Final Exam Flashcards

Question

Changing the zoning from residential to scenic reserve would be an example of: A. downzoning B. bulk zoning C. spot zoning D. buffer zoning

Answer 1

A. Changing zoning from residential to scenic reserve is a change in zoning from a more active to a less active classification.

Answer 2

A. The transfer fee is $475,500 x .003 = $1,426.50

Answer 3

C. The offer is void. There was never a contract because the essential elements of the contract were never met. Both spouses need to sign to accept the offer. If the missing spouse had authorized the other spouse to sign on their behalf, the spouse to whom the offer was presented could have signed that person's name and then signed on behalf of the missing spouse as a power of attorney. Wis. Stat. § 706.02 states that a contract to convey must be signed by or on behalf of all parties and 706.03(1m) states that a conveyance signed by one purporting to act as agent for another shall be ineffective as against the purported principal unless such agent was expressly authorized, and unless the authorizing principal is identified as such in the conveyance or in the form of signature.

Answer 4

D. WB-11 Residential Offer to Purchase lines 210-211.

Answer 5

D. Please refer to lines 336 - 337 of the WB-11 Residential Offer to Purchase.

Answer 6

C. Wis. Stat. § 452.135(1) No firm may provide brokerage services to more than one client in a transaction without an agency agreement with each client and a written consent to multiple representation.

Answer 7

B. Equitable title is the right to obtain absolute ownership to property when legal title is held in another's name. A buyer obtains equitable title after all contingencies have been removed and they are ready to consummate the transaction.

Answer 8

C. See lines 37-40 of the WB-36 Buyer Agency Agreement. The Firm has earned the Firm’s commission if during the term of this Agreement (or any extension of it), Buyer or any Person Acting on Behalf of Buyer acquires an Interest in Property or enters into an enforceable written contract to acquire an Interest in Property, at any terms and price acceptable to owner and Buyer, regardless of the purchase price range.

Answer 9

B. The firm earns a commission if the seller accepts an enforceable contract for the sale of all or any part of the property.

Answer 10

A. Licensees are not required to have the technical knowledge, skills, or training possessed by competent third-party inspectors and investigators of real estate and related areas.

Answer 11

C. An easement is the right to use the property of another. An encroachment is an encumbrance on property but is not an easement. A mortgage is a lien on another’s title.

Answer 12

C. Wis. Stat. § 706.02 says that a valid conveyance must identify the parties, identify the land, identify the interest conveyed, is signed by or on behalf of each of the grantors, is signed by each spouse is a homestead property, and is delivered

Answer 13

D. In the event that seller cancels the listing contract unilaterally before its expiration date, the firm may demand compensation for the damages sustained as a result. The firm cannot sue the seller for specific performance and cannot compel the seller to remain in the relationship as a party to the listing contract.

Answer 14

D. The WB-13 includes a map contingency where the WB-11 does not. A buyer of residential property using a WB-11 could include a map contingency but would have to add it in additional provisions or as an addendum to the offer.

Answer 15

D. Line 576 of the WB-11 Residential Offer to Purchase reads, “Name of Seller's recipient for delivery, if any___________________.”

Answer 16

C. Wis. Stat. § 452.13(1)(a): “client funds” means all down payments, earnest money deposits or other money related to a conveyance of real estate that is received by a licensee on behalf of a firm or any other person. "Client funds" does not include promissory notes. Security deposits collected by a property owner are just security deposits. If the property owner also happens to be a real estate licensee, then those security deposits will be real estate trust funds but they are considered "non-client funds" because they are not related to a conveyance of real estate.

Answer 17

A. A lease for less than one year can be an oral contract. A court would consider it enforceable against both parties.

Answer 18

A. When a buyer provides a Notice of Defects a copy of the home inspection report the WB-41 Notice Relating to Offer to Purchase should also be sent to the seller. Please refer to lines 206-208 of the WB-11 Residential Offer to Purchase.

Answer 19

B. The DNR defines the Shoreland zone as land located 1,000 feet of the ordinary high water mark of a lake, pond, or flowage; within 300 feet of ordinary high water mark of a river or a stream; the landward side of the floodplain, whichever is greater.

Answer 20

D. Special assessments for curb and gutter improvements will most likely be charged per linear foot. The house on the corner lot would have the most street frontage and the highest special assessment.

Answer 21

A. Termination section of WB-36 Buyer Agency Agreement, “Agents for Firm do not have the authority to enter into a mutual agreement terminate this Agreement, amend the compensation terms or shorten the term of this Agreement, without the written consent of the agent(s)’ supervising broker.”

Answer 22

C. According to the terms of the WB-1 Residential Listing Contract, the seller has seven days to provide the new listing firm a list of the protected buyers.

Answer 23

A. Wis. Stat. § 452.30(7) A salesperson may be associated with only one firm at a given time. (b) A salesperson may not engage in independent real estate practice and may engage in real estate practice only when associated with a firm.

Answer 24

A. Buyers may be protected for listing protection in one of four ways. If (1) the buyer submitted a written offer to purchase or (2) viewed the property with the seller or negotiated directly with the seller, the listing protection is automatic and the first listing firm would not have been required to perform any additional steps to protect the buyer for the override period. If, during the term of the listing (3) the buyer attended an individual showing or (4) negotiated with a firm, the buyer will be protected only if the listing firm delivered the buyer's name to the seller within three days of the expiration of the first listing contract. "Negotiate," for these purposes, means that the buyer discussed the potential terms upon which the buyer may acquire an interest in the property.

