Practice Exam Flashcards by Daniella carriglio

A person agrees to sell a property for $500,000. The buyer gives the seller $150 as valuable consideration for a six-month option. Which of the following statements is true?

a) the buyer must have at least 20% down
b) the $150 is valuable consideration if the seller accepted it.
c) the buyer must have at least 5% down as valuable consideration
d) the seller cannot accept money for the option

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The finance charges recorded on the Truth in Lending statements would include all of the following except

a) insurance premiums for mortgage insurance payment
b) loan fees charged by the lender
c) discount points and services
d) recording fees and title insurance premiums

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Owner Stan has been defaulting on mortgage payments and owes more than his property is worth. Stan’s lender is allowing him to sell the property for less money than necessary to satisfy the loan. The bank has permitted Stan to do what?

a) commit tax fraud
b) flip the property
c) short-sell property
d) deed the property to HUD

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Seller Jim tells his listing licensee that regardless of the offer, he will not sell to any Asian families. How does this impact the listing agent?

a) the licensee could be held liable if he or she knowingly goes along with the request.
b) the licensee must inform all agents regarding the request
c) the licensee must note the request on the MLS
d) the licensee is still required to take the listing

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Jack owns a leasehold interest in a property whose owners or tenants agree to use the property on a periodic, non-overlapping basis. With what type of property does Jack have?

a) cooperative
b) planned unit
c) a time share
d) condo

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Broker Cumbie recieved an offer of $200,500 on a $205,000 listing. After the seller gave the offer to his attorney to review, the broker received another offer. This offer was for $199,000 what should the broker do?

a) wait until the seller acts upon original offer
b) present the offer right away
c) return the offer
d) ignore the offer since it is lower

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What do liens and easements have in common?

a) neither can be done without consent of the owner
b) both are encumbrances
c) both are money claims against a property
d) both must be on public record to be valid

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Evan lives in an apartment building. The land and structures are owned by a corporation, with one mortgage loan covering the entire property. Like the other residents, Evan own stock in corporation and has a lease on his apartment. What is this type of ownership?

a) cooperative
b) time-share
c) planned unit
d) condo

a condo owners holds title to only the individual unit and a co-op owner is the renter

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to assign a contract for the sale of real estate means to

a) transfer ones right under the contract
b) allow the seller and the buyer to exchange positions
c) record the contract with the county recorders office
d) permit another broker to act as agent for the principal

think of it as transferring right of owning the house

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what type of listing agreement allows the owner to appoint an exclusive agent to sell his property, but retains the right to sell the property himself?

a) exclusive right to sell
b) open
c) multiple listing
d) exclusive agency

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broker k arrives to present a purchase offer to Mrs. D, an 80 year old invalid who is not always of sound mind and finds her son and daughter in law present. In the presence of Broker K, both individuals persistently urge and even threated Mrs. D to accept the offer, even though it is must lower than the price she has been asking for. If Mrs. D accepts the offer, she may claim later that

a) broker K should not have brought her such a low offer
b) her consumer protections right have been unsurped
c) she was undue duress from her son and daughter and therefore the contract is voidable
d) broker K defrauded her by allowing her son and daughter to see the purchase offer the broker brought to her

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An option

a) requires the optionor (seller) to complete transaction
b) makes the seller liable for a commission
c) gives the optionee (buyer) an easement on the property
d) does not keep the offer open for a specified time

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Calders Construction company has built a home in a new subdivision and it was sold 6 months after it was built, for $48,500. The amount reflected a depreciation amount of 3% knowing this, what was the original asking price on the home?

a) 51,500
b) 48,500
c) 53,000
d) 50,000

48,500/97%
97% + 3% = 100%

48,500/97% = 50,000

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A real estate licensee has a buyer agency agreement. What is the seller in this situation?

a) fiduciary
b) customer
c) agent
d) client

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an aggrieved party with Fair housing violation claim has how long to file a compliant with the department of housing and urban development?

one year

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if capitalization rate on a building that produces a $20,000 annual income is 10% what is the estimated value of building?

a) 220,000
b) 222,200
c) 22,000
d) 200,000

d 20,000/.10 = $200,000

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when the grantor does not wish to convey certain property rights, he or she

a) may note the exceptions in the deed of conveyance
b) must note the exceptions after closing
c) may not do so, since the deed conveys the entire premises
d) must convey the entire premises and have the grantee reconvey the rights to be retained by grantor

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a lot that is 65 feet wide by 80 feet deep will be fenced on BOTH sides and REAR how many linear feet of fencing would be needed?

225

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illegal practice of directing minorities to areas populated by the same race or religion is called

steering

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a house sale is closed on july 15th. the taxes of $648 for the calendar year (12 months) have been paid. assuming the seller owns the day of closing, what is the total prepaid portion that the buyer will owe the seller?

$300

648/365 (days in a year) = $1.7753 a day
seller owns as of 7/15, so only 16 days 
August is 31 days
Sept. 30 days
Octo 31 days
Nov 30 days
Dec 31 days

169 x 1.7753 = $300.03

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a mechanics lien is classified as a

statutory lien

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the title to real estate passes when a valid deed is

delivered and accepted

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discount points charged by a lender on a FHA or VA loan is a % of what?

loan amount

remember kate Loan to Value 80/20

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when the amortized payment of a mortgage remains constant over the period of the loan but leaves an outstanding balance to be paid at the end, the payment is called

a balloon payment

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if jamies quarterly interest payments are $150 on a 12,000 loan what is her annual interest rate?

