Course 1 Practice Exam Flashcards
What legal description has been used the longest in the US?
Metes and Bounds
What would be founds in a management proposal?
schedule of maintenance requirements
What is an example of a violation of the Sherman Antitrust Laws?
market allocation
Town is replacing a sidewalk that serves 8 homes and is 900 ft. Laura’s property is 60ft of the sidewalk and the cost of the project is $18,000. What will Laura’s assessment be?
$18,000 / 900ft = $20/foot
Laura’s 60ft x $20 = $1,200
Home Hoarding Realty is advertising to the public that their managing broker has been in the business 37 Yeats and has sold over 1,250 homes. This is an example of what type of advertising?
Institutional Advertising
Under the ___ of recording, title passes when the conveyance is registered on the title certification.
Torrens System
Unlike buyer/seller agency agreements that create ______, management agreement creates _____
special agency, general agency
The system of land ownership in the US is known as what?
Allodial System
How does PUD zoning differ from ordinary zoning?
it requires that multiple tracts of land be developed according to a single design for efficient use of space
Homeowner Louise has been lax in protecting her property rights. According to the _____, Louise may lose those property rights.
Doctrine of Laches
Francis just signed the papers on a conventional 30-year, $210,000 loan. What type of interest will he be paying on the loan?
Simple Interest
Given the net income of a property, the appraiser can determine an option of the value for that property by
dividing by the rate of capitalization
What is a disadvantage of real estate investment?
it is NOT highly liquid
New salesperson Juliet has been assigned office duty for Saturday and Sunday. What is another common term for office duty?
Floor time
Seller Monica is selling her property to Harriet. What is Monica’s primary responsibility at closing?
deliver marketable title
Vicky was posing as a customer of Established Realty. However, she was really there to see if Established Realty was following fair housing laws. Vicky was a
tester
Morgan owned a large condo on the ocean. She died and no legal heirs were found. Who will receive title to the property?
state or county
Buyer told broker Lena that they want to move to a Cuban neighborhood. Then buyer asked if Lena could show her the best home in the Cuban area. How should Lena respond?
Lena should explain to the buyer that she ethically and legally cannot recommend hosting based on national origin
Why would a property with a rectangular system description also have a metes and bounds legal description?
because the property is irregular in shape
if a cooperative corporation cannot pay its bills, what would happen?
The corp owing the property would be dissolved, and all of the residents could lose their interest in the coop
A property has a Gross Income Multiplier of 14, and value of $800,000. What is its annual income?
$800,000 / 14 = $57,143
An income producing property rents for $2,790/month and the GRM is 97. What is the estimated market value of the property?
$2790 x 97 = $230,630
A cooperative is a type of what property?
a type of residential property
What is true about the Americans with Disabilities Act?
Apartment manager might be required to allow a tenant with a disability to widen a doorway
On a $280,000 loan, the lender charges a 2 point service charge. How much does the borrower have to pay for the 2 points?
2 points = .02%
$280,000 x .02% = $5,600
Type of mortgage which allows the lender to increase the outstanding balance of a loan up to the original amount of the loan in order to advance additional funds is called what?
open-end mortgage
Ownership of a property reverted to the grantor of the estate when its usage failed to conform to a stated condition in the grant is known as what type of estate?
fee simple defeasible
Liens: $100,000 mortgage, $2,500 property tax bill, $8,000 mechanics lien, and a $25,000 judgement lien - which is paid off first after a foreclosure sale?
$2,500 property tax lien
Alex’s home has been on the market for 8 months - what is the most likely reason the home has not been sold yet?
property is overpriced
Tenant who stays beyond their lease without consent of the landlord is known as what?
tenant at sufferance
what is another common name for the lot and block system of legal description?
recorded plat method
what would be considered community property in a community property state?
car the spouses bought together after the marriage
Carla has been walking across a path on John’s property for the last 22 years. John knows about this but has never given Carla permission. What might a court grant to Carla?
Easement by Prescription
Non-judicial foreclosure is required to foreclosure on a
Deed of Trust
Why is designated agency a good alternative to traditional dual agency?
even through the same broker represents each party, both the buyer and seller have a licensee who exclusively acts as their agent in the transaction
The assessed value of Sidney’s home is $250,000 but the home was recently appraised at $225,000. As a result, Sidney believes her tax bill is way too high. What option does she have?
she can file a complaint with the local board of assessment review
The cost to replace an improvement with original materials is known as what?
reproduction cost
Written pledge by a lender to lend a certain amount of money to a qualified borrower on a particular piece of real hate for a specified time under specific terms is what?
conditional approval
Justin defaulted on his home mortgage payments. The lender obtained a court order to foreclosure on the property. At the foreclosure sale, Justin’s house sold for $339,000 and the unpaid balance of his loan is $400,000. What must the lender do to revere the $61,000 Justin still owes?
Seek a deficiency judgement
What clause protects a lender if they do not want the loan to be assumed by another party?
alienation
what best describes the principle of conformity?
home maintains its highest value by being in a neighborhood with similar-type housing
Broker Austin represents a party in a transaction where there is a dispute regarding the deposited escrow money. What should Austin do?
hold the money until both parties (or their lawyers) provide a written release
Deed in Lieu of Foreclosure is ideal because
borrower’s credit is hurt less, avoids public notice, and there is less risk to the lender that the borrower will damage the property in revenge
Earl orally agreed to a 18-month lease with landlord Blake. Is this contract enforceable?
No, all leases for longer than 1 year must be in writing
What type of clause allows a broker to collect a commission for some period of time after the listing expires?
