Exam 1: Definitions Exam 6

Question 1

Which of the following would be considered fraudulent misrepresentation?
A)
Agent makes a statement he knows is not true in order to induce a party to enter into a contract
B)
Agent knowingly withholds a material fact
C)
All of these
D)
Agent makes a promise that he or she does not intend to fulfill

Answer 1

All of these

Question 2

FHA mortgage insurance program loans for homes, as part of HUD, are made by
A)
FHA.
B)
FNMA.
C)
banks, savings and loans, or mortgage companies.
D)
VA.

Answer 2

banks, savings and loans, or mortgage companies.

Question 3

A plot plan
A)
is used as an exact guide for construction of improvements.
B)
shows contour of the land.
C)
shows exterior of structures to be built.
D)
is used as a guide to the placement of structures and related improvements on the lot.

Answer 3

is used as a guide to the placement of structures and related improvements on the lot.

Question 4

A seller sued a real estate broker for misrepresentation of a material fact that the broker had made to him during the sale transaction. In defending the suit, the broker was able to prove that the listing contract with the seller had been an oral agreement. Under these circumstances
A)
this is a valid defense based on the statute of frauds.
B)
the statute of frauds is not a bar in any real estate transaction litigation.
C)
this defense is not a bar because it was not the issue.
D)
the broker is only liable for misrepresentation to buyers.

Answer 4

this defense is not a bar because it was not the issue.

Question 5

Williams owned 40 acres of land in 1955, which she subdivided into 65 lots and placed a restriction in each deed that said these lots may “not be sold to non-Caucasians.” This restriction is
A)
prohibited by local, state, and federal statutes and regulations of all real estate commissions.
B)
none of these.
C)
unenforceable through court action because it is a violation of the 14th amendment to the U.S. Constitution.
D)
valid until Williams died.

Answer 5

unenforceable through court action because it is a violation of the 14th amendment to the U.S. Constitution.

Question 6

Which word is most closely associated with the term rider?
A)
Accretion
B)
Lien
C)
Amendment
D)
Person

Answer 6

Amendment

Question 7

A listing contract creates a fiduciary relationship and is governed by the laws of
A)
power of attorney.
B)
trusteeship.
C)
agency.
D)
limited partnership.

Answer 7

agency

Question 8

An executed contract is a contract
A)
signed, notarized, and recorded.
B)
under the jurisdiction of the probate court.
C)
completed and fully performed by both parties.
D)
to be rewritten.

Answer 8

completed and fully performed by both parties.

Question 9

A lessor wanted to create a lease that would provide a fixed and assured income for increased productivity on the land. He would draw up a
A)
graduated lease.
B)
percentage lease.
C)
cost of living lease.
D)
set-up lease.

Answer 9

percentage lease.

Question 10

A real estate sales employee was terminated by a broker for a violation of real estate law. The employing broker must
A)
write the full details to the real estate commissioner within a reasonable period.
B)
inform the real estate commissioner in a written certified statement of facts forthwith.
C)
notify the real estate commissioner by telegram.
D)
return the salesperson’s license to the commissioner immediately.

Answer 10

inform the real estate commissioner in a written certified statement of facts forthwith.

Question 11

Amenities of residential real estate are
A)
not considered by appraisers because they are intangible qualities.
B)
measurable on the market.
C)
the property's physical attributes.
D)
related to its capacity to provide shelter effectively.

Answer 11

measurable on the market.

Question 12

On January 1, a broker accepted a $600 check from a prospective buyer, who instructed the broker not to give the check to the seller until January 30. What is the correct behavior of the broker?
A)
Give the check to the seller
B)
The broker cannot accept the check
C)
The broker can accept the check and send it to the escrow company, or place it in his trust account, and in either case, by the next business day
D)
Hold the check but inform the seller before the seller makes his decision to accept the offer

Answer 12

Hold the check but inform the seller before the seller makes his decision to accept the offer

Question 13

"The relationship of the thing desired to a potential purchaser" is a definition of
A)
the economic man.
B)
need.
C)
value.
D)
"utility" as a definition of value.

