Law And Practice Exam 2 Flashcards
A broker may list a property currently listed by another broker when:
A. The new listing begins after the current listing ends
B. The broker initiates contact with the seller
c. No sign is on the sellers property
D. New broker offer significantly lower commission fee
A. The new listing begins after the current listing ends
Question three. In an arbitration dispute, which of the following is awarded attorneys fees? A. The losing party B. The prevailing party C. The instigator D. The escrow holder
B. The prevailing party
Four. A contract signed under duress is: A. Void B. Voidable C. Unenforceable D. Illegal
B. Voidable
Five. A right-of-way which is created by an agreement between the owner of the dominant and the owner of the servient property is: A. And easement in gross B. An appurtenant easement C. A license D. A profit
B. An appurtenant easement
Six. A rectangular property with a 450 foot frontage and an area of 3 acres has a depth of: A. 29.4 feet B. 2094 feet C. 290.4 square ft. D. 290.4 feet
D. 290.4 feet
Rationale 130,680÷450 = 290.4 feet
- Before closing, a seller decides not to sell his home, and the buyer is not in default. The deposit:
A. Will be split between listing broker and seller
B. Will be split between buyer and buyers agent
C. Will be returned to the buyer
D. Will be split between buyer seller
TC. Will be returned to the buyer
8. The city Council takes a property with just compensation through: A. Police power B. Escheat C. Annexation D. Condemnation
D. Condemnation. Eminent domain is based on condemnation
9. Rights of occupancy of owners in a cooperative are based on: A. A proprietary lease B. The articles of incorporation C. The bylaws of the association D. Individual deeds to each unit
A. A proprietary lease
10. Littoral rights relate to A. river B. Sea C. Navigable waterway D. Public park
B. Sea
11. Which of the following income tax deductions would be available to a taxpayer who owns and lives in a residential house? A. Property tax and interest B. Mortgage principal payments c. Cost of improvements D. Depreciation
A. Property tax and interest
- A broker, informed by the seller that there is a problem with a leaky roof and termites, must do which of the following?
A. Inform the prospective buyer of these conditions
B. Require that the rough be repaired and dad and exterminator be hired before showing it
C. Urge the buyer to obtain an inspection but say nothing about the problem
D. Urge the buyer to require the seller to repair the problem before closing
A. Inform the prospective buyer of these conditions
13. After closing which of the following would be the listing broker retain in her file: A. Title insurance policy B. Lender deed of trust C. Lender promissory note D. Settlement statements
D. Settlement statements
- What is the annual interest rate on $80,000 loan when the interest payments are $1200 per quarter on the loan.
A. 7% B. 15% C.6% D. 8%
C.6%m
Rationale –
$4800 divided by$80,000 equals .06
15. And what method of land description would you find a plat? A. Meets and bounds B. Lot and block C. US governmental survey system D. Global transfer system
B. Lot and block
16. The party making an offer is called the: A. Offeree B. Offeror C. Buyer D. Seller
B. Offeror
17. The best indication to an owner of a house of what his house should sell for would be: A. A competitive market analysis B. An independent appraisal C. A broker price opinion D. The county assessed value
B. An independent appraisal
- A comparable market analysis prepared by a broker for purpose other than the financing of the house sale requires which of the following disclosures:
A. A disclosure that the broker is not a licensed appraiser
B. A disclosure that comparable market analysis is not a formal appraisal
C. No disclosures are required
D. The license number of the broker
C. No disclosures are required
- A building built on leased land is considered by the landowner:
A. To be a personal property
B. To transfer to landowner upon end of lease
C. To be real property
D. To be building owners property after end of lease
B. To transfer to landowner upon end of lease
- A rectangular shaped parcel contains 14 acres. It’s with is 800 feet. The depth of the parcel is?
