Quizzes Flashcards
The Buyers interest under a contract of sale is?
Equitable title
What concept gives a vendee the right to sue the vendor for specific performance on a signed contract?
Equitble title
The contract of sale is also known as the:
Buy-Sell
The seller in a buy-sell contract situation is the:
VenDOR
The Vendee has:
Equitable title
A seller who defaults on a buy-sell may be forced to sell by being sued for:
Specific performance
Equitable title Gives the buyer the right to:
sue the seller for specific performance
If a potential buyer suspects that a listed property may have once been an oil refinery, the buyer should:
Include an environmental audit contingency provision in the offer
To be enforceable, a buy-sell must contain:
at least an accurate description of the property
a buy-sell obligates:
the seller to sell and buyer to buy
any person, including a real estate agent, may sign a buy/sell on behalf of either the seller or buyer if the seller or buyer has granted a/an?
power of attorney
a buy/sell which specifies that it is subject to a survey is an example of a contract with a/an?
Contingency
a stipulation in a contract for the purchase of a commercial building makes the purchaser ‘s obligation dependent upon obtaining a specific amount of lender financing
the purchaser is obligated to make reasonable efforts to obtain the financing
the title search is most likely going to be done by the:
title company
the document issued by the title company (abstractor) which first reveals to the buyer existing clouds on the title
title commitment
An advantage of an “extended coverage” title policy is that it may be used to provide coverage for:
Survey issues
Title insurance is usually paid for by:
the seller
an abstract of title contains references to deeds, easements, and mortgages only if they are:
recorded
A leaky roof would be covered by:
A home warranty
The general warranty deed is also known as a:
Warranty Deed
Which deed provides the best protection for a buyer?
General Warranty
Which deed gives no guarantees but transfers whatever ownership interest the grantor has?
Quitclaim deed
The deed most commonly used in America for both residential and commercial transactions is the :
Warranty Deed
What document is generally used to transfer ownership of personal property?
Bill of sale
Which deed guarantees that title is marketable?
General Warranty deed
The covenants of quiet enjoyment and further assurances are found in which deed?
General Warranty Deed
When selling housing, most developers use a :
General Warranty deed
The appropriate deed for a charitable donation is a:
Quitclaim deed
A valid deed requires each of the following EXCEPT:
Actual purchase price OR Signature of the Grantee
A valid deed must have:
The Grantee’s name
The Document evidencing the end of one persons ownership and the initiation of another persons ownership is the:
deed
Which covenant in a general warranty deed guarantees that the seller was the owner of the property and thus had the right to convey title?
Seisin
A quitclaim deed Conveys the same title as:
would be conveyed by a general warranty deed
Information available in the public records refers to:
Constructive notice
Information gained from personal observation or communication is:
Actual notice
Unrecorded deeds Are:
effective between the parties
Recording Creates:
priority
A buyer becomes the owner when the deed is:
Delivered to the grantee
In most states, real estate documents are recorded in the office of the:
County clerk and recorder
An authentication of a document made by signing the document under oath before a public official is known as:
Acknowledgment
Which document would NOT be recorded?
A salespersons employment contract with broker
A persons right to exceed those of the owner of record because the person has occupied the property for a long period of time. This appears to be an example of:
Adverse possession
Adverse possession is an example of the transfer of title to real property by:
Abandonment
Under adverse possession, an occupant may:
Aquire title
The process of governmental taking of private property is:
Condemnation
The power of the government to take private property is:
Eminent domain
A city wants to acquire right of way from private owners. The right of the city to do this is:
Eminent domain
A utility may force the sale of private property by:
Eminent domain
Without receiving any compensation, the transfer of privately owned property to the government is known as:
Dedication
If the identity of a property’s owner is unknown, the property reverts to the state government by the power of:
escheat
Just compensation must be paid for property transferred by:
Eminent domain
Which document would most likely contain a legal description of the property?
mortgage
Which document is most likely to be recorded?
mortgage
the mortgage borrower is referred to as the :
MortgagOR
The mortgage secures the:
note
the best evidence of the debt and promise to pay is the:
negotiable mortgage note
A mortgage is an example of a:
voluntary lien
Which document pledges property as security for a debt?
mortgage
A mortgage pledges property to:
secure a debt
A mortgage is used to defer:
part or full payment
If there is more than one mortgage, the priority of the mortgages is determined by the date that:
each is recorded
A mortgage must be signed by the:
MortgagOR
Which document personally obligates the borrower to repay the loan?
mortgage note
which mortgage clause grants priority to a later mortgage?
subordination clause
the priority of liens may be changed by a/an:
subordination clause
A subordination clause changes:
foreclosure rights
Which clause states: “The balance is due and payable upon default?”
acceleration clause
Which clause states: “The balance is due and payable upon sale?”
alienation clause or due at sale
The deed used when a defaulting mortgagor transfers the mortgaged property to the mortgagee to avoid a court foreclosure sale is known as a:
deed in lieu of foreclosure
Anyone signing a mortgage on behalf of an organization ( such as a business entity or charity) should insist on:
non recourse financing
A power of sale clause Allows a lender to:
foreclose without a court hearing
The deed which requires court approval is the:
Sheriff’s deed
When a mortgage note is paid in full, the title will be cleared by:
A certificate of discharge
The defeasance clause is initiated when the mortgagor:
pays off the loan
Prior to foreclosure sale, the mortgagor has:
an equitable right of redemption
After a foreclosure sale, the prior owner has:
A statutory right of redemption
A purchased a new home and financed the transaction at fidelity mortgage company. A defaulted and fidelity foreclosed. Unfortunately, the property did not sell for enough to pay off the balance due on the note. is A liable for the deficiency?
