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Real Estate Wrong Review > National Brokerage > Flashcards

National Brokerage Flashcards

1
Q

Puffing is best characterized as which of the following?

A

Subjective opinion

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2
Q

The Criminal Antitrust Penalty Enhancement and Reform Act increased the maximum criminal penalty for individuals to what amount?

A

$10 million

Maximum penalty of 10 years and $10 million fine

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3
Q

Which of these is not a violation of Sherman Antitrust laws?

A

Redlining

Antitrust laws prohibit price fixing, group boycotts, market allocation and tie-in arrangements.

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4
Q

An agent fails to discover flood marks on the walls in the basement of a property. The agent sells the property, and the buyer later sues the agent for failing to mention the problem. Which statement best describes what can happen in this case?

A

The agent has an exposure to a charge of negligent misrepresentation

If an agent fails to verify a fact before passing it to the buyer, or gives information carelessly, the agent may be guilty of negligent misrepresentation.

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5
Q

The principles of an agency relationship include all of these factors except which one?

A

Compensation

The principles governing an agency relationship are mutual consent, mutual agreement and authorization, and fiduciary duties.

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6
Q

When the real estate agent has produced a buyer who is ready, willing and able, the agent has generally done what?

A

Earned a commission

A real estate agent has earned his or her commission when he or she has produced a ready, willing and able buyer, the buyer and seller agree to the sale and sign copies of the agreement.

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7
Q

Under what conditions can an agent provide advice and counsel to the customer?

A

Never

A licensee can impart factual knowledge to a customer, but the licensee does not provide advice and counsel to a customer.

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8
Q

Violations of the Sherman Anti-Trust Act can include prison terms and fines of up to how much per violation?

A

$1 million

Individual violators of the Sherman Act can be fined up to $1 million and up to ten years in federal prison for each offense; corporations can be fined up to $10 million for each offense.

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9
Q

What condition occurs when dual agency is not disclosed and agreed to in writing?

A

Undisclosed dual agency

Dual agency must be disclosed to both the buyer and the seller in writing. If dual agency relationship is not disclosed and agreed to in writing it is known as undisclosed dual agency.

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10
Q

What do we call an agent who represents a seller exclusively in a real estate transaction?

A

Single agent

In a single agency relationship the agent can represent only one party (either the buyer or the seller) in a single transaction.

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11
Q

Which type of agency would be most advantageous to a buyer?

A

Buyer brokerage

Under a buyer brokerage agreement the broker owes all of the fiduciary responsibilities to the buyer and not to the seller.

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12
Q

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 the following?

A

Accounting

Once a 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.

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13
Q

The difference between an exclusive right to sell listing and an exclusive agency listing has to do with what issue?

A

Commission

Under an exclusive right to sell agreement the broker receives a commission regardless of who sells the property. Under an exclusive agency agreement the owner retains the right to find a buyer and sell the property without owing the broker a commission.

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14
Q

On an MLS listing form, in what section would you find information regarding waterfront footage?

A

Site information

The site information section of an MLS listing form can include information about lot details and waterfront footage.

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15
Q

What does a carryover clause do?

A

Allows the broker to collect a commission for some period of time after the listing expires

A carryover clause, or safety clause, is an agreement between the broker and seller that the broker may still receive a commission for a specific number of days after the listing expires.

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16
Q

Broker Jill has an agreement with seller Alice that says Jill will receive compensation if anyone except Alice sells Alice’s home. What kind of agreement is this?

A

Exclusive agency

Under an exclusive agency agreement the owner must pay a commission if the home is sold by the broker or an authorized agent or subagent of the broker, but the owner retains the right to find a buyer and sell the property without owing the broker a commission.

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17
Q

Martha signs a listing agreement with Broker Patrick. Which of the following would probably not be found in the agreement they signed?

A

Marthas average utilities

In most states listing agreements must have an identification of the property, promise of compensation to the broker, the specifics of that compensation, and be a written document with signatures of the seller or sellers.

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18
Q

Which of these listing agreements is considered a unilateral contract?

A

Open

An open listing is a non-exclusive contract and because the broker is not under the same obligation to perform as with other listing agreements, it is considered a unilateral contract.

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19
Q

Broker Alice has a listing agreement with Jack. If Broker Tom procures a buyer for Jack, Tom will get the commission and Alice will not. What kind of listing agreement does Alice have with Jack?

A

Open

An open listing is a non-exclusive contract and because the broker is not under the same obligation to perform as with other listing agreements, it is considered a unilateral contact

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20
Q

Which of the following types of transactions typically contain a property disclosure?

A

The transfer of a deed based on a open market sale of a residential property

Property disclosure statements are required for property transfers arising from open market sales.

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21
Q

Sales of manufactured and mobile homes

A

Are typically made with a property disclosure

Property disclosure statements are required for property transfers of manufactured and mobile homes.

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22
Q

Which of these items is not included in a lease agreement?

