recently been rezoned commercial- professional, the out of town seller should be notified of this fact because of the agent’s duty of:
c) Disclosure
Which licensee would be construed as an independent contractor of the brokerage?
a) A salesperson in general sales
Salesperson K of Westside Realty has listed seller R’s home. Salesperson W of Eastside Realty has a buyer brokerage agreement with buyer J. Which statement is CORRECT?
c) R is Westside Realty’s principal
J is a broker representing her investor client B, in acquiring a fourplex. Her duty in the transaction is to:
d) Seek the lowest possible price
The Statute of Frauds requires that all of these must be in writing in order to be enforceable EXCEPT:
c) A short term lease
Broker J has a listing on a large piece of acreage. The lot lines are very irregular and impossible to measure without a complete survey. J has heard rumors that the parcel is not as large as the seller believes it to be and that the fence along the back actually encroaches upon the next parcel. J is showing the land to a prospective purchaser. J should?
d) Inform both the buyer and seller that there may be some questions of survey
J listed a home with broker F on an Exclusive Right to Sell Listing. J sold the property before the Listing expired to his brother-in-law S. Does J owe F a commission?
a) Yes, because the Listing provides for him to receive a commission on any sale
A void contract is which of these?
b) A verbal contract of Real Property
Which of these contracts is unenforceable?
a) A contract with a minor
Which type of insurance is customary for a broker to require of the salespeople in the brokerage?
d) Errors and omissions insurance
A portion of a township which is square with mile long sides is called a:
c) Section
The rights of a landowner to use waters on an adjacent stream or river are:
d) Riparian rights
The grantor’s promise to obtain and deliver any instrument needed to make the title good is the covenant of:
d) Further assurance
A primary claim or interest anticipated by a title search is a:
d) Cloud
Title passes from the grantor to the grantee:
d) When the seller signs the warranty deed and gives to buyer
According to RESPA, lenders must provide:
b) A booklet explaining all the costs involved in owning a home
All of the following liens must be satisfied in order to transfer clear title EXCEPT:
d) Assumed mortgage
A specific lien is:
c) Mortgage
The three major evidences of title are:
d) Abstract and opinion, Torrens certificate, title insurance
Emblements are considered:
d) Property of the tenant farmer
Crops that are growing in a field on a land purchase contract:
d) Are negotiated as part of the contract
Jim offers to pay anyone $100 to mow his lawn and trim the bushes. This is an example of:
d) Unilateral contract
A recorded legal document that gives constructive notice that an action affecting a certain property has been filed in court:
c) Lis pendens
The buyer’s legal procedure to enforce a contract is:
d) Specific performance
A listing contract under which the broker’s commission is contingent on producing a ready, willing and able buyer before the property is sold by another broker or by the owner is a:
d) Open listing
A contract may be renegotiated after acceptance if the:
a) Inspection reveals items that need repair
Per contract, a home inspection is required on:
d) Home inspections are not required
An exclusive right to buy contract (buyer agency) may:
d) All of the above
On a purchase contract, the following are considered to be parties to the contract:
a) Buyer, seller
A seller hires broker A under the terms of an open listing contract. Broker B would not agree to list under an open listing agreement, so seller enters into an exclusive right to sell list agreement with broker B. Broker A produces an offer to purchase which is accepted by the seller. The seller must pay:
c) Full commission to both broker A and broker B
The law that requires real estate contracts to be in writing to be enforceable is:
a) Statute of Frauds
Broker A listed a property and later found out that the seller’s doctor had declared her incompetent. The listing agreement is now:
d) Voidable
Broker A takes a six month listing agreement beginning January 1. On February 22, the seller informs broker A that she no longer wishes to sell. Which of the following is true?
d) The seller may be responsible for broker’s expenses