Yes, because A still owes the balance of the note
A mortgage creates a lien in favor of the mortgagee but does not:
transfer title to the mortgagee
If the seller keeps title until the purchase price has been paid, the parties have a:
land contract or contract for deed
Payment of all or part of the purchase price is deferred with which of the following?
Contract for deed or mortgage
The seller under a contract for deed ( installment land contract) retains:
title
The purchaser under a contract for deed is the:
VenDEE
A buyer bought a home using a contract for deed. If the last payment has not yet been made, the buyer:
may list and sell her equity
The buyer under an installment land contract (contract for deed) usually wants:
possession before making the last payment
Who wants the contract for deed to be recorded immediately?
the buyer
Under a contract for deed, the buyers default usually results in:
The forfeiture of all payments made
What interest does the seller have under a contract for deed?
title
Under a contract for deed, the buyer gets equitable title when:
the contract for deed is signed
Under a contract for deed, the buyer gets title when:
The final payment is made
Judgment liens are created by:
Lawsuits
A lis pendens provides notice that:
a judgment lien may occur
Judgment liens may arise from:
a lawsuit in state or federal court
To determine weather a property is involved in litigation, such as foreclosure, look for:
a lis pendens
A contractor who has not been paid may file a:
Specific lien
The recording of a homestead exemption form could protect a homeowner from:
a judgement lien involving failure to pay a hospital bill
The priority between liens may be changed by:
a subordination agreement
Tax liens are statutory liens which may lead to a:
tax foreclosure sale with an equitable right of redemption
A judgment could cause a debtor to lose his:
house, furniture, jewelry, and other property
Which lien has highest priority?
unrecorded tax lien
The best protection from a mechanics lien is provided by a contractors:
bond
Which lien is voluntary?
mortgage
Two mortgages, three construction liens, and a tax lien encumber the title of a parcel. The priority among the liens is determined by:
the type of lien
Which liens apply to both real and personal property?
judgment liens
A contractor has not been paid for erecting a new building for a car dealer. The contractor may file a mechanics lien against:
the building only
Easements, liens and restrictive covenants are:
encumbrances
Easements run with the land even if:
Ownership changes
The difference between a deed and an easement is that:
a deed conveys title but an easement conveys only a right
An easement was recorded on a plat mp in 1886. The easement has never been used. The property has been sold several times. Is the easement still enforceable?
yes, because easements run with the land
An appurtenance is a right which:
transfers with the land
Each of the following runs with the land if the property is conveyed EXCEPT:
a license
Retaining a right to place a commercial billboard on a property is an example of:
an easement in gross
Which may be terminated at any time?
license
An easement appurtenant:
runs with the land
A survey would assist a property owner in:
constructing driveways and other appurtenances
Which is the best example of an appurtenance?
A tree
Restrictions are land-use controls which:
limit the future use of the land and improvements
Private land-use controls are enforced by:
court injunctions
Unless there is prompt enforcement, a deed restriction may become unenforceable due to:
laches
Restrictive covenants are intended to:
limit the property’s future use
Is it legal for a seller to enforce the standard old restrictive covenant prohibiting occupancy by minorities?
No, because such restrictive covenants are not legally enforceable
B gave a parcel of property to her daughter. At the time of the transfer, B placed a restrictive covenant on the property. Can B later waive the restrictive covenant?
Yes
A restrictive covenant will most likely be enforceable by only the:
Owners of property within the subdivision
A restrictive covenant is created by:
a contract for deed
A condition differs from a restrictive covenant in that a violation of a condition results in:
forfeiture of the property
If more than one party claims to be the owner, the parties should ask a court to:
quiet title
Which deed is most commonly used to clear clouds on the title?
Quitclaim deed
What are the two ways to clear up a claim or cloud on the title?
Quitclaim deed and quiet title action
Can a trust deed be used to clear up a cloud on the title?
No, because a trust deed is a type of mortgage and the trust deed further clouds the title
If title to the property is not marketable:
The property may be sold anyway
A buyer would most likely conduct a quiet title action if:
A third party claims an interest in the property
A seller signed a deed with her married name rather than using the maiden name by which she had originally purchased the property- this creates:
A cloud when recorded
If there is a cloud on the title and the owner is unable to successfully negotiate for a quitclaim deed, the owner should file a lawsuit which is known as a:
Quiet title action
Which deed cannot be used to clear up clouds on the title?
trust deed
After occupying a property for the statutory period required for adverse possession, what should the adverse possessor do to clear up the title?
file a quiet title action
Building codes regulate reach of the following EXCEPT:
Property use
A neighborhood is going to be rezoned from residential to commercial. If you own the only vacant corner lot in the residential area, the value of your vacant corner lot will likely:
increase
What protects existing business owners from having to conform when zoning changes from commercial to residential?
nonconforming use
A Baskin Robins ice cream store is a nonconforming use in a residentially zoned area. The business is destroyed by fire. can it be rebuilt as an ice cream store?