Answer 25

D. Any prudent buyer can see that the warped back porch stairs and overgrown weeds are what they are, rather than how Jane described them. Thus, Jane’s statements are considered to be “puffing.” Agents must be careful that they do not make any statements in a way to harm the buyer, or to take advantage of the buyer’s lack of knowledge. Statements that harm the buyer or take advantage of their lack of knowledge constitute fraud.

Answer 26

B. The primary disclosures required under the Truth in Lending Act (TILA) are the financing charges, the annual percentage rate, the total amount financed, and total payments that will be made.

Answer 27

B. Salesperson A has a listing contract with the seller. The buyer does not sign a buyer agency agreement with Salesperson A. Salesperson A provides brokerage services to the buyer as a customer.

Answer 28

D. The Title Evidence section of the offer, "Seller shall give evidence of title in the form of an owner's policy of title insurance in the amount of the purchase price on a current ALTA form issued by an insurer licensed to write title insurance in Wisconsin. Seller shall pay all costs of providing title evidence to Buyer. Buyer shall pay the costs of providing the title evidence required by Buyer’s lender and recording the deed or other conveyance."

Answer 29

B. Survivorship between owners is a key element of a joint tenancy.

Answer 30

C. The transfer fee on a $129,550 purchase is $388.80. To calculate the transfer fee, round the purchase price up to the nearest $100 and multiply times .003. Round $129,550 up to $129,600 and multiply by .003 = $388.80.

Answer 31

A. Local levels of government have the legal ability to enact fair housing laws as long as the local laws recognize the classes protected under the state law. However, not all local levels of government will have their own laws and unfortunately, some will have laws that contradict the state/federal law and allow discrimination under certain situations. A licensee must follow the law that offers the most protections.

Answer 32

D. An inspection contingency is not an essential term of a real estate contract. Wis. Stat. § 706.02 Conveyance of Real Property requires the following of a contract: identifies the parties, identifies the land, identifies the interest conveyed and any material term condition, is signed by or on behalf of each of the grantors, is signed or joined in by separate conveyance by or on behalf of each spouse, and is delivered.

Answer 33

B. A contract as described in this question is a contract to pay referral fees to a non-licensed individual. Payment of real estate related fees including commissions, finders fees, and referral fees is illegal fee-splitting in Wisconsin. Therefore this contact is for an illegal purpose and is void.

Answer 34

C. A tree or a structure that is physically extending across the lot line onto a neighbor's property is an encroachment. An encroachment is an example of an encumbrance.

Answer 35

C. The listing firm cannot do anything with the earnest money for 60 days after the scheduled closing date unless the parties reach a written agreement for the disbursement of the earnest money. The listing firm may wish to write a memorandum or letter to the buyer and seller and their respective attorneys, if any, pointing out Disbursement if Held By a Firm section of the WB-11 Residential Offer to Purchase and explaining that this is how the earnest money disbursement must be handled. It is then up to the parties to work out their differences by negotiation or by going to small claims court.

Answer 36

D. $240,000 assessed value x .01 = $2,400. $2,400 / 12 months = $200 monthly fee. $200 x 6 = $1,200 paid in condominium fees through June 1.

Answer 37

D. A buyer may withdraw an offer any time prior to binding acceptance.

Answer 38

C. A security interest is an interest a creditor holds in an item of personal property when the debt is secured by that item of personal property. A lender may have a security interest in a car, a tractor, machinery, or restaurant equipment for example. A security interest is also know as a chattel mortgage though security interest is the more common term.

Answer 39

C. A firm must provide its licensees with access to a supervising broker. The access must be reasonable and can be via phone, email, text, or other means if suitable.

Answer 40

D. A licensee writing an offer for a buyer-customer on another firm's listing is a selling licensee. A licensee who is writing an offer for a buyer-client is a buyer’s licensee.

Answer 41

D. Wis. Admin. Code § REEB 24.05(5): A licensee acting as a principal in a real estate or business opportunity transaction shall disclose his, her, or its license status and intent to act in the transaction as a principal at the earliest of all of the following: 1. The first contact with the other party or an agent representing the other party where information regarding the other party or the transaction is being exchanged. 2. A showing of the property. 3. Any other negotiation with the seller or the listing firm.

Answer 42

D. Agency disclosure to a client needs to occur either prior to entering into an agency agreement with the client. Agency disclosure to a customer must occur prior to negotiations. Holding an open house and answering a buyer's basic questions does not automatically constitute brokerage services. If the conversation went into more detail where a buyer was starting to discuss the terms under which the buyer would purchase the property, then an agency disclosure would need to be given.

Answer 43

A. $3,700 / 365 day year = $10.1370 daily proration. $10.1370 x 241 days between January 1 and the day prior to closing = $2,443.02.

Answer 44

A. A real estate condition report is used to disclose defects known by the seller prior to the acceptance of the offer. After the offer is accepted, the sales contract dictates how the parties must proceed.

