Real Estate Pre-Class Flashcards by Jennifer Deeds

Corn stored in a grain bin is considered real property.
o True
o False

False

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Kitchen cabinets, a furnace, or bathroom appliances are considered real property after they have been installed as improvements to the home, even though at one time they were personal property.
o True
o False

True

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A dishwasher installed in the cabinets does not need to be excluded from the listing if the owner is planning on taking the washer with them. It can be excluded on the sales agreement.
o True
o False

False

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It is not necessary for a licensee to be under the control of a real estate broker.
o True
o False

False

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A water well pump would be considered personal property and could be taken with the seller.
o True
o False

False

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The sudden replacement of land by a landslide is called avulsion.
o True
o False

True

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Riparian water rights are the right enjoyed by landowners located next to lakes.
o True
o False

False

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Appointees to the Iowa Real Estate Commission must be approved by the Iowa Senate.
o True
o False

True

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Littoral rights are rights enjoyed by landowners located next to rivers and streams.
o True
o False

False

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Real property is divided into two categories, physical and economic.
o True
o False

True

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Landowners can sell air rights or subsurface rights and retain the surface rights.
o True
o False

True

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A term that has been given to expanding exposure is “farming”. Some good examples of “farming” are as follows:
o Door knocking in your local neighborhood.
o Putting your business cards on local business bulletin boards.
o Joining breakfast clubs, service clubs, and other casual organizations.
o All of the above.

All of the Above

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Which of the following is not a physical characteristic of real property?
o  Immobility
o  Indestructibility
o  Uniqueness
o  Scarcity

Scarcity

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Which of the following is not a physical characteristic of real property?
o  Immobility
o  Indestructibility
o  Uniqueness
o  Scarcity

Scarcity

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Which characteristic is not an economic characteristic of real estate?
o  Location
o  Scarcity
o  Improvements
o  Uniqueness

Uniqueness

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The owner of land also owns the rights to the subsurface and the air above the land.
o True
o False

True

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All licensees have the right to call themselves REALTORS®.
o True
o False

False

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What REALTOR® associations must you belong to have the ability to call yourself a REALTOR®?
o  The local association
o  The state association
o  The national association
o  All of the above

All of the Above

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Is it possible for a licensee to belong to more than one multiple listing service?
o Yes
o No

Yes

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No special insurance is necessary for real estate licensees to conduct business in Iowa.
o True
o False

False

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A growing corn crop is considered part of the land.
o True
o False

True

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A Salesperson must take additional required courses before a broker’s license can be obtained.
o True
o False

True

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You need a special real estate license to manage an apartment house.
o True
o False

False

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ARELLO stands for Association of Real Estate License Law Officials
o True
o False

True

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``` Which of the following is not included in the Bundle of Rights? o Right of quiet enjoyment o Right of disposition o Right of separation o Right of control ```

Right of separation

``` From the date of purchasing this course, how many months do you have to take the Real Estate Salesperson Exam? o 6 months o 12 months o 3 months o None of the above ```

12 months

A broker may opt out of IDX and still display the listings of other companies on his website. True False

False

A commission is earned when the agent produces a ready, willing, and able buyer. True False

True

A commission may still be earned even though a seller and a buyer get together and decide to cancel the deal. True False

True

A commission may still be earned even though the seller was unable to deliver possession in a reasonable time. True False

True

A company can require you to buy from them if they sell your house. True False

False

A contract may not be denied legal effect or enforceability solely because an electronic record was used in its formation. True False

True

A licensed assistant is paid by the broker. True False

True

A licensee employing an assistant can pay that assistant a percentage of their earned commissions. True False

False

A personal assistant is permitted to submit data on listings to a multiple listing service. True False

True

A real estate agent is required to check the Do-Not-Call Registry every 31 days to have any defense of a violation. True False

True

A real estate company must have a physical office in Iowa to meet the minimum services requirements of the law. True False

False

A salesperson is allowed to contact a person on the Do-Not-Call list if he has had a business inquiry from that person in the past 3 months. True False

True

An antitrust conviction in Iowa will cost you your real estate license and possibly a high monetary fine. True False

True

An Independent Contractor is a real estate salesperson that works for more than one broker. True False

False

An unlicensed assistant can show a property as long as he or she explains they will have to talk to the broker to make an offer. True False

False

By the late 1960s, MLS’s had become the norm in larger cities. True False

True

Caveat Emptor means “Let the Buyer Beware”. True False

True

Even though you are an Independent Contractor, your broker must still withhold income taxes from your commissions. True False

False

IDX stands for Internet Data Exchange. True False

True

``` Company A is offering a selling bonus of $1,000 to the selling agent. You sell the house and at the closing, the broker for company A gives you a check for the $1000. Who if anyone has violated the law? No one You The broker for company A Both you and the Broker for company A ```

Both you and the Broker for company A

If a salesperson were to transfer from one broker to another, any active listings the salesperson has will transfer to the new broker. True False

False

If a spouse refuses to sign a deed it would still be possible for the agent to collect a commission. True False

True

If you have a commission dispute with another agent you cannot take it to the Iowa Real Estate Commission. True False

True

Iowa law spells out the minimum services that a broker must provide to a client. True False

True

It is not necessary for an independent contractor agreement to be in writing. True False

False

It is permissible for an unlicensed assistant to show a house as long as they make it clear they are working for a licensed agent. True False

False

It is permissible for brokers to get together and establish a standard commission for certain services. True False

False

It is permissible to receive a small wage from your broker as long as it does not exceed 10% of your total income from real estate. True False

True

Larry was holding an open house and during the event visited with Bill and Jane and mentioned another home they might be interested in. Bill and Jane went to that house, noticed it was also open and ended up signing an offer to buy with the other agent. Does Larry have a valid case to claim procuring cause? Yes No

Personal assistants are permitted to answer questions regarding mortgage financing. True False

False

Salespeople must not close a transaction unless under the direct supervision of the broker. True False

True

Simply talking about the commission your company charges in a meeting with agents from another company is not an antitrust violation. True False

False

The chain of events that leads to a real estate sale is the procuring cause. True False