No, the stores nonconforming use is terminated by the destruction of the property
Zoning would most likely regulate the:
setback
Property taxes are an exercise of:
the police power
An apartment house was built in an unzoned area. If the apartment house is later zoned single-family residential, the owner must:
Do nothing because the owner automatically has a nonconforming use
Before residentially subdividing a parcel of bare ground, the developer should first:
Check the density allowed by the city residential zoning regulations
A wants to build a pizza restaurant on a vacant lot but the setbacks won’t permit A to construct the restaurant. To resolve the problem, A should get a :
Variance or conditional use permit
The use of a planned unit development (cluster housing project) may be used to:
alter setback and density
State and local governmental regulation of real estate construction and transactions is done under the:
police power
The government protects consumers from shoddy home construction practices through the use of:
building codes
The licensing of real estate agents and the requirement of a trust account are examples of:
police power
Restrictive covenants are a:
private land use restriction
A contract of sale is signed by both parties. Prior to closing, the zoning changes and the property is now worth substantially more than the contract price. The contract of sale is:
Enforceable because there was no zoning
Assume that the restrictive covenants and the city zoning ordinance have different rules regarding maximum fence heights. The property owner should:
comply with both, thus, the most limiting of the two controls
Z and A signed a contract for sale for Z to purchase A’s bar and restaurant. Just days prior to closing, the city rezoned the property to residential use only. The contact of sale is:
still enforceable because there was no zoning contingency clause
If two unmarried persons own a parcel property. They are presumed to be:
tenants in common
ownership by one person is called:
severalty
If the last survivor will always take title, the parties are:
joint tenants
A property owned in a tenancy by the severalties could be owned by:
one person
A deed states that the grantees are “Gary Jung” and “Ron Zier” but the deed failed to state what type of tenancy was intended. There is a statutory presumption that the two owners are:
tenants in common
When asked by the buyers whether to hold title as joint tenants or tenants in common, the broker should recommend:
seeking the advice of a lawyer
A, B and C are joint tenants. C dies with a will designating an heir. C’s interest will go to:
A and B
Two buyers prefer to own their property with no right of survivorship. This is:
A tenancy in common
Riparian ( water) and mineral rights:
run with the land unless otherwise agreed
A, B and C are joint tenants. C sells her 1/3 to D. Which is correct:
A and B are joint tenants and D is a tenant in common
Surviving wives have a right called:
Dower
Surviving husbands have a right called:
Curtesy right
Which of the following indicates that the owner of the interest has the right to convey ownership of the property:
fee simple
A life estate for the life of another is:
pur autre vie
A transfers a life estate to B but A will get the property back when B dies. This is a life estate with a:
reversionary interest
Sam has a remainder interest in his mothers farm. His mother is living in a rest home. Can Sam sell his interest?
Yes, and the buyer will then own the farm when Sam’s mother dies
A transfers a life estate to B with a reversionary estate. B dies with a will naming the state government as B’ heir. Who gets the property?
A
The remainder will get a particular house when the life tenant dies. Axel desires to purchase the house and have fee simple title with an immediate right of possession. Axel should:
purchase the interests of the life tenant and remainder
The university purchased a home from Mr. Prescott. The deed specifies that Mr. Prescott could occupy the property as an owner for the rest of his life. But upon death, the university would become the sole owner. Prescott’s deed conveyed what interest to the university:
A remainder interest
A deeded a parcel of property to B. With the property to go to B’s heirs upon B’s death. In this situation:
A is the grantOR, B has the remainder interest, and B’s heirs have a revisionary interest.
A condominium involves A combination of:
fee simple ownership of each unit and a tenancy in common ownership of the common elements
A cooperative involves:
A leasehold interest in the unit and personal property interest in a share of stock
Which of the following is a condo “limited” common element?
an assigned parking spot
A condo owner sells by transferring a:
deed
The owner of a cooperative unit sells by transferring a:
share of stock
Assume the owner of several condo units have not paid their assessments for property taxes. Those units may be:
foreclosed upon separately from the other units
Assume that a cooperative has not paid its property taxes. This may result in:
a foreclosure of the entire cooperative complex
A new buyer has no liability for an existing mortgage when purchasing mortgaged property that is:
subject to the mortgage
A buyer purchased mortgaged property subject to an existing mortgage. The mortgage was foreclosed upon. Who Is liable for the deficiency?
the seller only
A buyer purchased mortgaged property and becomes personally liable. This is an example of:
an assumption
In which situation is a mortgagor released when mortgaged property is sold?
an assumption with a novation
An assumption with a novation is known as a/an:
full assumption
Which mortgage clause requires the balance to be paid in full when the property is conveyed?
alienation clause ( due on sale)
Which mortgage clause prevents a later purchaser from assuming the loan?
due on sale clause ( alienation )
Which clause is contained only in non assumable mortgages?
Alienation ( due on sale)
Which clause refers to the first step to be taken prior to foreclosure?
acceleration clause
An alienation clause may require which of the following to be paid in full when the property is sold?
the balance owning on the mortgage
If a mortgagor sells to a new buyer who takes over the payments on the old mortgage, what releases the mortgagor from liability?
novation
An offer from the seller back to the buyer in an?
counteroffer
A buyer offered 45,000 for a lot listed for 50,000. The seller counteroffer at 49,000. The buyer made an offer of 47,500. The seller rejected the offer. Several days later, the seller notified the buyer that the seller was accepting the 47,500 offer. This means:
No contract was created
A contract is created when the:
buyer is notified of the seller’s signed written acceptance of the offer
Prior to closing, the buyer learns that the zoning has been changed in such a way that the property is more valuable. The contract is:
enforceable
A buyer offered to buy a property for 50,000. The seller wrote back saying she would sell for 60,000. The sellers letter is:
a counteroffer and a rejection of the buyers offer
What does a counteroffer do to the original offer?
terminates it
A buyer makes an offer for 50,000. The seller changed the price to 55,000 and signed the document. The seller is now the:
offeror
May the broker accept full terms and a price offer for the seller?
