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226 Cards in this Set
- Front
- Back
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Karen is interested in a house that fits most of her needs, but it is located in a busy downtown area where she is not sure she wants to live. Her concern regards which economic characteristic?
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Area Preference
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Fixtures are
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Real property
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Exaggerated statements about a property ..
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are not considered fraudulent
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The principal difference between an estate for years and an estate from year to year is that an estate:
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from year to year has no expiration
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A lease that will terminate within one year of its inception:
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can be verbal
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Under which of the following types of liens can both the real property and the personal property of the debtor be sold to pay the debt?
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Judgment lien
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If a landlord fails to provide heat to an apartment and the tenant is forced to vacate the premises, the is an example of
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constructive eviction
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Taxes levied on a property owner to help fund the installation of sidewalks or sewers are called
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special assessments
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A township contains..
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36 sections
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When a tenant holds possession of a landlord's property without a definite lease term, but with consent of the landlord, this is called:
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tenancy at will
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In Illinois, landlords are required by law to pay interest on tenants' security deposits if they hold deposits for more than six months and receive deposits on residential leases in properties of
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25 or more units
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A land survey would best be described as a
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graphic description of the land
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According to the Interstate Land Sales Full Disclosure Act, if the property report is not given to the prospective purchaser at least three days before the contract is signed:
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the purchaser may revoke the contract up to two years following the signing of the contract.
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Brokers may create a corporation that is limited in the following fashion
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The corporation can be used only to accept compensation from their managing broker.
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An owner agrees to list his property on the condition that he receives at least $47,300 after paying a 5% managing broker's commission and paying $1,150 in closing costs. At what price must it sell?
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$47,300 / .95 = $49,789
$49,789 + $1,150 = $50,939 $51,000 |
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A listing agreement in which the brokerage commission is contingent on the brokerage being able to produce a buyer before the property is sold by the owner of another brokerage is called a...
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open listing
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What is a freehold estate?
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An estate in land in which ownership is for an indeterminate length of time, in contrast to a lease-hold estate.
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Under the covenant of quiet enjoyment, the grantor...
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guarantees that the title will be good against the title claims of third parties.
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Which of the following types of deeds merely implies, but does not specifically warrant, that the grantor holds good title to the property?
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Bargain and sale
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What do the terms condemnation and escheat have in common?
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They are examples of involuntary alienation.
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A deed contains a guarantee that the grantor will compensate the grantee for any loss resulting from the title's failure in the future. This is an example of which type of covenant?
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Warranty forever
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An Illinois resident died intestate. The man was survived by a mother and brother. Under these facts, which of the following correctly states how the man's estate will be distributed?
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The estate will be divided so that the man's mother receives two-thirds and the brother receives one-third.
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A purchaser went to the county building to check the recorder's records. She found that the seller was the grantee in the last recorded deed, and no mortgage was on record against the property. The purchaser may assume which of the following?
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The seller did not mortgage the property
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The date and time a document was recoded establish which of the following
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Priority
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X sold her home to Y. Y moved into the home but did not record the deed. A few weeks later, X died. X's heirs in another city were unaware that X had sold the home. The heirs conveyed title to Z, who actually recorded the deed. Who owns the property?
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Y
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Which would NOT be an acceptable proof of ownership?
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Deed signed by the last seller
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A homeowner wants to sell her property but cannot find her deed. In this situation, the homeowner..
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does not need the deed to sell if it was recorded.
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Mortgage title policies protect which parties from loss?
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Mortgages
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Which statement is TRUE regarding the lender's title insurance?
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The mortgagee's policy covers only the mortgage.
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Which of the following are traditionally covered by a standard title insurance policy?
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Improperly delivered deeds
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The recording of a valid deed:
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gives constructive notice of the ownership of real property
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When does a broker's license expire?
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April 30th of every even-numbered year
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What isn't required in a written Illinois listing agreement?
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The complete legal description of the property being sold.
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A decedent left a will giving his neighbor the right to use a well on the decedent's land as long as the neighbor was alive. The neighbor's interest in the property is properly called a
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Life Estate
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What is the general datum plane used by Illinois surveyors?
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The USGS datum
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The purpose of bulk zoning it to:
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control density and avoid overcrowding
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The agency responsible for the enforcement of the Fair Housing Act is the:
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Department of Housing and Urban Development
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The Civil Rights ACt of 1866 prohibits discrimination in housing based on:
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Race
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Real Estate brokers are required to show all of the properties they have listed, true or false?
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false
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Under the federal Fair Housing Act it is illegal to discriminate because:
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a person had AIDS
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Pledging property for a loan without giving up possession of the property itself is referred to as
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hypothecation
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In Illinois, mortgage foreclosures may be obtained only through a court proceeding. This means Illinois is characterized as a
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judicial foreclosure state
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In Illinois, when may a mortgagor in default exercise his right of reinstatement?
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Up to 90 days after service of summons
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In Illinois, when must a release be delivered to a mortgagor or trustor once the mortgage or deed of trust has been fully satisfied?
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Within one month after full payment and satisfaction
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According to the Illinois Mortgage Escrow Act, an individual who has owned his home for 12 years and reduced his mortgage balance to 65 percent of its original amount may
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terminate his escrow account
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What is the Illinois usury ceiling for loans secured by real property?
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There is no usury ceiling for such loans in Illinois
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Which of the following is included in the definition of mortgage contained in the Illinois Mortgage Foreclosure Law?
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Installment contracts payable over at least five years, with a 20 percent down payment
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The RESPA Uniform Settlement Statement (HUD-1) must be used to illustrate all settlement charges for
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residential transactions financed by federally related mortgage loans.
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The principal amount of a purchaser's new mortgage loan is a
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credit to the buyer
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The earnest money left on deposit with the seller's real estate broker is a
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credit to the buyer
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The document that provides borrowers with general information about settlement costs, RESPA provisions, and the Uniform Settlement Statement is the
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special information booklet
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Which charge noted on the Good Faith Estimate (GFE) must be the same or less than the charge noted on the HUD-1 form?
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Lender charges for taking and underwriting the loan
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Under the new Mortgage Disclosure Improvement Act (MDIA), a lender must extend the closing how many days if the APR is increased prior to closing?
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Three
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In Illinois, which party customarily prepares the closing statement?
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Buyer's lender
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In Illinois, the usual "proof" that the listing broker has earned his commission is the
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closing of the sale
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Under Illinois Law, is an unlicensed assistant allowed to sit at a property that is not open to the public?
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Yes
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After a particularly challenging transaction finally closes, the client gives the sponsored broker representing the client a check for $500 "for all your extra work." May the sponsored broker receive compensation from the other sponsoring broker?
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Yes
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The amount of commission paid to a sponsored licensee is determined by...?
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mutual agreement with the sponsoring broker.
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Each room of a house was preassembled at a factory, driven to the building site on a truck, and then lowered onto its foundation by a crane. Later, workers finished the structure and connected plumbing and wiring before the owners moved in. What type of home is this?
