exam 2 Flashcards by Caiti Jones

Which of the following would not terminate an easement?

(a) Merger

(b) Acquiring the adjacent property

(d) Abandonment

Prescription

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Which of the following would not be an example of police power?

(a) Zoning

(b) Building codes

(d) Regulation of coastal properties, floodplains, and wetlands

Deed restrictions

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In discussing property taxes, which of the following statements would be false?

(a) Property taxes are an automatic lien on real property

(b) Property taxes are a general lien

(d) Property taxes are based on the assessed value and the tax rate

Property taxes are a general lien

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John owns a bar and restaurant on the corner of Broad St. The neighborhood is rezoned to category R-1(Residential Single-Family only). What does John have to do to keep his business at that location?

(a) Apply for a non-conforming use permit

(b) Nothing

(d) John cannot keep his business at that location

Nothing

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The government will take real property under the right of escheat when:

(a) property is abandoned

(b) a property owner dies without a will

(d) the property owner has violated local zoning laws

property is abandoned

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The buyer’s agent is working with a couple who have decided on a particular property. They are concerned about the boundaries as it appears the fence from a neighboring property encroaches. The buyer’s agent should:

(a) check the listing to determine if there is an encroachment

(b) talk to the listing agent to determine if there is an encroachment

(d) recommend that the buyers get a survey

recommend that the buyers get a survey

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A developer owns 300 acres of land and plans to build a new subdivision. The surveyor has recorded the plat. The developer will sell individual parcels of land to custom builders. What type of legal description will most likely be used for these transactions?

(a) Lot and block description

(b) Metes and bounds description

(d) Rectangular Survey System

Lot and block description

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A property is surrounded by a wooden fence. The owner removes the fence and now has a pile of lumber in the yard. This action is best described as:

(a) annexation

(b) severance

(d) sufferance

severance

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A property has an easement appurtenant. Which of the following statements about this is true?

(a) The easement belongs to a person or corporation

(b) The easement does not go with the land

(d) The easement benefits the dominant estate.

The easement does not go with the land

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A court order directing the county sheriff to seize and sell property of a debtor to satisfy a lien is:

(a) An injunction

(b) A writ of execution

(d) A judgment

(b) A writ of execution

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Mark and Robert are brothers. They inherited the family farm as joint tenants upon the death of their father. Mark and Robert have agreed to partition, and Robert has sold his interest in the farm to their cousin Carl. What type of ownership do Mark and Carl have?

(a) Tenancy by the entirety

(b) Tenancy at will

(d) Tenancy in common

Tenancy in common

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Jane and Anna are joint tenants in an investment property. One wants to sell, the other does not. How can this be settled?

(a) Partition

(b) Accession

(d) Defeasance

Partition

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A seller has sold his property but will continue to occupy the property after the sale. This is called:

(a) lease with an option to buy

(b) lease purchase agreement

(d) right of first refusal

leaseback

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Which of the following statements about foreclosure is false?

(a) Notice must be received by the borrower 21 days before the sale

(b) Notice must be mailed to the borrower 21 days before the foreclosure sale

(d) Notice must be filed in the county clerk’s office

Notice must be received by the borrower 21 days before the sale

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What is the main disadvantage to a lender who chooses to accept deed in lieu of foreclosure?

(a) It takes longer than foreclosure

(b) The lender must accept responsibility for subordinate liens on the property

(d) It is more complicated than foreclosure which results in loss of time and money for the lender

The lender must accept responsibility for subordinate liens on the property

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A three-year lease on office space would be terminated by:

(a) Death of the landlord

(b) Death of the tenant

(d) Sale of the property

Mutual rescission

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Constructive eviction is a result of:

(a) actions of the tenants

(b) pest infestation

(d) actions or inactions of the landlord

actions or inactions of the landlord

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A residential single-family home neighborhood was never fully built out. The developer has sold a tract of land in the middle of the subdivision to a group of investors who plan to build an industrial park on the land. The result of this will be many new jobs for the area. Based on appraisal principles what will happen to the value of the homes in the immediate vicinity of the industrial park?

