Exam 4 Missed Questions Flashcards
(28 cards)
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.
(c) the executor she chose will settle her estate.
(d) her heirs will inherit her property by devise.
(b) the courts will appoint an administrator to settle her estate.
She was intestate - no will
therefore, there will be no executor, only a court appointed administrator
Title by devise also requires a will
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
(c) Subordination
(d) Defeasance
(a) Subrogation
The “No Double Dipping” or subrogation clause in a title policy allows the title company to claim a refund from the property owner who collects from both the title company and the seller for one problem
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
Title insurance covers:
Forged deeds
Illegal acts of attorneys
Human errors in copying and recording
Does not cover survey or boundary problems
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
(c) a defeasible fee
(d) conditional fee simple
(a) equitable title
Definition of equitable title is when the buyer has a signed sales contract but has not gone to closing yet
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
(c) The buyer, seller, and seller’s lender
(d) The seller’s lender, the buyer’s lender, and the title company
(c) The buyer, seller, and seller’s lender
The buyer’s agent, the appraiser, and the title company are not involved in the negotiation process
What does the GIM convey or determine?
(a) Net yield
(b) Value
(c) Rent/month
(d) Operating expense
(b) Value
The purpose of the GIM is to help a seller or buyer determine value using price/rent
GIM x annual rent = price
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
(c) A broker cannot charge for a CMA
(d) Only a broker can prepare a CMA
(b) A CMA results in a range of value
A broker can charge for a CMA
Anyone can prepare a CMA with access to the information in the MLS
It is not an appraisal
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
A sales license holder can prepare a BPO
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
(c) The income approach
When a property has rent, the income approach will be used
Market approach is for residential properties
Cost approach is for unique properties
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
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
According to the Statute of Frauds, a verbal lease agreement for one year or less is 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
damages established in the contact are called liquidated damages
if the buyer defaults the sell can keep the deposits
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.
The seller must withdraw his counteroffer to the first buyer BEFORE accepting the offer from the second buyer
A counteroffer can be withdrawn any time before it is accepted
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.
An investor only has to own a property for 1 year before he can do a 1031
The boot is taxed
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
Death does not terminate a sales contract, it is binding in the heirs
Death of the broker or seller would only terminate a listing
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
(c) Provide the seller with a CMA and encourage the seller to price it correctly
It is your duty as it would fall under fair and honest dealings
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
Broker funds and client funds cannot be mixed
Rent belongs to the landlord and can placed in the operating account
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
(c) If both the buyer and seller agree to their use
Electronic signatures require the agreement of the parties (buyer and seller) to be the legal equivalent of handwritten signatures
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
The exclusive right to sell listings entitles the broker to a commission, no matter who sells the property
A hazardous substance that was used before 1978 and that is friable is:
(a) asbestos
(b) lead
(c) radon
(d) mold
(a) asbestos
the term friable (crumbles easily) only applies to asbestos
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
SARA was passed to increase the balance available for cleanups
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
The title is not transferred to the buyer until the final payment has been made
Redlining is an illegal practice for:
(a) Brokers
(b) Lawyers
(c) Title companies
(d) Appraisers
(c) Title companies
Redlining by lenders and insurance companies is prohibited and title companies are insurance companies under the regulation of the State Department of Insurance
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
The formula is cost x (100% - deprecation %) and a separate calculation is needed for each year
100%-4% = 96%
250,000 x 96% x 96% = 230,400