A. 131.18 feet
B. 913.11 feet
C. 3111.42 feet
D. 762.3 feet
D. 762.3 feet
14 acres times 43,560 feet equals 609,840 feet divided by 800 feet equals 762.3 feet
21. The right of survivorship feature is only found in A. Severalty ownership B. Tenancy in common C. Joint tenancy D. All of the above
C. Joint tenancy
22. Which type of listing agreement gives the broker the maximum benefits? A. A net listing. B. And exclusive agency listing C. An exclusive rights to sell listing D. An open listing
C. An exclusive rights to sell listing
23. How was ownership of common areas of a condominium held? A. Tenancy in common B. Joint tenancy C. Co-operative D. Partnership
A. Tenancy in common
24. A life estate may not be A. pass by will B. Mortgaged C. Sold D. Leased
A. pass by will
25. The higher the leverage: A. The the greater the L.T.V.. B. The less the lenders risk C. The greater the equity D. The more of borrowers funds are utilized
A. The the greater the L.T.V..
The greater the loan to value
- When a real estate broker makes an evaluation of real estate, for purposes other than marketing, the evaluation must contain a written notice that:
A The preparer is a real estate broker
B. The evaluation is not an appraisal
C. The preparers not registered, licensed or certified as an appraiser
D. No written notice is required
C. The preparers not registered, licensed or certified as an appraiser
- Which of the following would normally be a charge to the buyer in a new loan settlement statement:
A. Recording on the least of existing loan
B. The net loan proceeds
C. The existing loan payoff
D. Loan discount points
D. Loan discount points
Hey deals with the seller be deals with the debit to the broker see also deals with the seller the only one that deals with the buyer is D
- The difference between a cooperative and a condominium is that a condominium owner may:
A. own and finance their property
B. Never own common interest assets
c. Have a proprietary lease
D. Always determine who their neighbors are
A. own and finance their property
29. $9600 is equal to 8% of the price paid for the house. What was the price paid? A. $120,000 B. $150,000 C. $76,800 D. None of the above
A. $120,000
Rationale – 9600÷8 percent equals 120 thousand
- A broker should not tell a prospective buyer:
A. About structural defects
B. That’s only makes the present usage nonconforming
C. That here she has seen evidence of termites
D. That the owner will accept less than the listing price
D. That the owner will accept less than the listing price
- Using the following information, which can be deducted for tax purposes by owner of a residential single-family home? Principal and interest per year on loan 11,000 build a spa 4000, Maintenance per year $3000, property tax, $2000, insurance $500,
A. Maintenance and insurance
B. Maintenance, insurance and the spa.
C. Principal interest taxes and insurance.
D. Interest on loan and property tax
D. Interest on loan and property tax
32. Zoning and planning our examples of: A. Covenants B. Eminent domain C. Police power D. Private limitations on ownership
C. Police power
33. Damages to the property caused by a life tenant over and above normal use and wear and tear: A. Malicious injury B. Statutory damages C. Waste D. External depreciation
C. Waste
- So ownership of land is
a. Feesimple ownership
B. Tenancy in common
C. Joint and several ownership
D. Ownership in severalty
D. Ownership in severalty
One. The most comprehensive estate of ownership in real property is: A. Feed tail estate B. Feesimple estate C. Homestead D. Littoral right
B. Feesimple estate
35. All of the following run east/west except: A. Baselines B. Correction lines C. Range lines D. Tier lines
C. Range lines
- What would the buyer have to bring to close the following transaction? Sales price $55,000, the closing costs or $2000, the buyer must pay three points for the origination fee, the buyer has been granted and 80.percent loan.
A. $14,230
B. $14,320
C. $14,023
D. $14,032
B. $14,320
55,000×20% equals 11,000. $55,000 $-11,000 equals $44,000 times 3% equals $1320
So now you add $11,000 Plus $1320 plus $2000 equals 14,320
- The lenders margin is:
A. A reduction in the index rate.
B. And amount added to the index right on an adjustable mortgage
C. And inconsistent perimeter based on adjustable indexes
D. Seldom a consistent variable
B. And amount added to the index right on an adjustable mortgage
38. An appraiser uses comparable homes for his appraisal. He is using the principle of: A. Anticipation B. Pottage C. Substitution D. Assemblage
C. Substitution
39. One disadvantage a real estate as an investment is it's: A. Durability B. Relative scarcity C. Illiquidity D. Utility
C. Illiquidity
- And owner wants to net $80,000 after paying a 7% commission to his broker. He must sell his house for:
A. $85,600
B. $86,021
C. $87,000
D. $85,021
B. $86,021
Rationale – $80,000 divided by 93% should equal the amount the owner must sell it for
- In real estate practice of variance is best described as
A. A change in the purchase price of the house
B. An amendment to title
C. Permission to deviate from a setback requirement in zoning laws
D. A term used in calculating an average
C. Permission to deviate from a setback requirement in zoning laws
- If the seller wishes to make a counter offer after receiving an offer from a buyer:
A. Both buyer and seller should sign the original offer
B. Seller should not sign the original offer.
C. Only the buyer should sign the counter offer
D. Only the seller should sign the counter offer
B. Seller should not sign the original offer.
- Which of the following methods of land description should not be used in a deed as a legal description
A. Metes and bounds
B. Street number and street name
C. Lot and block according to the recorded plat map
D. Government survey
B. Street number and street name
44. The method of land measurement known as metes and bounds his reference to A. A plat map B. The system of ranges in tears C. A point of beginning D. Front feet
C. A point of beginning
- A joint tenancy requires all of the following except:
A. Survivorship
B. Equal interests
C. Interest acquired at the same time by the tenants
D. Parties must be married
D. Parties must be married
46. If property sold for 525,000 and an owner made 50percent profit, what did he pay for it? A. $262,500 B. $350,000 C. $393,750 D. $787,500
B. $350,000
Rationale $525,000 divided by 1.5 equals $350,000
- The best way to describe a novation is:
A. A first contract between the seller and buyer
B. A method of claiming liquidity damages
C. A new contract with substitutes for an old contract
D. An appraisal technique used for new houses
C. A new contract with substitutes for an old contract
- Appraised value is an estimate of what
A. The average price of homes in the neighborhood
B. The listing price in the MLS
C. And estimated value way should based on assessed value
D. The most probable selling Price based on the market
D. The most probable selling Price based on the market
49. A defeasance clause A. Would eliminate the lenders claim on the lien B. Defeats a warranty provision C. Violates RESPA D. Clouds the title
A. Would eliminate the lenders claim on the lien
50. A parcel of land has 380 frontage feet and is a 4.2 acres in area. What is the depth? A. 380 feet B. 366 feet C. 481 feet D. 475 feet
C. 481 feet
Four point 2×43,560 = 182,952divided by 380 equals 481 feet
51. A real estate salesperson discovers termites after an offer has been received for the home the salesperson must inform: A. Only the broker B. Only the buyer C. Only the seller D. Both the buyer and the seller
D. Both the buyer and the seller
52. Whether or not an FHA loan is a qualified or unqualified assumption depends on: A. The borrowers credit score B. The date of the loan C. Individual lender requirements D. The amount of the loan to be assumed
B. The date of the loan
53. Person W conveys to his mother for life, and on her death wants the property return to him. He retains a: A. Life interest B. Life interest pur autre vie C. Remainder interest D. Reversionary interest
D. Reversionary interest
54. If a restaurant sold for $67,000 including a 50% profit for the seller, what did the seller pay for it? A. $33,750 B. $50,625 C. $44,666 D. $101,250
C. $44,666
Rationale $67,000 divided by 150% equals 44,666
55. Which of the following is never considered a fixture A. S swimming pool B. A deck C. Land D. Fireplace
C. Land
56. The seller is not required to transfer ownership if the type of contract utilized is a/and: A. Land contract B. Option contract C. Bye and sell contract D. Bilateral sales contract
B. Option contract
- If property sold for $675,000 including a 50% profit, what did the owner pay for it?
A. $450,000
B. $337,500
C. $45,000
D. $500,000
A. $450,000
675,000 dividedBuy 150% equals 450,000
58. A psychological impairment may be disclosed: A. If impairment is obvious B. With sellers permission C. A punk client inquiry D. The brokers discretion
B. With sellers permission
59. A land contract is also called: A. A sales contract B. And installment contract C. A buy and sell contract D. A list contract
B. And installment contract
- And out-of-state seller wants to list his home for $80,000. You know firsthand that homes in the area sell and $125,000 range. As a broker you should:
A. Declined the listing
B. List at $80,000 to ensure a fast sale
C. List at $80,000 as per sellers instructions
D. Recommend seller obtain a competitive market analysis
D. Recommend seller obtain a competitive market analysis
61. The semi annual tax on $140,000 property assessed at 50% of value with the mill levy of 9.2% per hundred would be: A. $6440 B. $12,880 C. $3220 D. $4640
C. $3220
Rationale – $140,000 times 50% equals $70,000 times 9.2% equals $6440 divided by two equals $3220
It is divided by two because it is semiannual
- Defeasance clause in a mortgage
A. Eliminates the rights of the mortgagee
B. Is evidence of ownership interest
C. Defeats and accrued interest
D. Eliminates the rights of the mortgagor
D. Eliminates the rights of the mortgagor
63. Person W wants to transfer his house to his mother, and on her death to his daughter. He would utilize: A. The life estate with a remainder B. A life estate with a reversion C. A life estate pur autre vie D. A community property trust
A. The life estate with a remainder
- After delivering a counter offer a seller receives a higher contract offer. The seller may:
A. Rescind the counter offer
B. Consider the new contract to be a backup offer
C. Ignore new offer
D. Allow Both purchasers to negotiate
A. Rescind the counter offer
65. A developer try to obtain financing for property in low income part of town. He has turned down by three lenders. These lenders are possibly guilty of: A. Blockbusting B. Redlining C. Price-fixing D. Improper loan documentation
B. Redlining
- RESPA requirements must be given to a borrower when:
A. within three days of loan application
B. Within one day of loan application
C. Within two days of loan application
D. RESPA has no requirements
A. within three days of loan application
- The house is appraised at $42 per square foot, and the lot at $25,000. If the assessed value ratio is 40%, what is the tax value of the property if it has a 2800 square-foot house on it?