True

The National Association of REALTORS IDX policy established rules allowing other companies to display another company’s listings on their web sites. True False

True

The practice of paying referral commissions grew because of the popularity of franchises. True False

True

A bilateral contract means only one party needs to act. True False

False

A contingency is something that has yet to be done before the contract becomes final. True False

True

A counter offer need not be initialed by all parties of the contract. True False

False

``` A minor can void a contract in what circumstance? They cannot obtain a loan They change their mind They cannot get a co-signer At any time ```

At any time

Agents are required to, as soon as possible, deliver to the parties of the contract, copies of the contract. True False

True

Agreeing with someone to mow your lawn is an example of an implied contract. True False

True

``` An expense stop is most commonly used in what type of lease? Gross Lease Full Service Lease Triple Net Lease Gross Industrial Lease ```

Full Service Lease

An Open Listing allows the seller to sell the property himself and list the property with other agents. True False

True

An Option to Buy is an agreement to buy in the future at a set price. True False

True

An Implied contract is one of actions and not of words. True False

True

``` Bill and Sue sign an offer to buy on the Green’s home with a clause in the contract that states Bill and Sue must first sell their present home. This is called a _______? Option Contingency Stipulation Land Contract ```

Contingency

Carol and Ed sign an Offer to Buy the Smith’s house but change their minds a couple hours later and the Smiths had already signed the Offer. Can Carol and Ed void the contract? Yes No

``` Consideration, offer and acceptance, legally competent parties, and reality of consent are essential elements of a contract. What is the fifth? Terms and conditions Acknowledgement of a Notary Legal purpose Legal description ```

Legal purpose

Contract Law is the body of law that governs contracts. True False

True

Earnest money in an offer to purchase can be returned if the buyer changes their mind before the seller has signed the offer. True False

True

``` Frank and John entered into a contract for the sale and purchase of Frank’s home. What type of interest does John now have in Frank’s home? Escrow Contract Equitable Insurable ```

Equitable

If a buyer obtains financing but is not able to close the transaction until two weeks after the time specified in the sales agreement, the seller can void the contract because of the “Time is of the Essence” clause. True False

True

If the contract is not carried out within the time frame provided for, is the contract void voidable

voidable

If there are multiple counter offers back and forth, it is best to draw a new document when an agreement is reached and have all parties sign the new document to clean it up. True False

True

If either party to the purchase agreement fails to perform, the other party may sue for Specific Performance. True False

True

In an Exclusive Agency listing, the owner retains the right to sell the property himself. True False

True

In the lease language, a CAM refers to construct and manage. True False

False

It is wise to provide for the acknowledgment of receipt of the Agency Agreement, Sellers Disclosure of Property Condition, and Lead-Based Paint information in the Offer to Buy Agreement. True False

True

Jim and Harry are visiting at a party and Jim offers Harry $200,000 for his house and Harry says “Great”. They shake hands and say “that’s a deal”. Is there a contract? Yes No

Most real estate contracts are express contracts. True False

True

Novation is the substitution of one party to a contract for another. True False

True

Once a counteroffer is made, the original contract is void. True False

True

The Brown’s decide to make an offer on the Johnson’s home, but make a counteroffer of $5,000 less than the listing price. The Johnsons reject the offer with their own counteroffer of $2,500 less than the listed price. The next day the Johnson’s had a change of heart and decide to accept the Brown’s offer of $5,000 less. Is there a valid contract. Yes No

The most common tenancy in residential leasing is: Tenancy at Will Fixed-term Tenancy Tenancy From Period to Period (Periodic Tenancy) Tenancy at Sufferance

Tenancy From Period to Period (Periodic Tenancy)

``` The owner of a property agrees to finance the property for the buyer for 10 years. What type of contract would this be? A Unilateral Contract A Land Contract A Voidable Contract An Option ```

A Land Contract

The seller can answer “Unknown” on the seller disclosure statement if he does not know one of the mandatory questions. True False

True

The Seller’s Disclosure Statement must be received and acknowledged before the Offer to Buy is signed. True False

True

``` There are 3 types of commercial leases. Two of them are a Gross Lease, a Net Lease. What is the third? A CAM Lease A Tenancy at will Lease A Holdover Lease Percentage Lease ```

Percentage Lease

There does not need to be a specific period of time in a listing to make it a valid listing. True False

False

There is a paragraph in the IAR offer to Purchase that provides for a counteroffer. True False

True

There is no mention of Fair Housing in the Listing Agreement or Offer to Purchase, but both the agent and seller are required to obey the Laws of Fair Housing. True False

False

To have a valid protection clause from an expired listing, the list of protected buyers needs to be delivered to the seller before the listing expires. True False

True

What essential element of a contract is missing from a contract that contains an offer and acceptance, reality of consent, is a legal act, and contains consideration. The Legal Description The date of the contract The consent of the legally competent parties The rate of commission

The consent of the legally competent parties

What kind of interest does a person who signed an Offer to Purchase land contract have in the property? A contractual interest A leasehold interest An equitable interest

An equitable interest

When a Land Contract is used in a sale, the Deed is delivered to the buyer at the time of the closing. True False

False

``` When you buy property on a Land Contract, the contract, when recorded, will give you what? A leasehold interest Possession An insurable interest An equitable interest Both 3 and 4 ```

Both 3 and 4

Which covenant of a warranty deed is missing from the following? Covenant of Quiet Enjoyment, Covenant against encumbrances, Covenant of possession, Covenant of warranty forever? Covenant of Construction Covenant of Hazards Covenant of Further assurance

Covenant of Further assurance

``` Which of the following is not an essential element of a contract? Consideration Offer and acceptance Address of the property Legal purpose ```

Address of the property

``` Which of the following is not grounds for termination of a contract? Agreement of the parties Death of one of the parties Duress Terminal illness of one of the parties ```

Terminal illness of one of the parties

``` Which of the following listing agreements is illegal? An Exclusive Agency listing An Open Listing An Exclusive Listing A Net Listing ```

A Net Listing

A lender will typically loan the greater of Market Value and Market Price. True False

False

A Capitalization Rate and a Gross Rent Multiplier is the same number. True False

False

A Competitive Market Analysis follows the same steps as an appraisal. True False

False

After you have determined the depreciated value of the improvements in the cost approach, you need to add in the value of the land. True False

True

