Exam 4 Flashcards
This estate may be terminated by either party. It has no duration limitation.
A. Estate at will
B. Estate from period to period
C. Estate for years
D. Freehold estate
Estate at will
Estate at will (also called tenancy at will) gives the right to terminate the lease to both the landlord and the lessee. The termination of the lease is valid provided that prior notice is issued, and a reasonable time is provided for by the party that initiated the lease termination. Estate at will means the owner is ok with the tenant staying longer.
The One to Four Family Residential Contract (Resale) is the form used to make an offer on a property. It becomes the contract when:
A. A lawsuit affects the property.
B. The buyer has signed the form.
C. The offer is made to the seller.
D. Acceptance is communicated
Acceptance is communicated
A broker has shown a property to a customer. The customer assumes from the broker’s actions and words that the agent represents the customer. This is:
A. Implied Agency
B. Express agency
C. Agency by ratification
D. Gratuitous agency
A. Implied Agency
Implied agency is agency based on the acts of the agent. If the agent acts like he is representing the person, then it can be considered the agent is representing that person. In other words, the actions of the agent imply that they are representing the person.
What is a common risk encountered in the agency relationship?
A. Forgetting to put the listing in MLS within 24 hours
B. Failing to take a personal interest in the property
C. Failing to inform the principal and disclose properly
D. Acting as an exclusive agent for the seller
C. Failing to inform the principal and disclose properly
Inform and disclosure are two areas of risk in the agency relationship. Agency agreements should be in writing and disclosed to all parties in the transaction.
Lending institutions often charge interest on ________________ at a rate that is higher than a conventional mortgage to compensate for carrying more risk.
A. Predatory mortgage
B. FICO mortgages
C. Participation mortgages
D. Subprime mortgages
D. Subprime mortgages
The riskier the loan, the higher the interest rate.
Jennifer Rand is purchasing a townhome for $725,000. She is going to put 20% down for her down payment. The interest rate for the loan is 4.5% and the factor for the loan is 5.067 for a 30-year loan. What is Jennifer’s PI payment on the mortgage? (Round up to the nearest dollar.)
A. $3,673
B. $4,205
C. $3,895
D. $2,939
D. $2,939
$725,000 × .80 = $580,000 loan. $580,000 ÷ 1000 (factor is per thousand dollars borrowed) = 580 × 5.067(factor) = $2,938.86 = $2,939.
The Browns’ monthly mortgage payment will be $1,100. If the lenders’ qualifying ratio is 28%, how much income must they earn monthly to qualify?
A. $3,696.57
B. $3,700.60
C. $3,928.57
D. $4,200.60
C. $3,928.57
$1,100 ÷ .28 = $3,928.57 is the amount of monthly income needed to qualify.
The subject property sold on May 25, 2017 for $165,000. Prorate taxes for a closing on June 22, 2017. The year 2016 taxes were $7,012.50. Use a statutory year.
A. Credit the buyer $3350.41, debit the seller the same amount.
B. Credit the buyer $2824.48 debit the seller the same amount.
C. Credit the buyer $3105.60, debit the seller the same amount.
D. Debit the buyer $2956.40, credit the seller the same amount.
Credit the buyer $3350.41, debit the seller the same amount.
The seller will be charged for the taxes for the time he owned the property, so he will be charged from January 1–June 22. Annual taxes $7012.50 ÷ 360 (statutory year = 360 days not 365) = 19.4791 (daily tax). All months have 30 days so it would be January–May (30 days × 5 months = 150 days) + 22 days in June for a total of 150 + 22 = 172 days. $19.4791 x 172 days = $3,350.4052 = $3350.41 (Seller pays the buyer and then when the taxes come due at the end of the year, the buyer pays the entire year.)
A tract of land has been purchased containing 2.5 acres. 2/5 of the tract is too steep to be useful, ¼ is taken up by a stream, and 15% is reserved for an easement. How many square feet of land remain available for use?
A. 23,800 sq. feet
B. 21,650 sq. feet
C. 21,780 sq. feet
D. 78,100 sq. feet
C. 21,780 sq. feet
First, figure the total amount of square footage in the tract. You must know that there is 43,560 square feet in an acre. 43,560 x 2.5 = 108,900 total square feet in the tract. Then, you want to convert the fractions to decimals. 2÷ 5 = .4, 1÷ 4 = .25 and 15% = .15. Add the three numbers: = .80 = 80% (that is the amount of land used. The question asks, what is left for use? That would be 20% (100%-80%= 20%). 108,900 x .20 = 21,780 square feet that is available for use.
The Texas Real Estate Commission is made up of 9 members, 6 of whom are brokers and 3 are members of the general public. These members serve 6-year terms and are:
A. Hired by a state employment agency
B. Elected by the public
C. Appointed by the governor
D. Appointed by the president
C. Appointed by the governor
Joseph lives next door to Tom who is in the process of selling his home. Joseph assisted Tom in negotiating the sale of the property but received no compensation for doing so. Based on this information, Joseph______________.
A. Is required to have a real estate license to advise his neighbor
B. Is not required to have a real estate license
C. Must be a broker to assist with negotiations
D. Should have referred his friend to an attorney
B. Is not required to have a real estate license
Who writes the Code of Ethics and Standards of Practice?
A. The Texas Real Estate Commission
B. The local Board of REALTORS® creates their own.
c
D. Brokers who have 100 agents or more create their own.
C. The National Association of REALTORS®
All active and inactive sales agents, who are under the Sales Agent Apprentice Education (SAE) requirement, must show evidence of having completed a minimum of ___ hours in qualifying real estate education and 4 hours in Legal Update I and 4 hours in Legal Update II prior to the first two- year license term for a total of ________ hours by the end of the second year of licensure.
A. 100 / 280
B. 90 / 278
C. 95 / 280
D. 100 / 278
90 / 278
If a potential licensee has a criminal background or has been convicted of a _________, they must submit a moral character determination form designed to review the candidate’s background and current situation.
A. Felony
B. Misdemeanor
C. Either of the above
D. Neither of the above
A. Felony
A broker is responsible for all the following EXCEPT:
A. Notifying the salesperson in writing of the scope of their authorized activities
B. Providing a policy and procedures manual
C. Supervising the salesperson directly
D. The proper handling of trust funds placed with the broker
C. Supervising the salesperson directly
