chapter 3 and 4 quiz

Question 1

A property manager is hired and signs a management agreement with the owner. At this time, the property manager is:

Answer 1

c. a general agent

Question 2

A buyer and seller have negotiated a contract on the seller’s property with a closing set for June 14, time is of the essence. On June 12th the listing agent calls the buyer’s agent and tells him the seller will be unable to close on the 14th. The seller can close on the 16th. At this time, what is true?

Answer 2

. the contract is voidable by the buyer

Question 3

A licensee is representing a seller in a commercial transaction. The property is under contract and all contingencies have been met. The listing agent learns the State Department of Transportation has authorized the construction of an exit ramp to the interstate right behind the commercial property. The exit ramp will greatly increase the value of the seller’s property. What should the agent do?

Answer 3

tell the seller and encourage the seller to complete the negotiated sale

Question 4

A listing agent is showing his listing to a buyer customer and notices a problem with the exterior of the property that he missed when he listed the property. What should he do?

Answer 4

point it out to the buyer as it is a material fact

Question 5

A buyer’s agent has accidentally forwarded confidential information about his buyer’s financial background to the listing agent. What is true?

Answer 5

the buyer’s agent is guilty of negligence and the listing agent must disclose the information to the seller

Question 6

What is the difference between replacement cost and market value?

Answer 6

depreciation

Question 7

Economic life is defined as:

Answer 7

years of depreciation

Question 8

8. An unlicensed assistant gets a call from a listing owner with questions about a contract – what should the assistant do?

Answer 8

take the information to the listing broker

Question 9

An underage college student signs a lease then discloses his age to the landlord. What is true?

Answer 9

c. the contract is voidable at the minor’s option

Question 10

A seller comes into the office to sign a contract. The seller is stumbling and smells of alcohol. How do you proceed?

Answer 10

a. tell the seller to leave and return at another time

Question 11

What are the requirements/criteria for real estate to have value?

Answer 11

Demand, Utility, Scarcity, Transferability

Question 12

What principle of value defines the most important factor for appraisal?

Answer 12

Highest and Best Use

Question 13

What approach would an appraiser most likely use to value a residential rent house in a neighborhood where a majority of the homes are leased

Answer 13

income approach

Question 14

A licensed broker is advertising that he will perform a free appraisal if you contact him for a listing appointment. He is not in violation of the law:

Answer 14

if he is a licensed appraiser

Question 15

Which of the following is NOT an example of functional obsolescence?

Answer 15

deferred maintenance

Question 16

According to the Statute of Frauds, which of the following leases must be in writing?

Answer 16

c. a lease for more than 1-year

Question 17

Your client is an investor who would like to have the right to purchase a commercial tract for $5 million for the next six months. What type of contract should he enter into with the seller?

Answer 17

. an option contract

Question 18

A signed sales contract that has not yet gone to closing is:

Answer 18

executory

Question 19

When does an offer become a contract?

Answer 19

when it is accepted and acceptance is communicated

Question 20

20. Which of the following statements is true about the duties of an agent according to the common law of agency?

Answer 20

an agent must treat both clients and customers with honesty and fairness