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Modular
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When married homeowners (who file jointly) realize a profit from the sale of their home that exceeds $500,000, what's true about what they can do?
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The excess gain will be taxed at the current applicable capital gains rate.
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In 2011, a buyer paid two discount points at the closing. What is not deductible from their gross income?
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The gain realized from the sale or exchange of a principal residence.
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A lot is valued at $25,000, and the house is valued at $75,000. If the house is totally destroyed by fire, under a guaranteed replacement cost policy with a coinsurance clause, which of the following would most likely occur?
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The insurance company would pay $60,000 to the owner.
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A homeowner has $80,000 equity in his primary residence of three years. The owner sells the residence for $135,000. The broker's commission was 5.5 percent, and other selling expenses amounted to $1200. What is the owner's taxable gain on the transaction?
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$0
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A community that merges housing, recreation, and commercial units into one self-contained development is called.
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PUD
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What clause is found in most homeowners' insurance policies?
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Coinsurance clause
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That portion of an owners' property value that exceeds the amount of their mortgage debt is called
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equity
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subordination clause
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allows a subsequent mortgage to be placed ahead of the existing mortgage and would generally also have an escalation clause that would increase the interest rate caused by the increased risk
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Security Deposits
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are an example of a seller's debt
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Nancy's tenants all had several months remaining on their leases when she sold her six unit apartment building to Chuck. Tenants in this situation...
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need to do nothing and may remain until the end of their leases - a lease survives the sale, and the new landlord is in the exactly the same position with tenants as the old one was.
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The federal ban on discrimination based on familial status is intended to provide equal access to rentals for...
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people with children. familial status refers to a parent or guardian who lives with one or more children under the age of 18.
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In the market or sales data approach to appraisal, the sales prices of similar, recently sold properties are
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adjusted. sale prices of comparable properties are adjusted to match the specifications of the subject property
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For appraising a 20 year old single family residence, the best data is the..
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recent sale prices of nearby houses. How much buyers have paid for similar nearby properties is the best guide to market value.
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All of the following are economic principals that can affect the value of real estate except:
competition contribution change cost |
cost.
Competition, contribution, and change are all economic principals that affect real estate. |
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Market data approach appraising may require adjustments of sold comparables by an appraiser for all of the following except:
sale date of comparable replacement cost of structure financing made available by seller lot size and location |
Sales date, seller financing, lot size, and location of a property are adjustments to sold comparables an appraiser must consider in determining market value of an object property. Replacement cost of a structure is used to determine value in a cost approach appraisal.
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The economic characteristics of land are
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scarcity, fixity, modification, and situs
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All of the following are PHYSICAL characteristics of real estate except:
immobility scarcity indestructibility non-homogeneity |
scarcity is an ECONOMIC characteristic of real estate
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Tenancy by the entirety is a special form of ownership available only to...
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Tenancy by the entirety, available in most non-community property states, is automatically assumed when a married couple purchases real estate together, unless they specify some other form of ownership.
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Riparian rights refers to all except:
rivers streams waterways oceans |
oceans, Littoral rights includes oceans
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Which of the following is NOT a PHYSICAL characteristic of land?
immobility situs non-homogeneity indestructibility |
Situs is an ECONOMIC characteristic of land, not a physical characteristic
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A seller, anxious to sell, tells a cooperating agent during a showing that the agent will be given a riding lawnmower if he brings an acceptable offer by the end of the week. All of the following are true in this situation EXCEPT that the
agent may accept the lawnmower because it is not cash agent should report the incident to the listing broker agent would be in violation of the law if he took the lawnmower cooperating agent could legally receive the lawnmower from his broker |
Salespersons may only receive compensation from their principal broker. Gifts of merchandise, use of luxury cars, trips, and outings are also compensation and may only be given to a broker who disposes of them in accord with the company policy.
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Attorney Sam gave agent Molly $100 to show his appreciation for the referral of Molly's client. This type of transaction is
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illegal, since it's considered a kickback under RESPA
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For there to be a valid right to purchase or terminate, an option contract must contain
-notice to terminate -at least 7 days to back out of the agreement -dollar consideration -a right of rescission |
The lack of a dollar consideration may invalidate an option. The courts want "something at risk" for the right to purchase/terminate at a later time.
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In a real estate transaction, a broker does not affirmatively represent either the buyer or the seller as agent. He is acting as ...
a transaction broker an undisclosed dual agent a non representing dual agent an illegal real estate licensee |
If a broker is handling both sides of a transaction, he may do so only as a transaction broker or by disclosing a "no brokerage" relationship
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When a property owner leases his property, at the end of the lease he has
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a reversionary interest in the property
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You're the buyer's agent for Robert and Debbie, who will be selling their present home with you, in the purchase of 1234 Main st, listed by ABC Realty. What is your agency relationship with all parties?
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Under the Law of Agency, Robert and Debbie are your clients; the seller of 1234 main street is your customer. you owe a duty of fairness to all parties.
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If a principal terminates the listing agreement during the listing period, the broker may be able to do any of the following EXCEPT
-collect a commission for a transaction in process -recover marketing expenses -encourage termination of any contract in progress -continue to cooperate with any subsequent listing broker |
The agent is prohibited from interfering with any transactions that originated during the relationship
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Property taxes are paid annually in November for the calendar year. The closing is held on August 15 and the property taxes of $3,250 are prorated to date of closing. What entries are made on the settlement statement?
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The seller owes 7.5 months' of property taxes;
$3,250 / 12 months = $270.80 $270.80 x 7.5 = $2,031 Charge seller and credit buyer $2,031 |
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The area of a lot that measures 850' x 850' is how many square yards?
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850 x 850 / 9 is just less than 80,278 square yards
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Joanna bought a house for $120,000, putting 20% down and borrowing the rest with a conventional loan. At the end of the first year, her principal had been paid down by $480 and property values in the area had risen by 6%. Her equity at the end of the first year was...
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Her equity is the present market value of her home, minus the amount of debt remaining on it.
$120,000 x 1.06 = $127,200 market value $96,000 (amount of loan) - $480 = $95,520 $127,000 - $95,520 = $31,680 |
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If a developer wants to build a commercial building closer to the street than is permitted by the local zoning ordinance because the shape of the lot makes a standard setback impossible, the developer should seek a...
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variance - permission obtained from zoning authorities to build a structure or conduct a use that is expressly prohibited by the current zoning laws; an exception from the zoning ordinances
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A licensee showed an owner-occupied property that had window screens, custom venetian blinds, and a wall bed to a buyer. The owner accepted the buyer's offer. What may the seller remove prior to closing?
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None of the identified items
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In a 28/36 ratio, the 36 means
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recurring long-term debts and housing payment combined may not exceed 36 percent of GROSS monthly income
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Police powers include which of the following?
-deed restrictions -zoning -restrictive covenants -taxation |
zoning
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A building sold for $360,000, with the purchaser putting down 10 percent down and obtaining a loan for the balance. The lending institution charged a 1 percent loan origination fee. What was the total cash used for the purchase?