Answer 45

D. A public accommodation must provide auxiliary aids to individuals with disabilities who have physical or mental impairments, such as vision, hearing, or speech impairments that substantially limit the ability to communicate. A real estate office is a public accommodation and is required to incur the expense of the auxiliary aid unless it results in an undue burden.

Answer 46

B. 120 feet x $18 = $2,160.

Answer 47

A. Wis. Admin. Code § REEB 15.02 Copies of documents - A licensee shall promptly provide an exact and complete copy of any document utilized, prepared, or received by the licensee in real estate practice to any person who has signed the document. A broker or salesperson shall promptly distribute an exact and complete copy of a lease or rental agreement which has been accepted and signed by all parties to the tenant upon execution of the lease or rental agreement when the tenant leases the property and to the landlord upon the landlord's request.

Answer 48

A. The placement of interior partitions does not affect public safety. The purpose of zoning is to protect public safety and welfare.

Answer 49

B. By treating the buyer like a client, the selling licensee has likely created an implied agency agreement and possibly undisclosed multiple representation.

Answer 50

A. Mortgage fraud occurs anytime a participant in a real estate transaction misrepresents facts with the intent to swindle another party of money. The key to committing mortgage fraud is keeping terms of a transaction away from the secured lender. Licensees should never draft paperwork that misrepresents the terms of a transaction and they are obligated to disclose all terms of a real estate transaction to the secured lender.

Answer 51

A. The seller's indicate on line 123 that they allow ABC Realty to participate in multiple representation with designated agency.

Answer 52

D. The WB-1 Residential Listing Contract authorizes the buyer to accompany a home inspector during the inspection.

Answer 53

A. Record title is the way that the title appears on public records.

Answer 54

A. Mistakes by licenses may lead to lawsuits for substantial damages, and/or rescission of the transaction, and possible filing of disciplinary complaints with the DSPS.

Answer 55

B. Lines 58-59 of the WB-1 Residential Listing Contract is where the seller and the listing firm agree to the amount of compensation the listing firm will offer to cooperating firms.

Answer 56

A. In a listing contract, the seller is the one who has hired the firm. Thus, the seller would be the principal/client in a listing contract.

Answer 57

C. To ensure compliance with the LBP disclosure law, licensees must inform the seller of the seller's obligations under the federal LBP laws, ensure that the seller has performed all activities required by law, and provide the necessary disclosure documents for the seller to sign and provide them to the buyer as well.

Answer 58

B. The remedies for breach include loss of commission, rescission, and the client’s ability to sue for damages. The REEB may order disciplinary action against the licensee as well.

Answer 59

D. If one party selects multiple representation with designated agency and the other party selects multiple representation without designated agency, the agency choices do not match. That means the firm and all its licensees must remain neutral.

Answer 60

A. Wis. Stat. § 452.23(2) A licensee is not required to disclose any of the following to any person in connection with the sale, exchange, purchase or rental of real property; 1) That the property was the site of a specific act or occurrence, if the act or occurrence had no effect on the physical condition of the property; 2) information relating to the physical condition of the property or any other information relating to the real estate transaction, if a written report that discloses the information has been prepared by a qualified third party and provided to the person; 3) the location of any adult family home, community based residential facility, or nursing home in relation to the location of the property.

Answer 61

A. The Sherman Act makes it illegal to conspire to restrain trade or the free flow of goods and services in a market place.

Answer 62

C. Wis. Admin. Code § REEB 16.06. A licensee cannot all additional lines. Any language that the party does not want included in the approved form may be stricken in such a way that the original language remains legible. Licensees cannot delete language from a form so that a party to the transaction is not aware of the deleted language. Licensees may never charge for completing a form.

Answer 63

C. See lines 215-229 of the WB-1 Residential Listing Contract. Protected Buyer means "a buyer who personally, or through any Person Acting on Behalf of Buyer, during the term of this Listing: 1) Delivers to Seller or the Firm or its agents a written offer to purchase, exchange or option on the Property; 2) Views the Property with Seller or negotiates directly with Seller by communicating with Seller regarding any potential terms upon which the buyer might acquire an interest in the Property; or 3) Attends an individual showing of the Property or communicates with agents of the Firm or cooperating firms regarding any potential terms upon which the buyer might acquire an interest in the Property, but only if the Firm or its agents deliver the buyer’s name to Seller, in writing, no later than three days after the earlier of expiration or termination (lines 273-281) of the Listing. The requirement in 3), to deliver the buyer’s name to Seller in writing, may be fulfilled as follows: a) If the Listing is effective only as to certain individuals who are identified in the Listing, by the identification of the individuals in the Listing; or, b) If a buyer has requested that the buyer’s identity remain confidential, by delivery of a written notice identifying the firm or agents with whom the buyer negotiated and the date(s) of any individual showings or other negotiations. A Protected Buyer also includes any Person Acting on Behalf of Buyer joined in interest with or otherwise acting on behalf of a Protected Buyer, who acquires an interest in the Property during the extension of listing period as noted on lines 230-234."

Answer 64

C. Wis. Admin. Code § REEB 18.031 A licensee having an ownership interest in a rental property shall either place security deposits related to that property in a real estate trust account or shall provide in a lease for security deposits to be held in an account maintained in the name of the owner or owners.

