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185 Cards in this Set
- Front
- Back
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In SC, real estate license law is administered by the?
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SC Real Estate Commission
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The SCREC has the authority to?
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Make and enforce the rules by which all real estate licenses must abide
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The SCREC may investigate a licensee for all of the following reasons:
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Its own initiative, the director has reason to believe that a licensee is unfit to practice, and a written complaint submitted by a disgruntled customer
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In SC, the following would not need to be a licensed real estate broker:
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Licensed attorney working under POA, owner of a duplex, partnership selling a building by the partners
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In the event that two rival brokers claim a commission under an open listing, the commission should go to the broker who:
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Was the procruring cause of the sale
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Brokers must be very careful of the statements they make. They are however allowed to make statements of opinion as long as there is no intent to deceive. This is called:
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Puffing
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Under this type of listing agreement, the owner of listed property can sell the real estate without having to pay the listing broker a commission in SC:
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Exclusive agency listing
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This type of person can legally enter into listing agreements, advertise, and act as an agent in real estate transactions:
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A licensed BIC
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A listing agreement may be terminated for:
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Destruction of the premises (Not: change of seller's marital status, bankruptcy of salesperson, death of salesperson)
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Dual agency is:
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Legal in SC if both parties give their informed consent
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The relationship of trust and confidence between an agent and his principal is that of:
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Fiduciary
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An open listing:
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Allows the owner to sell by his/her own efforts without payment of a commission (not allowed on MLS)
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All exclusive right-to-sell listings:
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Require payment of a commission to the agent if the property is sold
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The relationship between the client and the broker in a listing would be that of:
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Special agent (one transaction)
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An agency contract may be terminated by:
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Acts of the parties (Not: a change in marital status, police power, POA)
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A real estate BIC:
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Is usually considered a special agent
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An exclusive agency listing:
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Allows the owner to sell by his/her own efforts and not pay a commission
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A purchaser's funds held by an agent:
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Must be kept in a trust account
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The "principal" is best described as the:
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Person with whom the agent signs the contract of employment (client)
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What is true of a broker's authority?
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It includes only that authority granted or implied
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The better description of a special agent would be a person who?
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Has limited authority
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A broker owes certain fiduciary duties to his/her principal. What is one of those duties?
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Must obey instructions (lawful)
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An offer has been accepted on a ten acre parcel when the listing broker learns that the buyer has been buying land in the area at a much higher price. The broker should:
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Notify the seller of the facts
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An arrangement by which a group of brokers agree to share their exclusive right to sell listings is called:
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Multiple listing
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Without permission, a listing broker may properly disclose what to a prospective purchaser?
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What is wrong with the property
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The primary requirement for a licensed broker to receive a commission is to:
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Negotiate a meeting of the minds
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A broker's failure to include the name of of the company in the advertising of a listing would be:
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An example of a blind ad
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An owner employing more than one broker at a time has given an:
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Opening listing
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Broker A's listing is due to expire in one week. A salesperson from broker B may proceed to solicit the seller for the listing:
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After broker A's listing expires
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If offered a listing by a seller on the condition that the property may not be shown to members of a certain religious sect, a broker:
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Should refuse the listing
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The following is true regarding a cooperating agent:
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He/she may work for the seller
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If a seller makes a misrepresentation to the broker, and the broker, having knowledge of such is silent in the course of the transaction:
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Both the seller and the broker are liable
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Willful misrepresentation of a material fact which results in a person assenting to a contract, the performance of which results in damage is:
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Fraud
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The SC Agency Disclosure brochure should be presented to:
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Both the buyer and the seller early in the relationship
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The concept indicating that a 'buyer should beware' when purchasing real estate is:
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Caveat Emptor
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An instrument which pledges real property as collateral for a loan is known as:
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Mortgage
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A default on a mortgage may be declared by the lender if the mortgager fails to pay:
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Principal and interest
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A partially amortized loan has a:
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Balloon payment
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A purchase money mortgage is characterized by the fact that:
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Title passes at closing
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The clause in a mortgage which allows the lender to declare the entire balance of the loan due and payable immediately if there is any default is referred to as the:
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Acceleration clause
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The right of the property owner to redeem title to property after a tax sale is called:
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Statutory right of redemption
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Currently, a homeowner who sells his/her home and is not married is entitled to a federal capital gains exemption up to how much every two years?
