A standard policy of title insurance will not provide protection for: (a) illegal acts of attorneys (b) forged deeds (c) survey or boundary problems (d) human error in copying and recording

(c) survey or boundary problems

Exam 4 Flashcards by Caiti Jones

John owns the dominant estate with an easement appurtenant. John sells the property. What happens to the easement?

(a) An easement is terminated by the sale.

(b) It belongs to the buyer.

(d) John retains ownership of the easement.

(b) It belongs to the buyer.

How well did you know this?

Not at all

Perfectly

A commercial tenant’s lease will expire at the end of this month. He is currently in the process of removing his display cases from the shop. What is true?

(a) He must leave the fixtures if the owner wants them.

(b) He must negotiate with the owner to take the fixtures.

(d) He can only take them if he pays for them.

How well did you know this?

Not at all

Perfectly

A surveyor has described a property from a point of beginning 200 feet north on Broad St. from the oak tree at the intersection of Main St. and Broad St., then 90° east for 100 ft., then 90° north for 50 ft., then 90° west for 100 ft., then 90° south for 50 feet back to the point of beginning. What type of description is this?

(a) Government Survey System

(b) Metes and Bounds

(d) Lot, block, and subdivision plot

(b) Metes and Bounds

How well did you know this?

Not at all

Perfectly

Which of the following demonstrates the physical characteristic of indestructibility?

(a) A building has major foundation problems, but it is still standing.

(b) A property is foreclosed on for non-payment of property taxes.

(d) A house is condemned by the city.

How well did you know this?

Not at all

Perfectly

Mary, a single woman with no children, owns her own home. She dies intestate. What happens to her property?

(a) the courts will appoint an executer to settle her estate.

(b) the courts will appoint an administrator to settle her estate.

(d) her heirs will inherit her property by devise.

(b) the courts will appoint an administrator to settle her estate.

How well did you know this?

Not at all

Perfectly

Which of the following is the best example of an emblement?

(a) Barley

(b) Sugar cane

(d) An elm tree

(b) Sugar cane

How well did you know this?

Not at all

Perfectly

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

How well did you know this?

Not at all

Perfectly

Which of the following would NOT be a characteristic of a PUD?

(a) A greenspace for use by property owners

(b) A non-profit HOA to provide maintenance of the green space

(d) Non-conforming use status

How well did you know this?

Not at all

Perfectly

Personal property that is installed or attached to real property is best described as:

(a) chattel

(b) a fixture

(d) situs

(b) a fixture

How well did you know this?

Not at all

Perfectly

Joe received payment from his title insurance company to compensate him for a defect in his title. Subsequently he was awarded a judgment against the seller, and collected the funds from the seller, to compensate him for the same defect. The title company has claimed the right to a refund from Joe. What clause in the title policy allows the title company to make this claim?

(a) Subrogation

(b) Arbitration

(d) Defeasance

(a) Subrogation

How well did you know this?

Not at all

Perfectly

An agreement allowing a tenant to match or better any purchase offer the landlord receives before the property will be sold to another is called:

(a) a right of first refusal agreement

(b) a lease with an option to buy

(d) a rescission agreement

(a) a right of first refusal agreement

How well did you know this?

Not at all

Perfectly

A standard policy of title insurance will not provide protection for:

(a) illegal acts of attorneys

(b) forged deeds

(d) human error in copying and recording

How well did you know this?

Not at all

Perfectly

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

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

How well did you know this?

Not at all

Perfectly

A buyer has a signed sales contract and has not yet gone to closing. His interest in the property is called:

(a) equitable title

(b) a statutory estate

(d) conditional fee simple

(a) equitable title

How well did you know this?

Not at all

Perfectly

Who must be involved in the negotiation of a short sale?

(a) The buyer’s lender, the seller’s lender, and an appraiser

(b) The seller’s lender and the title company

(d) The seller’s lender, the buyer’s lender, and the title company

How well did you know this?

Not at all

Perfectly

John, Maria and Mark are joint tenants. Their joint tenancy agreement allows for partition if all parties agree. Mark dies. Maria sells her share to Jane, with John’s agreement. John and Jane are:

(a) joint tenants

(b) tenants by partition

(d) tenants in common.

How well did you know this?

Not at all

Perfectly

A buyer who wants to be sure that he is getting good title to a property should rely on:

(a) an attorney’s opinion of title

(b) a title insurance policy

(d) a title commitment based on the abstract of title from the title company

How well did you know this?

Not at all

Perfectly

It has been determined that an older home needs to be renovated and updated to meet the needs of modern technology. What type of depreciation would this renovation eliminate?

(a) Physical deterioration

(b) Economic obsolescence

(d) External obsolescence

How well did you know this?

