Practice of real estate #3 Flashcards
Price fixing
Price fixing is the practice of multiple (or all) real estate agents in an area working together to charge the same commission between brokerage
group boycotting
is an agreement between two or more parties who conspire to not do business with a particular company or person
tie - in arrangements
Is an antitrust violation and an agreement in which the seller conditions the sale of one product (the “tying” product) on the buyer’s agreement to purchase a separate product (the “tied” product) from the seller.
market allocation
involves and agreement between brokers to divide up the market and then refrain from competing for business
Which type of deed conveys real property from a decedent’s estate to a buyer?
executors deed
Executor’s Deed:
This may be used when a person dies testate (with a will). The estate’s executor will dispose of the decedent’s assets and an executor’s deed may be used to convey the title or real property to the grantee.
referee’s deed
Used in judicial foreclosures to transfer ownership of the foreclosed property to the. A person who bids the highest amount of money at a foreclosure auction.
State usury laws are typically not applicable to what type of lending?
Credit cards, retail installment contracts, and consumer leases are typically exempt from usury laws.
Which economic principle is related to supply and demand?
competition
Gina is in the county assessor’s office looking at the maps of her county. She sees several areas that are one-mile square, or 640 acres each. What are these areas?
sections
Which document is used to give a buyer an overview of the title history and information about what is or isn’t covered in an insurance policy?
preliminary report
preliminary report
is a report prepared prior to issuing a policy of title insurance that shows the ownership of a specific parcel of land, together with the liens and encumbrances thereon which will not be covered under a subsequent title insurance policy.
quitclaim deed
Releases any rights of the grantor to the property to the grantee, but does not offer any warranties to the grantee
What type of deed is commonly used to clear any clouds on a title?
quitclaim deed
Select the statement that accurately reflects the type of deed used for the transfer.
A deed of trust conveys real estate to a trustee for the beneficiary named in the deed
What type of deed releases any rights of the grantor to the property to the grantee and clears any clouds on a title, but does not offer any warranties to the grantee?
quietclaim deed
Victor’s family has always owned this particular lake house. When he was little, he remembers the “beach” being no more than four feet wide before the waterline. Now Victor brings his own children to the lake house, but the beach is almost seven feet wide. What natural process could explain the beach being bigger?
reliction
When a property owner wishes to convey her property to a new owner, she will generally use a ______.
deed
a written and signed legal document that legally transfers (conveys) title to real property from the old owner (the grantor) to the new owner (the grantee).
deed
Frontage (or front foot) refers to what?
A property’s boundary line that’s adjacent to a road or waterway
liquidated damages
a legal clause that protects the real estate agent’s client from additional exorbitant fees. In the event of a contract breach, the injured party is compensated with the funds that are set aside in an escrow account that are equal to the amount of damage caused by the offending party
Saul was unhappy after he and Janelle liquidated their business. Janelle sold some items for less than he’d initially agreed to, and he wanted the full price to be included in the profit split. He wanted to sue, but he was required to pursue other options. What contract clause kept Saul from being able to sue?
arbitration
liquidated damages
a legal clause that protects the real estate agent’s client from additional exorbitant fees. In the event of a contract breach, the injured party is compensated with the funds that are set aside in an escrow account that are equal to the amount of damage caused by the offending party
Esmerelda makes regular monthly payments on her loan. In addition to paying interest, she’s slowly paying down the principal of the loan. With each payment she makes, more will go towards the principal and less to interest. What type of loan does she have?
amortizied
Nate represents Elena in the purchase of a house. Katherine represents the seller, Timothy. Which of the following statements accurately reflects the agency duties owed?
Nate owes Timothy the duty of disclosure
In marketing her new listing, Alice asks the photographer to “touch-up” the photos of the house so that the old roof and siding look as though they are new. Which statement about this is true?
This is deceptive advertising for which both Alice and her broker may be disciplined.
You’re on a planning board that’s discussing how to keep the city more livable by reducing building density. The subject of bulk zoning comes up. What is your response?
“That will work for residential areas, but what about commercial?”
You’re on a planning board that’s discussing how to keep the city more livable by reducing building density. The subject of bulk zoning comes up. What is your response?
“That will work for residential areas, but what about commercial?”
What is the primary purpose of the Superfund Amendments and Reauthorization Act (SARA)?
To release homeowners from the responsibility of cleaning up hazardous substances if the homeowner didn’t know they existed
Which clause in the listing agreement gives the listing broker the authority and obligates the broker to market the property to other brokers?
Multiple listing clause this is the (MLS)
You represent the buyer and seller in the same transaction. What type of agency relationship do you have with your clients?
Disclosed limited agency
You are in a disclosed agency relationship with your clients because you represent both the buyer and the seller.
Which of these situations addresses the fiduciary duty of confidentiality?
Which of these situations addresses the fiduciary duty of confidentiality?
The property management agreement between owner Susan and property manager Phil creates a relationship where Phil is the agent for Susan. Which of the following is NOT addressed in the agreement?
Whether or not the owner will accept lease applications requesting accommodation of an emotional support animal
Homestead Realty had a listing agreement with Gertrude. The listing expired, and Gertrude moved the listing to another firm. Another licensee at Homestead Realty has a buyer client who’s interested in Gertrude’s property. What restrictions are in place for Homestead Realty?
