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14 Cards in this Set

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1. Broker M is going to contact customer P who would like to see one of M’s listings. M should make his agency disclosure

1. prior to meeting with P.
2. prior to discussing P's financial qualification and type of house desired.
3. prior to actually showing the listed property.
4. prior to writing an offer to purchase.
1. (2) While this is generally correct, you should check with your state licensing board on the disclosure timing. (85-86)
2. Which of the following would not be classified as a latent defect?

1. An unknown underground oil tank
2. Hidden structural damage
3. A large crack in the living room ceiling
4. A cracked heat exchanger in the furnace
2. (3) A latent defect would not be discovered by an ordinary inspection. (84)
3. Which of the following statements does NOT correctly describe the status of dual agency?

1. Dual agency is legal in all states.
2. Dual agency is not allowed unless all parties agree to it.
3. Disclosure of dual agency should be made when preparing an offer to purchase.
4. Disclosure of dual agency should be made prior to the closing of a real estate transaction.
3. (1) Dual agency is not legal in some states. Moreover, dual agency is not allowed in any state unless all parties agree to it. (84)
4. The Comprehensive Environmental Response, Compensation, and Liability Act was amended in 1986 to protect innocent landowners from cleanup liability through which legislative action?

1. SARA 3. Title VIII
2. FIREEA 4. Title X
4. (1) SARA (Superfund Amendments and Reauthorization Act) was enacted to create an innocent landowner defense against the strict liability interpretation of CERCLA. (84)
5. The Residential Lead-Based Paint Hazard Reduction Act of 1992 does not require that

1. the seller disclose any lead-based paint or related hazards.
2. homebuyers be given an agreed-upon time period for the opportunity to conduct a lead-based paint inspection or risk assessment at their own expense.
3. a Certification and Acknowledgment of Disclosure be attached to the offer to purchase.
4. a copy of the Certification and Acknowledgment be kept by only the listing broker.
5. (4) A copy of the Certification and Acknowledgment must be kept by the seller and both agents. (85)
6. The Residential Lead-Based Paint Hazard Reduction Act of 1992 requires that copies of the Certification and Acknowledgment be kept for

1. one year after closing.
2. two years after closing.
3. three years after closing.
4. five years after closing.
6. (3) Copies must also be kept for three years after the beginning of a lease. (85)
7. Which of the following statements would NOT be a material fact to be disclosed by a seller's agent?

1. The buyer's ability to make a higher offer
2. Disclosure of a roof that leaks
3. Discussion of the advantages of an offer to purchase
4. Knowledge of active infestation of termites
7. (2) Property defects caused by deferred maintenance. (85-86)
8. Which of the following statements would NOT be a material fact to be disclosed by a buyer's agent?

1. Disclosure of how long the property has been listed
2. Buyer's ability to make a higher offer
3. Recommend the lowest price the buyer should offer regardless of the list price
4. Disclosure of provisions of offer to purchase that are not favorable to buyer
8. (2) A seller's agent would be required to disclose the buyer's ability to make a higher offer unless prohibited by state law. (85-86)
9. Which of the following does NOT correctly describe the status of agency disclosure?

1. Disclosure is required in some states.
2. Disclosure is required at the first meaningful contact with a buyer.
3. Disclosure is required at the first meaningful contact with the seller.
4. Disclosure is required in every state.
9. (1) Agency disclosure is required in every state; therefore, the first response is incorrect. Agency disclosure is generally required at the first meaningful contact with either a buyer or seller. (84)
10. CERCLA is a law that deals with

1. fair housing legislation.
2. environmental legislation.
3. appraisal legislation.
4. banking legislation.
10. (2) Environmental legislation that funds federal money for the cleaning up of toxic waste sites; also called the Superfund. (84-85)
11. Legislation that has helped resurrect deserted, defunct, and derelict toxic industrial sites is known as

1. DNR.
2. Waste field.
3. Due diligences.
4. Brownfields legislation.
11. (4) Brownfields legislation guidelines give individual states the authority to determine how to clean up defunct and derelict toxic industrial sites. (85)
12. An owner had a grease fire and it spread to the ceiling. The kitchen was remodeled and the charred ceiling joists were sealed with paint. When the seller sells the property, the hidden charred ceiling joists should be disclosed as

1. nothing because they were repaired.
2. discoverable defects.
3. caveat emptor.
4. latent defects.
12. (4) Latent defects are hidden structural defects that can't be discovered by ordinary inspection. These defects can potentially threaten the soundness or safety of the property. Caveat emptor means "buyer beware," but with seller property disclosure laws that kind of thinking is unfair and unacceptable. (84)
13. What federal legislation would a community call upon to clean up a toxic waste site?

1. HUD
2. Regulation Z
3. CERCLA
4. Title VIII
13. (3) CERCLA is also known as the Superfund. HUD enforces fair housing laws; Regulation Z is legislation that requires lender disclosure of the cost of credit; and Title VIII is fair housing legislation. (84-85)
14. If a buyer's agent knows that the house her buyer desires to purchase has been stigmatized by a recent murder-suicide, what ethically should the buyer's agent do?

1. Remain silent to protect the seller
2. Remain silent because the incident didn't harm the structure
3. Disclose it to the buyer after the purchase agreement is signed
4. Disclose it to the buyer before the buyer writes an offer
14. (4) The buyer's agent has an ethical duty to tell the buyer everything he or she knows that relates to the decision-making process unless the disclosure violates the law, such as the racial composition of a neighborhood. (84)