``` Allen purchased a house for $75,000 that he plans to use as a rental. He wants a gross rent multiplier of $110. How much rent does he need to receive to achieve his goal? $800 $681 $875 $900 ```

$681

An adjustment in a CMA for a house larger than your subject would be: A plus adjustment A minus adjustment

A minus adjustment

Can the Highest and Best Use of a property change? Yes No

Yes

Economic Life Depreciation is assuming that the depreciation of a property occurs evenly over a certain term. True False

True

In an appraisal report, the factor of Contribution is considering whether an improvement will add sufficient value to the property. True False

True

In Capitalization, Value, times, Rate equals Income. True False

True

In order for you to do any kind of real estate appraisal, you must at least have a real estate license. True False

False

In using the income approach to value of an apartment complex, management fees are not considered an operating expense. True False

False

Incurable Functional Obsolescence is typically never curable. True False

False

It is difficult for the Highest and Best Use of a property to change. True False

False

It is legal for a real estate agent to charge for a CMA. True False

True

``` Jim is the owner of office space he is leasing for $0.85 per foot per month. The total space leased is 5250 square feet. Jim has decided he wants to sell the space and advertise that the space will generate a 7.5% return. At what price should Jim list the space? $618,400 $623,535 $714,000 $723,600 ```

$714,000

Market Value and Market Price basically mean the same thing. True False

False

Market Value is defined as the price that a property should bring after being exposed to the market for a reasonable time, under reasonable circumstances that an informed seller and an informed buyer agree to. True False

True

Market Price is the actual price that is paid for a property. True False

True

On most residential appraisals the approach to value that typically most weight is given is the Cost Approach. True False

False

``` Phillip purchased an apartment building with annual revenues of $31,400 and monthly expenses of $485. If the capitalization rate is 8%, what should the appraised value be? $308,340 $319,750 $354,230 $297,780 ```

$319,750

Progression is when a lesser quality property is surrounded by very desirable properties. True False

True

Property values are not typically affected by environmental conditions. True False

False

Real estate agents are allowed to charge a fee if they provide a Broker’s Price Opinion. True False

True

Replacement Cost New is the primary method most appraisers use to determine the cost approach of residential units. True False

True

Reproduction Cost is used in the Cost Approach for residential units. True False

False

Researching the market will produce valuable data to all three approaches to value. True False

True

Room adjustments are never made in a CMA if you are making an adjustment for square footage. True False

False

Sales concessions are never considered in the adjustments of a CMA. True False

False

Straight-Line Depreciation assumes that all depreciation occurs evenly over a certain number of years. True False

True

Straight-line depreciation uses a number of years age to determine the amount of depreciation. True False

True

The first principal to be considered in an appraisal report is Anticipation. True False

False

The Iowa Real Estate Commission also administers the licenses of Iowa appraisers. True False

False

The Appraisal Standard Board of the National Appraisal Foundation establishes the USPAP standards. True False

True

The factor of Contribution needs to be considered when an appraiser is appraising a home for a pending remodeling project. True False

True

The first thing you should examine is the Highest and Best Use of the property. True False

True

The four factors that determine Market Value are Utility, Demand, Scarcity, and Transferability. True False

True

The six principals of value are the Highest and Best Use, Competition, Change, Anticipation, Conformity, and Contribution. True False

True

To calculate the Capitalization Rate of an income property, you multiply the value, times, the income. True False

False

Transferability is measured by the ease in which a property can be transferred to others. True False

True

``` Using a Gross Rent Multiplier of 118 the value using the Income of a house renting for $2100 per month would be? $245,000 $247,800 $253,000 $242,800 ```

$247,800

Using a Capitalization Rate is the preferred system of appraisers when appraising a commercial income property. True False

True

``` What percentage depreciation has occurred to a property 45 years old with an estimated life of 125 years? 40% 42% 36% 33% ```

36%

When calculating a gross rent multiplier you need to deduct expenses to get an accurate figure. True False

False

When coming to a final estimate of value on a CMA, you should average the three adjusted values, to arrive at a final estimate of value for the subject. True False

False

``` In how many months must the owners vacate the home in a foreclosure, in return for a waiver of a deficiency judgment? 3 6 8 9 ```

A deed back in lieu of foreclosure will always be accepted by the lender because it will terminate the borrower’s right of redemption. True False

False

A deficiency judgment is allowed in Iowa unless the lender elects to file a foreclosure lawsuit and asks the court to disallow the statutory redemption period. True False

True

A Judicial foreclosure requires an action of the court. True False

True

A loan origination fee is any of the costs incurred in the underwriting process of approving a mortgage such as credit report, appraisal, or various inspections. True False

False

A mortgage is not a lien on the property. True False

False

A second mortgage is merely another mortgage that is junior to the first mortgage. True False

True

A power-of-sale clause in a mortgage will enable the use of a non- judicial foreclosure. True False

True

Adjustable Rate Mortgages are typically 7 to 10-year terms and amortized over the same period. True False

True

Adjustable Rate Mortgages interest rates are adjusted periodically to reflect the change in the economic index. True False

True

``` At what percent of equity in a home does the private mortgage insurance requirement typically drop off? 20% 22% 25% 28% ```

22%

Borrowers wanting to borrow money on a home equity loan have a 3 day right of rescission. True False

True

Discount points are points reduced from the interest rates charged because of a high credit rating. True False

False

Even though the down-payment requirements are lower on a FHA loan, the borrower must contribute at least 5% of the transaction which can be a combination of down-payment and closing costs. True False

False

Fannie Mae groups mortgages into blocks then issues Mortgages Backed Securities that are guaranteed. True False

True

Fannie Mae, Freddie Mac, and Ginnie Mae are all part of what part of the mortgage market? Primary Market Secondary Market

Secondary Market

FHA and VA guaranteed loans are made from funds of the two organizations. True False

False

For a person to be eligible for a Veterans Administration loan they must have served in one of the conflicts. True False

