Real Estate Flashcards by John Brunstad

Juan listed his home with REALTOR@Petra. Juan’s neighbor, Krista, is also a REALTOR@ and a good friend. When Krista’s buyer client is ready to make an offer on Juan’s Property, Krista____.

Must bring the offer to Juan’s agent, Petra.

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First-time home buyers require_____.

Extra hand-holding

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Which of the following is NOT a trait of quality lender?

Likes yield spread premiums

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______ can help offset the costs of defense attorneys, fines and/or penalties incurred during a claim.

Errors and omissions insurance. (E&O) insurance

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Which of the following is an account held by a third party on behalf of two parties in a transaction?

Escrow

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You’re working with a buyer who’s purchasing a home appraised at $80,000. The buyer is obtaining a 90% loan and the lender will charge an origination fee of 1% at closing. How much will the loan origination fee be?

$720

$80,000 x .9 = $72,000 (loan amount) 1% of $72,000=$720

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Anna discovers a serious lead-based paint issue in a home she just bought. It turns out that true seller knowingly violated the EPA’s disclosure requirements. Which of the following options is available to Anna?

Suing the seller for up to three times actual damages.

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Caleb’s absent shows him every available property, even For Sale by Owners for which there is no offer of buyer agent commission. It is highly likely that Caleb and his agent are operating under an _____ agreement.

Exclusive right to represent

Buyer representatives working under an exclusive right to represent are guaranteed a commission, even when the seller offers non.

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You’re listing a property for a client. Which of the following statements about advertising is true?

You can advertise on your website once you get a signed consent from the sell.

You must receive written consent before advertising a property for sale. The listing agreement usually grants permission to advertise on the MLS and other third party websites and publications.

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There are_____types of prepayments penalties that borrowers should understand.

Two

There are two types of prepayment penalties: hard prepayment penalties and soft prepayment penalties.

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______ are usually paid in cash at the closing and are used to buy down the interest rate on a mortgage.

Points

Points usually are paid in cash at the closing and are typically used to buy down the interest rate on the mortgage.

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Brooke doesn’t have a written contract with Leo, but their actions suggest that one is in place. This is a(n)________.

Implied agreement

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Why might you want to include recent expired comparable in your CMA?

To show sellers the price at which their home will likely not sell.

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What is 1/4 x 2/3?

1/6

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With a(n)______, borrowers can sell their homes at anytime without incurring a penalty.

Soft prepayment penalty

With a soft prepayment penalty, borrowers can sell their homes at anytime without incurring a penalty.

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When should you print the MLS sheet and tax records?

Prior to writing the purchase agreement

After printing the current MLS sheet and tax records, ask the buyer to contact their lender, if necessary, to clarify loan information, and gather all form needed to write the purchase agreement.

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Don is the buyer, and Sandra is the seller. On the contract, they are considered the____.

Principals

The principals are the parties to a real estate contract. The full names of the parties should be on the contract.

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Casey was found to be in violation of the NAR Code of Ethics. What penalties could the NAR hand down against him?

All of the above.

A formal reprimand.
NAR membership suspension.
Mandatory educational seminar attendance.

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You’re a real estate licensee and you want to sell your own home. Based on the NAR Code of Ethics, are you allowed to represent yourself in the transaction?

Yes, but you must disclose to all potential buyers that you’re a real estate licensee and you have ownership interest in the property.

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Thanks to the internet, clients and customers now____.

Have greater access to information than ever before.

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REALTORS@ protect and promote the interests of ______.

Their clients

A REALTOR@’S primary obligation is to her client, whose interests the REALTOR must hold above all others.

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The major causes of closing delays and cancellations include all of the following EXCEPT____.

Holidays

Most hurdles that delay or prevent closings fall into three major areas:j loans and appraisals, title issues and home inspections.

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A conventional loan is one that is____.

Made by a private entity

Conventional mortgage loans are made by private entities such as banks, credit unions, private lenders, or thrifts.

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Clive prequalified for a loan, which means____.

He has a rough estimate of what he can afford.

Prequalifying for a loan isn’t based on any sort of formal verification process (as is done for pre-approval).

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To be an effective communicator, you must understand that the most important part of communication is_____.

The response The response you receive indicates whether or not you have communicated effectively.

Elena, an owner of a rental property, decides not to show a rental unit to Carlito, because he is African American, and she had problems with her last African American tenant. This action is_____.

Unacceptable, because it violates fair housing laws. It is a violation of fair housing laws to discriminate against any protected class in terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection there with.

The illegal act of ____ can occur when you have multiple beneficiaries and funds are combined between beneficiaries.