yes, but only if the broker has a power of attorney
A buyer has delivered an offer to a seller. The seller may accept the offer by:
notifying the buyers agent
A promise for a promise is:
Bilateral
Every unilateral contract involves:
a promise for performance
The difference between unilateral and bilateral contracts is:
A performance obligation is required to create a unilateral contract, whereas multiple promises are exchanged to create a bilateral contract
A valid contract requires:
mutual consideration
Why is consideration required?
to satisfy the requirement of mutual obligations
Contracts of sale require:
consideration
On the day of closing, the seller agreed to lower the agreed selling price from 300,000 to 275,000. The 275,000 written agreement is not enforceable due to:
lack of consideration
A contract to purchase commercial property requires:
consideration
The statue of frauds requires real estate contracts of sale to be:
reduced to writing
A written contract is an example of a contract which is:
expressed
ALL written contacts are:
expressed
A contract which is notarized is:
acknowledged
A buyer signed a contract of sale but overlooked a clause which was clearly detrimental. Is the clause binding?
yes, because the buyer agreed to the terms of the contract
The seller orally agreed to leave the 4,000 lawnmower with the property. The written contract did not mention the mower. The buyer sued to obtain the mower and will:
lose because of the parol evidence rule
Two parties negotiate for the sale of a hardware store. The final agreement was reached through the use of two handwritten and signed letters. The letters:
satisfy the statue of frauds requirement that the agreement be written
A minor’s contract to purchase land from an adult is voidable by:
the buyer only
When dealing with an insane person, it is best to:
deal with the insane persons court appointed guardian
If a buyer becomes insane two weeks after signing a real estate purchase contract:
the seller may sue the buyers guardian for specific performance to force performance on the contract
A minors real estate sales contract is:
voidable by the minor due to the minors incompetency
A buyer who has purchased land as a minor has recently reached the age of majority. The buyer is under the impression that the buyer may still cancel the contract and seek the return of the purchase price paid. The buyer may:
rescind within a reasonable time after reaching the age of majority
Intentional concealment for misrepresentation of material facts is:
fraud
A brokers statement that a fairly ordinary home h as a “lovely floor plan and a charming exterior” is referred to under contract law as:
puffing
If fraudulent misrepresentation is present, a real estate contract is:
voidable
A contract signed under duress is:
voidable
Stating that a 20 year old house is “new” is an example of:
fraudulent misrepresentation
A buyer who is uncertain of his ability to obtain financing should include in the contract:
a financing contingency provision
A contract where all requirements have been performed by each party is:
executed
Annulling a contract to restore the parties to their original positions is known as:
rescission
Asking the court to compel the other party to sell or buy under the terms of a contract of sale is:
specific performance
Which provision should be in the contract of purchase if the owner must close by December 31st for tax purposes?
time is of the essence
An agreement predetermining the amount of money to be paid if one party breaches a contract is:
liquidated damages
Which is not included in the individuals “bundle” of rights?
condemnation
Legally, who is required to pay for the survey and property inspection?
it is negotiable between the buyer and seller
Options are:
unilateral
If a tenant has a right of first refusal, the tenant:
can exercise the right only if the lessor decides to sell the property during the lease period
In a right if first refusal, what determines the selling price?
the market price at the time the property is placed for sale
A right of first refusal in a tenants lease:
is no longer binding if the landlord decides not to place the property on the market during the lease term
In an option situation, the buyer is the:
optioNEE
A contract gives the buyer the right to buy the property if he can obtain financing within 29 days. This contract is:
an option
The person who pays for an option is the:
optioNEE
In an option situation, who may be sued for default?
optioNOR
If an option isn’t exercised, the:
Optionor may keep the option money
Which is always true of an option?
It must be written and signed to be enforceable
If an option is not exercised, who takes the option money?
optionOR
An offer which states that it will be held open for 3 days may be:
withdrawn any time prior to acceptance
the purchase price under the right of first refusal is determined by:
the market when the property is offered for sale
The lessors right of possession after the lease is a:
reversionary right
Does a tenant need consent of the landlord to assign a lease?
No, the tenant is presumed to be able to assign the lease unless the lease specifically prohibits assignments
Each is a tenant’s interest EXCEPT:
leased fee
A tenant farmer can’t move into her newly leased farm because the old tenant is still living there and planted new crops and remodeled the farm house. The old tenant refuses to leave. The landlord violated the lease covenant of:
quiet enjoyment
A lease is terminated by:
death of NEITHER the lessor or the lessee
What happens to a one year residential lease when the landlord sells the home?
nothing
The landlords interest is:
freehold
Who has the freehold interest?
lessOR
An assignment is a transfer of:
All of the rest of the lease.
When a leased property is sold the buyer:
has no right to take possession until the lease expires
Who pays the operating expenses under a triple net lease?
the lessEE
A tenant pays only part of the operating expenses under a:
net lease
In addition to paying 750/month rent, a tenant is required to pay 10.2% of the property’s maintenance, utility, and tax expenses. This is a:
net lease
A lease where the landlord pays all taxes, insurance and maintenance and the tenant pays only rent is:
gross lease
Business tenants are often short of cash when they start their businesses. To make a property appealing to such start-up business tenants, the property manager should offer which type of lease?
graduated
Which clause in percentage lease allows a landlord to cancel a lease if t he tenant’s business is not as successful as expected?
recapture
To ensure that future rental rates will be able to keep pace with inflation, a landlord should insist upon:
a step up lease
A percentage lease is one where the tenant pays a percentage of:
the tenants gross income
Which legal document is used to convey an ownership interest in personal property?
bill of sale
Another name for personal property is:
chattel
A tenant farmer’s right to come back after the lease expires and harvest growing crops is known as:
an emballement, which is a personal property right, that is, a chattel
Which of the following is NOT real property?
trade fixtures
Permanent additions to property are:
improvements
Fixtures are:
part of the real estate
A tenant installs counters and shelves in a store. The trade fixtures are:
removable by the tenant any time prior to expiration of the lease
A window air conditioner is a/an:
chattel
A home’s new furnace is:
an appurtenance
A tenant farmer plants an annual crop. The crop is:
an emballement which is the tenants personal property
A home’s garage door opener remote control is:
a fixture that must be left with the buyer at closing.
