Oregon RE and National RE Exam Prep Questions 1 Flashcards

Question

The primary survey line running East and West in the Rectangular Survey is a

Answer 1

the base line

Answer 2

range lines

Answer 3

the principal meridian

Answer 4

sign or give formal consent to (a treaty, contract, or agreement), making it officially valid.

Answer 5

a pending legal action, or a formal notice of this.

Answer 6

Escrow agent Principal Broker

Answer 7

involving trust, especially with regard to the relationship between a trustee and a beneficiary.

Answer 8

that he is duly licensed. that he found a ready, willing and able buyer. that he was the procuring cause.

Answer 9

principal broker

Answer 10

purchase money note.

Answer 11

can recover damages from the broker

Answer 12

commingling & conversion.

Answer 13

conversion

Answer 14

agency is immediately terminated

Answer 15

An undivided ownership in real estate by two or more persons. The interests need not be equal, and upon death of a co-tenant, the interest passes to the deceased co-tenant's heirs.

Answer 16

Laws requiring certain types of contracts to be in writing. All contracts for the sale of real property must be in writing, and leases for more than one year must be in writing.

Answer 17

Laws requiring certain types of contracts to be in writing. All contracts for the sale of real property must be in writing, and leases for more than one year must be in writing.

Answer 18

The cost of reproducing a property at current prices using similar materials.

Answer 19

One acting in a relationship of trust and confidence. In real estate practice as between a principal (seller or buyer) and a broker. The fiduciary owes the duties of loyalty, accounting, disclosure, care and confidentiality. These duties cannot be breached.

Answer 20

loyalty, accounting, disclosure, care and confidentiality. These duties cannot be breached. Listen As Dude Casually Cusses

Answer 21

A mortgage or trust deed given from buyer to seller to secure all or a portion of the purchase price. Also known as a Trust Deed.

Answer 22

A limited warranty deed using the word "grant" like words that assures a grantee that the grantor has not already conveyed the land to another and that the estate is free from encumbrances placed by the grantor. The most common deed form used in California. Not used in Oregon

Answer 23

Time periods to enforce a claim by court action. After the statutorily defined time period for the type in action has expired, the court will not hear the claim

Answer 24

an express contract.

Answer 25

The illiteracy of the seller or the buyer

Answer 26

Punitive damages are awarded in addition to actual damages in certain circumstances.

Answer 27

A Liquidated Damages provision allows for the payment of specified damages should the buyer breach the contract – a way to stipulate damages on the front-end of the transaction to save the parties from spending time and money fighting over damages at the back-end of the transaction

Answer 28

A written agreement between the exchanger and the Qualified Intermediary (QI) defining the transfer of the relinquished property, the ensuing purchase of the replacement property, and the restrictions on the exchange proceeds during the exchange period. Having to do with escrow.

Answer 29

will lapse after a reasonable time.

Answer 30

punctual performance of the terms is required of the principals to the contract.

Answer 31

They stay with Principal Broker Adams

Answer 32

void and unenforceable

Answer 33

the seller or listing broker must reveal all known defects to the buyer or buyer's broker.

Answer 34

The customer must be legally competent to undertake the transaction. They do not need a commitment from a lender to be ready willing and able.

Answer 35

the client. Generally, buyer and tenant representation agreements are subject to the same laws and regulations as those applying to owner listings. The only difference is the client and his or her transaction expectations.

Answer 36

That the statement was in writing.

Answer 37

When a private corporation wants to sell its real property, **any person authorized by the board of directors** should sign the listing contract.

Answer 38

A broker is entitled to a commission regardless of who sells the property under an **exclusive right to sell listing.** With the exclusive right to sell listing, the seller employs just one brokerage. The brokerage earns its commission if the property is sold by another brokerage, the seller, or the listing brokerage.

Answer 39

1. A description of the property. 2. The seller's obligation to pay a commission. 3. Terms on which the seller wishes to sell the property. Description Commission Terms Dudes Casually Toot

Answer 40

**Until the expiration date the buyer included in the offer.**

Answer 41

an exchange agreement. an option agreement. a lease agreement.

Answer 42

The buyer and the seller

Answer 43

all personal property transactions.

Answer 44

**finance charges.**

Answer 45

*The process of securing a loan by pledging a property without giving up ownership of the property is called hypothecation.*

Answer 46

**It is a negotiable instrument.**

Answer 47

**A buyer's market and high interest rates.**

Answer 48

**The number of persons employed in base industries in an area**

Answer 49

**Potential gross income minus vacancy and credit loss minus expenses.**

Answer 50

**A state in which a mortgagee has equitable title to a secured property.** *States differ in their interpretation of who owns mortgaged property. Those that regard the mortgage as a lien held by the mortgagee (lender) against the property owned by the mortgagor (borrower) are called lien-theory states. Those that regard the mortgage document as a conveyance of ownership from the mortgagor to the mortgagee are called title-theory states.*

Answer 51

Title theory

Answer 52

There are a number of elements required to make a deed valid. These essential elements vary in minor ways from state-to-state. In Oregon, the deed must: * be in writing * be signed by the grantor * have an identifiable grantee * show acceptance of conveyance by the grantee * have an adequate property description * contain words of conveyance * list the consideration * be delivered to the grantee

Answer 53

Ad valorem is a Latin phrase that translates to “according to the value.” The essential characteristic of ad valorem tax is that it is proportional to the value of the underlying asset, unlike a specific tax, where the tax amount remains constant, irrespective of the underlying asset's value.

Answer 54

an estate in real property.

Answer 55

A possessory right or ownership interest in real estate

Answer 56

A life estate A fee simple estate

Answer 57

creates the possibility of an automatic reversion of title

Answer 58

a sale/leaseback arrangement.

Answer 59

It must be inheritable. It must be transferable. It is of indefinite duration.

Answer 60

fee simple absolute

Answer 61

a fee simple estate.

Answer 62

a fee simple determinable estate.

Answer 63

Reverter clause

Answer 64

A freehold estate

Answer 65

land returns to the grantor.

Answer 66

A life estate is considered to be a freehold estate. A life estate can be measured by the life of someone other than the holder of the life estate.