Answer 65

A. Wis. Admin. Code § REEB 24.07(6): If a licensee’s reasonably and diligent inspection reveals facts materially inconsistent with or materially contradictory to the seller’s statements or the inspection or investigation report of a third party, the inconsistency shall be disclosed in writing and in a timely manner to the parties.

Answer 66

C. Under lien theory, the buyer has legal title and the lender has the right to place a lien on the buyer's property given as collateral for the loan.

Answer 67

C. An unlicensed personal assistant cannot do any activities that would require a real estate license such as showings, open houses, or completing forms. An unlicensed assistant can complete activities that do not require a license such as scheduling appointments.

Answer 68

C. Firms are responsible only for the brokerage services provided on behalf of the firm by any licensee who is associated with the firm.

Answer 69

B. A comparable property is a similar property currently being sold. The maximum value of a property tends to be established by value of similar properties that have recently sold. A foreclosed property does not provide a good comparison because it is not an arm's length sale.

Answer 70

A. A firm can delegate supervision responsibility in writing as long as the delegation is signed by both the broker/firm delegating and the recipient of the delegated authority.

Answer 71

C. The chain of title for a property is the succession of conveyances from some starting point whereby the current owner derives title to the real estate. A chain of title may start with the original grant of ownership from the United States to the first private owner and all subsequent conveyances up to the current owner.

Answer 72

C. Line 230 of the WB-1 Residential Listing Contract states, “The Listing term is extended for a period of one year as to any Protected Buyer.”

Answer 73

D. This is the area of the listing contract that describes how the firm’s listing contract is extended for a period of one year for protected buyers.

Answer 74

A. Lines 483-485 of the WB-11 Residential Offer to Purchase state "At time of Buyer's occupancy, Property shall be in broom swept condition and free of all debris, refuse, and personal property belonging to current tenants, or that sold to Buyer or left with Buyer's consent." The offer to purchase determines what property is included or excluded in the transaction. Since the washer are dryer are personal property, if they are not addressed in the offer to purchase they must be removed at closing.

Answer 75

D. Lines 273-281 of the WB-1 Residential Listing Contract.

Answer 76

B. The sellers' divorce is the sellers' confidential information and cannot be disclosed to the buyer.

Answer 77

B. Wis. Stat. § 452.23(3) A licensee shall disclose to the parties to a real estate transaction any facts known by the licensee that contradict any information included in a written report. Wis. Stat. § REEB 24.07(2) A licensee when engaging in real estate practice, shall disclose to each party, in writing and in a timely fashion, all material adverse facts that the licensee knows and that the party does not know or cannot discover through a reasonably vigilant observation, unless the disclosure of the material adverse fact is prohibited by law.

Answer 78

B. The Sherman Antitrust Act was designed to maintain and preserve business competition.

Answer 79

C. The Fair Housing Act and Wisconsin law make it unlawful to print or publish any statement, notice, or advertisement with respect to the sale or rental of a dwelling that indicates a preference of a federally protected class. An advertisement can mention gender if there will be shared living space such as someone renting out a room in a person's home.

Answer 80

C. The total value of the four condominiums is $860,000.

Answer 81

A. When calculating a principal and interest payment for an adjustable rate loan, one would use the interest rate at which the loan is originated.

Answer 82

A. A planned unit development (PUD) is a regulatory process which promotes large scale, unified land development by means of mid-range, realistic programs in chase of physically curable, social and economic deficiencies in land and cityscapes. A developer seeking to create a PUD must obtain approval for the relevant land use and zoning authorities.

Answer 83

A. Wis. Stat. § 703.33(1): Not later than 15 days prior to the closing of the sale of a unit to a member of the public, the seller shall furnish to the purchaser a copy of the proposed or existing declaration, bylaws and any rules or regulations, together with an index of the contents.

Answer 84

A. Wis. Admin. Code § REEB 18.06 If the parties to a transaction do not desire that the firm hold the earnest money in the firm's real estate trust account, and wish to designate an escrow agent other than the firm, the firm may not draft the escrow agreement. The escrow agreement shall be drafted by the parties or an attorney. The firm may not hold the funds in the firm's real estate trust account, nor may the firm act in any way as custodian of the funds for the parties. The funds, pursuant to the escrow agreement, shall be held by some other party, such as a bank, a savings and loan association, a credit union, or an attorney.

Answer 85

D. A licensee, when engaging in real estate practice that involves real estate improved with a structure, shall conduct a reasonably competent and diligent inspection of accessible areas of the structure and immediately surrounding areas of the property to detect observable, material adverse facts. While it may not be advisable, it is not illegal for a licensee to write an offer for a buyer without attending a showing. A buyer may have already seen the property or perhaps is willing to write an offer sight unseen. The real challenge for a licensee in drafting an offer without seeing a property is knowing what contingencies to include.

Answer 86

D. The WB-36 Buyer Agency Agreement provides that the buyer’s firm has the exclusive right to act as a buyer’s agent. The form would need to be modified to create and exclusive right to locate or negotiate.

Answer 87

A. The date and time of recording a document establishes priority. For example, the priority of liens is established by the date and time the lien is recorded.