A

Alienation clause

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23
Q

Which of the following statements best defines closing costs?

A

Expenses above the price of the property that buyers and sellers normally are required to pay to complete a real estate transaction

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24
Q

When a tenant agrees to pay all taxes, insurance, maintenance and repairs, that tenant has what kind of lease?

A

Net

In a net lease the tenant pays for occupancy, maintenance and operating expenses such as taxes, insurance, utilities and repairs.

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25
Q

Which statement best defines the concept of “quiet enjoyment?”

A

A landlord’s obligation to provide the tenant with reasonable privacy and freedom from interference

A tenant has the sole right to occupy and use a premises without interference from the landlord.

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26
Q

Buyers Sam and Linda Pope are entering into a contract with sellers, Jim and Alana Jones in which part of the sale price of the property will be deferred. What kind of contract is it?

A

Installment sales contract

An installment sales contract is a bilateral agreement between a seller and a buyer in which the seller defers receipt of some or the entire purchase price over a specified period of time.

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27
Q

Under what type of compensation plan is the agent responsible for the costs of advertising and promotion?

A

100% plan

Under a 100% commission plan an agent is responsible for the costs of advertising and promotion, the agent also pays a monthly fee to the company to cover costs of office space and supervision, and in return receives 100% of the commission.

28
Q

What type of methodology works well to ensure that all agents are given and hear the same information?

A

Staff meetings

Licensees benefit from attending staff meetings. Meetings ensure the same information is distributed to everyone and helps keep licensees informed and educated.

29
Q

In an IRS audit, which of the following situations would cause the IRS to think that a contractor might really be an employee?

A

The licensee receives an hourly wage

In order to qualify as an independent contractor, the IRS requires a licensee to be fully licensed, be paid on commission only, and have a written agreement with a broker stating the licensee is not an employee.

30
Q

Agent Mary sold a listing for another brokerage. Agent Mary is entitled to a

A

Selling side commission

A licensee who sells a listing will receive a share of the employing broker’s commission on the selling side.

31
Q

What is the payment program, when an agent starts out at a lower percentage payment but then graduates to higher percentage rates?

A

Graduated

32
Q

Most licensees are hired as

A

Independent contractors

33
Q

The CAN-SPAM Act requires all of the following EXCEPT:

A

Prior permission of the recipient to send commercial e-mails.

The CAN-SPAM Act prohibits sending false or misleading information, prohibits the use of deceptive subject lines, mandates the inclusion of an opt-out method, and mandates that commercial e-mail must be identified as an ad and include the sender’s physical postal address.

34
Q

The acronym AIDA stands for

A

Attention, Interest, Desire, and Action

35
Q

Which of the following payment arrangements are associated with a press release?

A

Free advertisement

Although not a true ad in itself, a press release is considered free advertising because of the coverage it can generate.

36
Q

Which of the following methods allows you to keep track of your advertising results?

A

Assigning a code

Assigning a code to a print ad helps businesses track the effectiveness of advertising

37
Q

What kind of ad usually combines both institutional and product advertising?

A

Display

Display ads usually combine institutional and product advertising to enhance the image of a company while showcasing specific properties.

38
Q

Which of the following types of newspaper ad is the most expensive?

A

Display ad

Display ads are more expensive than classifieds, so are often used when promoting developments rather than individual homes.

39
Q

Which kind of advertising aims at increasing sales by informing the public of a company’s capabilities?

A

Institutional

Institutional advertising, or corporate advertising, attempts to establish a positive image of a company, its services, and its reputation in the minds of the public.

40
Q

Which of these is a free form of advertising?

A

Press release

Although not a true ad in itself, a press release is considered free advertising because of the coverage it can generate.

41
Q

What is the most common reason a property fails to sell?

A

Overpricing

42
Q

All of these statements are true except which one?

A

Virtual tours are an expensive marketing tool to use

43
Q

Most states require that the broker make available to the real estate licensing agency

A

All escrow records and related documents

Most states require that a broker make available all escrow records and related documents that he or she maintained in connection with the practice of real estate to the real estate licensing agency.

44
Q

Buyer Jim put down a deposit in the form of a boat title worth $5,000. The boat is owned by Jim’s parents. The transaction was not completed, who should the boat title be returned to?

A

Jim

If earnest money is provided by a person other than the parties to the contract, the earnest money must be returned to the party in the contract in the event that the money needs to be returned.

45
Q

Who holds the escrow money when a dispute occurs?

A

The sponsoring broker

If there is a dispute over escrow funds the broker should hold the money until both parties (or their authorized agents) provide written authorization to disburse it

46
Q

Where would you find every escrow entry showing the running balance after each receipt or disbursement?

A

Journal

A sponsoring broker must keep a journal for each escrow account, which shows the chronological sequence in which funds are received and disbursed.

47
Q

Both the buyer and the

A

Lender should have title insurance

Insurance for the buyer ensures a clear title and protects his or her investment. Insurance for the lender protects the lender’s interest in the property.