Answer 67

conversion

Answer 68

Commingling in real estate occurs when a tenant security deposit or funds received from members in an LLC are deposited with the landlord or managing partner's business or personal funds.

Answer 69

A title plant is a database of property records, organized by location rather than by property owner. A title plant allows title searches to be completed quickly and efficiently by title companies so that a title can be cleared and title insurance issued. These title plants may be owned by the title company or may be a separate company with a formal information-sharing agreement with title companies – allowing title companies to access, update, and track a shared pool of property information.

Answer 70

a title search

Answer 71

protects only the party named as the insured party in the written policy.

Answer 72

The mortgage debt being paid in full

Answer 73

vendee on a land sales contract

Answer 74

vendee on a land sales contract

Answer 75

Mining claims

Answer 76

The policy will protect the insured party's interest forever. Subsequent owners of the piece of property must obtain their own title insurance if they want it.

Answer 77

Unrecorded easements Unrecorded liens Rights of parties in possession

Answer 78

governmental regulation

Answer 79

an extended coverage title insurance policy. a standard coverage title insurance policy.

Answer 80

prescriptive easements. a recorded deed that was forged. claims of persons in possession of the property at the time the purchaser takes title.

Answer 81

as long as the insured has a liability

Answer 82

Is a summary of title history and guarantees a valid title

Answer 83

an individual does not need to have a real estate license if the nonlicensed individual acts in the nonlicensed individual’s official capacity as a **receiver, a conservator, a trustee in bankruptcy, a personal representative or a trustee, or a regular salaried employee of the trustee**, acting under a trust agreement, deed of trust or will ## Footnote A person who is a full-time employee of a single owner of real estate, whose activities involve real estate of that employer and are incidental to the employee's normal non-real estate activities. A common example is the secretary of a property owner who periodically shows a vacant space to a tenant in the owner's building. (Note: this person cannot be licensed. If the employee has a license, this exemption cannot be used). A non-licensed regular full-time employee of an employer who buys and sells real estate for their own account. Example: The employer buys and sells property for their own account. The employee assists the employer in these transactions by finding properties to purchase, analyzing the properties and structuring and negotiating transactions. If the employee does have a license, this exemption cannot be used. When a person is a regular full-time employee of a single non-licensed corporation, partnership, association or single owner and that person only engages in property management activity for that single entity, then this employee may engage in property management activity. The employee may not engage in the sale, exchange, lease option or purchase of the real property of the owner. The employee may manage property for this single owner ranging from one residential unit to multiple apartment complexes. Compensation of all employees in these exemptions must be through regular paychecks, with proper federal and state tax withholdings. In other words, independent contractor status is not allowed nor can commission be paid for such activities on behalf of the employer. A non-licensed employee of a principal broker or property manager whose activity is limited to negotiating rental or lease agreements, checking tenant credit references, physical maintenance of the real estate, tenant relations, rent collection and supervising premises managers. This employee can be part-time, paid by the hour or be salaried. This person can do almost all property management activity except negotiate and enter into management agreements with an owner, be the trustee of a client trust account, or make financial reports to the owner. If the employee is licensed, this exemption cannot be used. A person who is acting as an attorney in fact under a duly executed power of attorney from the owner. The power of attorney must authorize the person to supervise or execute any contract for the leasing of real estate. The power of attorney must be recorded in the county in which the property is located. An attorney at law who is rendering services in the performance of their duties as an attorney for a client. A typical example might be an attorney executing a rental agreement relating to a property for an estate they are in the process of probating. A person that engages in real estate activity under the order of any court. A common situation in this exemption category may be a court-appointed receiver, who is ordered to manage or liquidate property in a bankrupt estate. A person who is a general partner for a domestic or foreign limited partnership. The person must be working for a limited partnership properly registered with the Oregon Secretary of State, Corporation Division. The general partner may engage in the sale, acquisition, exchange, lease, transfer or management of the real estate of the limited partnership without a license. An engineer or architect rendering engineering or architectural services. Note: these persons may be required to have other state licenses that are required for their specific profession. A person dealing in cemetery lots. A person preparing land use, environmental impact or other types of land studies. A hotel keeper or innkeeper. A salaried employee of the state of Oregon dealing in real estate owned by the city, county or state. An appraiser. (An appraiser must be licensed to perform appraisals by the Appraiser Certification and Licensure Board.)

Answer 84

Possessory interests - A tenancy in common is created when two or more people have an undivided interest in the property. Each co-tenant has the right to possess the entire property, not just a part or a separate piece of the whole property. Unity of time - The co-tenants can take title to the property at different times. Unity of title - The co-tenants can take title to the property under different deeds. Unity of interest - The interest of each co-tenant does not have to be equal. For example, one co-tenant might have an undivided one-quarter interest in the property and the other an undivided three-quarters interest. Right of Survivorship - A tenancy in common does not include the right of survivorship. The will of each deceased co-tenant determines who inherits their individual interest. If a co-tenant dies intestate, that co-tenant's interest will be distributed under the laws of descent and distribution. Tenants in common can be between two or more persons, related or unrelated. Ownership between co-tenants can be in equal or unequal shares. Each co-tenant's interest is freely transferable without the permission of any other co-tenant. Each co-tenant can freely encumber their interest and liens can be filed against each co-tenant's interest independently of the other co-tenants. A judgment, income tax levy, or other personal obligation of a co-tenant can only affect the interest of the debtor co-tenant, not the interests of the other co-tenants. All co-tenants can possess the property, or just one co-tenant can possess the property. However, no co-tenant can exclude another co-tenant from possessing the property.

