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RE school exam Flashcards

1
Q

The Civil Rights Act of 1866 prohibits any type of discrimination based on

A

Race

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2
Q

The real estate contract for a specific property for use as an unlicensed whiskey sales operation was forced to terminate. The termination was the result of

A

Impossibility of Performance

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3
Q

A prospective buyer made an offer to purchase a property. The owner responded with a counteroffer. While the buyer was reviewing the counteroffer, the owner received a better offer. The owner can accept the second offer if

A

The owner withdraws the counteroffer before accepted

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4
Q

A judgment has been properly recorded. Any subsequent purchasers, whether they have actually examined the record or not, have been given

A

Constructive notice

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5
Q

A property owner died, having willed his real property to his two daughters. There is still a chance that they could lose the land for a variety of reasons, but it CANNOT be taken through

A

Escheat

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6
Q

Which of the following liens serves as a notice of possible future legal actions against a parcel of real estate?

A

Lis pendens

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7
Q

A competitive market analysis takes into consideration

A

The square footage of a subject property

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8
Q

A property is encumbered by a first mortgage of $60,000 and a second mortgage of $23,500. The property has just been sold at a foreclosure auction to a speculating investor for $88,000. Assume that all costs of the foreclosure sale are included in these balances. Which of the following statements is FALSE regarding the distribution of funds?

A

The second mortgage receives nothing unless he forced the foreclosure auction

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9
Q

The day after a broker’s listing on a house expired, it was listed with another broker and offered in the MLS. Several days later, a third licensee called the first broker and asked for the key to show the home. The broker should inform the caller that

A

He is no longer the listing agent

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10
Q

A buyer wants to purchase a home for $160,000 with a 15% down payment. The lender charges 2 points. How much money does the buyer need up front to make the purchase?

A

$26,720

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11
Q

A managing broker can be held responsible for

A

All real estate activities done by a salesperson

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12
Q

Which of the following approaches MOST reliably estimates the sales price of a single-family residence?

A

Market data

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13
Q

A major reason for buying and owning a condominium rather than a detached single-family home is that

A

A condominium tends to be more affordable

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14
Q

At the time of harvest, crops that require annual planting are generally considered to be

A

Personal Property

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15
Q

The buyer is assuming a mortgage presently on the property in the amount of $110,000. What is the adjustment made at closing?

A

Credit buyer, debit seller

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16
Q

An agency relationship between a property owner and a property manager is usually created by

A

a management agreement

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17
Q

A borrower has defaulted on the mortgage. The mortgage contains an acceleration clause. This permits the lender to

A

demand immediate payment of the entire note

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18
Q

A deed restriction is applicable to the activities of

A

All owners, present and future

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19
Q

n MOST states, foreclosed property is sold through

A

Public auction

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20
Q

Which of these Federal laws regulates the advertisement of a lender’s credit terms (rates, payment, etc.)?

A

Regulation Z

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21
Q

An equal housing opportunity notice MUST be

A

Displayed in the brokerage office

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22
Q

Which of the following consumers would be able to derive the most benefit from a reverse mortgage?

A

A couple in their late 60’s who need to tap their home equity to help cover their expenses but do not want to sell their house.

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23
Q

MOST closed real estate transactions should be reported to the IRS. Required information includes the seller name(s) and social security number(s) and

A

The sales price

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24
Q

When is flood insurance REQUIRED in order to obtain a loan?

A

When the property is located in the Flood Hazard Zone

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25
Q

A couple signed a lease on an apartment for a period of 1 year. The lease does NOT contain an automatic renewal clause. The couple plans to move out at the end of the lease rather than renew it. How much notice MUST they give to comply with the lease term?

A

no notice is required

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26
Q

A lawsuit for inverse condemnation may be brought by

A

a homeowner

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27
Q

At the time of listing, the seller tells the listing agent that they are moving because the neighbor has loud parties every weekend. The agent should

A

tell potential buyers about the parties

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28
Q

An unlicensed assistant in a real estate broker’s office may

A

Pick up keys

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29
Q

All ads for real estate must specify the

A

the properties municipal location

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30
Q

Real estate is defined to include all of the components of land and also

A

man-made improvements

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31
Q

Three identical homes in a neighborhood were listed at the same time in a market where demand was constant. According to the law of supply and demand, which would have sold for the lowest price?

A

The first sold

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32
Q

A land owner wishes to build a neighborhood grocery store on a busy street in an area zoned for residential use. Which of the following would MOST likely be used to obtain permission for this store?

A

conditional use permit or zoning varience

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33
Q

Which of the following services can be provided by a real estate salesperson?