False

Freddie Mac loans are guaranteed on the secondary market. True False

False

How does the Federal Reserve System slow down the economy? Takes currency out of circulation Freezes interest rates Increases the cost of money to member banks Lowers the cost of money to member banks

Increases the cost of money to member banks

``` How many Federal Reserve districts are there? 10 9 13 12 ```

``` How many parties must there be to a Deed of Trust. 1 2 3 4 ```

``` How much of the mortgage does private mortgage insurance cover? 50% 25% 20% 30% ```

20%

HUD’s Office of Consumer and Regulatory Affairs, Interstate Land Sales/RESPA Division is responsible for enforcing RESPA. True False

False

``` If a couple withdraws funds from their IRA, how soon do they need to close their deal to avoid a tax penalty? 2 months 90 days 120 days 6 months ```

120 days

If interest rates are quoted in an advertisement what must also appear in the ad? The annual percentage rate All of the numbers and terms The name of the lender offering the rate A and B All of the above

A and B

n a Reverse Mortgage, payments are made each month from the lender to the Mortgagor. True False

True

In order to exercise your right of rescission of a loan, the borrower must notify the lender by certified mail. True False

False

``` In the amortization schedules shown comparing a 15-year loan and a 30-year loan, how much more of a balance was left of the 30-year loan after 10 years? Roughly $26,000 Roughly $31,000 Roughly $39,000 Roughly $42,000 ```

Roughly $39,000

``` Iowa Usury laws do not apply to loans over what amount? $10,000 $15,000 $20,000 $25,000 ```

$25,000

Loans insured by an agency for the Federal Government typically include a pre-payment penalty. True False

False

On an amortized mortgage, interest on the mortgage is typically paid up-front. True False

False

One and a quarter percent interest rate loans are available through the Federal Housing Administration. True False

True

Private mortgage insurance pays off the mortgage in the case of default by the borrower. True False

False

Regulation Z contains language that limits language on advertising the financial terms of a transaction. True False

True

Section 8 of RESPA prohibits a person from giving or accepting anything of value for referrals of settlement service business related to a federally regulated mortgage loan. True False

True

Straight loans on mortgages require interest-only payments. True False

True

The certificate of eligibility for a Veterans Administration loan can be used again by the veteran if his previous loan has been satisfied. True False

True

The Community Reinvestment Act requires reinvestment in community development, participation in programs for small businesses and in local housing endeavors. True False

True

The Department of Justice developed Regulation Z of the Truth in Lending Act which requires full disclosure of lending costs to borrowers. True False

False

The Farm Service Agency is primarily used for financing family farms. True False

True

The Federal Reserve requires the member banks to keep a certain amount of reserves that are not allowed to be loaned. True False

True

The Federal Reserve System is the main influence on the cost of money because it regulates the flow of money and interest rates through the member banks in the 12 Federal Reserve districts. True False

True

The mortgagor is the person borrowing the money. True False

True

The most commonly used type of loan to guarantee a mortgage is an amortized loan. True False

True

A developer/builder can refuse to sell a lot because he or she intends for all the homes in the addition to be built by his company. True False

True

A statement like “Before you list with XYZ Company, you should know that no other company will work with them”, would permit a judge or jury to infer you are engaged in a conspiracy. True False

True

An agent from another company sold one of your listings. Can you put a sold sign on your sign and advertise the property as sold? Yes No

Yes

``` How many REALTORS® make up the REALTOR® panel that will hear an ethics complaint? 3 4 5 7 ```

A bad reputation spreads through the business community quickly and in the end, could put you out of business. True False

True

It is legal for a company or an agent to refuse to participate in a commission split with another company, but this has to be an independent decision. True False

True

Jim has never sold any commercial property, however, he knows his best friend wants to sell his gas station. Should Jim solicit the listing? Yes No

One of the best risk reduction tools against an antitrust complaint is good documentation. True False

True

The Clayton Act can also be used in a criminal action. True False

False

The court can determine a violation exists without it being anti-competitive, only an agreement is needed. True False

True

The REALTOR® Professional Standards Committee consists of 5 REALTOR® members. True False

True

What is the best way to compete with a new entrant into your market that offers much lower commissions? Lower your commission Refuse to sell their listings Do a better job of selling your services Do not allow them to show your listings

Do a better job of selling your services

The four most common anti-trust violations are: Tie–in agreements, Group Boycotting, Price Arranging, Protective Clauses Group Boycotting, Allocation of Markets, Protective Clauses, Price Fixing Group Boycotting, Price Fixing, Tie-in Agreements, Brokerage Agreements Price Fixing, Tie-in Agreements, Group Boycotting, Allocation of Customers or Markets

Price Fixing, Tie-in Agreements, Group Boycotting, Allocation of Customers or Markets

You are presenting an offer to your client from your buyer and you know of another offer that is being prepared. Should you advise your client there is another offer coming from another agent? Yes No

Yes

A phrase like “the MLS will not accept listings for less than 120 days” can be an anti-trust violation. True False

True

A tie-in agreement results when you force a client to buy or sell one property in order for them to buy or sell another property. True False

True

Fines for a FTC violation in civil court can range as high as $100,000. True False

False

Hart-Scott Rodino Act requires prior notification of larger mergers to both the FTC and the Justice Department. True False

True

If a person is found guilty in a civil action under the Sherman Act there is a possibility of treble damages, of which none of those damages are tax deductible. True False

False

If you are found guilty of a criminal act under the Sherman Act you could receive a $100,000 fine and 5 years in prison. True False

False

Only a court may declare an action illegal under the Rule of Reason. True False

True

Parens Patriae refers to the powers of the United States Department of Justice and its powers of prosecuting anti-trust violations. True False

False

Private individuals can collect attorney fees in civil court under the Sherman Act. True False

True

The Clayton Act outlaws activities which may affect future restraint of trade. True False

True

The Iowa Attorney General has the authority to bring an action against you for an anti-trust violation. True False

True

The four most common violations of anti-trust are tie-in agreements, price-fixing, group boycotting, and protective clauses. True False

False

There is no such thing as an innocent discussion of commissions with other agents. True False

True

Under the per se rules, one does not have to establish an anti-competitive effect; just an agreement is enough to determine a violation. True False

True

The Code of Ethics consists of the Preamble, 17 Articles, many Standards of Practice defining the Articles and the Pathways to Professionalism. True False

True

Allocations of Customer Markets occur when two or more brokers or companies try to avoid competition by dividing customers or markets. True False

True

A datum is used in measuring vertical property rights. True False

True

A Lot and Block description must have the size of the lot in the description to be totally accurate. True False

True

A Lots and Blocks legal description is a division of either a Rectangular Survey description or a Metes and Bounds survey. True False

True