Answer 85

only available to persons who are legally married at the time they take title. Not all states recognize this title vesting, but it is recognized in Oregon. In Oregon, when a married couple takes title to property, and both names are on the deed, the couple automatically takes title as tenants by the entirety, unless they specifically state in the deed that they wish to take title as tenants in common or as tenants in partnership. ## Footnote Module 3: Real Estate Law Chapter 3-4: Forms of Ownership Co-Ownership Types Permitted in Oregon Tenancy by the Entirety Tenancy by the entirety, also known as tenancy by the entireties, is only available to persons who are legally married at the time they take title. Not all states recognize this title vesting, but it is recognized in Oregon. In Oregon, when a married couple takes title to property, and both names are on the deed, the couple automatically takes title as tenants by the entirety, unless they specifically state in the deed that they wish to take title as tenants in common or as tenants in partnership. Tenancy by the entirety is characterized by the following: Possessory Interests - Under tenancy by the entirety, spouses are viewed as one, and each co-tenant has the right to possess the entire property, not just a part of a separate piece of the whole property. Although each spouse owns the entire property, Oregon law requires each co-tenant to share equally in the rents and profits from the property. Unity of Time - The co-tenants must take title to the property at the same time. Unity of Title - The co-tenants must take title to the property under the same deed. Unity of Interest - Spouses are seen by the law as one. Therefore, they each own all the property or the "entirety." They do not each own a one-half interest in the property. Right of survivorship - Tenancy by the entireties is subject to the surviving spouse's right of survivorship. As a result, when one spouse dies, the interest of the deceased spouse is extinguished, thereby leaving the surviving spouse vested in severalty. In other words, the interest of the deceased spouse automatically transfers to the surviving spouse; the deceased spouse's interest cannot be transferred by will. Additionally, the right of survivorship cannot be destroyed, so long as the marriage exists.

Answer 86

Some states allow joint tenancy of real property. Joint tenancy is a form of common law co-ownership with survivorship rights. Oregon allows joint tenancy of real property for only personal representatives and trustees. Oregon does permit joint ownership of personal property, such as automobiles.

Answer 87

Community property is permitted in just nine states. Oregon is not a community property state. Washington, Idaho, Nevada, and California are included in the nine community property states. As a result, a deed vesting title in spouses as community property would have no force in Oregon. In states that allow community property, the legal implication is that all property, whether real property or personal (except for gifts or inheritances), acquired by married persons during the course of the marriage is held jointly and completely by each spouse. Generally speaking, the property that each partner brings into the marriage or receives by gift, bequest, or devise is held in severalty. Property held in severalty in a community property state is known as separate property.

Answer 88

Even though joint tenancy is not allowed in Oregon, the right of survivorship is possible for unmarried persons. Standard deed forms can be used, so long as the intention of the grantor is clear that the unmarried parties want the right of survivorship.

Answer 89

a form of ownership to allow a partnership to hold title to real property. A partnership is a form of a business organization owned by two or more individuals. The individuals who comprise the partnership are called partners. Oregon has adopted the Uniform Partnership Act, which allows a partnership to hold title to real property. Although Oregon has adopted that a partnership can hold title, this does not mean that a lender is required to finance a real estate purchase for a partnership. Lenders typically do not like to loan to a partnership because the partnership interests can be freely sold, leaving the lender in the situation of holding a mortgage loan with partners other than the original borrower.

Answer 90

a private, nonprofit organization that, as all or part of its mission, actively works to conserve land by undertaking or assisting in land or conservation easement acquisition, or by its stewardship of such land or easements; or an agreement whereby one party (the trustee) agrees to hold ownership of a piece of real property for the benefit of another party (the beneficiary).

Answer 91

length x width (to find square footage) Acreage = Total square feet divided by 43,560 sq. ft. (1 acre)

Answer 92

1% of the loan amount

Answer 93

Loan Amount × Number of Points (percentage) = Dollars Paid in Points

Answer 94

Determine the annual charge or amount to be prorated. Calculate the daily rate of the expense by dividing the annual charge to be prorated by 365. The daily charge is referred to as the per diem charge. During a leap year, a 366 day year should be used in this calculation. Note: Sometimes the banker's year is used in this step. A banker's year is a 360 day year, used so the year can be divided into 12 equal months of 30 days each. This makes interest calculations simpler and more consistent. Determine the number of days the seller and the buyer are responsible for with respect to each item to be prorated. Multiply the per diem rate by the number of days determined in Step 3 to calculate the share of the expense for each party.

Answer 95

Module 6: Finance Chapter 6-7: Real Estate Mathematics Depreciation Depreciation is a loss in value from any cause. The formula to calculate depreciation is Original Value × Percent of Value not Lost = Present Value. Problem: The value of a 5-year-old building is estimated to be $450,000. What was the building's value when new if the building depreciated at the rate of 2% per year? Solution: 5 Years × 2% = 10% depreciation 100% (New Value) - 10% = 90% of Value NOT Lost Original Value × % Not Lost = Present Value \_\_\_\_\_ × 90% = $450,000 $450,000 / 0.9 = $500,000 The value when new is $500,000

Answer 96

Property taxes are calculated based on the property's assessed value

Answer 97

To calculate NOI, subtract all operating expenses incurred on a property from all revenue generated on the property.

Answer 98

Annual Net Income / Rate of Return = Investment Value

Answer 99

Investment (or Value) × Capitalization Rate = Annual Net Income

Answer 100

The prior appropriation doctrine determines water rights by priority of beneficial use. This priority of beneficial use means that the first person to use or divert water for a beneficial purpose can acquire individual rights to the water. In Oregon, as in most prior appropriation states, prior appropriation asserts that the State owns all water within its boundaries. This ownership allows the State to create a system of permits and certificates, as well as to keep good records of water rights claims.

Answer 101

This rule means that the mineral rights holder will own all the oil or gas that can be produced from wells on their owned property, even if the oil and gas originated under the land of a neighboring property owner. This rule of capture tends to encourage the owners of neighboring properties to drill for oil and gas to ensure that each landowner gets their share before it migrates away from their property.

Answer 102

**A certificated water right remains valid forever, so long as it is used**. If the water right is not used for a period of five or more years, it then becomes subject to forfeiture and cancellation.

Answer 103

The passage of Oregon's first unified water code in 1909 introduced state control over the right to use water. The code dismissed the concept of "riparian rights," the right to use water because it flowed through an individual's property, and replaced it with the idea of prior appropriation--first in time is first in right. Water users were required to file an application with the state engineer and include maps and drawings of important water diversion structures. Applicants were also required to prove they were using the water "beneficially" for stock watering, irrigation, or fire control before a permit was issued. By limiting approved usage to defined parameters, monopolization of water resources was prohibited and the barter and sale of water rights was largely eliminated.