Appurtenances include:
property improvements
A new furnace installed by the property owner is a:
fixture
grass is considered an:
appurtenance
The lowest estate in real property is the:
estate at sufferance
How much notice to terminate must be given by a tenant with an estate for years for one week?
none
A holdover tenant has as:
estate at sufferance
A 6 month lease is a:
tenancy for years
A lease from Saturday to Friday is a:
tenancy for years
A tenant who fails to move out after termination of a lease has a:
tenancy by sufferance
How much notice must be given to terminate a 1 year lease?
none
After a lease expired, the lessor allows the lessee to remain by paying rent until either the lessor finds a new tenant or the old tenant finds another rental. During the negotiations, the lessee now has a:
tenancy at will
A tenant moves because the property has a leaky roof and inadequate wiring. This is:
a constructive eviction
A foreclosure on an apartment building will not affect any of the leases if the mortgage contains a:
non disturbance clause
A lease is terminated by:
condemnation
A lessee with a commercial lease dies. The lease:
is not terminated by the death of the lessee and the lessee’s estate/heirs are obligated for the rent
Which of these refers to the owner of a non freehold estate?
lessee
An agency relationship exists between the:
principal and broker
A broker supplies the financing for a condo development, provided the developer agrees to give the broker an exclusive listing to sell the completed units. The broker is known as a:
Agent coupled with an interest
A listing is also known as:
an employment contract
Who is liable if a broker obeys the sellers instructions to hide defects ?
both the seller and the broker
When asked by a client about a defect, the broker remained silent even though the broker knew of the defect. This is:
A breach of the law of agency
When asked by a customer about a defect, the broker remained silent even though the broker knew of the defect. This is:
fraudulent misrepresentation
An agent owes a customer/prospect which duties?
honesty, no misrepresentation, disclosure of defects
An E and O (Error and Omissions) covers:
a brokers professional negligence
If a broker receives multiple offers on a listed property, the broker should present to the seller:
all offers
The listing broker may purchase the listed property only if:
full disclosure of the purchase is made to the listing principal
A sellers agent may tell the buyer about:
hidden defects in the property
A broker who fails to submit to the seller any offers below asking price:
violates fiduciary duties
theft of money is covered by:
fidelity bonds
If the broker receives an offer but anticipates several more offers, the broker should:
present the offer and tell the seller that more offers are likely
The seller asks about the race of the buyer. The listing broker refuses to answer. The broker:
did not violate any fiduciary obligation because the buyers race is not material
If the buyer asks if the seller will take less than the 200,000 listed price, the broker should respond:
“it is listed for 200,000 but I will take all offers to the seller.”
The owner wants to list at 60,000 but the broker knows that the property is worth much more. The agent should:
disclose the property value to the owner
If a property manager learns that a tenant is dealing in illegal drugs, the property manager should:
disclose this information to the owner
A broker must disclose to the principal seller that:
the buyer ( who needs seller financing) has a less than desirable credit history
If the buyer has no money for an earnest money deposit but is able to sign a 5,000 negotiable note instead of using cash. The real estate agent should:
notify the seller that the buyer has put earnest money in the form of a negotiable note
A salesperson should disclose to the seller the:
neighbors house has a sinkhole problem
Defects which are not apparent are referred to as:
latent defects
An “as is” clause in a contract of sale indicated that:
there are no warranties regarding defects
A broker learns about a zone change which may have a substantial effect on the property value. Must the broker inform the seller?
yes
The owner dies before the listing broker is able to present a full terms offer. Is the broker entitled to a commission for having found a ready, willing and able buyer at the listed terms?
No
Which terminates a listing?
the property is condemned
Which will NOT terminate a listing?
the property fails a termite inspection or the buyer defaults
Death of a listing seller:
automatically terminates the listing
When a listed property is destroyed by fire, the listing:
automatically terminates
The listed property was sold at a foreclosure sale. Is the broker entitled to a commission?
No, the broker did not find a ready, willing and able buyer prior to the foreclosure
A six day listing creates:
a special agency
A property manager is a:
general agent
A broker may sign a contract of sale for the seller if the :
broker has a power of attorney
An agent hired to perform a particular task is a:
special agent
A guardian is an example of a
universal agent
Under exclusive agency listings, the broker is paid:
if anyone other than the owner sells the property
Which is true of the brokers motivation to spend her money to advertise the property in hopes of getting a commission?
the exclusive right to sell provides more incentive than any other listing
Which listing requires the broker to be the procuring cause of the sale to be entitled to a commission?
open
Under which listing does the broker have the least motivation to find a buyer because of there is less certainty of a commission?