Answer 13

value.

Question 14

Which of the following is a definition of a quiet-title action?
A)
Foreclosure
B)
Quitclaim
C)
The result of a "dummy" transaction
D)
Procedure through court action to remove a cloud on title

Answer 14

Procedure through court action to remove a cloud on title

Question 15

When is there a late charge permitted on a mortgage payment on a home?
A)
When 15 days late
B)
After 10 days beyond the due date
C)
On the 10th day
D)
Right after the due date

Answer 15

After 10 days beyond the due date

Question 16

Escheat is a legal term meaning
A)
an agent's license has been revoked.
B)
property under a trust deed may be reconveyed.
C)
property has reverted to the state.
D)
that a fraud has been committed

Answer 16

property has reverted to the state.

Question 17

At the time an owner offers to list his or her property with a broker, the owner makes it a condition that it may not be disclosed that the home is in a slide area. What should the broker do?
A)
The broker should not take the listing.
B)
The broker should recommend that the owner list his property with someone else.
C)
The broker should advise the owner to sell the property himself.
D)
The broker should accept the listing but disclose this information orally to any initial buyers.

Answer 17

The broker should not take the listing.

Question 18

A contract between two or more persons where one grants the other the right to sell, offer to sell, or exchange goods or services under a marketing plan designed by the grantor is a
A)
financing agreement.
B)
franchise agreement.
C)
business opportunity.
D)
securities and exchange agreement.

Answer 18

franchise agreement.

Question 19

When dealing with the public, a broker must
A)
delegate responsibilities to another person.
B)
not refuse to take a listing.
C)
do all of these.
D)
disclose all material facts known only to himself or herself.

Answer 19

disclose all material facts known only to himself or herself.

Question 20

Property is
A)
real if tangible.
B)
all of these.
C)
personal if not real.
D)
personal if a fixture.

Answer 20

personal if not real.

Question 21

An agency agreement may be terminated by all of these occurrences EXCEPT
A)
mutual termination by both the principal and agent prior to the original termination period.
B)
renunciation of the agreement by the agent.
C)
the principal’s refusal of an offer to purchase presented in the name of a third person.
D)
destruction by fire of the property that is the subject matter of the agency agreement.

Answer 21

the principal’s refusal of an offer to purchase presented in the name of a third person.

Question 22

Middleton is a 15-year-old emancipated minor who hired a broker to sell her property. Middleton gave this broker her emancipation documents. After the broker procured a buyer, to whom should the broker deliver these documents?
A)
The buyer's lender
B)
The escrow company
C)
The title insurer
D)
The buyer

Answer 22

The escrow company

Question 23

In comparing real estate investments to other types of investments, the turnover is
A)
faster than other commodities.
B)
faster than stocks.
C)
slower than other investments.
D)
slightly slower than an average of other investments.

Answer 23

slower than other investments.

Question 24

A certain piece of property was sold through a licensed real estate broker. The seller and the broker were aware of a hidden defect in the property, but neither the broker not the seller disclosed this information to the buyer. After the buyer purchased the property, he suffered a financial loss resulting from the undisclosed defect. If the buyer were to take legal action for the loss
A)
the courts would rule that the buyer was negligent as it was his responsibility to inspect the property and discover the defect.
B)
the seller would be the only one liable since he was the only one that was obligated to disclose the defect.
C)
the broker could be subject to disciplinary action by the Bureau of Real Estate.
D)
a standard form title insurance policy would protect the seller.

Answer 24

the broker could be subject to disciplinary action by the Bureau of Real Estate.

Question 25

Jones is using Smith's swimming pool and suffers an injury. If Jones instituted court action and obtained a judgment against Smith for $2,500, it would be a(n)
A)
general lien.
B)
voluntary lien.
C)
specific lien.
D)
abstract lien.

Answer 25

general lien.