``` A township lying between 12 and 18 miles South of the baseline would be identified with what township number? 1 South 2 South 3 South 4 South ```

3 South

All Principal Meridians use the same baseline. True False

False

Benchmarks are seldom used in modern surveys for determining a legal description. True False

False

Correction lines are located every 4 Townships North and South of a baseline to correct for curvature of the Earth. True False

True

Every sixth township line both North and South of each baseline is a correction line. True False

False

Fractional sections are always on the East and South of a township. True False

False

How many acres are in a square mile? 2560 640 1280

640

``` How many acres are in the following description? The SW1/4 of the SE 1/4 of the SW ¼ of Sec 3, Twp. 5 North of 3rd PM? 20 40 80 10 ```

``` How many acres are in this tract of land? The NE1/4 of the SW 1/4 of the N1/2 of Sec 36, Twp 17, N Range 4 East. 40 60 20 80 ```

How many acres are there in a Township? 640 3,840 23,040

23,040

``` How many square feet are there to an acre? 44,600 43,560 48,500 42,000 ```

43,560

``` How many square miles are there in a Township? 36 6 24 42 ```

Iron pins or concrete posts are used more today as monuments. True False

True

Irregular Lots is a name used by surveyors for areas smaller than quarter sections. True False

False

Metes and Bounds descriptions use a Point of Beginning and then measurements and angles around the parcel back to the point of beginning. True False

True

Monuments are “fixed” objects that are used to mark a point of beginning; objects such as a tree or a rock, a road, a stream, or even a stone fence. True False

True

Owners of a cooperative own a unit with a legal description assigned to it based on the Lots and Blocks system. True False

False

Principal Meridians run North and South. True False

True

Range lines run North and South. True False

True

Section 36 ends in the Southwest corner of the township. True False

False

The area below and above the surface of the land has to be described in the same manner as the surface. True False-correct

False

The Beginning Point of the U. S. Public Land Survey is located at a point on the Ohio-Pennsylvania border between East Liverpool, Ohio and the Pittsburgh-metropolitan area, on private property. True False

True

The legal description of a townhome typically follows a Lots and Blocks format. True False

True

The legal description of a townhome typically follows a metes and bounds description. True False

False

There are three systems that are commonly used that surveyors can both locate and determine the size of the land involved. True False

True

There are 39 principal meridians across the United States True False

False

Township tiers are divided by lines running East and West six miles apart. True False

True

Vertical property rights give the owner the rights to the minerals beneath the surface. True False

True

``` What additional section did Western states designate as a school section? 24 10 15 36 ```

``` What is the name of the meridian used in rectangular surveys for properties in Iowa? Fourth Principal Meridian First Principal Meridian Fifth Principal Meridian Indian Meridian ```

Fifth Principal Meridian

``` What section is directly East of Section 36? 12 6 31 36 ```

What system is most commonly used in urban subdivisions to identify a parcel or land? Metes and Bounds Lots and Blocks Rectangular Survey

Lots and Blocks

A licensee is not required to disclose something that a reasonable buyer can determine himself. True False

True

A licensee must have a dual agency agreement in place to be able to show a client a property he or she has listed. True False

True

A material adverse fact is a fact that could impact the buyer’s decision to enter into a contract or agreement on a property. True False

True

A ministerial act is an act a licensee performs after the signing of a purchase agreement. True False

False

Agency laws are based on common laws. True False

True

An agent does not have to be paid by the principal in order to be deemed his agent. True False

True

Anything contained in a professional inspection report does not need to be repeated. True False

True

Appointed agency could be used if a client refuses dual agency. True False

True

Bill is covering for Edwin while Edwin is on vacation. One of Edwin’s buyer clients that does not want dual agency, calls, and wants to see a house Bill has listed. Should Bill show the house? Yes No

Each company is required to have a written policy that identifies and describes the types of real estate brokerage relationships the company may engage with clients. True False

True

Express agency exists because of an agreement expressing the agency. True False

True

If a licensee is listing a property, he or she must have a potential dual agency policy signed by the seller if he or she is planning on showing that property to potential buyers. True False

True

Implied agency exists in the absence of a written agreement but is implied by the action and words of the agent. True False

True

In Appointed Agency the listing agent appoints another agent to work with potential buyers. True False

False

In today’s market, an agent working for a broker is a sub-agent of that broker. True False

True

Iowa does not require the disclosure of a sex offender in the neighborhood but agents are advised to suggest a potential buyer to check with the local sheriff. True False

True

Iowa real estate agents are required by law to inform potential buyers of registered sex offenders living in the neighborhood. True False

False

It is illegal for an agent to report any person in a protected class as a material adverse fact. True False

True

It is possible to list a buyer just as it is to list a property. True False

True

Mark lists a buyer to a Buyers Agency Agreement without the dual agency clause. He makes appointments to show the buyer several homes including one in which he is the listing agent. Can he show the potential buyer the home he has listed? Yes No

Single Agency companies typically deal only with buyers. True False

True

Single agency means a licensee works with both buyers and sellers, but never at the same time. True False

True

Specific assistance means any communication beyond casual conversation concerning the facts and features of a property. True False

True

Stigmatized properties and material adverse facts mean the same thing. True False

False

Stigmatized properties are those properties labeled by public opinion. True False

True

The payment of compensation determines whether or not an agency exists. True False

False

The transaction coordinator is not the advocate of either party and therefore has no obligation to negotiate for either party. True False

True

The customer is the person represented by someone else or not represented. True False

True

There are five statements that a dual agency agreement must contain. True False

True

Jim is showing one of his listings to potential buyers. He has a buyer’s agency with these buyers and the potential dual agency clause signed. Jim notices some rather large cracks in the plaster in one room. Is Jim obligated to point these cracks out to the buyer? Yes No

Larry is showing a house located next door to someone with AIDS. Should he inform the buyers? Yes No

Licensees have fiduciary duties to sellers but not to buyers. True False

False

Mark is showing a house to potential buyers that he has a buyer’s agency agreement with. Mark notices what he believes are termite tracks on a couple of boards in the basement. Should Mark point out what he believes is evidence of termites? Yes No

Yes

The Dual Agency Potential/Consent Agreement is used for both buyers and sellers. True False

True

The obligation of either the seller or buyer to pay compensation to the broker is not determinative of the agency relationship. True False

True

The principal reason for the change in agency laws was to clearly set out who is to be paid the commission. True False

False

A licensee may work with a single party in separate transactions pursuant to different relationships. True False

True

COLD-AC means Care, Obedience, Loyalty, Disclosure, Accounting, and Confidentiality, which represents the fiduciary responsibilities of agency. True False

True

Is showing a client through a property being sold by an owner on his or her own behalf a ministerial act? Yes No

Yes

Betty is showing a house listed by Harold, to unrepresented buyers and they start talking about their price range for a home purchase. What should Betty do? Do nothing. Ask more questions. Provide verbal agency disclosure Explain she is not their agent and can't discuss the price with them.

Provide verbal agency disclosure