Carryover clause
Tenancy in Common
Tenants share an indivisible interest, all tenants in common have distinct and separable ownership of their respective interests and any number of people may by co-tenants in a single property
What can qualify for an FHA loan?
anyone with qualified income
Independent Contractor
broker cannot tell them how to work, they are paid commission on all sales, and they will have to pay income taxes
A(n) ____ is one that conflicts with the ordinances that where enacted after the use commenced.
Legal nonconforming use
What type of agency cannot be revoked by the principal, nor is terminated if the principal dies?
agency coupled with an interest
Broker Jon is attaching a rider strip to a For Sale sig. What info is most likely on it?
Jon’s call number
If a comparable has one less bathroom than the subject, an adjustment is made by
Add value to the comparable
The size of jurisdiction’s tax base is derived by
subtracting exemptions from assessed values
Broker Jack has an agreement with seller Mark that says Jack will receive compensation if anyone except Mark sells Mark’s home. This is an example of what?
Exclusive Agency
If a coopering broker accepts the offer of subagency from a listing broker, to whom does the cooperating broker owe fiduciary duties?
seller
When the agency relationship has been terminated, the licensee is no longer considered the principal’s agent and does not owe any further duties to the principal except for
accounting and confidentiality
Should a licensee who represents both buyer and seller tell the buyer about material defects on the seller’s property?
Yes, any defects known to the broker should have been disclosed to the buyer
What principle is used with the Sales Comparison Approach rot value?
substitution
One of the major considerations in a master plan is
the effect of new development on traffic patterns and the environment
Jordan has a month to month lease with landlord Greg. What type of lease is this?
Estate from period-to-period
The first step in the appraisal process is to
state the problem
The cost of doing direct mail ads depends on
the frequency of the mailings
Owner Tom decided to lease out his basement to a college student. By leasing the basement, Tom has
transferred a portion of his bundle of rights
A broker induces an owner to sell by telling them that Muslims are moving into the neighborhood. This broker is guilty of what?
Blockbusting
A seller decided to back out of a sales contract for no good reason. What recourse does the buyer have?
To sue for specific performance
Under what type of contract is a seller obligated to sell, but the buyer is not obligated to buy?
Option
Gerald is 55, singe and resides on his 3 acre property. Why will Gerald qualify for a homestead exemption?
Because he lives on the property
A(n) ____ contract is one that unduly favors the party with superior bargaining power
unconscionable
What type of property sale typically requires a property condition disclosure?
a 3 unit, multi-family dwelling
Judicial Foreclosure is a _____ property sold under the supervision of a ____
mortgaged, court
Real estate licensees should know enough about building ordinances to be able to
alert clients of potential problems in a home
Rob owns his property and enjoys the full bundle rights. Can his use his property as collateral for debt?
Yes, he can encumber his property
“This property has the best view in the entire county” is an example of
puffing
What are the primary advantages of PEX piping?
PEX piping is able to withstand both high and low temps and is highly resistant to chemicals
Escrow moneys should always be held in the broker’s ____ account
escrow
160 County Drive has 4 acres of open pasture and a 1,900 SQFT home. The home has 2 beds and 4 baths. Call 555-555-5555 now for info! What is missing from this ad that makes it a blind ad?
The broker’s ID
What is a valuable skill for a property manager to have?
knowledge of building systems
What is the definition of “valuable consideration” in regard to contract validity?
somethings specifically offered in exchange for something else
How might a voidable contract become valid?
if the party who has reason to disaffirm the contract elects instead to perform
Broker Tom hires salesperson Wes as an independent contractor. Wes can expect what from Broker Tom?
performance expectations
Broker Ron wants to open a separate escrow account for each transaction he is involved in. Is this legal?
Yes, there is no legal limit on the number of escrow accounts a broker can have
A shopping center is an example of what type of property?
Retail
A will that is not signed is considered to be
invalid
Promissory Notes
property is collateral, primary evidence of a loan, is a negotiable instrument, which means that the lender can sell the note to a third party
In the appraisal process, looking at the number of rec facilities, the distance to schools, and adequacy of public transportation is called?
Neighborhood analysis
Quarry Mountain Subdivision requires all property’s to have fences that are all at least 8ft tall surrounding each property. This is an example of what?
Deed restriction
Licensee Alex only represents the buyer in a transaction. What is Alex called in this situation?
Single agent
When should the managing broker send a thank you for listing letter to the sellers?
within the first few days of obtaining a listing
Listing Agreement
listing price is listed, can be modified but only if all parties agree in writing, and contract law applies to it
Mary abandoned her property by failing to pay its property taxes, and the property reverted to the state. This is an example of what?
Escheat
Neal’s home has been foreclosed on and sold at Sheriff’s sale. The sale brought in $500,000 and the total liabilities on the home were $425,000. Who receives the additional $75,000?
Neal
What is a forecast of income and expenses that can be projected over 5 years?
Stabilized Budget
Why is the condition of bearing walls more important than non-bearing walls?
bearing walls support the ceiling and roof
Which parties typically purchase title insurance once the transaction is complete?
Lender and buyer
What form does RESPA require lenders to use to detail the costs that the buyer and seller will pay at closing?
closing disclosure
What is the most common lease term for space in an office building?
3-5 years
Bobbie decided to redeem her property after a tax sale. Bobbie exercised her
Statutory right of redemption
How does the Federal Reserve control lenders?
the tell lenders what percentage of assets they must keep as reserves
What is the balance on an amortized loan of $780,000 after the first payment if the interest rate is 5% with a monthly P&I payment of $3,780?
$780,000 / 12 months =$65,000
$65,000 x 5% = $3,250
$3,780 - $3,250 = $530
$780,000 - $530 = $779,470
The essential criteria for an acceptable legal description is that it
accurately locates the parcel in the opinion of a court
