Ch 13 - 32

Question 1

Forbearance

Answer 1

An agreement to reduce or suspend payments for a short period of time.

Question 2

Property that is undergoing a reduction in market price due to the pressures of a threatened foreclosure, divorce, estate settlement, drastic economic changes, and/or deteriorating physical condition is called

stigmatized property.
distressed property.
underground property.
redlined property.

Answer 2

Distressed property

Personal problems or external environmental or economic challenges are all examples of distressed property situations.

Question 3

When someone is broke and has to sell their house short, can the portion of the loan that is forgiven be considered “income” or tax purposes?

Answer 3

Yes

Any portion of the loan that is “forgiven” may be considered income and must be reported for tax purposes.

Question 4

T/F: Last minute objections about a property are good because they are signs the buyer is ready to submit an offer. The first thing you should do is acknowledge the buyer’s concerns.

Answer 4

True

Last minute objections about a property are good because they are signs the buyer is ready to submit an offer. The first thing you should do is acknowledge the buyer’s concerns.

Question 5

T/F: The real estate transfer tax is a tax imposed on any deed or instrument which conveys interest in real property.

Answer 5

True

The amount of the tax is $.50 per $500 of taxable consideration.

Question 6

Amount of real estate transfer tax per $500

Answer 6

50 cents

The amount of the tax is $.50 per $500 of taxable consideration.

Question 7

The licensee must use a form called the __ ___ ____ _____ to show the amount of taxable consideration that was used to determine the transfer taxes. It includes:

Answer 7

Real Estate Transfer Declaration

The licensee must use a form called the Real Estate Transfer Declaration to show the amount of taxable consideration that was used to determine the transfer taxes

Question 8

A ______ is a type of fee that locks in a desired specific interest rate.

Answer 8

A Loan Lock fee

A loan lock fee is a type of fee that locks in a desired specific interest rate.

Question 9

Can a partition deed ever bee exempt from transfer tax?

Answer 9

Yes

A partition deed that may separate a property into two or more parcels can be exempt from transfer tax because it’s not always an actual sale to another party.

Question 10

Which document is used to show the amount of taxable consideration that was used to determine the transfer taxes?

Answer 10

Real Estate Transfer Declaration

Question 11

A falsified Real Estate Transfer Declaration is a class ___ misdemeanor

Answer 11

Class B misdemeanor

Real Estate Transfer Declaration is used to show the amount of taxable consideration that was used to determine the transfer taxes

Question 12

Which of the following charges does the seller usually pay?

Commission Fees
Lender Fees
Inspections
PMI

Answer 12

Commission Fees

Question 13

When does an Assumption Fee apply?

When the seller pays off the entire loan

When the buyer assumes the seller’s existing loan.

When the buyer assumes two loans.

When the lender drafts a PMI loan.

Answer 13

When the buyer assumes the seller’s existing loan.

Question 14

What is a fee charged to secure a specific interest rate?

Lender’s Rebate Fee
Take Fee
Recording Fee
Loan Lock Fee

Answer 14

Loan Lock Fee

A loan lock fee is a type of fee that locks in a desired specific interest rate.

Question 15

What tax is imposed on any deed or instrument which conveys interest in real property?

Impound Tax
Property Exchange Tax
Render Tax
Real estate transfer tax

Answer 15

Real estate transfer tax

Question 16

What document is a detailed accounting of the transaction that is prepared before closing?

RESPA Statement
Trust Account
Settlement Statement
Deed

Answer 16

Settlement Statement

The settlement statement is a detailed accounting statement of closing costs.

Question 17

T/F: The seller is responsible for providing a title report or abstract to the buyer as part of the due diligence process prior to closing.

Answer 17

True

Seller must provide title report or abstract to buyer before closing

The seller is responsible for providing a title report or abstract to the buyer as part of the due diligence process prior to closing.

Question 18

T/F: After someone has decided to buy and wants to do a property inspection, the broker should have a list of inspectors handy to provide to the buyer.

Answer 18

True

The broker should have a list of inspectors handy to provide to the buyer.

During the inspection period, the buyer will most certainly want to order a property inspection.

Question 19

Whenever a buyer wants to renegotiate the contract, you will have to prepare an _______ to the contract in order for any changes to be effective.

Answer 19

amendment

Whenever a buyer wants to renegotiate the contract, you will have to prepare an amendment to the contract in order for any changes to be effective.

Amendment has to be in writing and executed by both parties.

Question 20

What is “consideration”

Answer 20

A promise to pay money

Question 21

Is flood insurance covered in a basic homeowners policy

Answer 21

No

Flood insurance is not included in a basic homeowners policy.

Question 22

T/F: Each home has an insurance record of its own

Answer 22

True

Each home has an insurance record of its own

if the buyers are unaware of the claims history of the home they wish to purchase, they could find themselves in a very bad situation.

Question 23

What does the coinsurance clause do?

Answer 23

Requires the homeowner to have property insurance equal to 80% of the home’s replacement value.

Question 24

After the contract has been executed, the buyer needs to change the closing date. What should the broker do?