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$360,000 x .10% = $36,000
$360,000-$36,000=$324,000 $324,000 x .01% = $3,240 $36,000 + $3,240 = $39,240 |
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A buyer makes an offer on a property and the seller accepts. Three weeks later, the buyer announces that"the deal's off" and refuses to go through with the sale. If the seller is entitled to keep the buyer's earnest money deposit, it is MOST likely because there is what kind of clause in the sales contract?
-liquidated damages clause -contingent damages clause -actual damages clause -revocation clause |
liquidated damages clause
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After signing a five-year lease, the business outgrew its rental space within three years. The business would like another company to take on the responsibility for the remaining two years. A second business can do this through...
-assignment -a novation -a substitution -a recisission |
an assignment
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An ownership interest that is based on annual occupancy intervals is a
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time-share
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A defect or a cloud on title to property may be cured by
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obtaining quitclaim deeds from all appropriate parties
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Under the terms of a net lease, a commercial tenant usually would be responsible for paying...
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real estate taxes
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If a borrower must pay $6,000 for points of a $150,000 loan, how many points is the lender charging for the loan?
3 4 5 6 |
4
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In 2001, an owner constructed a building that was 8 stories high. In 2011, the municipality changed the zoing ordinance and prohibited buildings taller than six stories. Which of the following statements is TRUE regarding the existing 8 story building?
-the building must be demolished -the building is a conditional use -the building is a nonconforming use -the owner must obtain a variance |
-the building is a nonconforming use
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What kind of lien is created as a result of a judgement, estate or inheritance taxes, the decedent's debts, or federal taxes?
specific general voluntary equitable |
general
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An FHA-Insured mortgage loan would MOST LIKELY be obtained from which of the following?
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Any qualified lending institution
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In a real estate transaction, who is usually responsible for paying state and county transfer taxes that due?
-buyer -seller -escrow agent -lender |
seller
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Jake, Manny, and Henry are joint tenants owning a parcel of land. Henry conveys his interest to his long-time friend William. After the conveyance, Jake and Manny:
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remain joint tenants owning a two-thirds interest.
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The Real Estate Settlement Procedures Act requires:
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that disclosure be made of all closing costs prior to the closing
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The sale of a single-family home by the owner is exempt from the Illinois Human Rights Act if the owner:
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does not own more than two single-family homes at one time
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After real estate has been sold by the state or county to satisfy a delinquent tax lien, the defaulted owner usually has a right to:
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redeem the property within the time specified by law
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What would probably occur if a tenant's lease is breached because the landlord has allowed the unit in an apartment building to become uninhabitable?
-A holdover tenancy -A suit for possession -Tenancy at sufferance -Constructive eviction |
constructive eviction
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The legal concept that requires leases, that connot be fulfilled within one year of their making, to be in writing to be enforceable is the:
-law of descent and distribution -statute of frauds -parole evidence rule --statute of limitations |
statute of frauds
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An income producing property has $73,250 annual gross income and monthly expenses of $1,760. What is the appraised value if the appraiser uses a 10% capitalization rate?
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$73,250 - ($1,760 x 12 months)
$73,250 - $21,120 = $52,130 / .10 = $521,300 |
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The Americans with disabilities Act requires that:
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reasonable accommodations be provided to people with disabilities.
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If the yield on a 30-year loan is 7 1/4 percent and a mortgage lender charges 3 points, what is the interest rate on the loan?
-6 7/8 percent -7 5/8 percent -8 percent -10 1/4 percent |
6 7/8 percent
each point is worth 1/8, subtract (because it says the mortgage lender charges 3/8ths from 7 1/4 (7 2/8) to get 6 7/8 |
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Julian owned the fee simple title to a vacant lot adjacent to a hospital and was persuaded to make a gift of the lot. He has his attorney prepare a deed that conveyed the ownership of the lot to the hospital "So long as it is used for medical purposes." After the completion of the gift, the hospital will own a:
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fee simple determinable
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Mr. and Mrs. Horton have been living in their new condominium at the shore for the past 1.5 years. They leased the home they lived in for the past 25 years to a tenant 1.5 years ago. If they sell the house now for $490,000 how much of the capital gain will be taxable?
- 0 percent - 18 percent - 49 percent - 100 percent |
0 percent, because they had lived their 2 out of the last 5, even though it wasn't the most recent 2 years.
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The Real Estate Settlement Procedures Act is a regulation of the
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federal government
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A property valued at $600,000 has a land value of $225,000. The improvement was expected to last 50 years. It is now 10 years old. What is the property's remaining economic life?
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$600,000 - $225,000 = $375,000
$375,000 / 50 years = $7,500 depreciation per year 10 years old x $7,500 = $75,000 $600,000 - $75,000 = $525,000 |
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The clause in a mortgage instrument that would prevent the assumption of the mortgage by a new purchaser is a
-alienation clause -defeasance clause -power of sale clause -certificate of sale clause |
alienation clause -
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The recordation of a warranty deed:
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protects the interests of the grantee
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A tenant has negotiated a net lease with the property owner. Under the terms of the lease, the tenant would probably be responsible for paying which of the following expenses?
mortgage expense maintenance expense property owner's income taxes depreciation expense |
maintenance expense
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the landlord's lease prohibits tenants from altering the property. If a person who uses a wheelchair cannot maneuver in the unit's kitchen:
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the tenant is entitled to make the necessary alterations.
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Potholes in the driveway, peeling paint, and broken windows are examples of
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physical curable depreciation
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Capping is the method of
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laying soil over the surface of a landfill and planting vegetation.
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In 2000, the EPA required that water suppliers report any health risk situation....
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within 24 hours
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In Illinois, landlords are required by law to pay interest on tenants' security deposits if they hold deposits for more than six months, and receive deposits on residential leases in properties of:
fewer than 5 units 25 or more units 15 or more units 1025 or more units |
25 or more units
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An Illinois general real estate tax was levied in all counties, except cook county, on January 1, 2012. When is the first installment due and payable?
Jan 15, 2013 June 1, 2013 June 1, 2012 September 15, 2012 |
June 1, 2013 - 18 months later
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In Illinois, is it the duty of an agent to discover latent defects?
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No, the courts have ruled it is not a broker or managing broker's obligation.
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Which of the following deeds should the grantor use to transfer title without providing any warranties to the grantee?
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Quitclaim deed
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On Wednesday, a property seller offers to sell his house to a potential buyer for $320,000. On Sunday, the buyer makes a counteroffer of $310,000. On Friday, the buyer withdraws the counteroffer of $310,000 and accepts the seller's offer of $320,000. In this situation there is:
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no valid agreement because the buyer's counteroffer ended the seller's offer
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In Illinois, any arrangement in which a purchaser receives the right to use an accommodation for a specified period of less than one year on a recurring basis of more than three years, but does not receive a fee simple interest in any real property, is the statutory definition of a
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Time share use
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A sister and brother bought a house, taking title as tenants in common. If the brother dies, which of the following is true about the ownership of the house?