Answer 88

A. The purpose of RESPA is to ensure that borrowers in mortgage loan transactions have knowledge of all settlement costs. It applies to all federally related new first mortgages on residential 1-4 family transactions.

Answer 89

B. The most expensive unit is $225,000. The total value of all the units is $860,000. $225,000 / $860,000 = .2616 or 26%.

Answer 90

B. The redemption period is the period during which the defaulted borrower can continue to live in the property and attempt to pay off the debt resulting from the foreclosure judgement. State statute determines the redemption period.

Answer 91

D. Conviction record is not a protected class under Wisconsin fair housing laws.

Answer 92

C. Wis. Stat. § 452.24 Disclosure duty; immunity for providing notice about the sex offender registry. (1) If, in connection with the sale, exchange, purchase or rental of real property, a licensee receives a request from a person to whom the licensee is providing brokerage services in connection with the sale, exchange, purchase or rental for information related to whether a particular person is required to register as a sex offender under s. 301.45 or any other information about the sex offender registry under s. 301.45, the licensee has a duty to disclose such information, if the licensee has actual knowledge of the information. Notwithstanding sub. (1), the licensee is immune from liability for any act or omission related to the disclosure of information under sub. (1) if the licensee in a timely manner provides to the person requesting the information written notice that the person may obtain information about the sex offender registry and persons registered with the registry by contacting the department of corrections. The notice shall include the appropriate telephone number and Internet site of the department of corrections.

Answer 93

B. Representing both the buyer and the seller without written consent is a violation of duties of licensees. Licensees can pay referral fees to other licensees without disclosure. A listing agent can only accept payment from the listing agent's firm. Advertising a property without the seller's consent is a violation of Wis. Admin. Code Ch. REEB 24.

Answer 94

C. A license who is convicted of a misdemeanor or a felony must notify the DSPS of the conviction within 48 hours of the conviction.

Answer 95

B. Licensees shall not advertise in a manner that is false, misleading, or deceptive.

Answer 96

D. Under the federal LBP law, an agent means any party who enters into a contract with a seller or lessor including any party who enters into a contract with a representative of the seller or lessor, for selling or leasing target housing. This term does not apply to purchasers or any purchaser's representative who receives all compensation from the purchaser.

Answer 97

B. The deteriorating asbestos is most likely going to be friable and would be the largest health risk. Asbestos, which has been covered or encapsulated so that the fibers cannot become airborne, would be considered the safest.

Answer 98

A. The federally protected classes are race, color, religion, gender, national origin, disability, and familial status.

Answer 99

D. Any encumbrances that are going to be removed at closing do not need to be disclosed. This would commonly include taxes, mortgage loans, and other liens that will be paid off at closing with the seller's proceeds.

Answer 100

D. Radon is a gas that comes from the natural (radioactive) breakdown of uranium in soil, rock, and water and gets into the air.

Answer 101

B. A firm must provide licensees associated with the firm with a written statement of procedures under which the firm and licensees associated with the firm shall operate with respect to handling documents relating to a real estate transaction.

Answer 102

A. Wis. Admin. Code § REEB 24.10: Licensees shall not obtain, negotiate or attempt to obtain or negotiate any listing contract providing for a stipulated net price to the owner with the excess over the stipulated net price to be received by the firm as commission. Wis. Admin. Code § REEB 16.06(6): A licensee may alter an approved exclusive right to sell listing contract to create an exclusive agency listing or an open listing.

Answer 103

B. Interest earned from a firm's IBRETA account belongs to the Department of Administration.

Answer 104

B. Paying an unlicensed individual a portion of a licensee's commission is fee-splitting. Fee-splitting is illegal.

Answer 105

B. Multiple representation occurs when a firm has an agency contract with both the buyer and the seller in the real estate transaction. The phrase "a buyer's licensee" tells us that the buyer has an agency agreement with the firm. "A property listed with the buyer's licensee's firm" tells us that the seller also has a listing contract with that firm. The buyer’s licensee's firm has an agreement with both the buyer and the seller.

Answer 106

A. The multiple counter-proposal allows a seller to negotiate with several buyers at one time by issuing a non-binding proposal to each buyer. If the buyer accepts the seller’s multiple counter-proposal, it becomes an offer from the buyer to the seller that can be accepted by the seller, thus creating a binding sales contract.

Answer 107

D. The DNR describes wetlands as providing critical habitat for wildlife, water storage to prevent flooding and protect water quality and recreational opportunities for wildlife watchers, anglers, hunters and trappers and boaters.

Answer 108

A. A licensee cannot act as a principal and an agent at the same time. Therefore, the agency information found at lines 1-2 of the WB-11 Residential Offer to Purchase should be stricken completely.

Answer 109

B. Seller shall give evidence of title in the form of an owner’s policy of title insurance in the amount of the purchase price.

Answer 110

A. A buyer’s firm is only representing one party, the buyer. The seller is represented by another firm.

Answer 111

C. The listing contract, unlike the other contracts, does not require the signature of both spouses in order to be valid. The courts have held that the party signing the contract is responsible for the commission. If only Jimmy signs the listing contract, Jimmy is stating that he alone is responsible for the commission.

Answer 112

A. WB-11 Residential Offer to Purchase Lines 576-577 allow the parties to designate an alternative recipient for delivery of documents.