Not at all

Perfectly

What do Demand, Utility, Transferability and Scarcity represent?

(a) the elements of a contractual agreement

(b) the characteristics of an appraisal

(d) the characteristics of value

How well did you know this?

Not at all

Perfectly

What does the GIM convey or determine?

(a) Net yield

(b) Value

(d) Operating expense

(b) Value

How well did you know this?

Not at all

Perfectly

Which principle of value used by appraisers states that values are maximized when properties have a reasonable degree of similarity?

(a) The principle of conformity

(b) The principle of contribution

(d) The principle of substitution

(a) The principle of conformity

How well did you know this?

Not at all

Perfectly

A fast food establishment is extremely successful, and the drive-through lanes are always crowded. What principle of appraisal would explain a similar establishment planning to open directly across the highway?

(a) Balance

(b) Change

(d) Substitution

How well did you know this?

Not at all

Perfectly

Which of the following statements about a CMA is true?

(a) A broker can advertise a CMA as an appraisal

(b) A CMA results in a range of value

(d) Only a broker can prepare a CMA

(b) A CMA results in a range of value

How well did you know this?

Not at all

Perfectly

An appraiser has valued a residential property. He then observed the neighborhood and noticed many declining-valued properties surrounding the subject. As a result, he deducted $10,000 from the appraisal result. Which principle of appraisal explains this?

(a) Regression

(b) Substitution

(d) Change

(a) Regression

How well did you know this?

Not at all

Perfectly

What is the step in the appraisal process that determines an exact number rather than a range of value? (a) Regression (b) Capitalization (c) Reconciliation (d) Reporting the results to the client

Which of the following statements about a BPO is FALSE? (a) Only a broker can prepare a BPO (b) A BPO may be used in a short sale instead of an appraisal (c) A broker usually charges a fee to prepare a BPO (d) A BPO can be prepared by a sales license holder

(a) Only a broker can prepare a BPO

The value of a residential property for tax purposes is: (a) appraised value (b) mill value (c) market value (d) assessed value

(d) assessed value

An appraiser has been hired to value an office building. What approach will he be most likely to use to determine the value of this investment? (a) The market approach (b) The GIM (c) The income approach (d) The cost approach

A broker has listed his own property for sale. Which of the following statements is true? (a) The broker must always disclose this dual role (b) The broker must disclose his ownership interest if asked (c) This is called dual agency (d) The broker cannot list his own property as it creates a conflict of interest

(a) The broker must always disclose this dual role

A seller has received and accepted an offer on his property with a closing date of November 15th, time is of the essence. Two days before closing, the seller notifies the buyer that he will be unable to close on the required date but will be able to close 2 days later if the buyer agrees. At that point this contract is: (a) void (b) valid but unenforceable (c) invalid (d) voidable at the option of the buyer

(a) void

When does a buyer's offer become a binding contract? (a) When the buyer signs it (b) When it is delivered to the seller (c) When all negotiations are complete and both parties agree (d) When it is accepted, and the acceptance is communicated

(d) When it is accepted, and the acceptance is communicated

A landlord and tenant negotiate a verbal lease agreement on the phone for an 8-month term. The tenant later decides not to move in. What best describes the lease agreement in this situation? (a) Valid but unenforceable (b) Valid and enforceable (c) Voidable and unenforceable (d) Void and unenforceable

(b) Valid and enforceable

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 agreed to? (a) Liquidated damages (b) Partial performance (c) Suit for specific performance (d) Money damages

(a) Liquidated damages

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

A house is listed for $499,000. The seller received an offer for $485,000. He countered at $490,000. He has not had a response to his counteroffer. The listing agent has received a new offer from a second buyer for $495,000 and presented it to his seller. The seller would like to accept this new offer. What is true? (a) The seller must wait to hear from the first buyer before he can accept the second offer (b) The seller can accept the second offer because he has not had a response to his counteroffer (c) The seller can only accept the second offer as a backup contract (d) The seller can withdraw his counteroffer to the first buyer and then accept the offer from the second buyer.

(d) The seller can withdraw his counteroffer to the first buyer and then accept the offer from the second buyer.

John has equitable title to the property at 123 Main Street. Which term describes his contract? (a) Enforceable (b) Executory (c) Voidable (d) Unenforceable

(b) Executory

A property owner has a property tax exemption due to a physical disability. The result is a $1500 reduction in the annual property tax bill. The listing license holder failed to notice the exemption on the appraisal district website and therefore has not disclosed this exemption. This failure to disclose a material fact about the property is an example of: (a) fraud (b) negligent misrepresentation (c) puffing (d) errors and omissions insurance

(b) negligent misrepresentation

A landlord and tenant sign a lease agreement and the tenant pays for the first and last month’s rent. The landlord learns that the tenant is only 17 years old. Which of the following statements describes this lease? (a) It is voidable at the option of the tenant because he is a minor (b) It is voidable at the option of the landlord because the tenant did not disclose his age (c) It is valid and binding on both parties because the tenant already paid some rent (d) It is void because there was no real mutual agreement

(a) It is voidable at the option of the tenant because he is a minor

Which of the following answers best describes the agent’s duties to his principal? (a) Care, obedience, loyalty and confidentiality (b) Loyalty, consideration, reasonable care and responsibility (c) Compensation, reimbursement and indemnification (d) Loyalty, indemnification, accounting and disclosure.

