Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
73 Cards in this Set
- Front
- Back
|
A distinguishing characteristic of owning property by land trust is that |
The identity of the legal owner is kept confidential |
|
|
legal descriptions using the government survey system are NOT generally used in |
The original 13 states |
|
|
Although states make specific laws governing water rights and the rights in land that borders water, most states generaly follow one of 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 |
prior appropriation |
|
|
A homeowner is willing to let his neighbor park an RV in his backyard. He does NOT want to make the permission permanent in case he dislikes others who might move next door in the future. What should he give his neighbor? |
A license |
|
|
An easment can be terminated by |
merger of titles |
|
|
A potential buyer is interested in the residential property of your client. The buyer earns a living by making crafts and selling them from home and caring for children in the late afternoons. In this situation, you should |
Suggest the buyer check the zoning ordinances |
|
|
New sidewalks installed only on one particular street will probably be paid for by |
a special assessment |
|
|
If conditions for property use are included in a deed and these conditions are violated, what is the most severe potential penalty |
A court may order the return of the property to the original owner |
|
|
A broker is showing a buyer one of his residential listings. The buyers says he wants to establish a day care center for seniors in the property. The property has been used as a day care center for no more than 5 children. How should the broker advise the buyer |
Provide the buyer with contact information for the local planning and zoning office to confirm that zoning and determing whether it permits his use |
|
|
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? |
The first sold. |
|
|
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 |
Anticipation |
|
|
A competitive market analysis takes into consideration |
square footage of the subject property |
|
|
For a buyer, a disadvantage of a partially amortized or baloon payment loan is that |
At the end of the term, all remaining principal must be paid in a single large payment |
|
|
According to the Truth-in-Lending Act, if any "trigger terms" are used in an ad, what does not have to appear in the ad |
prepayment penalties and rebates. |
|
|
What Federal law regulates the advertisement of a lenders credit terms (rates, payment, etc) |
Regulation Z |
|
|
A broker and the buyers he represents are anxiously awaiting the closing on their new home. The closing is scheduled in 4 days. The buyers inform the broker that they just received revised Loan Estimate and Closing Disclosure forms from the lender, indicating the Annual Percentage Rate on their loan has increased by 0.3%. Based on the TILA-RESPA Integrated Disclosure rule, what action should the broker take in this situation. |
Confirm with the seller's broker, the lender and the closing entity that the closing must be delayed to allow for a new seven-day waiting period because of the interest rate revision. |
|
|
The FHA functions MOST like |
an insurance company |
|
|
Even if a loan applicant's current income seems adequate to qualify for a certain loan, the Equal Credit Opportunity Act allows a lender to refuse the loan as a high risk if the applicants main source of income is |
commission sales |
|
|
To what party or parties does the broker owe the fiduciary duty of care? |
The party or parties employing the broker |
|
|
The day after a brokers listing on a house expires, 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 |
he is no longer the listing agent |
|
|
A salesperson list a property with a contract that allows for subagency and dual agency. The salesperson is |
an agent to the broker and a subagent to the principal |
|
|
What is an example of a service contract |
a listing agreement |
|
|
What is one reason that a listing agreement would be AUTOMATICALLY canceled? |
Property owners death |
|
|
Under the common law of agency, what do licensees not owe the broker with whom they are associated? |
Indemnification |
|
|
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 five homes have been sold to purchasers that the firms agents have contacted. The realty firm has an agency relationship with... |
The builder |
|
|
A broker, acting as agent for the seller, presents an offer to buy from the brokers former college roommate. The broker knows that the buyer will increase the amount of the offer if the seller turns down the offer. When presenting the offer, the broker should |
tell the seller that the buyer will pay more |
|
|
A licensee has entered into a dual agency agreement. In this situation, it is critical that all parties understand that it is impossibly for the licensee to fully perform for either party the traditional common law agency duty of |
loyalty |
|
|
The Department of Housing and Urban Development estimates that most private homes built before 1978 contain potentially dangerous levers of lead. Because of this, some Federal agencies, such as FHA |
require the buyer to acknowledge disclosure of the presence of any known lead paint |
|
|
What critical aspect of the property inspection process MUST licensees convey to prospective buyers? |
Need for inspections to be completed within the time stated in the contract |
|
|
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? |
Seller |
|
|
While touring a new listing a broker detects a very pronounced moldy odor. Upon inspection, the broker finds that all closets located on a particular wall in the vacant residence are extremely moldy. The mold growths are heavy, multi-colored and cover the lower back walls and part of the side walls and flooring of the closets, and the other associates on the tour are experiencing sneezing and watering eyes. The broker has already accepted the listing. What immediate action should the broker take regarding the listing status? |