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$250,000
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The owner's interest in the value of real property, which is usually reflected as the difference between the market value and the balance due on the mortgage note is called:
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Equity
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In Lien Theory states, at closing, title to real property which has been financed by way of mortgage goes to:
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Corporations or governmental agencies which buy mortgages
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A FHA loan:
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Is insured by the FHA, but paid for by the buyer
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A land contract is described as:
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A method of selling real estate whereby the buyer takes possession and pays for the property while the seller retains the title
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Private mortgage insurance is frequently required in cases where:
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The amount of the down payment is less than 20%
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Assuming that eight points equal 1% in interest, a lender who charges 7.25% interest, but wishes to receive the equivalent of 7.5% interest would charge how many points?
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2; 1pt = 1%
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When a buyer assumes an existing mortgage:
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He/she takes primary personal responsibility for the debt
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This is true of VA loans:
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A veteran must intend to occupy the home after closing
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If a mortgage specifies a balloon payment:
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The final payment is larger than the previous payments
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A lender might make an FHA or VA loan rather than a conventional loan because of the:
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Lower risk
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Funds for FHA loans are provided by:
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Qualified institutional lenders
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Discount points are often used with government support loans to:
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Increase the lender's yield
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Mortgage insurance on an FHA loan is designed to protect the:
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Lender
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Mortgage brokers/bankers:
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Serve to place mortgage loans in local markets using funds provided by institutional investors
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To hypothecate is to:
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Pledge real property as security for a debt without giving up posession
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The clause calling the entire balance due and payable if the property is sold is called a(n):
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Alienation clause
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Subordination means to:
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Waive priority of a lien to another lender
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To be valid and enforceable, a mortgage must be:
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In writing
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The alienation clause is also referred to as:
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Due on sale clause
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The purpose of an introductory rate on an ARM being less than the index and margin would indicate is to:
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Induce the borrower to agree to an adjustable rate mortgage
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To obtain a VA loan, it is necessary to have a:
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Certificate of Eligibility
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What loan may be a 100% LTV?
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VA Loan
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Which of the following is an appraisal?
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An estimate of value
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What represents external obsolescence?
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Loss of value due to changes in the neighborhood (Not: rusted boiler, leaking roof)
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When appraising a commercial property, the appraiser is most concerned with?
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Net Annual Income
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The sales comparison approach is most important in estimating the value of a(n):
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Existing residence
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The Income Approach is most important in estimating the value of a(n):
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Office building
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The first step in the appraisal process should be to:
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Determine the objective or problem
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Capitalization is a process to:
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Convert income into present value
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Loss of value due to the property being unsuitably located is known as:
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External obsolescence
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The sales comparison approach to value is the method of appraisal in which the value of the property is:
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Based on sales comparison properties
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Two of the three main types of depreciation are physical deterioration and external obsolescence. The third is:
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Functional obsolescence
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To obtain a gross rent multiplier, an appraiser must obtain from comparable properties the:
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Gross rent and selling price
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The income approach for an appraisal would be most widely used on:
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Commercial and investment properties rented to tenants
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In appraising older structures, consideration must be given to:
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Depreciation
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A home listed for sale with five bedrooms and one bath faces what kind of depreciation?
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Functional
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When the capitalization rate increases, the value of the property?
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Decreases
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The concept that value is the present worth of future benefits relates to what appraisal technique?
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The income approach
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An appraiser used all three appraisal methods in appraising a property. The appraiser assigned 40% of the value to the market comparison approach, 25% to the cost approach, and 35% to the income approach. This process is known as:
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Reconciliation
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Which appraisal approach is best suited for estimating the value of a school?
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Cost approach (special use)
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Which of the following is a logical sales comparison approach?
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Adjusting the comparables to the subject property
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The form of depreciation deemed to be incurable is:
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External obsolescence
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Physical deterioration most nearly means:
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Wear and tear
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The advisability of including a tennis court with a planned apartment building may be determined by the principle of:
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Contribution
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Which of the following would be the most comprehensive appraisal report?
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Narrative report
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A property has a net income of $30k. An appraiser decides to use a 12% cap rate rather than 10%. Use of a higher rate results in?
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$50k decrease in the appraised value
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Several homes valued at $150k were built in an area where the existing homes had been valued at $400k. The effect was that the value of the existing homes declined. What real estate principle applies to this situation?
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Regression
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A separate value for the land is needed for which appraisal approach?