Answer 104

Timber, which is a common example of an uncultivated crop

Answer 105

Annual plantings and harvestable crops In general, annual crops are the personal property of the party who planted them.

Answer 106

If the party who planted the crops is a tenant farmer, under most situations, the farmer has the right to cultivate and harvest these crops even if the landlord terminates the rental agreement before the crops are ready to harvest. This is known as the right of emblement. However, if the tenant farmer had a fixed-term lease, and the farmer planted crops that could not possibly be harvested prior to the expiration of the term, there would be no right of emblement and the crops become the personal property of the landlord at the termination of the lease. When agricultural property is either rented from year-to-year or leased for a specified number of years and is sold, the buyer takes the property subject to the rights of the tenant. Prior to marketing an agricultural property, licensees should obtain information from the seller regarding any leases, crop lien rights, or rights of emblement.

Answer 107

the most common deed in Oregon given by the seller, and which provides the most protection for the buyer

Answer 108

In Oregon, the deed must: be in writing be signed by the grantor have an identifiable grantee show acceptance of conveyance by the grantee have an adequate property description contain words of conveyance list the consideration be delivered to the grantee

Answer 109

10 calendar days

Answer 110

Three banking days Section 24 of the residential real estate sale agreement form directs the selling firm to hold the earnest money check or promissory note for the buyer until there is a signed agreement and then to deposit it as further instructed, but within three banking days.

Answer 111

a unilateral contract used by a seller to give a buyer the right to buy the seller's property at a predetermined price during a fixed period. The contract is unilateral because only the seller is making a promise - to sell the property to the buyer - and the buyer's performance - to buy the property - is optional. If the buyer decides not to buy the property, both parties are released from the contract. Options are used more in commercial or raw land transactions than in residential real estate.

Answer 112

True Unless a seller or licensee is aware of a survey of the property that can be relied upon (survey pins are clearly verifiable and determinable), no representation should be made regarding the actual property boundaries.

Answer 113

outlaws restraint of trade authorized the federal government to institute proceedings against trusts in order to dissolve them. Any combination "in the form of trust or otherwise that was in restraint of trade or commerce among the several states, or with foreign nations" was declared illegal.

Answer 114

outlaws practices that harm competition

Answer 115

outlaws unfair methods of competition

Answer 116

Real Estate Settlement Procedures Act. RESPA seeks to reduce unnecessarily high settlement costs by requiring disclosures to homebuyers and sellers, and by prohibiting abusive practices in the real estate settlement process. ## Footnote What is the RESPA rule? RESPA prohibits loan servicers from demanding excessively large escrow accounts and restricts sellers from mandating title insurance companies. A plaintiff has up to one year to bring a lawsuit to enforce violations where kickbacks or other improper behavior occurred during the settlement process.

Answer 117

no discrimination in selling or leasing housing based on race

Answer 118

no race discrimination involving FHA- or VA-backed loans

Answer 119

no discrimination based on race, color, religion, national origin Exemptions: privately owned home where no broker is used and no discriminatory advertising is used rental of 1-4 unit building where owner is also an occupant; no discriminatory advertising facilities owned by private clubs; leased non-commercially to members facilities owned by religious organizations with non-discriminatory membership requirements

Answer 120

no race discrimination, without exception

Answer 121

no discrimination based on sex

Answer 122

no discrimination based on sex or against the handicapped or familial status

Answer 123

not making loans in certain areas for discriminatory reasons

Answer 124

inducing sale or rent based on incoming minorities that will lower values

Answer 125

channeling buyers to or away from neighborhoods

Answer 126

Reg Z implements Truth-in-Lending Act & Consumer Credit Protection Act lender must disclose finance charges and APR prior to closing borrower has limited right of rescission lender must follow advertising disclosure requirements

Answer 127

the Flood Disaster Protection Act of 1973 made the purchase of flood insurance mandatory for the protection of property located in Special Flood Hazard Areas; requires borrowers of "federally-related loans" to obtain flood insurance if property is in designated flood [hazard] area

Answer 128

the right of the government to enact laws to support and protect the health, safety, morals, and general welfare of the public. Most police power relating to real estate is used to limit or restrict the use of property in ways that benefit the public. Some examples of police power in real estate are zoning and land use restrictions; environmental laws and regulations; building code and code enforcement; and subdivision laws. Police power is a government's legal authority to create, regulate, tax, and condemn real property in the interest of the public's health, safety, and welfare; is granted by state-level enabling acts like zoning, use restrictions, building codes, regulations, and the like.

Answer 129

The original primary purpose of Fannie was to buy FHA loans from lending institutions to stabilize the mortgage market. At the end of World War II, Congress enacted the GI Bill, including a provision to authorize the Veterans Administration (VA) to guarantee home loans for returning veterans. Fannie, in 1948, was authorized to buy VA loans. In the 1970s, Fannie Mae began to purchase conventional loans, which opened up a new real estate loan market that could be easily resold on the secondary market. Fannie Mae now buys FHA, federal VA, and conventional loans.

Answer 130

The Housing and Urban Development Act of 1968 created the Government National Mortgage Association (GNMA), also known by its nickname Ginnie Mae. Ginnie is a division of the United States Department of Housing and Urban Development (HUD) and is wholly owned by the government. It acts as a secondary market for loans that carry a greater risk for the lender. These higher risk loans are low interest and subsidized loans geared toward the high-risk or low-income borrowers.

Answer 131

The Federal Home Loan Mortgage Corporation (FHLMC) was created by the Emergency Home Finance Act of 1970. It is frequently known by its nickname Freddie Mac. The original purpose of Freddie was to provide a secondary market for savings and loan associations that were members of the Federal Home Loan Bank System. The thrift institutions experienced hard times during the late 1960s and found themselves with virtually no funds to make new mortgages. Freddie Mac was formed as a secondary lender to purchase loans from the thrifts so cash could be pumped back into the thrifts, making funds available for more real estate loans. Today, Freddie Mac buys federal VA, FHA, and conventional loans from a variety of primary lenders. However, the vast majority of loans purchased originate out of savings and loan institutions (thrifts).