Answer 113

A. The zoning plan defines allowable uses for zoning districts. Zoning districts are based on the master plan.

Answer 114

D. A firm may charge a single flat fee, a commission based upon a percentage of the selling price, or an hourly rate. The practice of getting together with other firms in an area and agreeing upon a certain rate to charge for services rendered is a violation of antitrust laws.

Answer 115

A. Lines 88-93 of the WB-11 Residential Offer, “If ‘Time is of the Essence’ applies to a date or deadline, failure to perform by the exact date or Deadline is a breach of contract. If ‘Time is of the Essence’ does not apply to a date or Deadline, then performance within a reasonable time of the date or Deadline is allowed before a breach occurs.”

Answer 116

B. The grantee was already aware of the defect before the transfer of title and the grantee had the ability to discover the defect prior to the purchase of the property.

Answer 117

B. Eminent domain is one form of police power and is the power of a governmental body to take ownership of real estate for a public use.

Answer 118

A. A rise in interest rates may make a property more difficult to market but it would not legally terminate the listing.

Answer 119

D. Lines 222-226 of the WB-11 Residential Offer to Purchase. Specifically, lines 222-223, “This Offer shall be null and void if Buyer makes timely delivery of the Notice of Defects and written inspection report(s) and: (1) Seller does not have a right to cure…”

Answer 120

A. $91,600 x .003 = $274.80.

Answer 121

A. Not all lenders offer discount points to borrowers.

Answer 122

C. The guarantee feature on a VA loan promises lenders that in the event of deficiency in a foreclosure the lender will be compensated by the VA for any losses incurred in the foreclosure and subsequent sale of the property up to the limit of the guarantee.

Answer 123

B. An authorized power of attorney would have the authority to sign contracts on behalf of the principal.

Answer 124

D. Wis. Stat. § 452.14(3)(f) Disciplinary proceedings shall be conducted by the board if it finds that a licensee accepted from any person except the firm with which the licensee is associated, if the licensee is associated with a firm, a commission or valuable consideration for the performance of any act specified in this chapter or as compensation for referring a person to another licensee or to any other person in connection with a transaction.

Answer 125

A. In determining if an advertisement violates fair housing, the ordinary reader test is applied. Essentially, if the add appears to prefer or "dis-prefer" individuals because of their membership in a protected class, it might be discriminatory.

Answer 126

C. The four tests a court will use to determine a property's classification are how is it attached, how is it adapted, what was the party's intent, and any agreement between the parties regarding the item.

Answer 127

C. A group boycott is competitors conspiring against another business or agreeing to withhold their patronage to limit competition.

Answer 128

D. Shrubs, bulbs, trees, fences, and built-in appliances are all considered real property. Farm equipment, because it is not attached, is considered personal property like a car, trailer, or snowmobile.

Answer 129

A. Wis. Admin. Code § REEB 24.04(1) states, “Licensees shall not advertise in a manner which is false, deceptive, or misleading.”

Answer 130

B. Lines 39-40 of the WB-11 Residential Offer to Purchase, “The Offer is binding upon both Parties only if a copy of the accepted Offer is delivered to Buyer on or before ___________________________.”

Answer 131

B. A property owner has the following six rights: disposition, encumbrance, quiet enjoyment, control, possession, and exclusion. A property owner has a right to use the property but that right does not extend to using the property in an unlawful manner.

Answer 132

A. Federal fair housing laws do not apply to commercial property. Lead-based paint disclosure is only applicable to target housing, which is housing built before 1978. Wisconsin does not have approved leases for commercial or residential property. Licensees must follow local fair housing or equal opportunity laws and those might apply to commercial properties.

Answer 133

C. Wis. Stat. § 452.13(a) "Client funds" means all downpayments, earnest money deposits, or other money related to a conveyance of real estate that is received by a licensee on behalf of a firm or any other person. "Client funds" does not include promissory notes.

Answer 134

D. $18,500/ .065 = $284,615.

Answer 135

B. Wis. Stat. § 452.19No licensee may pay a fee or a commission or any part thereof for performing any act specified in this chapter or as compensation for a referral or as a finder's fee to any person who is not licensed under this chapter or who is not regularly and lawfully engaged in the real estate brokerage business in another state, a territory or possession of the United States, or a foreign country, unless the person was licensed under this chapter when the commission was earned or when the referral fee arrangement was made. (2) If a licensee is associated with a firm, all fees or commissions and any part thereof for performing any act specified in this chapter and all compensation for a referral or as a finder's fee shall be paid to the firm.

Answer 136

A. Penalties for knowingly or willfully violating the federal lead-based paint disclosure rules can be up to $11,000 for each violation and imprisonment for up to one year, or both.

Answer 137

B. A buyer would indicate on line 400 of the WB-11 Residential Offer to Purchase that they wish for the seller to provide a gap endorsement at the seller’s cost.

Answer 138

B. The title company notifies the buyer of the condition of title in writing with the title insurance commitment. This document is also sometimes called a preliminary report or the title insurance binder but in Wisconsin it is most commonly referred to as the title insurance commitment.

Answer 139

B. Lines 67-69 of the Offer to Purchase – Disbursement states, “If negotiations do not result in an accepted offer, the earnest money shall be promptly disbursed (after clearance from payer’s depository institution if earnest money is paid by check) to the person(s) who paid the earnest money.