open
Under an exclusive agency listing, the listing broker is entitled to be paid if the:
property is sold by another firm
The only listing which entitles the broker to a commission no matter who sells the property is the:
exclusive right to sell
A salespersons payment is determined by:
a contract with the employing broker
Two real estate firms agree to divide the market with one firm taking only residential sales and the other taking only commercial sales. The two firms agree not to deal with the only other firm in town. This violates:
the Sherman act’s antitrust and boycotting
A salesperson may only collect her commission from:
her employing broker
A broker wants to charge a flat fee commission. This is:
Illegal
Commissions are set by the :
seller and broker
A ready, willing and able buyer makes a full price offer, the broker who listed the property is:
entitled to a commission
If a salesperson is paid an annual salary, the broker must send the salesperson a:
W-2 form
A broker who doesn’t withhold the salespersons taxes, pay a salary, or pay FICA for the salesperson must have:
a tax status agreement with the salesperson
Who is not on a salary and receives a 1099 form?
indépendant contractor
A salesperson is paid on a salaried basis and has vacation, retirement and workers comp benefits. In addition, the salesperson works 8-5. The salesperson appears to also be an:
employee
With buyer agency, the prospect or customer is the:
Seller
A broker may tell the buyer that the seller will take less than listed price if the broker is a:
buyers agent
A salesperson is an agent of:
The salespersons employing broker
Under seller agency, the prospect or customer is the :
buyer
under buyer agency, the seller is the :
brokers customer
Under the typical buyer agency agreement, the broker is the agent of:
the buyer only
A salesperson may show:
all properties listed with the firm
A salesperson is an agent of the:
employing broker
Placing earnest money in the office general account is:
commingling
State real estate license laws do NOT regulate:
commission disputes
A buyer should be given a copy of the buyers offer:
immediately after the buyer signs it
Earnest money is:
not required by state or federal law
A real estate agent cannot legally inform a client about:
the quality of the property’s title
When showing a listed commercial property, the broker must disclose to the buyer:
the property’s latent defects
A buyer made an offer which included 50,000 earnest money. the earnest money is in the form of a negotiable note. The listing broker should:
inform the seller that the earnest money is in the form of a negotiable note
A securities license is required to sell:
shares of stock or limited partnership interests
Sales of interstate securities are most likely registered under:
Securities Exchange Commission
Sales of intrastate securities are regulated by the:
state of blue sky laws
Which of the following requires a securities license?
selling stock
The sale of an investment security should be handled by a:
licensed securities dealer
An investor who wants to shield personal assets from business creditors would prefer any of these EXCEPT:
general partnership
The metes and bound form of land description uses:
the point of beginning
A township contains how many square miles?
36
A plat map is used in which type of legal description?
lot, block and subdivision
The point of beginning is associated with:
A metes and bounds description
Which of the following methods of legal land description would most likely be used to describe agricultural lands?
government survey
A survey would reveal all of the following about a property EXCEPT:
a license
Which of the following best describes a plat?
it is a document used to record the subdivision of land
The voluntary giving of land for public use by an owner is:
dedication
The right of ingress and egress over the land of another person is called an:
easement
A survey would reveal all of the following about a property EXCEPT:
the water rights reserved by a previous owner
The US government survey uses all of the following EXCEPT:
lots and blocks
Which form of legal land description uses measures of definite distances in indicated directions?
metes and bounds
The three methods used to legally describe land are:
recorded plat, us government survey and metes and bounds
A column of townships running north and south is called a:
range
Which form of legal land description describes a parcel by enclosing it?
metes and bounds
in zoning, the distance from the street to the front of a house is called a:
setback
The length of the front of a lot on the street is referred to as the lots:
front footage
A land owner is contemplating building a septic tank sewer system on his lot. What test would determine the grounds ability to absorb water?
a percolation test
Which method of land description would describe an irregular piece of property?
metes and bounds
The permanent receding of water increases the land owners property by:
reliction
What is the most important reason for a lender to require a survey before making a loan?
to make sure improvements are constructed on the mortgaged lot
What do you call the process by which a land owner loses land by a sudden or violent act of nature?
Avulsion
A property owner on a river or creek is said to have which type of rights?
Riparian
What is the process by which a landowner increases his property due to the accumulation of alluvial deposits washed on to his property from other properties?
Accretion
A residence that has a bathroom but no tub would be said to suffer from:
functional obsolescence
The four characteristics of land value are:
Demand, Utility, Scarcity, and Transferability DUST
When appraising a rental property, the appraiser should emphasize which of the following?
the income approach
The capitalization approach is best used in determining the value of:
an income producing property
When appraising a 20 year old residential home, the appraiser should emphasize which of the following:
the selling prices of similar properties
A shopping mall developer buys three adjoining lots creating a single parcel. This is an example of:
Assemblage
A shopping mall developer buys three adjoining lots creating a single parcel. The increased value is called:
Plottage
All of the following are operating expenses EXCEPT:
vacancies and lost rent
Which of the following is true about depreciation in appraisal?
it is a real loss in value
The principal that assumes that property values are highest in neighborhoods where houses are similar in design, construction, and size, is known as the principal of:
conformity
When appraising an income producing property, which of the following is the MOST important consideration?
the net operating income
Which of the following appraisal methods would be best when appraising a residential property?
market data
Which of the following would an appraiser use to estimate the value of a vacant lot?
market data
If an appraiser was appraising a school building, a church or a library which method would he use most heavily?
Cost
All of the following are physical characteristics of value of land EXCEPT:
Demand
When an appraiser is estimating the square footage in a building the appraiser would use:
outside dimensions
if demand for an apartment is less than the available units for rent in the area, the market would be referred to as a:
Buyer’s market
When using the cost approach to appraisal. The appraiser has found that while the subject property is in excellent condition, the neighborhood is made up of poorly maintained properties. This loss in value would be called:
Economic obsolescence
Capitalization would best be used in which of the following circumstances?