(a) Care, obedience, loyalty and confidentiality

Which statement about a 1031 is TRUE? (a) An investor must own a property for at least 3 years before he can do a 1031. (b) At the time of the 1031, capital gains taxes are deferred. (c) At the time of the 1031, the boot is not taxed. (d) An investor must hold a property for 5 years before he can do a 1031.

(b) At the time of the 1031, capital gains taxes are deferred.

Which of the following will terminate a sales contract? (a) death of the seller or buyer (b) bankruptcy of the seller (c) death of the broker (d) death of the listing agent

(b) bankruptcy of the seller

Which of the following best describes a unilateral contract? (a) It is unenforceable (b) It is binding on both parties (c) Either party can sue for breach of contract (d) It is in the “if…..then…..” format

(d) It is in the “if…..then…..” format

What type of contract can be described as: a contract where one party can rescind? (a) Void (b) Voidable (c) Unenforceable (d) Invalid

(b) Voidable

Which is an example of an enforceable bilateral real estate contract? (a) A written sales contract (b) A written option contract (c) A verbal buyer representation agreement (d) A verbal option contract

(a) A written sales contract

A party inherits a property. He wants to sell it quickly, as he wants the cash. He contacts a broker to list the property for $300,000. The broker knows that homes in that neighborhood are selling for $325,000 and more. What should the broker do? (a) Take a net listing on the property (b) Buy the property himself as an investment or to resell (c) Provide the seller with a CMA and encourage the seller to price it correctly (d) List the property for $300,000 as this is what the seller wants

A property where there has been a murder is referred to as: (a) undesirable (b) stigmatized (c) red-flagged (d) condemned

(b) stigmatized

A senior apartment complex has more than 80% of the units occupied by someone 55 years old or older. There is a vacant apartment. Can they refuse to lease it to a single mother with a child? (a) No (b) Yes (c) Yes, if they advertise “adults only” (d) Yes, but only if her income is too low to meet their requirements

(b) Yes

Which of the following is an example of illegal commingling? (a) A buyer deposits money in an escrow account (b) A broker deposits tenant security checks in an operating account (c) A property manager puts client rents in an operating account (d) A landlord deposits rents in the business operating account

(b) A broker deposits tenant security checks in an operating account

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

(d) Puffing

A sales agent has just attended a seminar on the benefits of using social media in marketing her client’s properties. She is very excited to begin to use all the wonderful ideas that were presented. In order to advertise her client’s properties on social media she will need: (a) written permission from the owner (b) access to the property owner’s Facebook page (c) access to the owner's Twitter account (d) verbal permission from the owner

(a) written permission from the owner

Electronic signatures are the equivalent of handwritten signatures: (a) If the listing agent is willing to use them (b) Never (c) If both the buyer and seller agree to their use (d) If both the listing broker and selling broker agree to their use

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. If the services of a broker are not involved and she does not discriminate in her advertising, she can discriminate for any reason except: (a) Age (b) Color/Race (c) Religion (d) Sex

(b) 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 only must restore structural changes that might impair the rights of other tenants

A property is advertised as “For Sale by Owner.” The seller owns 2 homes. The seller receives several offers and chooses the buyer based on the buyer’s national origin. Neither party is represented by a broker. Which of the following is true about violation of the Fair Housing laws? (a) The seller is in violation of the Fair Housing Act (b) The seller is not in violation of the law because his actions do not involve a broker (c) The seller is guilty of a Class A Misdemeanor (d) The seller is guilty of a civil offense

(b) The seller is not in violation of the law because his actions do not involve a broker

A seller-client is abandoned by the listing agent of his property. He is very anxious to sell and very upset by this situation. What can the client do? (a) File for release due to abandonment (b) Wait for the written agreement to expire (c) Verbally terminate the contract (d) Hire a new agent

(d) Hire a new agent

Which of the following would be considered an operating expense when a property manager draws up the operating budget for the owner? (a) repainting units for new occupants (b) depreciation (c) mortgage loan payments (d) building an extension on the parking garage

(a) repainting units for new occupants

The Exclusive Right to Sell Listing entitles the broker to: (a) the right to sell without exclusivity (b) the exclusive right to be the only broker to sell the listing (c) rights to sell with the right to convey title (d) exclusive right to a commission no matter who sells the listing