The sister owns the property in severalty The sister holds a life estate in the brother's share of the property. The sister continues to hold her original interest, and the brother's interest goes to the brother's heirs. The sister holds fee simple ownership in the brother's share of the property. |
The sister continues to hold her original interest, and the brother's interest goes to the brother's heirs.
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Which of the following best describes the statutory duties of agency in Illinois as it relates to broker/client relationships?
It governs all broker-salesperson relationships. It has replaced common law duties While superseded by the Cod of Ethics, it still applies to certain transactions. It has been replaced by local ordinances. |
It has replaced common law duties.
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If an Illinois licensee has been found by a court to have illegally discriminated
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His or her license must be suspended or revoked
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For purposes of mortgage foreclosures, Illinois is classified as a judicial foreclosure state. Which means....
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lenders must go to court to obtain a court order to sell the property.
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Which of the following best expresses the statutory method of proration?
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Yearly charge / 360
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Sam is a leasing agent working for a property manager of a large privately owned complex. Two apartments are now available to lease. Sam has set up several showings for today. Sam is required to:
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give each prospective tenant a written disclosure before showing the apartments stating that he represents the owner.
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A large manufacturing co agrees to relocate to an economically depressed neighborhood of Chicago if the city can provide suitable property in a short period of time. The property needed is alarge cavant lot owned by an investment partnerhsip that refuses to sell. If the City of Chicago wants to relieve unemployment in the neighborhood and improvecommercial condiions in the city by bringin in the manufacturer immediately, what can the city legally do?
- nothing. private property is exempt from eminent domain - obtain title to the property by escheat through the provisions of article 1, section 15, of the illinois constituion - obtain title to the property though a court action seeking condemnation of the property -obtain immediate rights of possession and use by depositing a sum of money that a court preliminarily considers to be just compensation with the county treasurer through a process known as a quick-take |
obtain immediate rights of possession and use by depositing a sum of money that a court preliminarily considers to be just compensation with the county treasurer through - quick-take
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In 1971 a developer conveyed a motel and restaurant to an investor "on condidtion that no liquor is ever served on the property." The conveyance provided that if liquor was served on this property, ownership would revert to the developer. In 2011, the investor sold the motel and restaurant to his son. based on these facts, which statement is TRUE?
-The sale of the motel and restaurant in 2011 extinguished the developer's right of reverter -Both the developer's right of reverter and the condition expired by operation of Illinois statue in 2000; the investor is free to sell the motel and restaurant without condition -while the condition continues forever, the developer's right of reverter automatically expired in 2011. -both the condition and the developer's right of reverter automatically expired in 2005. |
While the condition continues forever
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A licensee was showing a property in an eight-unit complex to a prospective tenant using a motorized wheelchair. The tenant wanted to rent a unit, install grab bars in the bathroom, and lower all the door handles. The landlord
-can allow the tenant to make these modifications and pay for them to be made. -can refuse to rent to the individual because it would devalue the property -must allow the tenant, at the tenant's expense, to make the modifications, but cannot require restoration at the end of the lease. -must allow the tenant to make the modifications at the tenant's expense, but can require, by the terms of the lease, restoration of the property. |
must allow the tenant to make the modifications at the tenant's expense, but can require, by the terms of the lease, restoration of the property.
1988 Amendments to the Federal Fair Housing Act require that a landlord allow a tenant to make changes to the property to accommodate a disability. These modifications are at the tenant's expense, and the landlord can require the tenant make reasonable restoration to the property at the end of the lease. |
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The most typical purpose of a deed restriction is to
-ensure that the property will not become encumbered. -encourage varied uses of the property -control future uses of the property -limit costs of new houses in a subdivision |
control future uses of the property. Deed restrictions control how the property is used. Once they have been recorded, they run with the land. They bind current and future owners of a property.
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A couple leased a waterfront bungalow. The leases began on June 15, 2010, and continued through July 31, 2010. The couple had
- a tenancy at will - a tenancy by the entireties - an estate for years - a holdover tenancy |
an estate for years. A lease that has a specific beginning and ending date is called an estate for years, even though it may not be a year in duration
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An owner obtains a new mortgage on her house because the house has appreciated in value and she wants money for an investment. The new mortgage rate is 1% lower than the old rate. What is this process called?
-refinancing -disintermediation -rollover -subordination |
refinancing, is the process of obtaining a new loan to pay off an old loan. If property has appreciated in value, this is frequently done to free up money for investment purposes.
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Which of the following is generally income tax deductible in home ownership?
-down payment of the property -major home improvements -points paid to obtain the loan -maintenance on the property |
points paid to obtain the loan. points paid by the buyer for a loan is income tax deductible.
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Which of the following is true concerning eminent domain?
-the property must be used solely for recreation. -the property is taken through the process of condemnation -the owner must be paid based on the mortgagor's perceived value -the property owner is not compensated for the property |
The property is taken through the process of condemnation.
Eminent domain is the power or right the government has to take private land for public use or use determined by a court to be in the public's best interest. To do this, the land must first be condemned and appraised. Just compensation must be paid to the property owner. A property owner has the right to appeal the amount of the compensation but is bound by the decision of the court. |
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An owner has been asked to grant a 60 day option to purchase a property. When should the purchase price be decided?
-upon creation and signing of the option to purchase -at the closing -at any time during the 60 day option period -within the last 10 business days of the 60 day option |
one of the essential elements of an option agreement is that the purchase price at which the property would be sold must be established at the time the option is created. The stated purchase price is separate from the consideration paid for the option right itself.
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Which of the following is true about prepayment penalties on VA or FHA loans for single family dwellings?
- the VA requires a prepayment penalty of 2% of the outstanding loan balance. - The FHA requires a prepayment penalty of 2% of the original principal amount. -Both the VA and the FHA require prepayment penalties of 3% of the outstanding loan balance - Neither the VA nor the FHA allows prepayment penalties |
A prepayment penalty is a charge for paying off a loan before it matures. By paying it off ahead of schedule the lender may not make the amount of interest planned on at the time the loan was initiated. By law, neither the FHA nor VA loans can contain prepayment penalties.
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The owner of a lot is interested in selling. The lot is 99' x 110'. If a similar property sells for $36,000 per acre, what is the most likely selling price for this property?
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There are 43,560 sq. ft. in an acre. 99x110=10,890 / 43,560 = .25
.25 x $36000= $9000 |
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A licensee is representing prospective buyers. The licensee orally informed the buyers that the developers would be paving the streets in front of a house in rural subdivision. The licensee had not verified this but assumed that it was true because the developer had done the paving in similar subdivisions. The buyers relied on the licensee's statement in deciding to buy the house. If no contract exists spelling out paving responsibilities, who can be held accountable for damages?
-the developer because it is a developer's responsibility to pave streets up to existing arteries -the licensee because his unverified statement was misrepresentation -the county because it has jurisdiction over roads in rural areas -no one because no written promise of street paving was made by either the licensee or the developer. |
the licensee presented the information as being factual but did not verify it. If it is incorrect and the buyers are damaged due to their reliance on that information, whether it is oral or in writing, the licensee can be held responsible for misrepresentation.