A

Competitive Market analysis

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34
Q

What critical aspect of the property inspection process MUST licensees convey to prospective buyers?

A

Need for inspections to be completed within the time stated in the contract.

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35
Q

According to the Truth-in-Lending Act, if any “trigger terms” are used in an ad, all of the following disclosures MUST appear in the ad EXCEPT the

A

Prepayments penalties and rebates

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36
Q

Legal descriptions using the government survey system are NOT generally used in

A

The original 13 states.

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37
Q

An escheat occurs when

A

A property owner dies without heirs or a valid will.

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38
Q

During the listing presentation, the seller questions the amount of commission to be paid and is told

A

The amount of commission is negotiable.

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39
Q

A broker has signed a listing contract for the sale of a home. Which of the following could make this contract voidable?

A

The seller is heavily under the influence of alcohol at the time of signing.

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40
Q

A realty firm has just entered into an agreement to represent a home builder in the sale of a new subdivision. The firm has located several potential buyers and give homes have been sold to purchasers that the firm’s agents have contacted. The realty firm has an agency relationship with

A

The builder.

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41
Q

Which restrictive covenant would be considered illegal?

A

A covenant that restricts selected parcels within a defined subdivision.

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42
Q

A licensee is listing a property in a known flood plain. The seller flatly denies that the structure and the property have ever been flooded. What is the licensee required to do in this situation?

A

Inform the seller of the legal obligation to disclose facts regarding flood plains.

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43
Q

What is the duration of a home warranty’s coverage?

A

As disclosed in the contract that offers the warranty.

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44
Q

An exclusive right to sell listing obtained by a broker associate belongs to

A

The employing broker only

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45
Q

Even after an offer has been accepted and is binding, the buyer and seller may still choose to sign mutual release papers rather than proceed to closing. Which of the following circumstances would NOT give either party a justifiable reason to insist on a mutual release?

A

The buyer finds a better property for better terms

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46
Q

Three people buy a house as tenants in common. Subsequently, two of the owners want to sell, but the third discourages each potential purchaser. The two owners who wish to sell the house can

A

File an action for partition against the third owner.

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47
Q

For federal income tax purposes, which of the following are costs of homeownership that may be deducted from gross income?

A

Mortgage loan interest, local property taxes, mortgage loan origination fees.

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48
Q

Which of the following may be considered prima facie evidence of discrimination by a broker?

A

Failure to display equal housing poster in brokerage office

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49
Q

At the closing, a seller’s attorney informed her that he would be giving credit to the buyer for certain accrued items. These items represent

A

Bills related to the real estate that have not been paid as of the time of the closing.

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50
Q

The sellers have agreed to give the buyer a carpet allowance to replace the family room carpet. They will allow $19.95 per square yard for carpet plus $5 per square yard for pad and installation. If the family room is 22’6x15’, how much will it cost the sellers (to the nearest cent)?

A

935.63
Length in yards = 22’6 / 3 = 7.5 yards

Width in yards = 15 / 3 = 5 yards
Area = Length x Width = 7.5 yards x 5 yards = 37.5 square yards
Carpet cost = Area x Carpet price per square yard

= 37.5 square yards x $19.95/square yard = $748.12
Pad/installation cost = Area x Pad/installation price per square yard

= 37.5 square yards x $5/square yard = $187.50

Total cost for the sellers = Carpet cost + Pad/installation cost

= $748.12 + $187.50 = $935.62

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51
Q

If conditions for purchase are included in a deed and these conditions are violated, what is the penalty?

A

Return of the property to the original owner

52
Q

Another term for the owner of a property listed with your firm is the

A

Client

53
Q

An environmental impact statement typically describes the effect of a proposed project on factors such as

A

Public health and safety.

54
Q

An easement can be terminated by

A

Merger of titles

55
Q

Errors and Omissions insurance covers the broker for

A

unintentional misrepresentations

56
Q

Which of the following documents must be retained by a broker for only six months?

A

unaccepted offers of purchases

57
Q

A Waiver of Broker Cooperation must be completed and signed when cooperation with other brokers is NOT desired by the

A

seller

58
Q

The creation of dry land by the gradual withdrawal of water from the land by the lowering of its surface level is known as

A

reliction

59
Q

Unlike trade fixtures, other fixtures are

A

legal considered real estate

60
Q

Permission to enter the land owned by another person for a specific purpose is

A

a license

61
Q

An easement by prescription is NOT created if the property owner

A

specifically grants permission for use of the land.

62
Q

In New Jersey, unless otherwise stated in the deed, a conveyance of two or more persons (not married to each other) creates a

A

tenancy in common

63
Q

A major difference between freehold and nonfreehold estates is that all freehold estates

A

Are of indeterminable duration.