When the appraiser is using the income approach to appraisal
When using the direct sales comparison or market data approach to appraisal, if you had three comparables with different prices which would you emphasize?
the one most similar to the subject property
Using land to its greatest economic advantage is called:
highest and best use
What income is used by the appraiser when estimating value of an investment property?
net operating income
The single most important factor affecting the value of a property is the:
location
The best evidence for justifying the price of a house is:
the appraised value determined by a qualified appraiser
The appraisal concept that assumes the value of an improvement is not what it costs but what it adds to the value of the property is the principal of:
Contribution
In a market where the demand exceeds the supply for single family homes economists would refer to the condition as a:
Sellers market
the existence of a “fair market” in which a willing buyer is in no hurry to buy, buys a property from a seller under no duress to sell is called a:
arms length transaction
Economic rent is:
the rent that real estate can command in an open and competitive market
Lenders require an appraisal to make sure the:
value of the property is high enough to secure a loan
Determining the present value of a property’s future income is what an appraiser does when using which approach to value?
Capitalization approach
which of the following items is not part of the profit and loss (income) statement?
liabilities
Which appraisal report would give the client the most information?
a narrative report
A property maintains its maximum value in a neighborhood of similar houses and residents according to the principal of:
conformity
If a property satisfies human needs, gives a monetary return or other satisfaction it is said to have value created by:
Utility
An appraiser should first consider which of the following when making an appraisal?
highest and best use
A property manager always works in the best interest of which of the following parties?
the owner or principal
A properly written property management agreement should include all of the following EXCEPT:
the operating budget for the property
A property manager has subtracted the losses for vacancies and collection losses from the scheduled gross rental income. The resulting figure is:
gross effective income
If the property manager suspected one of the tenants was carrying out an illegal activity in the managed building they should:
notify the owner of their concerns
A property management agreement would include all of the following EXCEPT:
the appraised value of the property
A property manager should know that an effective method of avoiding tenant problems with a rental property is to use:
A standard lease with specific rules and regulations
When should a property manager qualify a rental prospect?
before a rental agreement is signed
A property manager screens likely tenants to:
see if they can afford the rent
Property managers save money in clean up costs by:
retaining long tern tenants
The property management agreement should include:
how often the manager will report to the owner
factors such as the area to be maintained, availability of skilled help, and the skills and knowledge of the property manager would be considered when:
determining whether to contract for outside maintenance services
How are property managers paid?
on a percentage of gross or net rent, or an hourly or fixed fee if agreeable to both parties
Encouraging people to sell by telling them that minorities are moving in is?
blockbusting
Hiring a catholic salesperson to deal only with catholic customers violates what law?
Federal Fair Housing act of 1968
Limiting the neighborhoods in which properties are shown because of the race of the particular buyer is:
steering
A lender that refuses to provide mortgage funds in a particular ethnic neighborhood is guilty of:
redlining
Telling owners in an ethnically changing neighborhood to “sell now. preserve your equity” is:
blockbusting
Fair housing complaints are filed with the:
housing and urban development
The federal fair housing act does not apply to discrimination on the basis of:
tobacco smoking
Federal fair housing laws do not apply to discrimination based on:
sexual orientation
The federal fair housing act does not apply to:
the sale or lease of commercial office buildings
If a tenant wants to rent in a complex where children are not allowed. The broker should:
tell the tenants that bona fide retirement communities are allowed to prohibit families with children
protected classes under the civil rights act include:
persons with children under 18 living at home
If a blind tenant has a seeing-eye dog, a landlord with a “no pets” policy rule may:
grant the blind person an exception to the “no pets” rule
A landlord must provide a designated handicap parking space for a handicap tenant:
at no added cost if space is available and a need is shown
A handicap tenant wants the landlord to lower all the light switches and install grab bars in the shower. Must the landlord comply?
No
Which areas in a new high-rise apartment structure must be accessible to the handicapped?
The entire structure
Which of the following is a protected class under the federal fair housing act?
mental incapacity
a owner occupied 4 plex or smaller can refuse to rent to students who are catholic:
true
Which property is exempt from the fair housing act?
a property where the owner lives in one of the units and won’t rent the other units to women
An owner occupant of a unit in a 8 unit apartment complex:
may not discriminate because the complex has 8 units
The civil rights act applies only to discrimination based on:
race
The Americans with disabilities act ADA applies to:
A hardware store which is not handicap accessible
The ADA applies to a :
store with no designated handicap parking
Which federal law requires a lender to inform the borrower as to the annual percentage rate on a loan?
truth in lending act ( reg. z)
All of the following are part of the annual percentage rate on a loan EXCEPT:
Attorney’s fees
A broker runs the following ad in a local newspaper. “four bedroom, 3 bath home in soaking hawk location. 30,000 down and get a 9% loan with payments of 766 per month.” the ad is in violation of which law:
truth in lending
Under truth in lending, if a broker advertises a property with an assumable loan they must:
state the finance charge as an annual percentage rate
Which of the following would be regulated by truth in lending?
a loan on a single-family house with more than 4 payments
If a broker advertises a property as having an “assumable variable rate loan with a range of 8 to 11 percent.” it would be a violation of truth in lending because:
the ad must state “annual percentage rate” after the interest rate
Which of the following are regulated by reg z?
consumer installment loans
truth in lending establishes limits on which of the following?
the maximum number of days the borrower has to exercise his right of rescission
under truth in lending, annual percentage rate shows:
the true cost of credit
Which of the following loans are covered by truth in lending?
a homeowner gets a 2nd mortgage on his residence
All of the following are covered by truth in lending act EXCEPT:
A loan to buy a pet store
A borrower must be told the APR to:
allow borrowers to compare the true cost of credit
A loan estimate under TRID would likely include each of the following EXCEPT:
costs to bring the property to sound physical condition
RESPA requires that the lender provide to the borrower which of the following within 3 days of a loan application?