Answer 132

The Mortgage Guaranty Insurance Corporation (MGIC), also known by its nickname of Maggie Mae, was the first and is the largest insurer of conventional mortgage loans. Maggie also provides a secondary market for primary lenders. Conventional mortgages are consigned to Maggie Mae for sale to investors.

Answer 133

The Agricultural Credit Act of 1987 created the Federal Agricultural Mortgage Corporation, also known as Farmer Mac. The purpose of this secondary organization is to provide security for agricultural loans. In general, Farmer Mac underwrites a pool of loans that are then sold to investors. These loans are subject to federal guarantee in a way similar to the residential loans underwritten by Ginnie Mae. Farmer Mac is an important part of the agricultural credit markets and was created to increase access to and reduce the cost of capital for the benefit of American agriculture and rural communities. Farmer Mac is a secondary market for agricultural credit and provides financial solutions to a broad spectrum of the agricultural community, including agricultural lenders, agribusinesses, and other institutions that can benefit from access to flexible, low-cost financing and risk management tools.

Answer 134

Freehold estates are estates of indefinite duration that can exist for a lifetime or forever. Some types of freehold estates are classified as "estates of inheritance," where the estate continues beyond the life of the holder and descends to their living heirs upon death as specified by the will or by law.

Answer 135

Principal Interest Tax Insurance

Answer 136

a legally enforceable contract immediately upon the seller's acceptance and communication of acceptance to the buyer.

Answer 137

Yes, The buyer may revoke his offer anytime before the seller's acceptance is communicated to him and may obtain the return of his deposit.

Answer 138

Legal purpose

Answer 139

Land sale contract

Answer 140

Equitable title

Answer 141

The earnest money agreement

Answer 142

Principal broker

Answer 143

The money deposited by the purchaser at the time of signing the earnest money or sales contract

Answer 144

Contingency

Answer 145

Liquidated damages

Answer 146

* That the individual sending the information is a real estate licensee. * The first and last name of the licensee. * The telephone numbers or other contact information of the licensee. * The licensed name or registered business name of the principal broker. * The franchise name of the brokerage in which the licensee is licensed.

Answer 147

model unit, available for sale, in a subdivision for promotion of interest in the development.

Answer 148

The booth needs to be registered as a branch office.

Answer 149

A fee may be charged for providing a CMA. The analysis may not be contingent upon reporting a pre-determined value

Answer 150

30 calendar days

Answer 151

the principal broker and seller.

Answer 152

Earnest money deposits Collected rents to be prorated at closing Sales proceeds yet to be disbursed Earnest money deposits, collected rents to be prorated at closing and sales proceeds yet to be disbursed are all examples of monies that must be deposited in a clients' trust account or neutral escrow.

Answer 153

the interest earned on the account is not credited to the principal broker. all parties who have an interest in the funds give their written permission.

Answer 154

a federally insured, interest-bearing bank account

Answer 155

Every month

Answer 156

The bank at which the clients' trust account is open must be notified that the account is maintained for money belonging to clients. A branch office may maintain a separate clients' trust account as long as a separate bookkeeping system is maintained for the branch office. The Real Estate Agency must be notified of the bank, account number and name of account of all of the clients' trust accounts.

Answer 157

Notify the Real Estate Agency of the name of the bank, account number and name of the account Supply a notice to the bank that the account is maintained only for clients' funds

Answer 158

listing agreements and earnest money receipts. clients' trust account records and ledgers. vouchers, bills, or obligations paid for the account of a client from the trust account.

Answer 159

A copy of the listing agreement must be kept with the principal broker. Each listing agreement shall state a definite expiration date. The seller should always be given a true legible copy of the listing. The term of a listing agreement is negotiated with the seller and is NOT limited in duration to 180 days.

Answer 160

bringing a lawsuit against a seller for payment of a commission. directly accepting a finder's fee from a principal broker with whom the broker is not licensed.

Answer 161

The seller The buyer The escrow agent the broker can only accept Commission from a principal broker

Answer 162

Both the principal broker and the real estate broker are subject to disciplinary action for the guarantee. Real estate licensees should not guarantee a profit; both the principal broker and the real estate broker are subject to disciplinary action for the guarantee.

Answer 163

acting in the dual capacity of agent and undisclosed principal in any transaction. acting for more than one party in a transaction without the knowledge and written permission of all parties for whom the agent is acting. failure to deliver promptly a completed copy of any purchase agreement or offer to buy or sell real estate to the purchaser and to the seller. The Oregon Real Estate Commissioner can revoke a real estate license for all of these above reasons.

Answer 164

Give the check to their own principal broker as soon as possible

Answer 165

direct acts or statements. acts of omission, such as failure to disclose vital information.

Answer 166

False A real estate broker associated with a principal broker may neither accept a finder's fee directly from another real estate broker nor pay a finder's fee to a neighbor for referring a buyer. Brokers are prohibited from directly receiving any fee from any real estate activity from any person other than the principal broker under whom that broker is licensed. Likewise, Brokers are prohibited from sharing any portion of commission monies received with any unlicensed person for any purpose. Any fee sharing agreement with a licensed individual is implemented with the authority of and paid by the principal broker.

Answer 167

promises there will be future profits on the resale of real property. acts as an agent for both parties in a transaction without the knowledge and written permission of all parties for whom the licensee is acting.

Answer 168

the broker losing his license. contract rescission.

Answer 169

have their licenses suspended or revoked.

Answer 170

If an active Oregon real estate broker associated with a principal broker sells property they own as an individual, **the law requires the licensee to reveal his license status to the purchaser before the offer is accepted**.

Answer 171

property is not zoned for the current use, and the licensee knew of the zoning problem. Making a material misrepresentation to a prospective buyer, but the buyer did not purchase the property.

Answer 172

The seller could sue the broker in civil court for the amount of the profit realized on the resale of the property and the broker is subject to disciplinary action by the Commissioner.

Answer 173

Inducing a seller to break a listing contract with another principal broker to substitute a new listing contract with the broker's principal broker Violating Oregon's discrimination statutes Failure to deliver a completed copy of an offer to purchase to the purchaser and seller within a reasonable amount of time

Answer 174

The managers may have equal supervisory control over the property management activity of the firm. The managers must establish office policies.

