Ch 13 - 32 Flashcards
Forbearance
An agreement to reduce or suspend payments for a short period of time.
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.
Distressed property
Personal problems or external environmental or economic challenges are all examples of distressed property situations.
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?
Yes
Any portion of the loan that is “forgiven” may be considered income and must be reported for tax purposes.
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.
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.
T/F: The real estate transfer tax is a tax imposed on any deed or instrument which conveys interest in real property.
True
The amount of the tax is $.50 per $500 of taxable consideration.
Amount of real estate transfer tax per $500
50 cents
The amount of the tax is $.50 per $500 of taxable consideration.
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:
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
A ______ is a type of fee that locks in a desired specific interest rate.
A Loan Lock fee
A loan lock fee is a type of fee that locks in a desired specific interest rate.
Can a partition deed ever bee exempt from transfer tax?
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.
Which document is used to show the amount of taxable consideration that was used to determine the transfer taxes?
Real Estate Transfer Declaration
A falsified Real Estate Transfer Declaration is a class ___ misdemeanor
Class B misdemeanor
Real Estate Transfer Declaration is used to show the amount of taxable consideration that was used to determine the transfer taxes
Which of the following charges does the seller usually pay?
Commission Fees
Lender Fees
Inspections
PMI
Commission Fees
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.
When the buyer assumes the seller’s existing loan.
What is a fee charged to secure a specific interest rate?
Lender’s Rebate Fee
Take Fee
Recording Fee
Loan Lock Fee
Loan Lock Fee
A loan lock fee is a type of fee that locks in a desired specific interest rate.
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
Real estate transfer tax
What document is a detailed accounting of the transaction that is prepared before closing?
RESPA Statement
Trust Account
Settlement Statement
Deed
Settlement Statement
The settlement statement is a detailed accounting statement of closing costs.
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.
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.
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.
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.
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.
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.
What is “consideration”
A promise to pay money
Is flood insurance covered in a basic homeowners policy
No
Flood insurance is not included in a basic homeowners policy.
T/F: Each home has an insurance record of its own
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.
What does the coinsurance clause do?
Requires the homeowner to have property insurance equal to 80% of the home’s replacement value.
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.
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.
What is a CLUE (Comprehensive Loss Underwriting Exchange) report do?
provides a history of your property insurance claims for homes, rentals and vehicles. .
Does a licensee engaged in real estate activities have to maintain an office?
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
A licensee is required to maintain an office, does a place whose purpose is solely devoted to advertising count as an office?
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
T/F: The managing broker of each renewal applicant tis responsible for providing evidence of CE.
False
Each renewal applicant must provide some sort of CE compliance evidence when attempting to renew their license.
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.
True
No CE if
Military
Federal/state official
Full time employee of department
What are the three licensee designations in Illinois?
Broker, Managing Broker, Residential Leasing Agent
Individuals renewing or obtaining a managing broker’s license must complete a broker-management course of how many CE credit hours?
12
A credit hour must include classroom instruction in coursework of a minimum of ___ minutes
50 minutes
must be 50 min
Within how many days does a change in managing brokers need to be reported to the IDFPR?
15
Change in managing broker 15 days
When does the law prohibit a licensee from dual agency?
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.
T/F: RESPA prohibits real estate licensees from receiving a referral fee from any entity associated with the real estate transaction.
True
RESPA prohibits real estate licensees from receiving a referral fee from any entity associated with the real estate transaction.
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?
2 years
Carol has up to 2 years to make her recovery claims.
How many days from receipt of a peer review does the Department have to respond?
30 days
department has 30 days
In 1968, the Supreme Court in Jones v. _____ ruled that discrimination on the basis of race is strictly prohibited.
Mayer
In 1968, the Supreme Court in Jones v. Mayer ruled that discrimination on the basis of race is strictly prohibited.
Blockbusting (aka panic peddling or panic selling)
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.
Mortgage providers and Federal Loan programs base their loans on Debt to income ratios as determined by their own ______ Ratios
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
Is a person’s military status a protected class under federal guidelines?
No
A person’s active or retired military status is not a protected class under federal guidelines.
Is a person’s sex a protected class under federal guidelines?
Yes
but a person’s military status is not
Is a city in Illinois allowed to pass an occupancy law regarding number of tenants per apartment?
Yes, if the requirement is judged as reasonable.
Yes, this limitation on the amount of tenants per unit may be acceptable if considered reasonable.
T/F: Dept. of Housing files suits in ADA cases
False
It will be the Department of Justice who files lawsuits in ADA cases.
T/F: A model home that also operates as a sales office area must meet ADA guidelines
True
A model home that also operates as a sales office area must meet ADA guidelines that may include wheelchair ramps.
Which of these classes are protected by the Fair Housing Laws of Illinois?
Middle Income Renters
Criminal Record Holders
Military Status
Employment Status
Criminal Record Holders
Military Status
Does the truth in lending act (regulation Z) apply to all advertising?
Yes
Any advertising is subject to Regulation Z disclosure