Have the buyer ask his attorney to prepare an amendment requesting the change.

Rewrite the entire sales contract.

The broker must have an attorney prepare an addendum.

The broker may use a form called the Agreement to Amend/Extend Contract.

Answer 24

Have the buyer ask his attorney to prepare an amendment requesting the change.

The buyer should ask his attorney to create an amendment that details a closing date change request.

Question 25

What is a CLUE (Comprehensive Loss Underwriting Exchange) report do?

Answer 25

provides a history of your property insurance claims for homes, rentals and vehicles. .

Question 26

Does a licensee engaged in real estate activities have to maintain an office?

Answer 26

Yes

A licensee engaged in the practice of real estate brokerage must maintain an office.

The following places do not constitute an office:

• A motor vehicle
• A place whose purpose is solely devoted to advertising
• Storage or archiving of records

Question 27

A licensee is required to maintain an office, does a place whose purpose is solely devoted to advertising count as an office?

Answer 27

No

The following places do not constitute an office:

• A motor vehicle
• A place whose purpose is solely devoted to advertising
• Storage or archiving of records

Question 28

T/F: The managing broker of each renewal applicant tis responsible for providing evidence of CE.

Answer 28

False

Each renewal applicant must provide some sort of CE compliance evidence when attempting to renew their license.

Question 29

T/F: Broker licensees are exempt from continuing education requirements if they serve in the United States armed forces, serve as an elected state or federal official, or serve as a full-time employee of the Department.

Answer 29

True

No CE if

Military
Federal/state official
Full time employee of department

Question 30

What are the three licensee designations in Illinois?

Answer 30

Broker, Managing Broker, Residential Leasing Agent

Question 31

Individuals renewing or obtaining a managing broker’s license must complete a broker-management course of how many CE credit hours?

Answer 31

12

Question 32

A credit hour must include classroom instruction in coursework of a minimum of ___ minutes

Answer 32

50 minutes

must be 50 min

Question 33

Within how many days does a change in managing brokers need to be reported to the IDFPR?

Answer 33

15

Change in managing broker 15 days

Question 34

When does the law prohibit a licensee from dual agency?

Answer 34

When he, or an entity in which he has an ownership interest, is a party to the transaction.

A licensee is prohibited from serving as a dual agent in any transaction to which he or she, or an entity in which he or she has an ownership interest, is a party to the transaction.

Question 35

T/F: RESPA prohibits real estate licensees from receiving a referral fee from any entity associated with the real estate transaction.

Answer 35

True

RESPA prohibits real estate licensees from receiving a referral fee from any entity associated with the real estate transaction.

Question 36

Carol’s legal action must start within how many years after she became aware of the acts that led to legal action to obtain recovery from the fund?

Answer 36

2 years

Carol has up to 2 years to make her recovery claims.

Question 37

How many days from receipt of a peer review does the Department have to respond?

Answer 37

30 days

department has 30 days

Question 38

In 1968, the Supreme Court in Jones v. _____ ruled that discrimination on the basis of race is strictly prohibited.

Answer 38

Mayer

In 1968, the Supreme Court in Jones v. Mayer ruled that discrimination on the basis of race is strictly prohibited.

Question 39

Blockbusting (aka panic peddling or panic selling)

Answer 39

Using fear of ethnic change to induce owners to sell.

Making a profit by inducing owners to sell by telling them that persons of a protected class are moving into the neighborhood which will have detrimental results, such as the lowering of the property values, an increase in criminal behavior or a decline in the quality of the schools in the area.

Question 40

Mortgage providers and Federal Loan programs base their loans on Debt to income ratios as determined by their own ______ Ratios

Answer 40

Housing Affordability Ratios

Mortgage providers and Federal Loan programs base their loans on Debt to income ratios as determined by their own Housing Affordability Ratios

Question 41

Is a person’s military status a protected class under federal guidelines?

Answer 41

No

A person’s active or retired military status is not a protected class under federal guidelines.

Question 42

Is a person’s sex a protected class under federal guidelines?

Answer 42

Yes

but a person’s military status is not

Question 43

Is a city in Illinois allowed to pass an occupancy law regarding number of tenants per apartment?

Answer 43

Yes, if the requirement is judged as reasonable.

Yes, this limitation on the amount of tenants per unit may be acceptable if considered reasonable.

Question 44

T/F: Dept. of Housing files suits in ADA cases

Answer 44

False

It will be the Department of Justice who files lawsuits in ADA cases.

Question 45

T/F: A model home that also operates as a sales office area must meet ADA guidelines

Answer 45

True

A model home that also operates as a sales office area must meet ADA guidelines that may include wheelchair ramps.

Question 46

Which of these classes are protected by the Fair Housing Laws of Illinois?

Middle Income Renters
Criminal Record Holders
Military Status
Employment Status

Answer 46

Criminal Record Holders

Military Status

Question 47

Does the truth in lending act (regulation Z) apply to all advertising?

Answer 47

Yes

Any advertising is subject to Regulation Z disclosure