Answer 175

residential property. commercial property. industrial property.

Answer 176

both the buyer and the seller are represented by one or more licensees associated with the same principal real estate broker(s).

Answer 177

at any time prior to closing of the transaction.

Answer 178

Must promptly return the earnest money

Answer 179

Five business days if no waiver was signed

Answer 180

may authorize another property manager or principal broker to control and supervise the office for no more than 90 consecutive days.

Answer 181

the dates of the principal broker's absence Have the authorized licensee sign the notice accepting the supervisory responsibilities

Answer 182

a principal real estate broker to supervise the manager's licensed activity in the manager's absence. another licensed real estate property manager to supervise his property management activity in his absence. a normal real estate broker ( not principal) or unlicensed employee may **not** supervise the manager's licensed activity in the manager's absence.

Answer 183

only under two conditions: the parties are not charged a separate fee for the service, and the transaction was handled by the principal broker.

Answer 184

must be reduced to a written, signed agreement. should include the terms of the sale including minimum starting bid. includes terms set by the seller prior to the auction.

Answer 185

send an acknowledgment of transfer to the receiving principal broker without delay.

Answer 186

be done in the principal broker's registered name.

Answer 187

selling of a personally owned home.

Answer 188

The principal broker

Answer 189

state a definite expiration date.

Answer 190

a licensee to give a copy of the listing to the seller at the time of securing the listing.

Answer 191

as soon as the prospective buyer signs the offer. as soon as the offer is accepted by the seller.

Answer 192

By the close of business on the next Wednesday

Answer 193

Prior to the close of business of the third banking day after the day the check is received

Answer 194

account for all checks, including voided checks, used to disburse funds from their clients' trust account. if sufficient funds are available, withdraw earned management fees from appropriate clients' trust account at least once a month.

Answer 195

**(1)**Knowingly or negligently pursued a course of material misrepresentation in matters related to real estate marketing activity, whether or not damage or injury resulted, or knowingly or negligently made any material misrepresentation or material false promise in a matter related to real estate marketing activity if the material misrepresentation or material false promise created a reasonable probability of damage or injury, whether or not damage or injury actually resulted. **(2)**Failed, within a reasonable time, to account for or to remit any moneys or to surrender to the rightful owner any documents or other valuable property coming into the possession of the real estate marketing organization that belongs to others. **(3)**Disregarded or violated any provision of this section, [ORS 696.603 (License requirement)](https://oregon.public.law/statutes/ors_696.603) or [696.606 (Real estate marketing organization license)](https://oregon.public.law/statutes/ors_696.606) or any rule adopted pursuant thereto. **(4)**Guaranteed, authorized or permitted any person to guarantee future profits that may result from the resale of real property. **(5)**Failed or refused upon demand to produce or to supply true copies of any document, book or record in the possession or control of the real estate marketing organization for inspection by the commissioner or the commissioner’s authorized representative. **(6)**Failed to register and maintain the current and accurate names of, and information regarding, each real estate marketing employee of the real estate marketing organization. **(7)**Procured or attempted to procure a real estate marketing license by fraud, misrepresentation or deceit or by making any material misstatement of fact in an application for a real estate marketing license. **(8)**Failed to exercise supervision over the activities of real estate marketing employees. For the purposes of this subsection, “supervision” means that management by an organization that is reasonably designed and implemented to result in compliance by the employees of the organization with this section, [ORS 696.603 (License requirement)](https://oregon.public.law/statutes/ors_696.603) or [696.606 (Real estate marketing organization license)](https://oregon.public.law/statutes/ors_696.606) or any rule adopted pursuant thereto. **(9)**Engaged in any act or conduct, whether of the same or of a different character specified in this subsection, that constitutes or demonstrates bad faith, incompetence, untrustworthiness or dishonest, fraudulent or improper dealings. **(10)**Failed to meet or maintain the deposit requirements of [_ORS 696.606 (Real estate marketing organization license)_](https://oregon.public.law/statutes/ors_696.606) (3) or (4). **(11)**Failed to pay in full any final judgment on claims adjudged by the commissioner or by a court of competent jurisdiction. **(12)**Violated [ORS 646.608 (Additional unlawful business, trade practices)](https://oregon.public.law/statutes/ors_646.608). [1995 c.217 §6]

Answer 196

* 30 hours of continuing education are required during the two years preceding license renewal; * At least 3 of the 30 hours must be in a course on recent changes in real estate rule and law, called the Law and Rule Required Course (LARRC); * A licensee renewing a license for the first time must take a Real Estate Board-approved 27-hour course on Broker Advanced Practices or Property Manager Advanced Practices, depending on their license type, and a 3-hour course on recent changes in real estate rule and law (LARRC); * Continuing education courses, along with course objectives, must come from the Real Estate Board approved topics; * Continuing education must be provided by an OREA approved Certified Continuing Education Provider to be eligible; * The Certified Continuing Education Provider must ensure that persons who teach continuing education courses meet certain instructor qualification requirements; and * As part of the license renewal process, licensees will self-certify that they have met the continuing education requirement for the applicable renewal cycle. * While courses might be delivered by approved providers, **it is still the licensee's responsibility to see that the provider's courses meet timing requirements and that provider can prove the licensee's time in the course to the Agency**. This means that online courses must have timers and live lecture courses must have a method in place to verify time spent in attendance. A provider's certificate of completion issued when the provider cannot prove time spent in the course will not be counted if discovered during an agency audit

Answer 197

* Real estate broker or property manager pre-licensing courses. * Examination preparation classes. * Sales meetings. * Motivational classes or seminars. * Time management classes or seminars. * Sales and marketing classes or seminars. * Psychology classes or seminars. * Trade association orientation courses. * Courses in standardized computer software programs not specifically related to one of the eligible topics. * Courses with content that is specific to another state or jurisdiction.

Answer 198

make written disclosure to all parties to the transaction that they are licensed. This disclosure is usually made in the real estate sale agreement but could be a separate document. This disclosure rule applies to active and inactive licensees, and their principal broker must supervise personal transactions. This rule applies only to properties located within Oregon. Note: A licensee can be represented by another firm when buying or selling property for their own benefit. However, while being represented by another firm, except for advertising, the licensee must still be supervised by their principal broker.