A. $57,040
B. $47,040
C. $62,500
D. $42,000
A. $57,040
Rationale – 2800 ft.² times 42 per square foot equals 117,600 ft.² plus $25,000 equals 142,680 times 40% equals $57,040
68. The fair housing act does not prohibit discrimination based on: A. Familiar status B. Homosexuality C. Gender D. Religion
B. Homosexuality
- If the broker decides not to except the listing assignment:
A. Commission disciplinary penalties apply
B. The sellers do compensation
C. Consequences may lead to criminal repercussions
D. He may accept or decline the listing at his discretion
D. He may accept or decline the listing at his discretion
70. A protection clause in a listing contract provides limited protection for: A. A seller B. A buyer C. A lender D. The listing broker
D. The listing broker
- When the house is sold as is the listing broker:
A. Should not be concerned as the seller is legal and entitled to do this
B. Should question the seller about possible defects
C. Should not be concerned as the seller will be liable for all defects
D. Should advise the seller to have property inspections
B. Should question the seller about possible defects
- If the title exam proves unsatisfactory, the purchaser:
A. Can terminate the contract, the forfeit his earnest money deposit
B. Can terminate the contract, but must pay the broker’s commission
C. Can terminate the contract, and have his earnest money returned
D. Cannot terminate the contract until the quiet title suit is concluded
C. Can terminate the contract, and have his earnest money returned
73. If an associate broker changes brokers, they typically must: A. Leave behind her listings B. Renegotiate listings C. Compensate prior broker D. Inform sellers are new company
A. Leave behind her listings
74. The property has a land value of $40,000 in improvements are worth $210,000. After 30% depreciation, what is the property worth? A. $175,000 B. $187,000 C. $178,000 D. $147,000
B. $187,000
Rationale – $210,000 times 70% equals $147,000 plus $40,000 equals $187,000
75. Closing statements held by a broker associate must be given to their broker: A. Immediately B. Within one day C. Within two days D. With in three days
A. Immediately
There is a three day right of rescission right under the truth and lending laws for all but which one of the following:
A. A first mortgage loan to buy a new house
B. A home improvement loan
C. A second mortgage to finance a lot of credit
D. A reverse annuity mortgage
A. A first mortgage loan to buy a new house
- Net listings are illegal in many states because:
A. They are unfavorable to brokers
B. They give rise to inflated sales prices
C. They could encourage a broker to be dishonest
D. They violate antitrust laws
C. They could encourage a broker to be dishonest
Who pays the mortgagee title insurance A. The seller B. The lender C. The buyer D. The broker
C. The buyer
79. You inform a seller that his home is worth 180,000. He puts in a $15,000 improvement. You tell him that his improvement will not necessarily increase his value by $15,000. You are utilizing the principle of: A. Gentrification B. Plottage C. Supply and demand D. Contribution
D. Contribution
80. A letter requires three months interest escrow on a $650,000 loan at 7.5%. Amount of escrow would be: A. $48,750 B. $8125 C. $16,250 D. None of the above
D. None of the above
650,000×7.5% equals 48,750÷12 = 4000 62.50×3 months equals 12,187.5
This answer doesn’t come up in any of the numbers so it’s definitely D