64
Q

A licensee has an agency representation agreement with a buyer. When showing another company’s listing, what obligation does the licensee have to the seller and the listing broker at the other company?

A

Disclose the agency relationship when arranging the showing and disclose material information about the buyer if presenting an offer.

65
Q

A broker has bought a ready, willing, and able buyer to a seller. In MOST listing contracts, the broker has earned his commission when

A

The seller accepts the offer.

66
Q

A salesperson qualified a minority couple with two children and defined their price range as between $110,000 and $120,000 for the three-bedroom house they wanted. They asked to look at two listings in a non-minority neighborhood. The salesperson did not show them the properties because they were priced under $90,000 and only had two small bedrooms. Did the salesperson act appropriately and why or why not?

A

No, because it is appropriate to show any property for which the buyer is qualified.

67
Q

A minority couple comes to a salesperson looking for a house. The salesperson has some properties for which the couple qualify, but avoids showing or mentioning these listings. Instead, the salesperson shows only properties in low-priced and integrated neighborhoods. This practice is known as

A

Steering

68
Q

In helping a buyer to select a lender, if the buyer believes he has good credit and his income is documentable as a salary and by tax returns, the licensee might recommend a mortgage banker, instead of a mortgage broker, for all of the following reasons EXCEPT

A

More variety of loan programs available.

69
Q

When compiling a competitive market analysis, a broker would look for comparable properties that

A

were located near the property listing

70
Q

The Department of Housing and Urban Development estimates that most private homes built before 1978 contain potentially dangerous levels of lead. Because of this, some Federal agencies, such as FHA,

A

Require the buyer to acknowledge disclosure of the presence of any known lead paint.

71
Q

When a listing broker is preparing an Offer to Purchase for a buyer customer, contingencies involving inspections or approval by a third party should

A

have short deadlines

72
Q

An exception to title insurance coverage is

A

Defects that clearly appear in the title search.

73
Q

Under the terms of their listing contract, the owners may sell their house themselves and pay no commission. If their agent sells it, a commission will be due. What kind of listing contract do the owners have?

A

Exclusive agency listing.

74
Q

A real estate salesperson is representing only the buyer in a transaction. Which of the following actions would be a violation of the salesperson’s agency duties to the client?

A

Disclosing the highest price the buyer is willing to pay.

75
Q

If all other factors are equal, in which location is a parking lot likely to bring the highest sales price?

A

Business district zoned for a six-story office building.

76
Q

A buyer was negotiating the purchase of a house for himself. During a conversation with the seller, the seller agreed to include all kitchen appliances in the sale, and this fact was included in the sales contract. In this situation, if the seller takes the appliances with him, what recourse does the buyer have?

A

The buyer may sue the seller for specific performance.

77
Q

A salesperson lists a property with a contract that allows for subagency and dual agency. The salesperson is

A

An agent to the broker and a subagent to the principal.

78
Q

Real property can be converted to personal property by

A

Severance

79
Q

All of the following are methods to calculate the reproduction or replacement cost of a building EXCEPT the

A

Straight-line method.

80
Q

When a principal authorizes an agent to perform a particular act or transaction, it is an example of a

A

Special agency.

81
Q

State law differs on whether a buyer is entitled to know about

A

A suicide that occurred in the house last year

82
Q

A salesperson in a branch office is sued for damages by a buyer after the salesperson misrepresents a property. Who has the ultimate responsibility for the salesperson’s actions?

A

The supervising broker.

83
Q

To be valid, every deed must

A

Be executed by the grantor.

84
Q

The FHA functions MOST like

A

an insurance company

85
Q

A gross lease can be best defined as one where the tenant pays, as a part of the rent,

A

No operating expenses of the leased space.

86
Q

Under the Federal Fair Housing Law, which of the following is considered discriminatory advertising?

A

“Catholics preferred.”

87
Q

Antitrust laws prohibit competing brokers from all of the following EXCEPT

A

Receiving compensation from both the buyer and the seller.

88
Q

Although states make specific laws governing water rights and the rights in land that borders water, most states generally follow one of the two basic doctrines regarding water rights. In many states, the common law doctrine of riparian and littoral rights dictates that water rights are automatically conveyed with property. In others, all water rights are controlled by the state under the doctrine of

A

Prior appropriation.

89
Q

Unrepresented buyers ask the licensee who listed the home whether they should order a property inspection as a part of their due diligence for the purchase of the home. Which of the following would be the most appropriate way for the listing agent to respond?

A

If you feel it is in your best interest, please do so.