``` You are in the process of listing a home. The sellers have told you they want the home listed at a number that will net them at least $125,000 after the 6% commission and room for negotiation of $5,000. There is no mortgage. At what price, to the nearest $100, should you list the home? $140,000 $138,300 $139,200 $137,800 ```

$138,300

``` Allen purchased a house for $75,000 that he plans to use as a rental. He wants a gross rent multiplier of 110. How much rent does he need to receive to achieve his goal? $725 $681 $650 $700 ```

$681

``` The Cranes sold their home for $114,000 and said they made 16% over their original cost. What was their original cost? $99,342 $98,276 $98,834 $97,675 ```

$98,276

``` Bill and Mary are planning on purchasing a home for $196,000. They plan on a down payment of 20% and will borrow the balance over 30 years at 4.5% per year that costs $5.07 per thousand per month. They realize they will have to include property taxes and homeowners insurance in their monthly payment. The taxes on the home are $3,800 and the cost of their homeowner’s insurance is $1,118. How much will their monthly payment be? $1,178.16 $1,089.42 $1,204.81 $1,228.41 ```

$1,204.81

Darlene is qualifying a buyer to see if they can qualify for a mortgage payment large enough to purchase the home they want. The lender says the maximum payment to income is 45% of their monthly income including all fixed payments. Their total family monthly income is $7,600. They have a car payment of $425 per month and two credit cards with payments of $70 and $85 per month. Their house payment with insurance, taxes, principal, and interest will be $2,678.00. Will they qualify for the mortgage? Yes No

Yes

``` You are asked to help an owner with the value of his 8 unit apartment building. The owner tells you that his annual rental income is $26,500. His annual expenses have been running fairly steady at $11,000 per year. Most interested buyers want a capitalization rate of 8%. At what price should you tell the seller to expect to sell the apartment building? $193,750 $331,250 $204,500 $184,700 ```

$193,750

``` Mr. Black sold a quarter acre of his land for $3.50 per square foot. What was the selling price? $38,115 $36,478 $41,324 $44,244 ```

$38,115

``` Alice’s independent contractor agreement calls for her to receive 50% of the in-house commission from her listings and sales for her first $25,000 in income each year and 55% of any additional commissions generated by her for the rest of the year. To date this year she has received $24,000 and she just sold a $325,000 house listed by another company at 7% that splits with her company 50/50. What will her share of the in-house commission be? $6,256.25 $6,156.25 $5,875.50 $5,625.25 ```

$6,156.25

``` Betty is going into the real estate business with the idea she wants to make $40,000 per year. She is going to work with a broker that plans to pay her 45% of each side of the in-house commission she generates. Her broker is working on a 50/50 split with all the companies in the area. How much total sales volume will Betty need to generate to make her goal assuming all sales are at 6%? $2,963,000 $2,680,000 $2,750,000 $3,000,000 ```

$2,963,000

``` Harold is planning to bid on a section of farmland. He says his bid limit will be $4,500 per acre. If Harold bids his limit and gets the farm bought, how much will it cost him for the farm? $1,440,000 $2,790,000 $2,880,000 $2,460,000 ```

$2,880,000

``` David is being recruited by both real estate companies in his town. One company’s commission rate is 6% and the other is 7%. David thinks he will sell about $3,000,000 a year and two-thirds of it should be in-house business. The two companies split commissions equally. Assuming both companies are offering 50% of the in-house commissions. How much more will David make if he chooses the company with a higher commission rate? $5,500 $3,700 $5,000 $4,200 ```

$5,000

``` A developer is subdividing some land into lots. The minimum lot size allowable in the city is 10,000 square feet. At the end of a block in one area is a triangular piece of land that runs 145 feet deep. How much front footage will the developer need on that lot to meet the minimum requirement? 145 feet 176 feet 138 feet 70 feet ```

138 feet

$319,750

``` Mike purchased an investment property 10 years ago that has appreciated 4% annually compounded over the 10 years. What is his investment worth today if his original investment was $45,000? $64,049 $65,349 $66,611 $67,087 ```

$66,611

``` You are thinking about buying a warehouse producing $13,500 in annual income. You want an 8% return on your investment. How much should you pay for the warehouse? $172,400 $168,750 $156,480 $162,600 ```

$168,750

``` The Wilsons purchased a home 6 years ago for $78,500 and have been told houses in their area have increased in value 4.5% a year for the past 6 years. How much is their home worth today with-in $5? $98,789 $99,512 $101,323 $102,227 ```

$102,227