Conversion You must keep each beneficiary funds separate from those of other beneficiaries

What is an advantage to using mediation as a problem-solving tool in a contract dispute?

It offers a win-win solution because both parties come out with satisfactory results. In addition to creating a win win scenario for the parties, mediation is quick, low cost and private

Fiona is gathering document to prepare a listing presentation packet. She will likely want all of the following EXCEPT____.

Criminal Records All of these are useful in preparing a listing presentation except criminal records

Jamie, a real estate professional, always included a(n)____clause in his contracts, so that his rights to a commission are protected even after a contract ends.

Protected buyers clause A protected buyers clause, which is usually found in listing agreements such a as the exclusive right to sell contract, is used to ensure that you still receive a commission if the owner sells the home to any person who saw the property during the time it was listed with you.

Which is the best format for a listing presentation?

It depends on the seller and property The format of the listing presentation should be based on the seller and property.

Which of the following elements of the NAR Code of Ethics are broad statements of ethical principles?

Articles Articles are broad statements of ethical principles.

The first document you should provide to a new buyer is____.

An agency discourse Failure to provide agency disclosure at or before first substantive contact law violation in most states.

In 1965, Aaron, a buyer, is working with Joe, a licensee, to purchase Tim's house. Tim is represented by Carol. Who represents Aaron?

No one Aaron has no representation; until the late 1980s all agents worked for the seller.

A latent defect is a property flaw that is____.

Hidden Latent defects are hidden defects.

The________clause in Valencio's property management agreement states that he must give a 30-day written notice if he quits before his contract expires.

Termination Most termination clauses include a requirement for a written notice of between 15 and 30 days(30 is more common).

TILA is aimed at promoting the ______of consumer credit by requiring a disclosure statement about the loan term and cost.

Informed use TILA is aimed at promoting the informed use of consumer credit by requiring a disclosure statement about the loan term and cost.

Ariel cant wait to find her first home. When it comes to financing, she should start looking for a lender ______.

At the beginning of the process A home buyer should not start looking for a lender at the time when they sign their purchase agreement; rather; it should occur much earlier in the process.

Interaction with other is _____.

Communication Communication encompasses all of the aspects of our interaction with others.

How were appraisers first regulated?

Self-regulation

You should always get warranties______.

In writing If the seller makes any claims about the condition of the building or abou tits compliance with building and zoning ordinances. Include these statement sin a contact clause called "warranties and representations" This strengthens you legal position if the sellers statements turn out to be false.

As a real estate professional, Justine knows that she is required to carry____to protect her from liability.

E&O insurance Errors and omissions Insurance is mandated as a condition of licensing in many states due to the complex nature of a real estate transcation.

Max wrote into a buyer representation agreement with Scott, his buyer, a provision that if Scott didn't purchase during the term of their agreement, Scott would owe Max $500 for gas and incidentals, This provision is

Valid if signed Such an agreement is valid if singed by both parties

With a(n) _______, the seller is prohibited from listing the property with another broker prior to the expiration date in the contract.

Exclusive right to sell listing With an exclusive right to sell listing, the seller is prohibited from listing the property with another broker prior to the expiration date in the contract.

While assisting the sellers of a home, you notice an addition built on the back of the property. You should_____.

Ask the seller whether the addition was permitted and, if it was, whether permits are available. You should ask the seller whether the work was permitted, when it was completed and the whether permits are available.

Disclosures made_____of the process are designed to give the borrower advance notice of the loan program and the costs associated with the program.

At the beginning Disclosures made at the very start or point of origination, are designed to give the borrower advance notice of the loan program and the costs associated with the program.

Over how many years is a residential income-producing property depreciated?

27.5 Years

Paying off a loan over time is called_______.

Amortization Amortization is the paying off of a loan over time.

Stephanie's client wants to terminate her contract. Stephanie, who is always interested in growing her business and getting referrals, decides to______.

Try to end things on good terms

The majority of what we communicate is conveyed through our_____.

Nonverbal cues

Foreclosed homes_____sell at auction.

Rarely

When a buyer asks Brooke, a real estate professional, a question about a property, Brooke unknowingly makes a false statement. This is considered_______.

Innocent Misrepresentation

______ had one of the highest foreclosure rates in the nation in 2012.

California

An offer to purchase a home is, on its own, a ______.

Unilateral promise to act With a unilateral promise to act (an offer) there is no contract

Which of the following is NOT a health concern of lead exposure?

Multiple births

Which of the following percentages is an allowable loan origination fee?

Courts look to the_____of the parties to determine whether they actually meant to officially either into a binding agreement.