90
Q

An Environmental Impact Statement (EIS)

A

Projects the impact on the environment of a proposed project.

91
Q

An appraiser MUST be licensed or certified to handle Federally related work on residential property valued at more than

A

$250,000

92
Q

Earnest money should be deposited into a trust account

A

In a timely manner, according to state laws.

93
Q

Under a land contract for deed, who retains fee ownership of the property?

A

Vendor

94
Q

The Real Estate Settlement Procedures Act (RESPA) specifically prohibits

A

Kickbacks to real estate licensees for making referrals to lenders or other interested parties.

95
Q

A broker says, while showing rural property, “This property has the world’s purest well water.” This would be an example of

A

An expression of opinion, or puffing, which could lead to misrepresentation.

96
Q

The real estate broker who is listing a house for sale should personally verify

A

The number of square feet in the building

97
Q

The relationship in which the agent is placed in the position of trust and confidence to the principal is known by the term

A

The relationship in which the agent is placed in the position of trust and confidence to the principal is known by the term

98
Q

When someone has living heirs but dies without leaving a will, the estate is distributed according to the

A

Statute of decent.

99
Q

Usury laws were enacted to protect the

A

borrower

100
Q

Davis, Hernandez, and Moore are vested as tenants in common on a parcel of land. Each received a pro-rata undivided interest in the parcel. The total price was $120,000. David put up 40% and Hernandez put up $22,500. What percentage does Moore own (to the nearest tenth of a percent)?

A

41.2%

101
Q

A couple owns an older home in a neighborhood that is becoming a commercial area. Because of the change in the use of the land, the couple can expect the value of their parcel to increase at some future time. This is an example of the principle of

A

Anticipation

102
Q

The gross rent multiplier for a single-family home is calculated by dividing the sales price of the property by

A

Its gross monthly rent.

103
Q

A broker supplies the financing for a project to build condominiums with the stipulation that he has the exclusive right to sell the completed condos. Which of the following BEST describes this relationship?

A

Agency coupled with an interest.

104
Q

Which of the following forms of ownership may be held by a wife and husband?

A

Tenancy by the entirety

105
Q

A written agreement in which a purchaser agrees to buy, and a seller agrees to sell is called

A

contract

106
Q

A contract has been drawn which obliges the sellers to convey the title of their land to the buyers, if the buyers come up with $22,000 on or before December 31st. This is called

A

An option contract.

107
Q

Regulation Z requires that the borrower be fully informed of all of the following EXCEPT

A

The total interest.

108
Q

In an exclusive right-to-sell, an owner lists the property for sale with how many brokers?

A

one

109
Q

Tenants are still in their rental property even though their lease has expired. The landlord has given them written notice to quit and refused to accept rent. They are

A

Tenants at sufferance.

110
Q

A seller mentions to his agent that the previous owners of his property may have dumped hazardous waste on the site. Under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), who is liable for damages from the dumping prior to the sale of the property?

A

Seller

111
Q

The document used in a real estate sale that establishes the legal rights of the buyer and seller is the

A

Purchase contract.

112
Q

A loan which requires the borrower to pay interest only until the maturity date (or due date), and then to pay the entire principal on the maturity date, is called a

A

Term loan.

113
Q

The escrow officer or closing agent MUST give information regarding the sales price and the seller’s social security number to

A

irs

114
Q

A mentally disabled person who has been declared incompetent by a judge wishes to enter into a contract. Under what conditions can such a person do so?

A

The person appointed by the court to act for the disabled person must contract on his or her behalf.

115
Q

The economic characteristics of land are

A

Scarcity, location, and durability.

116
Q

The owner of an interest in commonly held property who wishes to dispose of the property, while the other owners do NOT want to do so, will probably

A

Begin a suit for partition.

117
Q

Which of the following statements about discount points is FALSE?

A

They are computed as a percentage of the selling price.

118
Q

In New Jersey, the realty transfer fee is always

A

seller

119
Q

Which of the following acts is illegal?

A

A licensed broker shares a commission with a real estate attorney.

120
Q

In New Jersey, no ads for real estate may

A

indiscriminately promise financing.

121
Q

The supervising licensee of a main real estate office must NOT be

A

otherwise employed.

122
Q

Prohibitions against commingling are aimed to prevent

A

mixing brokers’ funds with clients’ funds.

123
Q

When brokers’ licenses are suspended or revoked, their salespersons’ licenses are

A

suspended until the end of the current license period.

124
Q

An estate that an individual may own for a lifetime or forever is referred to as

A

a freehold estate.

125
Q

An estate in which the holder is entitled to all rights in the property is called

A

fee simple.

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