Homestead may represent the buyer, must disclose material facts about the property, and must maintain Gertrude’s confidentiality.
Which of the following is an example of price-fixing?
Two brokerages determine a standard commission rate.
Which of these might bring a charge of illegal steering against a licensee?
When working with single female clients, Cassandra is careful to promote properties in neighborhoods she considers safe.
What does the FTC consider to be a deceptive ad?
Any ad likely to mislead consumers acting reasonably under the circumstances
Several brokerages in a certain area agree to stop running advertisements in a local publication. What type of antitrust violation is this?
group boycotting
Carlson presents a real estate purchase contract to his clients. Along with the contract are several supplemental documents attached to it. What are these called?
addendums
Which of these is an example of severability?
Jules and Katrina are under contract for the purchase of Katrina’s house. A dispute arises over some contract terms, and they end up in court. The court rules one of the terms invalid but leaves the remainder of the contract in force.
The minimum rent to meet a property owner’s desired return on investment (ROI) is $98,000, which is a little lower than market comparisons. Research shows a very low vacancy rate for the area and there doesn’t appear to be a drastic increase in supply in the near future. Considering these few facts, what might a property owner suggest when setting rental rates?
The property manager may suggest rental rates higher than the minimum rent.
A property’s rental income for the month was $16,000 and expenses were 40% of that income. The property’s owner has a $5,000 monthly mortgage payment. What would the cash flow report show for the month?
A monthly cash flow of $4,600.
You’re on a planning board that’s discussing how to keep the city more livable by reducing building density. The subject of bulk zoning comes up. What is your response?
“That’s a great way to meet our objectives.”
Gregory is a widower who subsequently remarried. The couple lives in a large house Gregory owns in severalty. When they decide to downsize, Gregory grants an ordinary life estate in the property to his daughter from his first marriage, Giselle. He names Giselle’s son Will as remainderman. When will the property revert to Gregory’s current wife, Dora?
never
Disparate treatment
Treating someone differently based on protected class status (illegal)
Disparate impact
Policies that, while facility neutral, impact one protected class more (illegal)
Megan’s law
Common name given for all state laws that require law enforcement authorities to make information available to the public regarding registered sex offenders
Plessy v. Ferguson
“separate but equal”
Buchanan v. Warley
Unconstitutional to prohibit members of a specific race to live in a particular city block
Brown v. Board of education
Segregation in schools unconstitutional
John’s v. Mayer
Racial discrimination not allowed in any sale of property
Civil rights acts of 1866
Race and color (all discrimination)
Fair housing act of 1968
Ray’s color, national region, religion ( discrimination in housing)
Housing and community development act of 1974
Added sex as a protected class, introduce section 8 housing
Fair housing amendment act of 1988
Edit family status, disability (housing)
Americans with disability act of 1990
Accessibility, accommodation (housing, public buildings)
Housing for older persons act of 1995
Exempt housing design for seniors
Sexual offender act of 1994
(Megan’s law) information must be made available to the public regarding registered sex offenders
What are the state protected classes
Marital status orientation, gender identity, or source of income
What are the federally protected classes
Race, color, religion, national region, sex, family status, physical or mental disability
____ Commission members an executive director appointed by the _____ to ___ years terms
9 , Governor, 6 years term
Reedling
Is an iligal, discriminatory practice by lenders or insurance companies that refuse or limit business within specific geographic area based on the demographics of the area rather than on the credit worthiness of the specific borrower, figuratively drawing a red line around an area to indicate unwillingness to land or ensure homes in the area
Reverse redling
In another twist, the practice of charging non-white borrowers higher fees or interest rates may be referred to as reverse redling
Blockbusting
The act of interesting property cells by threatening that the changing demographics or the entry of a minority residence will increase the values. Licenses who engage in this behavior for their own profit are guilty of violating fair housing laws
Steering
Is the app on guiding perspective buyers / tenants two or away from a location based on their membership in a protected class that license is engaged in this practice are guilty of a fair house in violation
Negligence misrepresentation
A statement made by a person who should have known it to be false becomes fraud when it’s intentional
Misrepresentation
A statement, photo, or add that a reasonable buyer will consider to be reliable. Misrepresentations, even when unintentional, can lead to avoidable contract
The Sherman act
Property purpose is to prevent monopolies that will cause a restraint of trade
The Clayton act
Supports the Sherman act by prohibiting mergers that will result in a monopoly
A per se violation
Is one in which the competing firms agreed to Violate and anti trust laws
Precuring cause
Who started the chain of events that leads to a sale
The Federal trade commission was created to
Investigate antitrust practices
The real estate settlement procedures act (RESPA)
Prohibits you from receiving or pain referral fees or find her fees from mortgage brokers, title representative or any other settlement service provider
Performance contract
To meet the terms of a contract (they have fulfilled there obligations)
Assignment of a contract
The transfer of obligation to a contract from one person to another
Novation
The creation of a new agreement between the parties
Breach of contract
The filler of the party to meey one or more contracted terms
Earnest money serves as a….
Down payment on the down payment
Earnest money is disbursed according to the
Terms of the contract
Earnest money is an indicator of….
How serious a buyer is about buying a property
Earnest money must be placed in a ______ , which is also known as an______
Trust account, escrow account