``` The Smiths decide to sell their house and they tell you they want to net $125,000 after they pay your 6% commission and $4,000 in other closing costs. At what price do you need to list their home to get them their net price? $138,000 $137,234 $138,534 $136,844 ```

$137,234

``` Bill bought an apartment house for $175,000 that has an annual rate of return of 9%. What is Bill’s monthly income from the apartment house? $1,275.25 $1,346.56 $1,312.50 $1,387.14 ```

$1,312.50

Dave is making $75,000 per year and his wife Carol is making $81,000 per year. They have two car payments totaling $750 per month and credit card payments totaling $800 per month. They want to buy a $350,000 home with 20% down at 4.5% interest which figures out to $5.07 per $1,000 per month. Their insurance and taxes will total $625 per month. The lender tells them their payment to income ratio cannot exceed 45 percent. Can they qualify? Yes No

Yes

``` As part of a sale of the Green’s home, they have to replace the sidewalk. They need to replace 100 feet of sidewalk 3 feet wide and 4 inches thick. They want to know what the cost will be. The concrete is $95 a cubic yard and will cover 27 feet. The labor cost is $1.90 per linear foot. What will the sidewalk cost? $541.50 $567.50 $497.75 $512.00 ```

$541.50

``` Beth is working as an agent for a real estate company. She feels her annual cost of being an agent is $12,000. She wants to net in commissions after expenses $35,000 a year. How much in-house commission will she need to generate if she is on a 40% contract with her broker if she is to meet her goal? $124,000 $132,000 $117,500 $109,750 ```

$117,500

``` Your buyer has purchased a $145,000 home. Their loan calls for 3 discount points and a 1% loan origination fee, plus $500 in actual closing costs. If they obtain a 90% LTV mortgage, how much will they pay in closing costs? $4,940 $4,460 $5,440 $5,720 ```

$5,720

``` A grain bin measures 16 feet by 12 feet by 12 feet high. How many cubic feet of grain can the farmer store? 2,508 2,304 2,198 2,466 ```

2,304

``` You are thinking about going to your broker and asking for a new contract with an increased share of your commission split. Currently, you are on a straight 40% of your in-house commissions. Last year your in-house commissions were $148,500. You want your new contract to increase your split to 45% on all your earnings over $25,000. How much more would you have earned last year if you were working under the contract you are requesting? $3,800 $6,175 $4,800 $3,900 ```

$6,175

``` How many acres are in the following description S1/2 of the NE1/4 of the S ½ of Sec 16, Twp 4 North, Range 6 West of 5th PM? 60 acres 40 acres 80 acres 100 acres ```

40 acres

``` How many square feet are in a lot with a 95-foot front and a 125-foot depth and an additional triangular piece running another 20-feet deep on one side of the back that joins the other side of the back of the lot? 11,875 12,825 13,115 12,575 ```

12,825

``` The Blanks want to put a fence around the back of their lot. Their lot is 96 feet wide and the back of their house is set in 15 feet on each side from their lot line, and there are 50 feet from the back of their house to the back lot line. They plan to run the fence from each of the back corners of their home to 1 foot short of their lot lines on the sides and the back. How many feet of fence will they need to purchase? 220 feet 226 feet 218 feet 232 feet ```

220 feet

``` A house just sold for $178,000. How much are the transfer taxes? $284.00 $234.80 $284.80 $234.00 ```

$284.00

``` Janet sold a house listed with her firm by another agent at 6 percent. Janet works at 45% of the action side. Her commission share on the deal was $6,500. What was the selling price of the home to the nearest $50? $433,000 $385,000 $481,500 $475,000 ```

$481,500

``` The Greens purchase a home with a possession date of November 1st. The property taxes are $4,200 per year on the home. The lender tells the Greens that they will have to escrow enough money to pay the next bi-annual tax payment, plus 2 months. How much money will the Greens have to put into escrow at closing? (Keep in mind when the first payment will be made). $1,900 $2,100 $2,800 $1,400 ```

$2,800

No mention of gender should be made in advertising with the exception of ads soliciting persons of the same gender to share a dwelling as a roommate. True False

True

When marketing a home in an ethnic neighborhood it is permissible to run “for sale ads” only in the newspapers and fliers of that neighborhood. True False

False

If a Fair Housing complaint is heard in a Federal Court, punitive damages may be awarded in addition to the actual damages. True False

True

District judges typically hear cases brought by HUD regarding civil rights complaints. True False

False

The Fair Housing Act does not prohibit religious organizations or nonprofit institutions operated in conjunction with a religious organization from limiting the sale, rental or occupancy of dwellings which it owns or operates from giving preference to persons of the same religion unless membership in such religion is restricted because of race, color or national origin. True False

True

Familial status does not apply to a person who is in the process of acquiring custody of a minor child if that custody has not yet been attained. True False

False

Julie is in the process of listing a home. As she is in the process of writing the listing agreement, the owner tells her not to show the house to a minority because he wants to protect his neighbors. What should Julie do? Exclude that statement and tell the owner she will do her best. Tell the owner she cannot accept the listing with those conditions. Tell the owner to have his daughter sign a phony sales contract and when a minority shows interest she can tell the minority the house is sold. Tell the owner the MLS will not let her submit the listing.

Tell the owner she cannot accept the listing with those conditions.