(a) The industrial park will not affect the value of the homes

(b) The value of the homes will increase

(d) Appraisal principles do not address this type of situation or construction

The value of the homes will decrease

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A house has an unpopular floorplan. This is an example of:

(a) Physical deterioration

(b) Economic obsolescence

(d) Regression

Functional obsolescence

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A house is in a subdivision that is six miles from the nearest elementary school. A new school will be opening in the subdivision for the coming school year. Listing agents in the area have started to raise list prices on homes in the neighborhood based on this fact. Which principle of appraisal are the agents applying?

(a) Anticipation

(b) Change

(d) Highest and best use

Anticipation

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A license holder has been asked to prepare a CMA on a single-family home for a prospective client. Which of the following facts will be most important to the license holder when choosing comparables?

(a) The assessed value of the comparable property

(b) The total value of all liens on the comparable property

(d) The date of sale of the comparable property

The date of sale of the comparable property

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An appraiser has been asked to value a single-family home. The home has two bathrooms and a fireplace. He has found two comparable properties in the neighborhood. The first comparable has 2-1/2 bathrooms and a fireplace and sold for $180,000. The second has two bathrooms and no fireplace and sold for $175,000. The appraiser has determined that a ½ bath is worth $2,000 and a fireplace is worth $3,000. What is the appraised value of the subject property?

(a) $178,000

(b) $175,000

(d) $180,000

$178,000

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A property is listed for $399,500. in a hot seller’s market. The contract sale price $415,000. The appraiser values the property at $405,000. What is the market value of this property?

(a) $399,500 – the list price

(b) $405,000 – the appraised value

(d) $406,500 – an average of the list price, appraised value, and contract price

$405,000 – the appraised value

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The words demand, utility, scarcity and transferability represent:

(a) principles of appraisal

(b) characteristics of appraisal

(d) approaches to appraisal

characteristics of value

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Which of the following could a real estate license holder provide? (a) An opinion of value (b) A market analysis (c) An appraised value (d) Assessed value

A market analysis

FIRREA is a federal law requiring the use of licensed or certified appraisers in certain federally related transactions. Where does an appraiser obtain a license or certification? (a) Appraiser licensing and certification is done at the state level (b) Appraiser licensing and certification is done through USPAP (c) Appraiser licensing is done at the federal level (d) Appraiser licensing and certification is provided by private and public schools and colleges.

Appraiser licensing and certification is done at the state level

An appraisal tool with a yearly component in the calculation is: (a) the cost approach (b) the GRM (c) the GIM (d) the income approach

the GIM

An agent has been contacted to list a unique property. Which of the following would be most likely to help the agent to value this property? (a) A cost approach appraisal (b) A CMA (c) A BPO (d) A GIM

A cost approach appraisal

A broker has entered into an agency relationship by securing a listing on a seller's property. The broker must: (a) Arrange financing for qualified buyers (b) Manage the listed property (c) Account for any funds received in connection with the property (d) Accept any offer for at least list price

Account for any funds received in connection with the property

A residential property has been listed under an exclusive right to sell listing agreement with ABC Realty. The sellers have confided to the listing broker that they would like a quick sale as they are in the process of getting a divorce. The listing broker tells a buyer-customer to put in a low offer because the sellers are anxious to sell. The buyer offers 15% below list price and the sellers accept the offer. What is true? (a) The broker has violated the confidentiality of the seller, but since the sellers accepted the offer, the broker's actions are not considered unethical or improper (b) The broker has violated his agency relationship with the seller (c) Encouraging bidding is an effective marketing technique (d) The broker's actions were in the sellers' best interests as they resulted in a quick sale

The broker has violated his agency relationship with the seller

The law requiring that real estate contracts be in writing to be enforceable is: (a) The Statute of Frauds (b) The Statute of Limitations (c) The Law of Agency (d) The Sherman Anti-Trust Act

The Statute of Frauds

When does an offer to purchase real property become a sales contract? (a) When it is signed by the buyer (b) When it is signed, and acceptance is communicated (c) When it is signed by the seller (d) When the last party signs

(b) When it is signed, and acceptance is communicated

Two brothers have inherited the family farm. The brothers are 19 and 16 years old. The 19-year-old does not want the property and deeds his share to the 16-year-old. The 16-year-old sells the property. At this point the sales contract is: (a) void (b) voidable due to incapacity (c) terminated (d) unenforceable