Inform the sellers in writing that there is a possible health hazard that shold be inspected and, if necessary remediated, and the listing will be removed from the active list until such action is taken |
|
|
A contract for the sale of a home has been signed by both parties. This contract will remain executory until |
the transaction has closed. |
|
|
An example of a contract terminated due to inability to perform would be one in which the |
seller had contracted for sale of the entire property without knowledge or consent of the other joint tenant |
|
|
While an agent is showing a listed property, the seller and the buyer enter into an oral agreement for the purchase of the home. If a dispute over the terms arises later, the agreement may be unenforceable because |
the agreement does not comply with the Statute of Frauds |
|
|
A seller signs a listing agreement with a broker. The seller can cancel the listing at any time without legal liability if |
The broker violates the terms of the contract |
|
|
A broker has brought a ready, willing, and able buyer to a seller. In MOST listing contracts, the broker has earned his commission when |
the seller accepts the offer |
|
|
The sellers want to accept a purchase offer, but only if the price is raised by $5,000. What should they give the prospective buyer? |
Counteroffer |
|
|
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? |
The buyer may sue the seller for specific performance. |
|
|
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? |
The buyer finds a better property for better terms |
|
|
A mentally disabled person who has been declared incompetent by a judge wishes to enter inot a contract. Under what conditions can such a person do so? |
The person appointed by the court to act for the disabled person must contract on his or her behalf |
|
|
A company agrees to lease a property to be used as a gambling casino. State laws prohibit gambling. This particular contract would be legally defined as |
void |
|
|
Prospective buyers made an offer on a property. The seller did NOT accept, but made a counteroffer. The prospective buyers signed the counteroffer and the real estate agent delivered their acceptance to the seller. In the interim, the same buyers had found another house that they liked better and made an offer on it, which was accepted. Which contract is valid? |
Both contracts are valid |
|
|
A buyer made an offer on an apartment building. The offer was not acceptable to the seller. When the buyer refused to accept the sellers counteroffer, the seller agreed to accept the original offer. What MUST happen now? |
Nothing; by making a counteroffer the seller released the buyer from the original offer |
|
|
A property management plan may serve different purposes for different owners, and generally has to strike a balance between preservation of the propertys value and generation of income. What owner would MOST likely prefer a property manager who emphasizes maintenance of value over profitability? |
The Department of Housing and Urban Development |
|
|
If leased premises become unusable for the purpose state in the lease, the tenant may have the right to abandon the premises. This action is called |
constructive eviction |
|
|
A couple are moving to a new city. They ahve decided to rent temporarily before buying a house to see which part of the city they would like to live in. What type of lease would BEST suit the couples needs |
Month-to-month lease |
|
|
A property management plan may serve different purposes for different owners, and generally has to strike a balance between preservation of the propertys value and generation of income. What owners would MOST likely prefer a property manager who emphasizes cash flow or income over the maintenance of value? |
An individual entrepreneur who owns several apartment buildings |
|
|
MOST closed real estate transactions should be reported to the IRS. REQUIRED information includes seller name(s) and social security number(s) and |
The sale price |
|
|
At the closing on June 15, the buyer is assuming a mortgage presently on the property, on which the monthly interest charge is currently $600. The seller has made the payment due on June 1. Assuming a VA mortgage, what is the adjustment made at closing? |
Debit seller $300; credit buyer $300 |
|
|
Even with title insurance, the policyholder may still suffer losses arising from... |
land use change due to zoning ordinances. |
|
|
For federal income tax purposes, which of the following are costs of homeownership that may be deducted from gross income? |
Mortgage loan interest, local property taxes, mortgage loan origination fees. |
|
|
To be valid, every deed must |
be executed by the grantor |
|
|
In MOST states, foreclosed property is sold through |
public auction |
|
|
A minority couple come 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 |
steering |
|
|
Failure of a real estate agent to comply with Fair Housing practices is punishable by |
license revocation and criminal prosecution |
|
|
Failure of a real estate agent to comply with Fair Housing practices is punishable by |
license revocation and criminal prosecution |
|
|
A charge of violation of Federal fair housing laws can be heard by an administrative law judge within the department of housing and urban development (HUD) or by a federal district court jude in federal court. The advantage of a federal court hearing to the complaining party is that |
There is no dollar limit on damages paid |
|
|
In an effort to improve his brokerage a broker decides to streamline his handling of escrow/deposit funds. This streamlining can BEST be achieved by |
Following state law but having as few individuals as possible handle the funds before they are deposited. |