Answer 140

A. According to Wis. Stat. Chapter § 709 transactions involving the following properties are exempt from the real estate condition report requirements: property that has not been inhabited; transfers exempt from the Wisconsin transfer fee; transfers by personal representative, trustees, conservators, fiduciaries who are appointed by, or subject to the supervision by the court as long as the person has never occupied the property. There is NOT an exemption for a seller that does not live on the property or is not familiar with the condition of the property.

Answer 141

B. A license acting as an agent in a real estate or business opportunity transaction may not act in the transaction on behalf of the licensee's immediate family without the prior written consent of all parties to the transaction. The buyer's licensee is an agent representing in this case a family member; therefore, they must disclose this interest.

Answer 142

B. The buyer and the seller each have a signed agency agreement with Salesperson A, thus creating a multiple representation relationship.

Answer 143

D. The requirement to disclose material facts only applies to a client. A licensee must disclose material adverse facts to all parties in the transaction.

Answer 144

C. The duties owed to a CLIENT include: Loyally represent the client’s interest, provide information and advice on matters that are material to the client's transaction, disclose all material information, fulfill any obligation required by the agency agreement that is not in conflict with the law, and the duty to negotiate on behalf of the client, unless waived.

Answer 145

A. A nonconforming use is a use of property was once permitted but is no longer permitted under current zoning regulations. The use is considered "grandfathered" in and the property owner can preserve nonconforming use status by continuing to use the property in the nonconforming way. An agent can list and sell a nonconforming use and the new owner typically needs to use the property in the same way to preserve the status as a nonconforming use.

Answer 146

A. The listing contract is an employment agreement. The seller does not promise in the listing contract to consider or accept an offer, only to pay the firm a commission if the firm procures a buyer.

Answer 147

D. Lines 263-272 of the WB-1 Residential Listing Contract state, "Seller is aware that there is a potential risk of injury, damage and/or theft involving persons attending an 'individual showing' or an 'open house.' Seller accepts responsibility for preparing the Property to minimize the likelihood of injury, damage and/or loss of personal property. Seller agrees to hold the Firm and its agents harmless for any losses or liability resulting from personal injury, property damage, or theft occurring during 'individual showings' or 'open houses' other than those caused by the negligence or intentional wrongdoing of the Firm or its agents.”

Answer 148

C. Wis. Admin. Code § REEB 24.04: Except for advertisements for the rental of real estate owned by the licensee, a licensee firm shall disclose the firm's name as it appears on the firm's license or disclose a trade name previously filed by the department.

Answer 149

B. Duties to all parties: Safeguard trust funds, provide brokerage services honestly and fairly, present contract proposals in an objective and unbiased manner, confidentiality, provide accurate information about market conditions within a reasonable time after the person’s request, provide brokerage services with reasonable skill and care, disclosure of material adverse facts. The duty of negotiation is just for clients.

Answer 150

C. Wis. Admin. Code § REEB 15.04 A firm shall retain documents for at least two years. The two years runs from the date of closing. If the transaction does not close, it is two years from the date the expiration of the agency agreement.

Answer 151

D. The buy down provisions on a loan allow the borrower to pay points. The borrower purchases points to originate a loan at a lower than market interest rate.

Answer 152

B. Wis. Stat. § 452.13(2)(c) A firm shall deposit all client funds in the interest-bearing common trust account.

Answer 153

B. The most expensive unit is $225,000. The total value of all the units is $860,000. $225,000 / $860,000 = .2616 or 26%. The annual maintenance fee for all the units is $8,500. $8,500 x .26 = $2,210 per year for the most expensive unit. $2,210/12 months determines the monthly maintenance fee of the most expensive unit is $184.17.

Answer 154

D. Sellers of vacant land or real estate containing one-to-four dwelling units, whether listed with a firm or for sale by owner, are required to complete a real estate condition report. There is an exemption for a property that has never been lived in but if the builder is living in the home prior to closing, the builder is not exempt and must complete a real estate condition report.

Answer 155

C. The LBP disclosure addendum is required on all transactions involving target housing. Target housing includes any housing built prior to 1978 except for housing for the elderly or persons with disabilities and 0-bedroom dwellings.

Answer 156

C. A listing contract can be terminated by: death or incapacity of the principals, destruction or condemnation of the property by eminent domain, expiration of the term, mutual agreement, breach, operation of law, or completion. Bankruptcy and foreclosure are examples of operation of law. The seller has the power to cancel the listing contract at any time. A sales contract that fails to close would not have any effect on the listing contract.

Answer 157

A. Wis. Admin. Code § REEB 15.04: A firm shall retain for at least two years exact and complete copies of all listing contracts, offers to purchase, leases, closing statements, deposit receipts, cancelled checks, trust account records and other documents or correspondence received or prepared by the firm in connection with any transaction. The retention period shall run from the date of closing of the transaction.

Answer 158

B. Private mortgage insurance insures the top 20% of a loan to cover the extra risk to the lender for making a loan to a borrower with less than 20% down.

Answer 159

B. The principle of value being used is highest and best use, which is the most profitable use to which a property is adapted. The use must be legally permitted, financially feasible, physically possible, and maximally productive.