(b) voidable due to incapacity

A buyer has defaulted on a sales contract. The seller has agreed to keep the earnest money deposit as compensation. What remedy has the seller chosen? (a) Liquidated damages (b) Partial performance (c) Suit for specific performance (d) Money damages

Liquidated damages

A listing agreement is: (a) a bilateral contract (b) terminated by the death of the listing agent (c) an employment contract (d) a general agency agreement

At what age is an individual considered to have contractual ability? (a) 25 (b) 21 (c) 18 (d) 19

What real estate contract is an exception to the Statute of Frauds? (a) A lease for one year or less (b) An option contract (c) A listing contract (d) A buyer representation agreement

A lease for one year or less

A sales license holder has negotiated a listing agreement with a seller. This agreement establishes an agency relationship between: (a) the broker and the seller (b) the seller and any prospective buyers (c) the seller and the actual buyer (d) the seller and the sales license holder

(a) the broker and the seller

A listing agent will always: (a) give advice and opinions to the buyer and the seller (b) give full disclosure of all facts to both parties (c) treat both parties with honesty and fairness (d) support and defend the needs of the customer

treat both parties with honesty and fairness

A broker plans to sue for a commission. What is necessary for the broker to be able to win that suit? (a) The broker must be a realtor© (b) The broker must have a written listing agreement (c) The broker must have an office in the same community as the property in question (d) The broker must be able to prove he was the procuring cause of sale

The broker must be able to prove he was the procuring cause of sale

A written contract where one party can rescind is best described as: (a) void (b) voidable (c) unenforceable (d) illegal

voidable

A builder and a buyer have negotiated a contract for a new home. The builder has added a clause into the contract stating that he will pay the buyer $250 for every day that he is late in delivering the completed project. The $250 per day is an example of: (a) liquidated damages (b) specific performance (c) compensatory damages (d) punitive damages

(a) liquidated damages

What type of contract falls into the “If…….Then…….” format? (a) Implied (b) Express (c) Unilateral (d) Bilateral

Which of the following is NOT a requirement of a valid contract? (a) Legal purpose (b) In writing (c) Offer and acceptance (d) Competent parties

(b) In writing

When should a license holder advise a client to have a contract examined by an attorney? (a) Before a client signs a document he/she does not understand (b) At first substantive dialogue with a client (c) Prior to closing on a property (d) Never, as it is a waste of time and money and that is not in the client's best interest

Before a client signs a document he/she does not understand

A license holder who advertises a listed property as having "the most beautiful view of the city" is probably: (a) Liable for damages if sued by the buyer (b) Guilty of fraud (c) Guilty of misrepresentation (d) Puffing

Puffing

Which of the following situations or conditions regarding a property should never be disclosed? (a) Murder on the property (b) The property is alleged to be haunted (c) A previous owner died from HIV/Aids (d) A structural problem on the property resulted in a death on the property

A previous owner died from HIV/Aids

A sales license holder has worked in residential real estate for five years. He has decided to move to industrial sales. He should: (a) Pursue industrial listings and learn from experience (b) Advertise himself as an industrial broker to obtain clients (c) Visit some industrial properties and provide the property owners with his business card (d) Join a firm with a broker who specializes in industrial property and work with that broker to learn the business and develop competency

Join a firm with a broker who specializes in industrial property and work with that broker to learn the business and develop competency

A buyer has had inspections on property and is not pleased with some of the information. He has terminated his contract to buy. His right to do so suggests that his contract had: (a) a due diligence clause (b) a substitution clause (c) a default clause (d) an alienation clause

(a) a due diligence clause

Which of the following is NOT a penalty for violation of the Federal Fair Housing Act? (a) Fines (b) Up to one year in jail (c) Injunctions (d) Assessment of attorney fees

(b) Up to one year in jail

Mary, an unlicensed individual, owns a three-family property. She lives in one unit and rents out the other two. She chooses to discriminate when selecting her tenants. As long as the services of a broker are not involved and she does not discriminate in her advertising, she can discriminate for any reason except: (a) Color/Race (b) Age (c) Religion (d) Sex