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Which of the following is a characteristic of a limited partner's role in a limited partnership?
-reduced personal liability and no management decision making -a fixed return on investments and a loss of income tax write-offs -official anonymity with certain tax exemptions and a loss of annual profits exceeding 20% investment -authority over larger decisions and active interest investment potential |
reduced personal liability and no management decision making.
Unlike a general partnership, limited partners are passive investors, share in profits, and have no say in the organization and direction of the operation. Each limited partner may lose only as much as he or she invests. |
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For a real estate sales contract to be valid, it must include
- options - contingencies - consideration - a rescission clause |
Consideration is an essential element for any contract. For a real estate contract to be valid, it must contain some form of consideration
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A home equity line of credit is
-for a 30 year term -fully tax deductible -a secured loan -available on a rental property |
A home equity line of credit is a mortgage loan that allows the borrower to obtain advances up to an amount that represents a specific percentage of the borrower's equity in a property.
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Which of the following factors tends to increase the price of residential real estate in a given area?
-a zoning change allowing a group home -a larger manufacturing plant opening in the city -higher interest rates on home loans -an abundance of homes in a preferred area |
The price of residential property generally increases when there are more buyers, and, therefore, more demand for houses. If a large plant opens in a city, the employment opportunities increase and more employees would be buying houses, increasing demand.
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Four people bought an investment property together, each having en equal ownership interest. They took title in such a manner that if one died he could leave his one-fourth interest to his heirs. How did they take title to the real estate?
-joint tenants with the right of survivorship -tenancy by the entirety -tenants in common -year to year tenancy |
In tenants in common ownership, the ownership interests do not have to be equal, but they can be. Each owner can sell or bequeath his or her property without the consent of the other co-tenants.
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A couple's yearly income is $87,400. The couple's bank currently allows residential loans for an amount equal to twice the annual income. Disregarding minimum percentage down payment requirements, what is the minimum cash down payment that the couple will need to have on a $210,000 home?
-$35,200 -$42,000 -$87,400 -$122,600 |
The couple would need to make up any difference between the loan amount and the purchase price of the property in the form of a down payment. Since their joint incomes equal $87,400 the bank will loan twice that amount or $174,800. The purchase price of the property is $210,000, minus the loan amount of $174,800, equals a required down payment in the amount of $35,200.
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A seller agreed to list an older house for sale on an "as is" basis. He told the licensee that the roof leaked occasionally and that the plumbing and electrical systems were old and outdated. After signing the listing agreement, the seller had the house inspected for termites and rot damage. Both termite and rot damage were present, and the seller notified the licensee. If neither the seller nor the licensee told the buyer about the damage and the buyer personally inspected the property before closing, would the buyer be able to sue at a later date when the termite damage is found?
-no, because the seller sold the property on an "as is" basis. -no, because the buyer was free to inspect the property and ask any questions prior to the sale -yes, because the damages were from more than one cause. -yes, because the licensee did not alert the buyer once he discovered the damage. |
Even though the licensee is an agent of the seller, he is required by law to disclose any latent defect of which he has knowledge.
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A buyer has a properly executed option with a seller to buy a property, which runs through Sept. 15. The buyer decides not to exercise the option. What should the seller do to terminate the option?
-nothing, as the option expired automatically -have an attorney file a declaration of novation -exercise the statute of frauds -execute the contingency clause in the option |
An option must contain a stated time period. If the option right has not been exercised within that time period, the option automatically expired. The optionor (seller) does not need to take any further action to terminate the option.
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The closing date is approaching on the sale of a property to a buyer who is represented by a licensee. Although the sellers have both signed the sales contract, the licensee learns that a relative of the sellers may have a title claim to this property In this situation, the licensee should
-ignore the existence of the relative because if a title claim is not asserted before the closing, the buyer can experience no future title problems. -ask the listing licensee to advice the seller to contact an attorney to seek a quitclaim deed from the relative. -advice the buyer to contact an attorney in preparation to sue for specific performance. -inform both the sellers and the buyers that the closing cannot occur. |
The licensee should ask the seller's agent to advise the seller to seek a quitclaim deed from the relative who may have a possible interest in the property. The existence of the relative cannot be ignored because the relative may have a legal interest in the property that he or she decides to assert at a later date. The closing of the transaction can occur as soon as the quitclaim deed has been obtained.
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The primary purpose of the Real Estate Settlement Procedures Act is to
-inform the buyers and sellers of all settlement costs in real estate transactions -control the number of nonfederally-related mortgage loans in the country. -standardize the amount of all settlement costs in real estate closings. -standardize settlement procedures in all parts of the country. |
The primary purpose of the Real Estate Settlement Procedures Act is to inform the buyers and sellers of all settlement costs in a real estate transaction. It applied to any purchase of a one to four-family residence financed by a federally related mortgage loan. This would include loans made by savings and loan associations or other lenders whose deposits are insured by federal agencies, as well as insured or guaranteed loans through the VA or FHA.
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Under which of the following circumstances may a seller keep the earnest money deposit of a defaulting buyer?
-if the seller wants to declare the sales contract forfeited, and there is a forfeiture clause in the contract -if the seller wants to put the buyer on notice that the contract is being rescinded -if the seller suspects that they buyer never intended to execute the contract -under no circumstances |
If the buyer defaults on the terms of a real estate contract and there is a forfeiture clause in the contract, the seller would be able to retain the earnest money deposit. A typical forfeiture clause in a contract would be, "if the buyer does not perform on the terms of this contract within the state time period, the buyer will forfeit all moneys paid as earnest money to the seller"
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A deed restriction in a subdivision created a community playground that used a few square feet from the rear of every owner's lot. An owner has begun making plans to convert the rear half of his lot to a garden. The plans would require the removal of park equipment. A neighbor objects to these plans. The neighbor should
-do nothing since an individual landowner has no authority to enforce deed restrictions. -apply for a court injunction agains the owner's plans. -inform the owner that the playground is a community property. -file a lis pendens as soon as possible |
Deed restrictions are enforced through a court. If a neighbor sees a violation of a deed restriction occuring, or about to occur, the neighbor could apply for a court injunction against the owner's plans. This is usually done by the homeowners' association (HOA), but an individual property owner has the right to do so as well. The playground is not community property. The property belongs to the individual owners, but the deed restrictions have created the playground and are enforceable.
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An appraisal prepared using the amount of rent generated by the property is an example of which of the following approaches to value?
-cost -market data -square footage -income |
The income approach to value is determined by the amount of net income the property will produce over its remaining economic life. The following four steps are used:
1. Estimate the potential annual gross income. 2. Determine the effective gross income by deducting an allowance for vacancy and collection loss. 3. Determine the annual net operating income by deducting the annual expenses. 4. Apply the appropriate capitalization rate to the annual net income. |
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A licensee with firm A had a listing from a seller with a commission rate of 8%. The licensee in firm A listed it in a listing service, offering a 4% commission to the selling company. Licensee B, with a different company, cooperated through firm A and sold the listing for $150,000. At closing how much will the seller owe firm A?