Objective intent

Stacie often mixes her clients funds with her own, an illegal practice known as____.

Commingling The term commingling comes from the term to mix together and means combining trust funds with non-trust funds.

A contract that is considered binging unless or until a party successfully asserts a relevant defense is considered____.

Voidable Voidable contracts are binding unless or until a party successfully asserts a relevant defense

A butter has just called you for the first time. Why should you ask how the buyer got your name?

Buyer prequalification purposes

An open agency ONLY allows a buyer the right to______.

Work with any agent or self represent

When Rosa enters into a written agreement with a buyer or seller, she is creating an_____.

Express agreement When you enter into a written agreement with either a buyer or a seller you are creating an express agreement.

If a buyer asked you to perform the home inspection to save money, what should you do?

Refuse Buyers should use qualified inspectors. Licensees should not provide this service.

NAR Ethics complaints midst be filed with the local board or REALTOR association within _______days.

180days

You may not advertise real estate services or listed properties in any medium without disclosing the name of you firm__________.

In a reasonable and readily apparent manner.

Harvey is a respondent in an NAR Ethics complaint. He is______.

Considered innocent until proven guilty

To find a factor on an amortization chart, you need to know the length of the loan and the_______.

.interest rate

An effective negation technique is for the negotiator to come up with a list of reasons why the proposal would be beneficial to_________.

The opposing party

Charlie's lender made the loan based on the equity in Charlie's home rather than on his ability to repay the loan. This is an example of

Predatory loan A predatory loan is on that is Len based on the borrowers equity in the property, rather than on the borrowers ability to repay the loan.

How you determine debt coverage ratio?

You divide net income by debt service.

An investor is analyzing a three unit property by looking at its ability to produce future income. Which of the following would be used to determine this value?

Gross rent multiplier GRM

Making the borrower believe that credit insurance must be purchased and financed into the loan in order to qualify is a type of ______.

Packing

______ can drain the equality out of a home.

Flipping

Nick is approached by a lender who offers to buy his home at a discount, secure a better loan, and then sell the home back to Nick. This is considered ______.

Equity stripping

Prime targets for equity scams include homeowners who have_______.

Low incomes and high home equity

A ______loan is ideal for Sadie, because she plans for the loan to be short term while she improves her credit.

Subprime Subprime loans are intended to be short term, about two to four years, giving the homeowner a chance to pay back debts and clean up their credit.

Disclosures mad_______of the process are designed for the borrower that they are receiving what they expected.

At the end

HOEPA loans also are referred to as_______after the section of the law that addresses them.

Section 32 Mortgages

In a HOEPA loan, the total fees and points payable by the borrower at or before closing must be ______the larger of $625 or 8 percent of the total loan.

More Than

The primary component you look for when building a short list of qualified lenders is_____.

Real world experience

Which of the following best describes the meaning of the quote, " there are three kinds of lies: lies, damn lies and statistics"?

Statistics can be used to misrepresent data

The statistical median is determined by which of these methods?

Order the values in the data set sequentially and find the value that falls in the center.

When a data set has a lot of extreme values, the_____will be a higher number than for a data set that is normally distributed

Standard Deviation

____________is used to be describe the relationship between on data point and other variables that may affect it.

Regression Analysis

What's true about the Golden Rule?

It's a good guideline for all personal and professional ethical situations.

Brokerage fees, commissions, and service income are all examples of_____.

Non-trust funds

Because they create an unavoidable conflict with the clients best interest, what should a listing agent always avoid?

Net Listings

Went, a home inspector, will likely identify______.

Patent defects

Ethical standards for appraisers are spelled out in the _________.

USPAP

In accordance with RESPA guidelines, all of the following items are considered kickbacks EXCEPT________,

Educational and promotional CD'S

Jamal holds the title and owns his house, but a promissory note gives his lender the right to foreclose should he default. Jamal lives in a ______.

Lien theory state

Which of the following is an example of an external anchor?

Snapping your fingers

The overarching rule regarding management for appraisers involves_____.

Disclosures

A ______is a ratio that compares two quantities.

Rate

Range, average deviation and standard deviation are_____.

Measures of dispersion Measures of dispersion are ways to quantify gathering amount of variation in a data set.

For which of these properties would gross income multiplier be calculated?

Apartment building with 50 Units - remember, rent has four letters. Gross rent multiplier is used for income producing properties with four or fewer units. Properties with five or more units use gross income multiplier.

The_____is the whole number o amount of something.

Total

Over how many years is a commercial property depreciated?

A_______divides a continuous range of data into "bins" for display

Histogram