Color/Race

A physically handicapped tenant has modified an apartment to meet his needs at his own expense. His lease is about to expire and he plans to move. The landlord wants the apartment restored to its original condition. What is true? (a) The tenant has no responsibility to restore the apartment (b) The tenant must restore the apartment at the landlord's expense (c) The tenant must restore the apartment at his own expense (d) The tenant must restore it if structural changes he made might impair the rights of future tenants

An apartment complex is advertising for new tenants. Which of the following statements in advertising would violate Fair Housing Laws? (a) No drugs (b) No students (c) No alcohol (d) No alcoholics

No students

Persuading a property owner to sell by stating that minorities are moving into the area is called: (a) Steering (b) Panic peddling (c) Channeling (d) Marketing

Panic peddling

John owns a residential rental property. He has leased an apartment to a visually impaired tenant who has a guide dog. John's usual lease agreement has a "no pets policy" clause. What is true in this situation? (a) John does not have to allow the tenant to keep the guide dog in the apartment (b) John must allow the tenant to keep the dog if the tenant provides a court order to that effect (c) John must allow the tenant to keep the guide dog, however, the tenant will be liable if the dog damages the property (d) John must allow the tenant to keep the guide dog if the tenant can provide written proof that he needs the dog

John must allow the tenant to keep the guide dog if the tenant can provide written proof that he needs the dog

A sales license holder is working with a minority couple to find a home for them. The license holder is only showing the buyers homes in minority neighborhoods. The license holder is guilty of: (a) Target marketing (b) Blockbusting (c) Panic peddling (d) Steering

Steering

Why is commingling illegal? (a) To protect the broker from claims by creditors of the clients (b) To protect clients' funds from claims by creditors of the broker (c) Due to the difficulty of maintaining accurate records of clients' funds (d) To prevent a broker from earning interest on client funds

To protect clients' funds from claims by creditors of the broker

A broker has placed his own funds with client funds in his trust account. He has then used those funds to pay his office rent. The broker is guilty of: (a) commingling (b) conversion (c) subversion (d) misrepresentation

(b) conversion

A property is found to have asbestos on site. What is true? (a) Asbestos must be remediated by the seller (b) Asbestos must be removed by the seller (c) Encapsulation of the asbestos containing materials can be used to solve the problem (d) Property must be tented to remove asbestos safely

Encapsulation of the asbestos containing materials can be used to solve the problem

Many states require a seller's disclosure of property condition. Which statement about a seller's disclosure is FALSE? (a) A broker is responsible for discovering and disclosing all problems in areas accessible for visual inspection (b) A broker's role is to encourage honesty and full disclosure by the seller (c) A broker is not liable for hidden defects not disclosed by the seller (d) Both the broker and the seller are responsible for the accuracy of the disclosure form.

Both the broker and the seller are responsible for the accuracy of the disclosure form.

Which of the following statements about radon is false? (a) Radon is colorless and odorless (b) HUD does not require radon testing for FHA loans (c) Radon is only harmful to individuals who smoke or have lung disease (d) Radon enters homes through their foundations

Radon is only harmful to individuals who smoke or have lung disease

A license holder is showing a property with a pond. He notices iridescence on the surface of the pond and is concerned about the possible causes. What should the license holder do? (a) Advise the buyer to look for another property (b) Mention his concerns about the pond and tell the buyer to seek expert advice (c) Recommend that the buyer have inspections on the property, but not mention his concerns (d) Ignore the issue, because he does not know for sure if it is a problem and he does not want to be sued by the seller

Mention his concerns about the pond and tell the buyer to seek expert advice

A buyer's inspection report on a property shows the presence of asbestos on the property. Which of the following statements about asbestos is FALSE? (a) The asbestos abatement plan outlines the control of asbestos on a property (b) The owner of the property must remove the asbestos (c) Methods of abatement include encapsulation (d) The dust from the removal of asbestos is extremely hazardous

(b) The owner of the property must remove the asbestos

Homeowner's insurance will NOT protect property from: (a) flood (b) fire (c) vandalism (d) storms

flood

Gently used water that could be recycled but should not be used for human consumption is called: (a) whitewater (b) blackwater (c) greywater (d) clear water

greywater

Which of the following underground storage tanks is NOT exempt from federal UST rules? (a) Tanks storing heating oil used on the premises (b) Tanks on or above the ground (c) Septic tanks for collecting storm water and wastewater (d) Farm and residential tanks with a capacity greater than 1100 gallons