-$0 -$6,000 -$10,000 -$12,000 |
$12,000
The seller will owe firm A the entire commission amount agreed to in the listing contract. $150,000 x .08= $12,000. The firm will then split the amount with licensee B's firm as agreed to in the offer of cooperation. |
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When using the sales comparison approach, a licensee determines that a comparable property's tile floor in the entry hall is worth $2,000. The subject property does not have tile floors at all. Which of the following adjustments should be made?
-the comparable should be adjusted upward -the comparable should be adjusted downward -the subject property should be adjusted upward -the subject property should be adjusted downward |
In the sales comparison (market data) approach to appraisal, it is always the comparables that are adjusted, never the subject property. If the comparable is better than the subject property, the adjustment to it is downward. If the comparable is not as good as the subject property, the adjustment to ti would be upward.
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An owner has accepted an offer. Another buyer approaches the licensee with an offer on the same property. The licensee should tell this second offeror that
-there is a contract on the property and this offer cannot be presented -this offer will be presented and he will encourage the owner to cancel his existing contract -he will present this offer for consideration since the title has not yet been transferred. -this offer can be presented as a back-up offer only. |
Once an owner has accepted an offer, the owner has entered into a legal and binding contract. If a second offer comes in, the licensee should tell the second buyer that the offer can be presented only as a backup offer, which means that if the first contract is terminated for any reason, the second offer could be accepted by the seller.
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A real estate licensee was hired by a property management company to lease and manage commercial properties. Each commercial lease was different based on the negotiations of the parties. Which of the following is true in these circumstances?
-legal counsel should be sought to write or review the leases -the licensee can prepare the leases as he is trained in real estate -the licensee could fill in the blanks on the preprinted commercial lease forms. -a lease agreement is not that same as a contract and can be prepared by either party. |
A lease is a legal and binding contract. Although preprinted lease agreements are often used in residential leases, commercial leases are more complex. Drafting a commercial lease may constitute the practice of law, and a real estate licensee cannot practice law unless also a licensed attorney.
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A person bought property from a seller and received a general warranty deed. Two years later, the seller's brother came forth and claimed he had an ownership interest in the property. The brother stated he knew the court would uphold his interest. In a general warranty deed, the buyer is protected from this situation by the covenant
-of further assurance -of seisin -against encumbrances -of special warranty |
of seisin
Although all covenants in a general warranty deed work together to protect the buyer, the covenant of seisin specifically guarantees that the owner owned the real estate at the time of the sale and had the right to convey it. |
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What do special, general, and universal types of agency have in common?
-they originate with the prinicpal -they create ongoing work for the agent -they empower the agent to sign all contracts for the principal -they terminate upon the acceptance of an offer to purchase |
-they originate with the principal
Agency is created when the principal delegates to his agent the right to act on his or her behalf in business. Special agency occurs when the principal authorizes an agent to perform a particular act without consideration of continuity of services. General agency occurs when the principal authorizes an agent to perform duties associated with the continued operation of a business, as in property management. A universal agent is also a general agent, one who acts on behalf of another. |
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Which of the following could be deducted as expenses from annual income taxes on an investment property?
-making additional principal payments -replacing a roof -installing a new furnace -painting a structure |
Painting a structure
Repairs and recurring expenditures such as repairing a leaking roof or painting a structure are tax deductible expenses. |
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A buyer has been pre-approved for a loan up to $300,000. The buyer plans to make a down payment of 20% on a property. The buyer will most likely apply for which of the following types of mortgage loans?
-open end -home equity -wraparound -conventional |
conventional loans are viewed as the most secure because their loan-to-value ratios are often the lowest. Traditionally, the borrower will make a down payment of at least 20%. usually, with a 20% down payment, no additional insurance or guarantee is necessary.
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A listing licensee has which of the following obligations to a buyer?
-accounting -negotiation -honesty -loyalty |
A licensee's duties to a buyer or customer are fairness, honesty, and accuracy.
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A builder is obtaining a construction loan of $95,000 for a single family residence. Under the Truth-in-Lending Act, disclosure of a prepayment penalty by the lender is
-not required when the amount of the loan is less that $100,000 -no required for a business loan -required for a new construction under $100,000. -required for a single-family dwelling |
Not required for a business loan
The Truth in lending act is applicable to individual home owners, but it does not apply to a construction loan for a builder because the loan is for business purposes. |
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Which of the following is a unilateral contract?
- an option - a lease - a purchase agreement - an exclusive right to sell listing |
A unilateral contract is one in which one party makes an obligation to perform without receiving in return any express promise of performance from the other party. An option is a unilateral contract because the seller agrees to sell for a certain period of time at set terms, provided the buyer performs by paying the specified option price.
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Which of the following is a purpose of a staked survey?
-estimating the value of a property -determining assessed value -locating property boundaries -evaluating marketability of title |
A staked survey is a method of identifying boundaries of a parcel of land by placing stakes in the ground. Although it shows the corners of the property, it does not provide complete dimensions.
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A licensee is typically authorized to do which of the following on behalf of the principal?
-submit all written offers to purchase -place a client's money in the licensee's personal savings account to draw interest -bind the principal to a contract -withhold known information from a buyer concerning hidden defects in the listed property. |
submit all written offers to purchase.
As part of agency duties, a licensee must present all offers to his principal (client) |
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A metes and bounds description must contain which of the following?
-at least one artificial monument -a baseline from which measurements are taken -a lot and block number assigned to it in the county recorder's office? -a point from which the description begins and at which it ends |
A metes and bounds description must contain a beginning point and end at the same point, thus enclosing the parcel of land being described. A metes and bounds description must be based on landmarks or monuments.
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A prospective buyer says he only has $1,000 for earnest money, but he anticipates receiving $4,000 as a gift from his aunt. The licensee accepts the $1,000 and a promissory note for the remaining $4,000 as a deposit. Must the promissory note be tied to the buyer's mortgage?
yes, the note is negotiable and becomes part of the mortgage. yes, the note is part of the financing instrument required by the lender no, the note is only a personal document that is unsecured and not part of the mortgage. no, the note is a personal promise to repay a debt and is a complete contract alone. |
no, the note is a personal promise to repay a debt and is a complete contract alone.
A promissory note executed by a borrower is a contract complete in itself and need not be tied to a mortgage or a deed of trust. It is the borrower's personal promise to repay a debt according to agreed-upon terms. |
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In the appraisal process, the relationship between basic and non-basic employment patterns as a means of predicting population and income is known as
-economic-base analysis -economic life -market analysis -income approach |
Economic-base analysis is an appraisal term describing a means of measuring the economic activity of a community that enables it to attract income from outside its borders.
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Replacing the furnace filters at a rental property on a regular basis is what type of maintenance?
-corrective -constructive -deferred -preventive |
Preventive maintenance refers to those things done on a regular basis to prevent problems occurring in the future.