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Cost approach
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Which of the following descriptions refers to reproduction cost?
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Present cost to produce a duplicate structure
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The whole is worth more than the sum of its parts refers to?
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Assemblage
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An investor making extraordinary profits from a mini-warehouse is concerned with the principle of?
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Competition
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The highest and best use provides the greatest?
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Net return
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A contract may be:
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An agreement to do or not to do a certain thing
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For a meeting of the minds to exist:
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There must be an offer and an acceptance
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The term 'consideration' as applied to contracts means:
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Something of value is given in exchange for something of value
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When an agent accepts a listing on a real property and promises to advertise and promote its sale in exchange for the promise of a commission if the agent succeeds, this is:
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A bilateral contract
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Generally, contracts entered into by minors with adults are:
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Voidable by the minor
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Which of the following are incompetent to execute a deed?
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A minor (Not: widow, handicapped, over 80)
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Should a seller of real estate refuse to deliver a deed according to the terms of the contract of sale, the buyer may:
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Sue for specific performance
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When could a contract be terminated by the acts of the parties?
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Completion of the objective (Not: death of either party, destruction of the property, bankruptcy of either party)
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If a purchaser has signed a contract under duress, it is generally:
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Voidable by the buyer
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A counteroffer:
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Invalidates the original offer
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When only one party to the agreement makes a promise, this is called:
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Unilateral contract
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Every real estate sales contract must contain:
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An offer and an acceptance
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The amount of earnest money deposited is determined by:
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Agreement of the parties
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When a buyer executes a real estate sales contract that is accepted and signed by the seller, the:
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Buyer has equitable title
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A bilateral contract is one in which:
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The promise of one party is given in exchange for the promise of the other party
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What is an essential element of a contract?
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Consideration (Not: earnest money, commission, performance)
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A property is bought based on fraudulent income statements prepared by the listing broker. Therefore the contract is:
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Voidable
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Under the State of Frauds, all contracts for the sale of real estate must be in writing to be enforceable. The principal reason for this statute is to:
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Prevent fraudulent proof of a fictious oral contract
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A real estate sales contract is not effective unless it is signed by:
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Both the buyer and seller
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A contract to perform an illegal act is:
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Void
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What is a consideration in a contract?
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The promise of love and affection
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When withdrawing an offer to purchase before it is accepted by the seller, the offeror is first entitled to a refund of the deposit at which time?
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Immediately
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X agreed to build a house and sell it to Y in 180 days. Y agreed to pay the negotiated price within 45 days of completion. The contract, before completion of the house, may be referred to as:
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An executory contract
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A novation is best defined as:
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The substitution of one party for another in a contract wherein the original contract is extinguished and the undertaking of the new party is a new obligation
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The law that bars legal claims after certain periods of time is known as the:
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Statute of limitations
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A real estate sales contract will usually be terminated by:
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Delivery of the deed
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If the optionee (having no heirs) dies prior to the exercise of the option, the option is:
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Terminated
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The withdrawal of an offer before acceptance is called:
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Revocation
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If the buyer withdraws an offer before it has been accepted, the earnest money deposit is:
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Given back to the buyer
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Crooked Ed signs a real estate contract without first reading it. This allows him to later break the contract on the basis of:
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It doesn't
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J agreed to buy K's farm, but the deed given by K had the wrong legal description which included land that K did not own. J, who wants the land bargained for, would ask the court for:
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Reformation
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A court ordered L to pay M $100k in excess of M's out of pocket damages that resulted from L's breach of contract with M. What is the $100k called?
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Punitive damages
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What is an example of liquidated damages in a real property purchase contract?
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The forfeiture of a deposit
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A right to buy property at a yet undetermined price, where the seller is free to not sell is a:
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Right of first refusal
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An owner refuses an offer exactly in accordance with a valid exclusive right to sell listing. What is true?
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The owner does not have to sell
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Deed stamps
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$3.70/ $1,000 or $1.85/ $500
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Rate x whole =
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Part
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Part/rate=
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Whole
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Part/whole=
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rate
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Part can be:
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Income, net income, profit, return, earnest money, present value, annual interest, annual tax, and commission amount (always the largest)
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Rate can be:
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Percentage, rate of return, rate of profit, mill rate, annual interest rate, discount points, cap rate, commission rate
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V (whole) can be:
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Sales or purchase price, list price, original cost or value, loan or principal amount, total commission
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With respect to real property, what is an estate?