Answer 160

B. Generally, the firm must deposit earnest money in a real estate trust account within 48 hours of receipt. Wis. Admin. Code Chapter REEB 18 allows for the disbursement of trust funds upon rejection, expiration or withdrawal, prior to binding acceptance, of an offer to purchase, Therefore, if the offer is rejected, withdrawn or expires prior to the 48 hours, the firm may return earnest money to the buyer. It would be prudent practice to make a photocopy of the earnest money check and document the return.

Answer 161

D. Wis. Admin. Code § REEB 16.03: Salespeople can use approved forms, forms prepared by governmental, quasi-governmental, and tribal agencies for use in their programs, forms for real estate transactions in other states provided that the licensee is physically in Wisconsin, and property management agreements prepared by the broker or landlord.

Answer 162

C. Multiply length by width. 40 feet x 90 feet = 3,600. 3,600 x 2 = 7,200. Remember to be aware of how many stories the building has before you complete the calculation. In this case, you must multiply by 2 because there are two floors to the home. Thus, each floor is 3,600 square feet. Added together the two stories reflect the answer of 7,200 square feet.

Answer 163

D. A listing contract creates an express, special agency relationship because it is in writing and it allows the listing agent to represent the seller in one specific transaction.

Answer 164

C. A listing contract is a personal service contract based upon a special fiduciary relationship of trust and confidence in the firm. Specific performance is not an available remedy for breach of a listing contract. However, damages are an available remedy for breach of a listing contract.

Answer 165

A. A bill of sale is used to transfer ownership of personal property from one party to the new owner. You can think of a bill of sale as the "deed" for personal property. Ownership of real estate is transferred using a deed and ownership of personal property is transferred using a bill of sale.

Answer 166

D. Building codes ensure public safety by requiring that improvements meet minimum standards of construction.

Answer 167

D. The listing contract does not require the seller to compensate the listing firm for any advertising.

Answer 168

A. An appraiser is trained to provide an unbiased estimate of value. The appraiser will justify the value of the real estate by looking at past events such as what have buyers paid for this type of property in the past.

Answer 169

B. To calculate the monthly principal and interest payment, take the loan amount times the factor and then divide by 1000. The buyer would like to obtain a loan for 85% of the purchase price, which is $171,912.50. Multiply $171,912.50 by the factor of 4.77 and then divide by 1000 to get the monthly principal and interest payment of $820.02, which is $820 when rounded to the nearest dollar.

Answer 170

C. To prorate taxes using last year’s tax bill, divide the tax bill of $1876 by 365 days to get the daily tax rate of 5.1397. Carry your division for the daily tax rate to four decimal places. Multiply the daily tax rate of 5.1397 by 150 days. Pearson Vue does not give you a calendar, so you have to remember how many days there are in the months. There are 31 days in January, 28 days in February, 31 days in March, 30 days in April and 31 days in May but the transaction closes on May 31 so the day of closing is not included in the seller’s credit. The WB-11 Residential Offer to Purchase line 364: “Any income, taxes or expenses shall accrue to the Seller, and be prorated at closing, through the day prior to closing.”

Answer 171

C. The Buyers need to sell their current home to purchase the Sellers home. The agent drafting the offer for the Buyers would include the Closing of Buyer’s Property Contingency by checking the box on line 328 and by entering the Buyers’ address on line 329. Line 4 is for the address of the property the Buyers are seeking to purchase. Lines 585-586 are for the mailing addresses for the Sellers and Buyers if they were including U.S. Mail as a form of delivery. The Sellers and Buyers in this narrative are not including U.S. Mail as a form of delivery so lines 585-586 should be blank or marked n/a.

Answer 172

A. The sellers would like to restrict access to the property for Salesperson C from XYZ Realty. The listing agent would enter this information on lines 166-167 of the WB-1 Residential Listing Contract – Exclusive Right to Sell.

Answer 173

D. The agent drafting the offer is a subagent of the listing firm. The agent would strike (Agent of Buyer) and (Agent of Buyer and Seller) and leave (Agent of Seller/Listing Firm) unstruck.

Answer 174

A. When a buyer has received the seller’s Real Estate Condition Report prior to submitting an offer, the buyer acknowledges that by listing the date of the seller’s Real Estate Condition Report on line 107 of the WB- 11 Residential Offer to Purchase.

Answer 175

D. The buyer has 15 days from acceptance, which occurred on August 16, to deliver a notice of defects. When counting deadlines, exclude the day of the event and count subsequent calendar days. Therefore, Day 1 of the 15 days is August 17 and 15 days after acceptance is August 31.

Answer 176

A. Lines 20-23 is where a buyer lists the fixtures that the buyer is not purchasing, such as the seller’s rented water softener and security system.

Answer 177

C. $449,900 x 110% = $494,890

Answer 178

A. $494,890 x 6% = $29,693.40 (total commission). $29,693.40 x 50% = $14,846.70 (compensation to buyer’s firm). $14,846.70 x 50% = $7,423.35 (commission to buyer’s agent)

Answer 179

C. $4,562.50/365 = $12.50 for the daily tax rate. $12.5 x 134 = $1,675 credit to the buyer at closing.

Answer 180

C. $494,890 x 70% =$346,423.