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During property inspection, there are indications that a meth lab had been in the house. This may constitute
-an environmental hazard -a latent defect -curable obsolescence -physical deterioration |
According to the EPA, the production of meth causes fumes that can contaminate a structure's walls, flooring, built-in appliances, surrounding land, and groundwater. Whether the drug is smoked in a home or made in a home lab, meth production is an environmental hazard that should be disclosed and cleaned up.
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A minor leases an apartment. Immediately upon reaching the age of majority, the lessee notified the lessor that the lease was being terminated. Which of the following is true in this situation?
-The lease is fully enforceable regardless of the lessee's age. -The termination is possible because the rescission was made within a reasonable amount of time after the lessee reached the age of majority. -the termination is not possible because all lessees are subject to the principal of caveat emptor -the termination is not possible because a lessee cannot unilaterally terminate a signed lease. |
Most contracts entered into by a minor are generally voidable at his or her option. However, if a minor does not disaffirm a contract within a reasonable time after attaining majority, the contract becomes fully enforceable against him.
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A seller wants to allow a buyer to assume the existing mortgage. The sellers want to be sure that they will not be liable for the mortgage after it is assumed. Which of the following mortgage clauses will best meet the seller's needs?
-release -escalation -novation -due-on-sale |
Novation is substituting one party's obligations for that of the other party. In assumptions, the novation clause would release the seller from liability on the loan and make the buyer liable.
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To allow for more intensive use of subdivision land, a zoning variation is required to permit which of the following?
-a decrease in the number of outbuilding allowed per block -an increase in the number of building sites per acre. -deed restrictions prohibiting the sales of any residential lot to a family of fewer than four persons -deed restrictions prohibiting the shrinkage of the backyard area in any residential lot. |
An increase in the number of building sites per acre allows more buildings to be built, which intensifies the use of subdivision land.
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To qualify as a tax-deferred exchange, a property must be
-a principal residence -held for productive use in trade or business -financed through a federal institution -amortized over a 30 year period |
held for productive use in trade or business
To defer the gain on the sale of an income-producing property, a tax-deferred exchange may be used. |
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An unencumbered residence was sold. The closing expenses amounted to $526.40 plus a commission of 7%. The seller received a closing check int he amount of $37,231.60. What was the selling price?
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$37, 231.60 + $526.40 = $37,758. This amount equals 93% of the selling price since the seller paid the broker a 7% commission. 100% - 7% = 93%. To arrive at the sale price, divide the net plus expenses by 93%. $37,758 / .93 = $40,600.
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A person wants to lease a small building to use a coffee shop. The tenant and the landlord agree upon a lease where the tenant will pay all utilities and taxes, in addition to rent. The landlord will pay the insurance. This type of lease is best known as a
gross lease net lease gross rent multiplier flat lease |
In a Net Lease, the tenant pays some or all of the operating expenses, such as utilities and taxes.
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An office building is valued at $800,000 when the annual net income is capitalized at a rate of 20%. If the operating expenses and vacancy and rent loss total 40% of the gross income, what is the approximate gross annual income?
$266,667 $321,412 $400,000 $507,312 |
Annual net income divided by capitalization rate equals value. Therefore net income divided by .2 = $800,000.
Net income is $800,000 x .02 = $160,000 Net income is 60% of the gross income. Gross income is $160,000 / .6 = $266,667 |
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real property taxes are taxes on
-cars, boats, and trailers -a house and the land on which it sits -underdeveloped land only -all home furnishings and outbuildings |
real property is another term for real estate and includes the land and any permanent structures thereon.
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A licensee who finds a buyer a house listed with his own firm and is paid a fee by the buyer for finding a suitable house has what type of agency?
-universal -general -implied -dual |
Dual agency is a situation in which a licensee represents both principals in a transaction. States allowing dual agency generally require that licensees obtain written consent to dual agency at the beginning of the relationship.
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A licensee sold a property with a financing contingency. The mortgage lender calls the licensee and asks if the contract price on a property can be decreased by $5,000. The mortgage lender explains that this will help the buyer qualify for a loan and help the seller close. Which of the following should the licensee do?
-prepare an addendum to the contract to indicate the price change -notify the sellers that the buyer is not financially qualified. -contact a new mortgage lender for the buyer -refuse to change the price as this is illegal |
refuse to change the price as this is illegal.
Loan origination fraud schemes involve falsifying a borrower's financial information to qualify the buyer, who would otherwise be ineligible for a mortgage loan. the mortgage lender in this case may be trying to find a way to qualify an otherwise unqualified buyer. Cooperating with the lender in this request could involve the licensee in mortgage fraud. |
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A buyer bought a home from an owner. The owner agreed to owner-finance the property. The parties agreed to amortize the loan over a 15 year period. The buyer became the owner of record of the property, and the seller had a lien against the property. What type of instrument was used to purchase the property?
-a loan assumption -a land contract -a purchase money mortgage -a reverse annuity mortgage |
In a purchase money mortgage, they buyer acquires legal title and the seller has a lien against the property.
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The Real Estate Settlement Procedures Act (RESPA) applies to which of the following loans?
-a 30 acre farm -a contract for deed -an installment contract -a first mortgage home loan |
RESPA regulations apply to first mortgage loans only.
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Which of the following is an example of functional obsolescence?
-the living room carpet is worn out. -the house is located near a factory -a person must go through the kitchen to get to the only bathroom. -the house has a sloping wooden porch that is unattractive. |
A person must go through the kitchen to get to the only bathroom.
Functional obsolescence is a loss in value due to something being outdated or a defect in design. |
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An adult buyer who is illiterate signs a contract to purchase property from a seller. The buyer understands the nature of the contract because the terms were explained orally. Is the contract binding?
-Yes, because all adults are considered legally competent. -Yes, because the buyer understands the terms of the contract. -No, because the buyer is illiterate and, therefore, legally incompetent. -No, because a conservator must sign for the buyer |
Yes, Because the buyer understands the terms of the contract.
The contract is legally binding as long as the buyer understands the terms of the contract, regardless of whether or not the person is illiterate. |
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When an offer to purchase is agreed to and signed by all parties, but not closed, the purchaser has
-an equitable interest -a right of redemption -a right of rescission -a contingency clause |
An equitable interest in real estate is an interest a buyer has once a purchase agreement has been accepted and signed by all parties, but prior to the buyer receiving legal title from the seller at closing of the transcation
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A licensee is listing a rural property. The property was owned by a woman who is now deceased. The woman had six grown children. Two of the soons are listing the property for sale. Before completing the listing agreement, the licensee should do which of the following?
-check the woman's will to ascertain who the heirs are. -require all six children to sign quitclaim deeds. -have the woman's attorney sign a release of title. - check the ownership of record |
check the ownership of record.
the licensee needs to be sure the persons who are listing the property are the owners of record. If they are not the owners of record, they do not have the right to sell the property. |
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Under the Real Estate License Act of 2000, what does "Advisory Council" refer to?