Answer 199

* Any person who violates any provision of ORS 696.505 to 696.590, or any lawful rule or final order of the Real Estate Commissioner or any final judgment made by any court upon application of the commissioner, may be required to forfeit and pay to the General Fund of the State Treasury, a civil penalty in an amount determined by the commissioner of not more than $3,000 for each offense. Each violation shall be deemed a separate offense. * In addition to the civil penalty set forth in subsection (1) of this section, any person who violates any provision of ORS 696.505 to 696.590, any lawful rule or final order of the commissioner or any final judgment made by a court upon application to the commissioner, may be required to forfeit and pay to the General Fund of the State Treasury, a civil penalty in an amount determined by the commissioner but not to exceed the amount by which such person profited in any transaction that violates any such provision, rule, order or judgment.

Answer 200

* **No Action Necessary** - Most audits conducted by the REA result in no action necessary because there are no grounds for further action. * **The Nondisciplinary Education Letter** - The commissioner determines there is no basis to pursue disciplinary action against the licensee. The purpose of the letter is to educate the licensee. * **The Reprimand -** A reprimand is the next level of progressive discipline. The reprimand is the maximum disciplinary action the commissioner may issue against a licensee if the act or conduct that constitutes a grounds for discipline under ORS 696.302 did not result in significant damage, exhibit incompetence or exhibit dishonesty or fraudulent conduct, or repeat conduct that is substantially similar to conduct for which the licensee was disciplined previously. * **Suspension or Revocation of License -** The commissioner may suspend or revoke a license of a licensee who has committed an act that constitutes grounds for discipline under ORS 696.301 and such act also resulted in significant damage, exhibited incompetence or exhibited dishonesty or fraudulent conduct or was repeat conduct that is substantially similar to conduct for which the licensee was disciplined. The goal of this progressive discipline is to correct a licensee's inappropriate behavior, deter the licensee from repeating the behavior, and to educate the licensee about how to comply withapplicable statutes and rules. A full discussion of the complaint, investigation, and resolution process is beyond the scope of this course. The materials presented herein are selected highlights of how the REA tends to handle the audit and investigative process. The consequences for a violation of Oregon License Law or Oregon Real Estate Law could be any of the following: * Civil penalties; * Criminal action; * Civil liability; and * Income tax liability.

Answer 201

then both the licensee's principal broker and the employing licensee are liable

Answer 202

Deliver to each real estate consumer, at initial contact, a copy of the initial agency disclosure pamphlet, along with an explanation of the relationship disclosures contained therein. Fill out standard form transactional documents as per the terms dictated by the client and deliver a copy at the time of signature of those documents; receipt any trust funds as to the amount and form of those funds and deliver them immediately to the principal broker. Submit all transactional paperwork to the principal broker for review and approval as soon as reasonably possible, but not later than dictated by company policy or law. Inherent in this is the responsibility of the broker to ensure that all necessary documentation has been diligently prepared and fully executed by all parties. It is important to note that any activity performed in the effort to procure business, such as a comparative market analysis, is also subject to principal broker review. Unless the parties to the transaction agree in writing to delegate the closing function to an escrow agent licensed in Oregon, an attorney, or another real estate broker engaged in the transaction, a principal broker must promptly close any real estate transaction in which the broker is the listing broker. A real estate broker associated with a principal broker can also close a real estate transaction, as long as that licensee is authorized in writing by their principal broker, and the closing is supervised by the principal broker. The authorization must be in writing, signed by the principal broker and then kept in the transaction file. When hiring an unlicensed assistant, pay the assistant a salary that is in no manner based on a percentage of commissions. The broker must make sure that the assistant performs only duties allowed a non-licensee. Both the broker and principal broker are liable for the assistant's compliance with rules relating to permitted duties of an unlicensed person. Complete the necessary educational requirements for license renewal and keep a copy of course completion certificates or other proof of completion for three years from the renewal date. Further, it is the duty of the licensee to ensure the renewal of the license prior to the expiration date and that all courses are time-monitored and comply with all other renewal requirements. If renewal has not been accomplished prior to the expiration date of the license, the licensee must cease all real estate activity until the renewal is completed. A broker must immediately notify the principal broker of expired license status. When terminating a relationship with one principal broker to join another, the broker must cease all real estate activity until the broker's license has been transferred to the receiving principal broker. Also, any listings or pending sales are the property of the sending principal broker or the brokerage being absented, and all real estate activity by the broker on those transactions must cease. A broker can never supervise or control the activities of another licensee. Personal transactions of a licensee, inclusive of offering and negotiating for the sale, exchange, lease option and purchase of real estate are subject to the normal license law requirements, including principal broker supervision and retention of any earnest monies. A broker is not required by law to list with their principal broker and is not required by law to have that principal broker represent them as a buyer's representative in purchases if the principal broker, in writing, allows the broker to engage the services of another principal broker. However, whether or not the principal broker acts as agent for the licensee in personal transactions, the principal broker remains responsible under license law for supervising all personal transactions. In addition, the broker must disclose their status as a real estate licensee in any advertising, as well as in the first written document of agreement in any transaction. If the real estate licensee is oninactive status, there is no principal broker supervision necessary and the licensee must follow the license law requirements, including depositing all funds into a neutral escrow and maintaining a complete transaction file for six years. The rental or leasing of personal property is exempt from the above. Brokers are prohibited from directly receiving any fee from any real estate activity from any person other than the principal broker under whom that broker is licensed. Inactive licensees can never engage in or receive any fee for real estate activity. Brokers are prohibited from sharing any portion of commission monies received with any unlicensed person for any purpose. Any fee-sharing agreement with a licensed individual is implemented with the authority of and paid by the principal broker. Brokers can never proceed against a client for payment of commission or fees owed. All such matters are to be remedied by the principal broker. A broker must always disclose to all parties any material fact concerning a transaction. As detailed in previous modules of this course, a broker must never misrepresent facts, whether by direct acts or statements or by acts of omission. Regardless of whether there is an existing agreement to buy or sell property, all written offers must be tendered promptly to the seller. A broker must never manipulate offers by not following this procedure. A licensee can never engage in the unauthorized practice of law or expertise in any other area by giving advice or stating opinions beyond those permitted a licensee under licensing and administrative laws. A licensee must notify the Oregon REA of any adverse ruling in any court action or arbitration or mediation within 20 days of the ruling if the ruling involved a real property transaction in which the licensee is a seller or buyer of real property, or as a licensee representing a client in a transaction, and/or any criminal charge against the licensee concerning the licensee's professional real estate activity. Also, a licensee must immediately notify their principal broker of any client dispute.