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The nature and degree of an interest in real property
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The word fee, used in conjunction with real property, usually means:
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The estate of inheritance
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In order to protect the family from the financial irresponsibility of the head of household, most states provide some form of relief from creditors called:
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Homestead exemption
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A life estate may be founded upon the life of:
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The grantee or legally qualified person
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In tenants in common cannot agree on the division of their interests, they can request that the court:
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Partition the property
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Among the limitations of absolute ownership of land is:
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The power of eminent domain
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Mary owns property in her name only. She has:
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An estate in severalty
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When we refer to improvements concerning real estate, we are speaking of:
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Buildings, fences, driveways, etc
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A defeasible fee that can develop into fee simple estate upon the occurrence of a certain event is a:
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Determinable fee
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If the grantor of a life estate names a third party to receive the estate, this is known as an:
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Estate in remainder
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Ownership of an undivided interest in realty is a feature of:
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Tenancy in common
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Joint tenants can leave their interest to:
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Other joint tenants
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The bundle of rights:
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Includes the totality of private rights in the ownership of property
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In SC, joint tenancies may be created:
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By deed and will
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The estate, you, as a rational property buyer should attempt to obtain is a:
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Fee simple
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A son conveys his property to his mother for the life of his father. The interest the son holds in the property during his father's life is a:
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Reversionary estate
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Jacobs and Cole bought a building and took title as joint tenants. Cole died testate. Jacobs now owns the building:
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In severalty
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Jones, Murphy, and Davis are joint tenants owning a parcel of land. Jones and Murphy allow Davis to convey his interest to his friend, Phillips. After the conveyance, Jones and Murphy:
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Remain joint tenants, owning an undivided two thirds interest
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A widow is willed the use of the family home for the rest of her natural life, with the provision that the title shall go to the children upon her death. She has a:
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Life estate
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Two people who are not partners own an equal and undivided interest in a parcel of real estate. They are:
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Tenants in common
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A condominium owner may:
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Mortgage his/her interest to secure a debt
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Financing of a condo unit is usually through:
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An individual mortgage on each unit
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Laws governing condo development are know as:
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Horizontal Property Acts
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If you purchase a condo, you are buying:
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Residential or commercial property
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The four unities of possession, interest, time, and title are associated with which of the following?
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Joint tenancy
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Individual ownership of an individual unit and common ownership of the common area best describes:
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A condo
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E, J, and Q were concurrent owners of a parcel of real estate. J died and his interest passed according to his will to become part of his estate. J was a?
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Tenant in Common
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Metes and bounds
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Starts and ends up at a point of beginning
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Lot and block
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Plats of subdivisions
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Reliction
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Gaining of land because of receding water
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Due to client
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OLDCAR- Obedience, loyalty, disclosure, confidentiality, accounting, reasonable care, dilligence
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DEEPC
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Disposition, exclusion, enjoyment, possession, control
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Exclusive Right to Sell
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One broker is sole agent of the seller
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Exclusive Agency
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Only one brokerage firm, seller retains right to sell the property and not pay a commission
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Lien Theory
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Receives title at closing
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Partially amortized
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Balloon payments
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Encumberances
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Liens (general- all property of a debtor, specific-parcel of real property), easements, public (pete), EPA
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Tenancy in Common
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Husband and wife default, each holds an undivided interest in the whole, no requirement to have equal percentages of ownership, separate titles
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Joint Tenancy
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Undivided interest in the entire property, does require special wording, one title exists
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Civil Rights Act of 1866
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14th Amendment, prohibits discrimination based on race
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Federal Fair Housing Act of 1968
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FRESH CORN- familial, religion, sex, handicapped, color, race, national origin
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Block busting
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Playing upon people's fears or prejudices
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Redlining
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Lenders refusing to make loans in certain areas
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Complaints must be made to SCHAC in writing within how many day after the alleged incident?
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180
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Time share
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Copies of contracts must be kept for three years, right of rescission within five days
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SC Real Estate Commission
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10 members, 7 professional real estate agents, one from each of the congressional districts, 2 members from the public, then that 9 pick another active agent to make 10 total
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Earnest money
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Deposited within 48 hrs of receipt (after acceptance- checks)
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Lead Paint Disclosure Form
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Houses built before 1978
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1 Acre
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43,650 Sq ft
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