-the real estate education advisory council -the advisory council that enforces the rules -the framers of the license act itself -a business management consulting body for ocal associations of realtors |
the real estate education advisory council
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Under the Real estate License Act of 2000, what body does the director oversee?
department of real estate regulation the real estate education association legislators concerned for real estate the division of professional regulation |
the division of professional regulation
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When does a leasing agent's license expire?
on the date it was first acquired, every two years on July 31 of each even-numbered year on april 30 of each odd-numbered year on january 1 every third year |
on July 31st of each even numbered year
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A licensee does not receive a license renewal form in the mail. IN this situation, the licensee
-must respond within three months of the date of the scheduled renewal -must respond by the scheduled renewal date or the licensee will only have two additional weeks grace period. -may renew the license up to six months later with a $25 fine -must no longer practice real estate after the expiration date on the license |
must no longer practice real estate after the expiration date on the license
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Pre license courses will have to be taken again if a license has been expired for more than
-six months -one year -eighteen months -2 years |
2 years
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What is TRUE about real estate advertising in Illinois under the REal Estate License Act of 2000?
-the company name must appear in a print ad for houses -whenever the company name does appear, it must be in letters larger than the sponsored broker's name. -links on a broker's real estate website must routinely be approved by the department. -on an internet site, the company name is usually not needed. |
On an internet site, the company name is usually not needed.
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What is TRUE about the typeface of ads under the Real Estate License Act of 2000?
-The name of the licensee should always be smaller than the name of the company -The name of the company should always be at least as large as the name of the licensee -The name of the company must appear first -There is no statement or rule regarding relative size of agent name and company name. |
There is no statement or rule regarding relative size of agent name and company name
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Dual agency conflict of interest is best avoided in Illinois by way of
-implied dual agency -designated agency -special agency -co-op agency |
designated agency
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Under the Real Estate License Act of 2000, when the license of any sponsoring broker is suspended or revoked, what is TRUE with regard to sponsored licensees' agreements with that sponsoring broker?
-They expire on the date of suspension -Each licensee has ten days in which to find another sponsoring broker -a licensee can continue to work through the suspension -the licensee has 30 days in which to finish all deals |
they expire on the date of suspension
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A sponsored licensee can now sell "by owner"
-if the broker agrees -with the changes in the new license act -only if she lives in the home -only once per year |
with the changes in the new license act
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An Illinois sponsoring broker has been showing other agents' listings to a buyer but that buyer has not signed an agency agreement. Nothing else has been said. The buyer is
-unrepresented -client -a consumer -a customer |
client
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How are the terms statutory law and common law intertwined historically in the law of agency in Illinois?
-Illinois real estate law actively cites both common law and statutory law, but in a real estate conflict common law always supercedes -Illinois real estate law is historically grounded in common law; the current statutory laws were influenced by it. -common law dominates and supersedes statutory law in most real estate situations, but the statures apply in all other cases. -common law is federal law; statutory law is state law |
Illinois real estate law is historically grounded in common law; the current statutory laws were influenced by it.
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What should a buyer's agent check first if a buyer indicates he does NOT want to buy a home in a floodplain?
-the listings in the MLS computer -the seller disclosure form for a given home -floodplain maps for the areas in which the buyer is interested -house addresses available through FEMA |
Floodplain maps for the areas in which the buyer is interested
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An Illinois agent's errors and omissions insurance will NOT cover
-an agent who is being sued for failure to disclose urea-formaldehyde insulation. -an agent who is being sued because a client fell down the stairs at a showing -an agent who obeyed seller instructions not to show a house to a certain ethnic group -an agent who poorly handles a dual agency situation |
an agent who obeyed a seller instructions not to show a house to a certain ethnic group
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What is the status of disclosed dual agency in Illinois in the first few years of the 21st century?
-void -legal -illegal -voidable |
legal
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Actions being brought against licensees under ARticle 15 (agency relationships) of the Real Estate license act of 2000 must be taken
-within two years after the facts become known -within one year after the facts become known -any time after the closing if negligence can be proven -within six months after closing |
within two years after the facts become known
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Which of the following situations would be allowed by Illinois law?
-an offer of subagency through the MLS -showing homes after one's license has expired, so long as one doesn't write the contract -a listing agent refusing to present an offer to the sellers because it is a low offer -a buyer's agent choosing not to mention to the listing agent that the buyers plan to tear down the house after purchase |
a buyer's agent choosing not to mention to the listing agent that the buyers plan to tear down the house after purchase
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Under the REal Estate License Act of 2000, which statement is TRUE?
- The person with whom a licensee works is always a customer if nothing else is said. -The person with whom a licensee works is a client if nothing else is said -The person who works with buyers who do not want client status is called their agent -A client becomes a client only when the agency agreement is signed |
the person with whom a licensee works is a client if nothing else is said
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Who pays a licensed leasing agent?
-the owner of the properties being rented -the tenant -the sponsoring broker -the previous tenant |
the sponsoring broker
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Which of the following is TRUE about leasing agents in Illinois?
-Leasing agents in Illinois may operate independently as long as they are approved by the Department -While leasing agents are not licensed, a test indicating basic competence must be passed to work as a leasing agent -Leasing agents must have a sponsoring broker -Leasing agents may work without a license for 130 days if properly supervised. |
leasing agents must have a sponsoring broker
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In most transactions of residential real estate in Illinois, who pays for the local transfer tax stamps?
-the seller -the seller or buyer, depending on rules of the municipality -buyer's attorney -the buyer |
the seller or buyer, depending on rules of the municipality
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Who would receive a co-op fee in Illinois?
-the broker with the buyer (through the sponsoring broker) -the listing sponsoring broker only -no broker because there is no co-op fee -a dual agent (through the sponsoring broker) |
The listing sponsoring broker only
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A will must include which heirs?
-sisters and brothers -children -spouse -parents |
spouse
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What has replaced dower and curtesy in Illinois?
-Uniform probate code -spousal right of first choice -real estate by devise -life estate pur autre vie |
-Uniform probate code
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Which type of seller liens would a buyer MOST likely agree to at an Illinois closing?
-any liens existing at closing -mechanics' liens, because these often cannot be discovered prior to close -second mortgage liens, because these benefit the buyers -an assumed mortgage |
an assumed mortgage
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In Illinois, which type of deed becomes null and void after one year if it is not recorded?
-general warranty deed -special warranty deed -bargain and sale deed -tax deed |
tax deed
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Which appraisal licensing category allows an appraiser to appraise residential property of one unit to four units without regards to transaction value or complexity?
-associate trainee real estate appraiser -certified residential appraiser -certified general real estate appraiser -none of the above |
certified residential appraiser
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appraisal licensing is required for which of the following?
-all federally related transactions -for-sale-by-owner transactions -only commercial property transactions -commercial and industrial property transactions |
all federally related transactions
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which of the following shows the receipt and disbursement of funds affecting a single particular transaction?
journal ledger reconciliation worksheet master escrow account log |
ledger
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which of the following shows the chronological sequence in which funds are received and disbursed for all transactions?
journal ledger reconciliation worksheet master escrow account log |
journal
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Which of the following identifies all escrow band account numbers and bank name and address?
journal ledger reconciliation worksheet master escrow account log |
master escrow account log
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