Answer 203

_Module 5: Brokerage_ _Chapter 5-6: Financial Records and Recordkeeping Systems_ Recordkeeping Requirements The REA requires the principal broker to maintain the following real estate records for six years following termination: * All financial records required relating to trust funds, including but not limited to account records, bank statements, check registers, journals, beneficiary ledgers, principal broker signed and dated reconciliations, deposit slips, canceled checks, and the like. * All written agreements creating an agent relationship between broker and buyer or seller. * All written acknowledgment of any agency relationships between broker and buyer or seller. * The written agreements for the listing, sale, purchase, rental, lease, lease option or exchange of real property generated by a real estate broker. The agreement must contain the signatures of the parties. * Records regarding receipt of trust funds or other documents including: * Earnest money deposits from buyers - retain real estate purchase contract and receipt for deposit form. * Rents and security deposits from tenants - retain collection receipts (receipt book stubs). * Other Receipts - retain collection receipts. * Records regarding depositing trust funds - retain bank deposit receipts. * Records forwarding buyer's checks to escrow - retain a copy of the check signed and dated by the buyer showing receipt of check. * Records regarding disbursing trust funds - retain canceled checks and, where applicable, all paperwork supporting disbursement of funds. * All records for each offer or transaction that involves the actual sale, purchase, lease option or exchange of real estate. * Records regarding collecting management fees from the trust fund bank account - retain property management agreements between the broker and property owners; canceled checks.

Answer 204

All principal broker - salesperson contracts * Written authorizations from principal broker granting Oregon REA authority to review documents or trust fund accounts. * Listing contracts * Accepted offer deal files - Copies of all real estate purchase contracts and receipt for deposit, signed by the offeror and the offeree, which have resulted in a transaction. This file should contain all documentation relating to the transaction: offer, counteroffers, inspection reports, seller's disclosure/disclaimer statement, broker escrow instructions, agency disclosure and acknowledgment documentation, closing statements, etc. * Unaccepted offer file - Copies of all real estate purchase contracts and receipt for deposit, signed by the offeror but NOT signed by the offeree. A principal real estate broker is required to review each document or agreement generated by their brokers within seven business days after it has been accepted, rejected, or withdrawn by a client. At the time of review, the principal broker is to initial and date the document, thereby confirming that the review took place in the required period. Although Oregon Administrative Rules do not specifically define which documents should be reviewed, as a rule, any document that affects the rights or obligations of a party to the transaction should be reviewed. All active records of professional real estate activity are to be maintained at the main office of the principal broker, or at a branch office if the records were created in the branch office and the principal broker or branch office manager conducts real estate business from that branch office. After two years, a principal broker may store inactive records in a single location other than the licensed business address. Inactive records are records of transactions completed or terminated at least two years before transfer to off-site storage and any other records that originated or were created before transfer to the off-site storage. These inactive records may only be transferred to an off-site location if: * the principal broker notifies the REA, in writing, of the intended removal of the inactive records from the principal broker's licensed place of business; * if the principal broker notifies the REA of the new location (address) for such records; and * if the principal broker gives written authorization to the REA to inspect the inactive records at the new location and the name of the person to contact to gain access at the location. The brokerage is also required to provide an IRS Form 1099 for each independent contractor that reports all commission monies received. For income tax purposes, these 1099s should be delivered to the contractors and to the IRS. Copies of these 1099s and other tax information related to the brokerage should be kept for six years, which is the period the brokerage is subject to an audit.

Answer 205

* The advertising licensee must have authorization from the listing principal broker, either express written permission or automatically authorized under the rules of an MLS reciprocity agreement. * The advertising licensee must not alter any informational part of the listing that the listing licensee includes. * The advertising licensee must disclose the name and telephone number of the listing principal broker or brokerage, along with the name and telephone number of the listing broker, and include a statement that the same information is available on the listing broker's website. * The advertising licensee may not use any meta tags or other coding or programming to misdirect internet traffic from another licensee's site to their own.

Answer 206

1. Real estate photographers typically work for the listing agent and in some cases will be asked to modify photographs of properties for sale. 2. Listing agents everywhere have a legal responsibility to not "materially misrepresent" a property. That's a meaningful expression to lawyers since it keeps popping up every time this subject is talked about. 3. Modifying or removing temporary objects like garbage cans, cars, overcast skies etc is customary and generally not considered materially misrepresenting the property. 4. [Removing permanent objects like power lines](https://photographyforrealestate.net/how-to-remove-power-lines-photoshop/), telephone poles, neighboring homes etc. are customarily considered **materially misrepresenting the property** because they hide undesirable permanent property features. 5. Landscaping seems to be an area where not everyone agrees. Landscaping seems to be in between permanent and temporary. Many people believe that fixing defects in the grass or landscaping is OK whereas others believe it is not OK. When there is some question about if a feature is permanent or temporary it's safest to treat it as a permanent feature.

Answer 207

race, color, religion, sex (including gender identity and sexual orientation), disability, familial status, or national origin. The prohibition applies to publishers, such as newspapers and directories, as well as to persons and entities who place real estate advertisements in newspapers and on websites. It also applies where the advertisement itself violates the Act, even if the property being advertised may be exempt from the provisions of the Act. Other federal civil rights laws may also prohibit discriminatory advertising practices. Examples of advertising that may violate the Act include phrases such as “no children,” which indicates discrimination on the basis of familial status, or “no wheelchairs,” which indicates disability discrimination.

Oregon RE and National RE Exam Prep Questions 1 Flashcards

(260 cards)