Pregnant women are included as a protected class by virtue of Familial Status. True False

True

If a real estate licensee suspects he or she is being tested, it is best to show the protected class more houses and offer more services than normal to ensure there will be no complaint filed. True False

False

It is a violation of the Fair Housing Act for a licensee to advertise only in ethnic publications when soliciting business from the Spanish community. True False

True

The owner of a duplex hires a real estate licensee to find him a renter for the side of the duplex the owner does not live in and tells him only to rent the unit to a white male. Is this legal? Yes No

True

The Housing and Community Development Act of 1974 added sex as a protected class. True False

True

A private club that limits rental occupancy of its lodgings to its members or from giving preference to its members is not a violation of the Fair Housing Act. True False

True

A multiple listing service is not considered to be a housing facility and therefore not under the guidelines of the Fair Housing Act. True False

False

The Iowa Civil Rights Commission may on occasion use testers to determine if there is housing discrimination occurring in certain communities. True False

True

Blockbusting is the practice of scaring owners into selling their houses by using the fear of declining values because of the pending sale of a house in the neighborhood being sold to a minority. True False

True

Article VII of the Civil Rights Act of 1968 was the first civil rights act passed by Congress. True False

False

The Secretary of Housing and Urban Development administers the Fair Housing Act through the Office of Fair Housing and Equal Opportunity. True False

True

``` The Fair Housing Act does not apply to an owner selling his or her own home if they do not own more than how many houses at the time of the sale? 2 3 4 5 ```

It is not a discriminatory act to represent to a minority that a dwelling is not available for sale or rental when such dwelling is in fact available. True False

False

The fine for a first offense violation of the Fair Housing Act could be as high as $15,000. True False

False

In Iowa, there are nine classes of people included in the protected classes with respect to housing. True False

False

The Iowa Legislature decided against adding sexual orientation to the Iowa Fair Housing laws because there could be discrimination without knowing a person is gay. True False

False

The Iowa Legislature added sexual orientation and gender identity to the protected classes of the Fair Housing Act. True False

True

A private person who buys and sells houses is exempt from the Fair Housing laws as long as he does not use a real estate licensee and sells not more than 3 houses each year. True False

False

The limit of a first offense civil penalty for a housing discrimination violation is $11,000. True False

False

An owner living in a four-unit apartment house is excluded from the rules of the Fair Housing Act unless he uses a real estate licensee. True False

True

A condominium complex consisting mostly of a retired community can restrict the complex to people without children. This can be done without having any policies or guidelines in place designating it as housing for people 55 or older. True False

False

A religious organization can be partially affected by the Fair Housing Act when renting units to people of the same faith. True False

True

``` Which of the following classes are included in the Iowa Civil Rights law that are not included in the federal Fair Housing Act? Age Sexual Orientation Gender Identity B and C ```

B and C

Tom and Mary own a home as Tenants in Common. Tom passed away last month so Mary sold the home. A few days before the closing her real estate agent told her the closing will have to be delayed because Tom’s estate will have to be probated. Is her agent correct? No Yes

Yes

A 1031 Exchange can be used to exchange an apartment house for a new home to be used as a residence. True False

False

A freehold estate generally has a time limit attached by the grantor. True False

False

A Land Trust could be used to keep the names of the owners private. True False

True

A Life Estate can be terminated if the holder of the life estate moves out of the house. True False

True

A proprietary lease is given to the owner of a Cooperative unit. True False

True

A PUD is a Proposed Unit Development. True False

False

A Tenant in Common title holder can sell his/her share of the property and not disturb the title of the other title holder. True False

True

All owners of a cooperative could be held liable if liens are placed on any one of the units in the cooperative. True False

True

Common elements in townhomes and condominiums are the hallways, elevators, surrounding land, parking lots, etc. True False

True

Condominium owners hold a fee simple title to their unit but hold no title to any of the rest of the facility. True False

False

Fee Simple Defeasible is an estate where a previous owner has placed a condition or restriction at transfer. True False

True

Fee simple ownership of real estate is absolute ownership of the property. True False

True

HOA fees are typically included as a monthly payment in the loan qualification process. True False

True

Home Owner Associations typically have the authority to issue Special Assessments. True False

True

In Iowa, the spouse of the owner of a property must sign the deed at the time of sale even though he or she is not named on the title. True False

True

Iowa does not require the four provisions that all parties to the Joint Tenancy be named on one deed, the deed is executed, signed and delivered at one time, the deed must convey equal shares to all parties, and the owners must hold undivided possession of the property as joint tenants. True False

True

John gives his son a house but puts a restriction in the transaction that the son must go drug-free for 10 years. If he does not, he will lose the house. What form of title does the son have? Fee Simple Absolute Fee Simple Determinable Fee Simple Subsequent

Fee Simple Subsequent

``` John’s elderly mother is in a nursing facility. John finds out he has a terminal illness and is concerned about his mother’s continued care so he conveys land containing 80 acres of farm ground, the income from which is to provide for her care until her death. What kind of ownership does the nursing facility have? Fee Simple Life Estate Fee Simple defeasible Life Estate pur autre vie ```

Life Estate pur autre vie

Living Trusts are used to avoid the need for probate upon the death of the owners. True False

True

Steve’s mother and stepfather own a home together as Joint Tenants. Steve’s mother passed away and her will stipulates the home is to pass to Steve. Does Steve have a valid claim to the home? Yes No

The beneficiary of a land trust cannot be the trustor. True False

False

The only asset held in a Land Trust is land. True False

True

The owner of a coop does not receive the same income tax advantages as holders of fee simple ownership of single-family homes. True False

False

The owner of a cooperative unit holds a fee simple title to the unit. True False

False

The tax advantage of mortgage interest deduction is an advantage on all homes the seller may own. True False

False

The tax advantage on the gain on the sale of a personal residence may be used many times. True False

True

The trustor of a living trust cannot be the trustee. True False

False

The words “With full rights of survivorship” are not necessary in Iowa on a Joint Tenancy deed for the rights of survivorship to exist. True False

True

The owners or Board of Directors can void the prospective sale of any unit in a Cooperative facility. True False

True

There are no survivorship rights among owners in tenants in common. True False

True

There is no income tax liability on the gain up to $500,000, of a personal residence held for 2 of the last 5 years for a married couple. True False

True

A Life Estate is provided for by will and not by a deed. True False

True

In Iowa, dower rights place the name of a spouse on the title automatically after a marriage. True False

False

Joint Tenancy is the default tenancy in Iowa if another tenancy is not declared on a deed. True False

True

Life Estate is an interest in real estate granted by deed for the life of the grantee with limitations. True False

True

The best advantage of taking title as joint tenants is the right of survivorship. True False

True

he elective share of a dower interest in Iowa is 25 percent. True False

False

The main difference between a condominium and a cooperative is that with a condominium you actually own the unit and in a cooperative you have a lease. True False

True

The owner of a townhome also holds title to the land under the particular unit. True False

True