Practice of Real Estate 13%

Question 1

Trust

Answer 1

Property right held by one on behalf of another. A fiduciary relationship is created in which the trustee controls the property for the advantage of the beneficiary.

Question 2

Trust Account

Purpose and definition of trust accounts, including monies held in trust accounts

Responsibility for trust monies, including commingling/ conversion

Answer 2

A trust is a fiduciary arrangement that allows a third party, or trustee, to hold assets on behalf of a beneficiary

trust money means client’s money, earnest money, rent, unearned fees, security deposits, or any money held on behalf of another person.

Commingling is a breach of trust in which a fiduciary mixes funds held in care for a client with their own funds.

Question 3

Protected Classes in FHA

Answer 3

race, color, religion, national origin, sex, disability, familial status

Question 4

Red-lining

Answer 4

Refusal to lend based on a property’s location within a “red lined” area on a map. The illegal practice in which a lender refuses to provide loans to mortgagors in certain geographic locations they consider to be risky. Little consideration is given to applicant’s individual qualifications.

Question 5

Blockbusting

Answer 5

blockbusting. An illegal practice in which licensees or others encourage homeowners to sell because of an influx or expected influx of minorities into the area.

Question 6

Steering

Answer 6

a lender to refuse to lend in a specific area, often based on the minority makeup of the area

Question 7

Americans with Disabilities Act (ADA)

Answer 7

A Federal Act designed to eliminate discrimination against individuals with disabilities.

Question 8

Exemptions to ADA

Answer 8

illegal use of drugs, sexual behavior, compulsions.

Question 9

Truth in Advertising

Answer 9

Federal Law states that an ad must be truthful, not misleading and when appropriate, backed by science.

Question 10

Employee

Answer 10

an affiliated licensee who works on behalf of a broker.

Question 11

Independent Contractor

Answer 11

one hired for an end result. one who is hired to complete a specific job or to produce a specific result according to his own methods.

Question 12

Due Diligence

Answer 12

The standard of care a person exercised prior to engaging in an activity. The state of being diligent, meaning attentive, observant, or vigilant. Refers to the level of care and attention a person observes with entering into an activity such as purchasing land, e.g., did the buyer make all reasonable inquiries and conduct all appropriate inspections.