(d) Farm and residential tanks with a capacity greater than 1100 gallons

A sales license holder has advertised a property. Her ad states that the property is in a family- oriented neighborhood and can be purchased for $1,100 a month. What is wrong with this advertisement? (a) It violates Federal Fair Housing laws (b) It violates Federal Fair Housing laws and Truth in Lending (c) It violates Truth in Lending and the Equal Credit Opportunity Act (d) It violates the Equal Credit Opportunity Act and the Consumer Credit Protection Act

It violates Federal Fair Housing laws and Truth in Lending

A borrower is aware that interest rates are going down soon. He wants to purchase property now and be able to take advantage of the lower rates in the future. What type of loan should he secure? (a) A term loan (b) A budget loan (c) An ARM (d) A fixed rate loan

Which of the following statements about a conforming loan is FALSE? (a) It is a standardized conventional loan (b) It is not eligible for sale in the secondary market (c) It is written on uniform documents that meet the purchase requirements of Fannie Mae and Freddie Mac (d) Both the loan amount and borrower characteristics are considered in determining if a loan is conforming or not

It is a standardized conventional loan

According to the Equal Credit Opportunity Act, a lender cannot deny credit if the borrower's sole source of income is: (a) Alimony (b) Child support (c) A result of participation in public assistance programs (d) A pension plan

A result of participation in public assistance programs

In what document would you find an unconditional promise to pay a debt? (a) The Deed of Trust (b) The lien (c) The mortgage (d) The note

The note

Which of the following statements about VA loans is false? (a) Certain surviving spouses of veterans are eligible for these loans (b) Parents of veterans are eligible for VA loans (c) A non-veteran can assume an existing VA loan (d) To qualify, a veteran must have 181 days of active duty and be honorably discharged

Parents of veterans are eligible for VA loans

Which of the following would be least likely to have a negative impact on a person's credit rating? (a) Short sale (b) Foreclosure (c) Assumption subject to (d) Straight assumption

Straight assumption

A commercial property has potential gross rents of $20,000 per month and an occupancy rate of 80%. The expenses per year are $60,000 and the market value is $1,100,000. What is the owner's rate of return? (a) 8% (b) 10% (c) 12% (d) 14%

12%

A sales agent has negotiated a listing with a commission rate of 5.5% with 3% going to the selling broker and 2.5% going to the listing broker. The property sells for $365,000. The listing sales agent receives 60% of her broker's commission. How much does the listing sales agent receive? (a) $9,125 (b) $10,950 (c) $6,570 (d) $5,475

(d) $5,475

A property was purchased for $200,000 with an 80% loan-to-value purchase mortgage. The owner has paid off $53,000 and is now selling the property for $225,000. What is the seller's equity? (a) $78,000 (b) $47,000 (c) $118,000 (d) $88,000

$118,000

A homebuyer plans to purchase a home using a $200,000 loan with a loan factor of $5.30. The tax and insurance payment on the property is $900 per month. What is the minimum monthly income the buyer needs to qualify for the loan if lenders are qualifying at 28%? (a) $7,500 (b) $7,000 (c) $8,000 (d) $7,750

(b) $7,000

A commercial property measures 150’ wide x 165’ long. It is being sold for $10 per sq. ft. with a lot premium of $100 per front foot. What is the price of the property? (a) $262,500 (b) $247,500 (c) $15,000 (d) $150,000

(a) $262,500

A home was purchased for $300,000 in a neighborhood where homes have been appreciating 3% a year for the past 4 years. Using compound appreciation, what is the current value of the property? (Round your answer to the nearest dollar amount. (a) $309,000 (b) $336,000 (c) $337,653 (d) $327,523

An apartment complex has 12 units that lease for $2400 a month each. Last year one unit was vacant for 8 months. Two units were each vacant for 3 months. One unit was vacant for 4 months. Eight units were fully occupied all year. What is the vacancy rate for this complex? (a) 8% (b) 12.50% (c) 10% (d) 14%

12.50%

exam 2 Flashcards

(80 cards)