|
|
A broker did Not have a written independent contractor agreement with his salesperson. While showing homes to a family, the salesperson was involved in a car accident in which a child in her car was injured. Could the broker be held liable in this situation, and why? |
Yes; The lack of an independent contractor agreement may classify the salesperson an employee and an employer may be held liable for the torts of an employee. |
|
|
Several salespersons have asked a broker for his permission to use a personal websit for real estate advertising of specific properties for sale. Before giving permission the broker should first |
Review the sites and all proposed advertising for compliance with state laws. |
|
|
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 nonminority neighborhood. The salesperson did not show them the properties because they were priced under $90,000 and had only two small bedrooms. Did the salesperson act appropriately and why or why not? |
No, because it is appropriate to show any property for which the buyer is qualified |
|
|
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 salespersons actions? |
The supervising broker |
|
|
Under the federal fair housing law, who "Catholics preferred" be considered discriminatory advertising? |
Yes |
|
|
A tenant with a triple net lease rents a building that has the following yearly operating expenses: Property taxes: $5000 Utilities: $7000 Repairs and Maintenance: $1500 The tenant would be responsibly for how much of these expenses? |
$13,500 |
|
|
A lender will make an 80% loan to value loan on a property that is appraised for $72,250 and sells for $73,500. If the buyer has saved $14,450 for a down payment, how much more (if any) will he need in order to make the down payment required under the terms of this loan? |
He needs an additional $1,250 in order to make the down payment |
|
|
A couple bought a rental house for $195,00. Its assessed value was $180,000. If the tax rate is $1.50 per $100 of assessed value, what is the monthly contribution the lender will REQUIRE for taxes? Round to the nearest cent. |
$225.00 |
|
|
On february 1, a seller paid $1,140 in annual property tax for the current calendar year. He sold the house with the closing set for April 1. What will be the seller's crefit for the property taxes already paid if the buyer pays for the day of closing? Use a 360 day year and a 30 day month. |
$288 |
|
|
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. Davis put up 40% and Hernandez put up $22,500. What percentage does Moore own (to the nearest tenth of a percent)? |
41.2% |
|
|
You are hosting an open house. Mr and Mrs Charles Martin come into the house. You greet them and show them the house. The Martins tell youthe house is exactly what they are looking for and they are very interested in purchasing it. You then give them information showing the various types of financing available with down payment options and projected payments. Mr. Martin tells you they have been working with Mary Hempstead of XX Realty, a competing real estate company. Before leaving, you thank them for coming and give them your business card.
The Martins come to your office and explain that neither Mary nor her supervising broker are available. They insist you immediately write an offer for the house. How should you proceed? |
Write the offer after trying to contact Mary's broker yourself |
|
|
You are hosting an open house. Mr and Mrs Charles Martin come into the house. You greet them and show them the house. The Martins tell youthe house is exactly what they are looking for and they are very interested in purchasing it. You then give them information showing the various types of financing available with down payment options and projected payments. Mr. Martin tells you they have been working with Mary Hempstead of XX Realty, a competing real estate company. Before leaving, you thank them for coming and give them your business card. The first thing on Monday morning, Mrs. Martin calls and indicates they have tried to reach Mary and cannot. They indicate they have a written buyer's agent agreement with Mary's broker. They are afraid someone else is going to buy the house. What should you do? |
Tell them to call Mary's supervising broker or branch manager |
|
|
You are the supervising broker of a real estate company. On august 1, one of your licensees listed a house owned by an investor client. On august 10, a full price offer was received from the buyers agent, a licensee with a cooperating real estate company, and accepted by the seller. The buyers agent indicated that the buyer is a transferee. The sale is to close on septempber 10, but on september 5, the buyers agent informs the sellers agent that his client is not going to close and wants earnest money refunded. Your firm is holding the earnest money. Which information is the most critical to be obtained? |
Verifying if there is a clause in the purchase agreement regarding the disbursement of earnest money following default. |
|
|
In the property condition disclosure form under "asbestos", a broker reviewing an associated licensee's listing sees that the property owner reported that the asbestos siding on his building was not removed but was professionally applied ten years ago. Documentation of this professionally applied process is attached. The broker should |
have the listing agent verify the license of the firm that performed the encasulation process |
|
|
A broker learns that one of the licensees under his supervision, and the owners of a listed property, have worked out a scheme to withdraw a property from the market whenever a showing is requested by any buyer who seems to be from a foreign country. What is the most important action for the broker to take in this situation? |
Put the licensee on probation and require her to take a fair houseing class. |