(d) exclusive right to a commission no matter who sells the listing

A buyer tells an agent that he wants to purchase a home in a Hispanic neighborhood. What should the agent do? (a) Tell the buyer that he does not have access to that type of information (b) Tell the buyer he will check with his broker and get back to the buyer (c) Tell the buyer it is illegal for the agent to share information or choose a neighborhood based on national origin (d) Tell the buyer he will Google it and get back to the buyer

Who would inspect an oil and gas lease for compliance with the law? (a) The EPA (b) Surveyor (c) Inspector (d) Engineer

(a) The EPA

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

A hazardous substance that was used before 1978 and that is friable is: (a) asbestos (b) lead (c) radon (d) mold

(a) asbestos

Gently used water from showers, sinks and tubs is called: (a) clearwater (b) blackwater (c) whitewater (d) greywater

(d) greywater

What department of the government administers CERCLA? (a) The Department of the Interior (b) The EPA (c) The Department of Homeland Security (d) The Department of Transportation

(b) The EPA

What statement about radon is true? (a) A plan to control radon is an abatement plan (b) Radon has a distinctive odor (c) Radon is produced by decaying rocks underground (d) Radon is only harmful to individuals with a compromised immune system

Homeowner’s insurance will not protect a property for damage due to: (a) flooding (b) fire (c) vandalism (d) storms

(a) flooding

What law was passed to increase the balance available for cleanup in the Superfund when CERCLA could no longer meet the needs for this? (a) EIS (b) SARA (c) ESA (d) FEMA

(b) SARA

Which of the following statements about Contract for Deed is FALSE? (a) Contract for deed is not fully executed until the seller delivers the deed to the buyer (b) Legal title is transferred to the buyer when the agreement is signed (c) Contract for Deed is also called an installment contract (d) The buyer is the vendee and the seller is the vendor

(b) Legal title is transferred to the buyer when the agreement is signed

Redlining is an illegal practice for: (a) Brokers (b) Lawyers (c) Title companies (d) Appraisers

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

(d) 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) The VA must be notified prior to a foreclosure by the loan servicer on a VA loan

(b) Parents of veterans are eligible for VA loans

Which of the following transactions would not qualify for VA financing? (a) Senior apartment complex (b) Fourplex where one unit will be occupied by the owner (c) Single family home (d) a rural home on 10 acres

(a) Senior apartment complex

A property is advertised for sale on the radio. What part of the advertisement involves a trigger term? (a) the house is in a neighborhood of beautiful homes (b) the house is close to schools and churches (c) easy financing is available to qualified buyers (d) the seller offers an interest rate of only 5% on purchase mortgages

(d) the seller offers an interest rate of only 5% on purchase mortgages

Which clause in a mortgage requires that the loan balance be repaid if the property is sold, or changes owners? (a) subordination clause (b) defeasance clause (c) alienation clause (d) acceleration clause

(a) subordination clause

Using compound depreciation, what would be the value of a $250,000 property at the end of 2 years if depreciation is calculated to be 4% per year? (a) $230,400 (b) $230,000 (c) $210,000 (d) $150,000

(a) $230,400

A home is sold for $79,650. The buyer has a 6% down payment. The seller agrees to owner financing with an 83% LTV. There will be a second mortgage on the property. What will be the amount of the 2nd mortgage (rounded to the nearest dollar)? (a) $4,779 (b) $8,762 (c) $13,541 (d) $15,930

(b) $8,762

An apartment complex has 8 units. 6 units were each vacant for one-month last year. 1 unit was vacant for 4 months. 1 unit was vacant for 2 months. What was the vacancy rate for the complex? (a) 10% (b) 11% (c) 12.50% (d) 15%

A home sold for $334,880. This price includes a 12% profit. What was the original cost? (a) $294,694 (b) $299,000 (c) $295,000 (d) $300,000

(b) $299,000

If a lot measured 140’ x 200’ and there was a lot premium of $20 per front foot, what premium would be charged? (a) $2,800 (b) $4,000 (c) $6,800 (d) $3,000

(a) $2,800

Monthly taxes and insurance on a single-family home are $1200. Lenders are qualifying at 28% with a loan factor of $5.00. What monthly income will buyers need to qualify for a $300,000 loan? (a) $9,463 (b) $6,493 (c) $9,643 (d) $9,346

A lease expired at the end of March. The tenant is holding over until April 15. At move in the tenant had paid a one month’s rent security deposit for $1100. How much of that deposit will be refunded to the tenant. (a) $950 (b) $587 (c) $1,000 (d) $550

(d) $550

Exam 4 Flashcards

(80 cards)