48
Q

Taxes on the property Buyer Alan is purchasing are $3,200 due on December 31. If the closing is set for October 15, using the 365-day method, how much of the taxes will be credited to the buyer? (Assume it is not a leap year and the day of closing belongs to the seller.)

A

The sellers share of $2,525.76

$3,200 ÷ 365 = $8.77, 31 (Jan) + 28 (Feb) + 31 (Mar) + 30 (Apr) + 31 (May) + 30 (Jun) + 31 (Jul) + 31 (Aug) + 30 (Sep) + 15 (Oct) = 288 x $8.77 = $2,525.76

49
Q

If a seller prepaid the taxes of $2,100 and the closing is set for March 15, using the 12month/30 day method what will the buyer owe the seller as prorated taxes?

A

$1,662.55

$2,100 ÷ 12 = $175, $175 ÷ 30 = $5.83, 2 x $175 = $350, 15 x $5.83 = $87.45, $350 + $87.45 = $437.45, $2,100 - $437.45 = $1,662.55

50
Q

Recording the deed is done through which of these?

A

Constructive notice, aka legal notice

51
Q

What occurs during a walkthrough?

A

A final inspection

52
Q

How does a lender normally base the estimate on a loan that is in-progress?

A

A loan estimate is based on similar transactions that have already completed

53
Q

Which of the following items does the seller usually pay?

A

Satisfaction of existing liens

The title to a property cannot be transferred until any existing liens have been paid off. The liens and the fee for satisfying the liens is paid by the seller.

54
Q

What is the strategy called whereby lenders limit the number of loans based on the racial makeup of a neighborhood?

A

Redlining

Redlining is the act of restricting the number of loans in specific areas of a community due to those areas’ racial or ethnic makeup, which is illegal.

55
Q

Which of these statements about the Americans with Disabilities Act is FALSE?

A

A duplex owner might need to remodel the kitchen in the rental unit to accommodate persons with disabilities

The ADA mandates that persons with disabilities must have equal access to jobs, public accommodation, and government services. It prohibits discrimination in the “full and equal enjoyment of goods and services” provided by public places, including shopping centers and offices, and it applies to the lease and operation of commercial facilities

56
Q

Which of these is not an exemption to fair housing law?

A

The sale of a single family home by an owner who owns five residences

The fair housing laws allow for exemptions in some areas, including the sale or rental of a single family home by an owner if the owner does not own more than THREE homes at one time.

57
Q

During the investigation period, HUD can attempt to resolve the complaint by getting assurance from the person against whom the complaint was filed that he or she will remedy the alleged violation. This is known as

A

Conciliation

When HUD attempts to resolve a complaint by getting assurance from the person against whom the complaint was filed that he or she will remedy the alleged violation, it is called conciliation.

58
Q

What is NOT a licensee’s responsibility when complying with fair housing laws?

A

Complete and record all HUD-96 marketing report forms

Licensees must comply with fair housing laws. To do so licensees should; know the fair housing laws, act in accordance with the law, keep accurate records, periodically attend fair housing training seminars.

59
Q

What is an important task for a manager of a condominium or cooperative?

A

Physically managing the property

Managers of condominiums and cooperatives are typically very involved with the physical management of the property. They take care of the budgets, coordinate maintenance, landscaping and security, and enforce the regulations.

60
Q

Which IREM designation is reserved for individuals who meet a certain level of education and experience?

A

CPM

IREM has the designation of Certified Property Manager (CPM) for individuals who meet a certain level of education and experience requirements.

61
Q

What does the management agreement create?

A

General agency

A management agreement is an employment contract in which the property owner is the principal and the property manager is the agent, which creates a general agency between the parties.

62
Q

Which of these usually contributes to the property manager’s fee?

A

% of rental income

Management fees are often a base fee and/or a percentage of the collected rents. The manager may also receive additional compensation for renewed leases and for the supervision of repair projects.

63
Q

An individual property manager

A

is usually a real estate broker who manages properties for one owner or a number of owners.

An individual property manager is usually a real estate broker who manages properties for one or more owners. He or she may be a member of a small property management firm devoted to full time property management, or be a self-employed manager, or be one of several managers in a large real estate firm.

64
Q

Older office buildings that become obsolete

A

frequently become available for warehouse or light industrial use.

65
Q

Business owner Fred wants to lease office space at the most affordable rate. Which location would best meet his objective?

A

An office with a poor view

66
Q

What is the impact on nonresidential property when a local government requires extensive building safety improvements?

A

A substantial amount of capital outlay

An investor will have to make a substantial amount of capital outlay if the local government requires owners to add expensive safety improvements to buildings.

67
Q

Agricultural property is classified under which of the following real estate types?

A

Nonresidental

Nonresidential property is broken down into five major subcategories; commercial, industrial, agricultural, recreational, and institutional.

Real Estate Wrong Review (5 decks)

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