An estimate of the closing costs
All of the following would be covered by RESPA EXCEPT:
a commercial loan on a 5 plex
A loan estimate under TRID would likely include each of the following EXCEPT:
costs to bring the property to sound physical condition
A broker ran an ad containing a paid endorsement. The ad failed to mention that the endorsement was a paid endorsement. This violates the rules of which federal agency?
FTC
The Can-spam act applies to:
the do not call act applies to:
telemarketers
The FTC advertising rules apply to:
all business advertising
A real estate agent cold calling phone numbers must compare phone numbers with the FTC’s do not call list every:
31 days
A sellers listing with Molly broker expired. Due to the existing business relationship, Molly is exempted from the do not call rules if she calls the seller within a maximum of:
18 months
A broker wants to communicate with a potential buyer regarding a property for sale. If the communication will be via fax, the broker must:
include an OPT-OUT notice in the fax
All of the following may be depreciated EXCEPT:
Land
A charge to install civic improvements such as sidewalks and curbs in a subdivision is called a:
special assessment tax
The interest on a loan to purchase or refinance a primary residence is:
fully deductible
Which of the following is not a specific lien?
Income tax judgments
The value that is the basis for the determination of property tax is the:
Assessed value
When taxes on a property are based on the market value of the property, the tax is called:
ad valorem
How does a lender protect themselves against a lien being filed for the failure to pay property taxes?
the lender makes the buyer put 1/12 of the annual taxes in an impound account each month
the commission received by the broker is:
negotiated between the listing broker and the seller
on a principal residence the homeowner can deduct which of the following for tax purposes?
interest
which of the following is deductible on an investors federal tax return?
the annual hazard insurance premium on an office building owned by the investor
What is a special assessment:
the amount charged the owner to finance a civic improvement such as a sewer system which benefits the property
all of the following are true about special assessment EXCEPT:
they are tax deductible like property taxes
Which of the following has priority over a mechanics lien?
a tax lien
property taxes are considered delinquent and become a lien if not paid by the:
due date
Which of the following determines the loan discount points on a loan?
the money market
All of the following participate in the secondary mortgage market EXCEPT:
FHA
If a borrower is paying off a loan on an installment basis, the loan is called an:
Amortized mortgage
If an investor acquired a property by putting down a small amount of cash and financed the balance he would be:
leveraging his investment
A release clause is part of:
a blanket mortgage
Which of the following is a function of FNMA?
Providing a source of money for approved lenders
A buyer has found a seller who is willing to remain responsible for the existing loan on a property and gives the buyer a new, larger loan at a higher rate of interest. The new loan is called:
wrap around mortgage
If the bank gives the owner of a property a flow of payments and takes a lien position in the property, the loan is called:
a reverse annuity
Each of the following environmental issues involves an odorless, colorless gas EXCEPT:
Asbestos
Interest rate “caps” would be a part of which of the following type of loans?
adjustable rate mortgage
the amount of loan discount points charged by a lender is based off all of the following EXCEPT:
the borrowers marital status
A mortgage which allows the borrower to receive additional funds on an approved loan is called:
an open-end mortgage
Which of the following statements best describes FNMA?
it is a government sponsored, privately owned cooperation that provides money to private lenders
When a borrower purchases FHA mortgage insurance the policy insures the:
MortgagEE
When a buyer gives the seller a note and a mortgage for part or all of the price of a property, it is:
A purchase money mortgage
In order for a qualified veteran to secure a VA loan, the veterans would have to get from the VA a certificate of:
Eligibility
Which of the following is the key or unique part of a blanket mortgage?
Release clause
The FNMA buys mortgages from
Lenders
a buyer is assuming the sellers mortgage. If the seller wants to be relieved of all liability, he should:
get a release from the lender (novation)
If the interest rate on a mortgage is subject to changes over the life of the loan, the mortgage is called:
adjustable rate mortgage
the loan origination fee:
is charged by a lender to set up the loan
a mortgage that covers more than one piece of property so that single parcels may be released from the lien is called a:
blanket mortgage
who is the mortgagEE under a purchase money mortgage?
Seller
What is the purpose of charging loan discount points on a loan?
to raise the yield on a below market rate loan to the market rate
Which federal law deals with industrial pollution?
CERCLA
Mortgage brokers:
bring borrowers and lenders together for a fee
At closing, which of the following items would be a credit to the buyer?
earnest money deposit
Which is the recommended method for dealing with asbestos?
Encapsulation
The clause in a mortgage that permits the lender to raise the interest rate upon certain stipulation conditions, such as a raise in the prime interest rate is called:
Escape clause
If a homeowner secured a home equity loan on his property, it would most likely be a:
2nd mortgage
Which lien has the highest position?
Tax lien
Which of the following are allowed to get a VA loan?
qualified veterans and their un remarried widows
What does GNMA do?
Buys FHA and VA loans in the secondary market
When would a lender enforce a due-on sale clause on a property?
when the owner sells the property by a contract for deed
when is a loan fully amortized fixed rate loan?
when the principal and interest payment is constant over the life of the loan
which of the following would involve removal of industrial pollutants?
Phase III site assessment
All are lenders in the primary mortgage market EXCEPT:
federal reserve banks