150 x 4 ( 4 quarters in a year) = $600 600/12000 = 5%

a bill of sale is used to transfer the ownership of what?

personal property

a property seller signs a listing agreement with a licensee. what is that an example of?

expressed agency

a portion of wendells building was inavadertently built on ginnys land this is called

enroachment 1) it is accidental 2) involves only part of a structure

homeowner tanya acquired the ownership of land that was deposited by a river running through her property by

accretion think of accredited

how many CE hours?

when a prospective buyer makes a written purchase offer that seller accepts, then the

buyer receives equitable title to the property

what type of agency is not allowed in IL

undisclosed dual agency

what provides a buyer with the best assurance of clear, marketable title?

title of insurance

acts that a licensee may perform for a consumer, are informative and clerical in nature and do not rise to the level of active representation of a customer are known as

ministerial acts think of god and rise

sam and nancy bought a store building and took title as joint tenants nancy dies so sam now owns the store in

severalty

If the owner of the dominant tenement becomes the owner of the servient tenement and merges the two properties, what happens?

the easement is terminated

a person who has complete control over a parcel of real estate is said to own

fee simple

The ____ is the culmination of the real estate transaction

Title closing

which of the following types of ownership CANNOT be created by operation of law, but must be created by the parties expressed intent? a) tenancy by entirety b) condo ownership c) tenancy in common d) community property

a) this is a form of ownership that husbands and wives can choose or create by deciding to do so and declaring it as such in contracts and deeds.

the illegal process of a banker refusing to approve loans for a neighborhood based on the racial composition of the area is

redlining

what is not a physicals characteristic of land?

scarcity

owner grace's property has been foreclosed. after the property was cold for $340,000 she still owed $6,000 to the lender. the lender my be able to get a personal judgement against grace for the $60,000. This is called

deficiency judgement - which allows the lender to attach and foreclose a judgement lien on other real or personal property that borrow owns

the seller listed their property for six months on 2/26 for $522,500. they agreed to pay the listing broker a 7% commission at closing on the agreed upon sale price. a buyer made an offer on the property 3/29 for $510,000. the seller counter offered 4/1 at $517,500 and the buyer accepted with the closing to occur 6/15. How much commission did the seller owe the listing broker?

$36,225 517,500 x 7%

What does not need to be recorded to be valid?

Real Estate Tax Lien

a special warranty deed differs from a general warranty deed in that the grantor's covenant in the special warranty deed

applies only to a definite limited time

if the seller has a change of heart AFTER accepting an offer and decides not to sell, what applies to the sellers broker?

the broker IS entitled to collect a commission since the seller accepted the offer

a partition suit is used for?

to force a division of property without all the owners consent - typically used when a co-owner of a property wants to sell his or her share

a broker and seller terminate the listing contract. an offer is received in the mail by the broker after the termination of the listing contract. the offer is for full price and includes all of the terms and conditions of the seller. Why is this NOT a valid contract?

there is no current listing agreement

how soon after closing may a broker receive a commission check?

after the transaction is completed and funded

due to the procedure in which mortgage foreclosures occur under state laws, IL is characterized as a

judicial foreclosure state

what is used to clear a defect from the title records?

a quit to quite title

if skylars property has a net income of $5,480 and returns 8% annually, what is the property value?

$68,500 5480/.08% = $68,500

the buyer and seller agreed to a purchase price of $310,500 the buyer received an 80% loan. how much was the buyer's loan and how did it appear on the settlement?

$248,400 310 500 x 80%

a void contract is one that is

not legally enforceable

the recording of a deed gives?

constructive notice of the ownership of real property

what does not terminate an agency relationship

submission by the agrent of two offers at the same time

if a property sells for $12,100 and gains a 10% profit for the owner, what was the original cost?

$11,000 12,100 x 10% = 1,210 12,200 + 1,210 = 13,310 13,310/12,100 = 1.1 or 11,000

if sarah receives 35% of total commission from her broker and a property is sold for $23,000 what is the commission on a 6% basis?

897 23,000 x 6% = 1380 1380 x 65% = 897

if a home appraised for $93,000 and mr. nickel put downs 20% what is his loan amount?

$74,400 93,000 x 80%

to create a joint tenancy relationship in the ownership of a real esate, there is unities of what

PTIT | possession, time, interest and title

the rights of the owner of property located along banks of river are called

riparian think of alligators - reptiles

How many square feet is it an acre

43,560

What is the finance math for annual interest

Principal x rates or | Rate x loan

Finance math - principal

Annual / rate

Which of these is a lien on real estate? Recorded easement Recorded mortgage Encroachment Deed restrictions

Recorded mortgage

A sales contract was signed under duress (threats, violence, constraints, or other action brought to bear on someone to do something against their will or better judgment) which of these describes this contract? Voidable Breached Discharged Void

Voidable

Hey sponsoring broker receives a check for earnest money from a buyer and deposit the money in the sponsoring brokers personal interest bearing checking account. This action exposes the sponsoring broker to a charge of Commingling Notation Subgroation Accretion

Commingling

A borrower takes out a mortgage loan that requires monthly payments $875.70 for 20 years and a final payment of $24,096. This is what type of loan Wraparound Accelerated Balloon Variable

Balloon

When demand for a commodity decreases and supply increases Price is not affected Price tends to rise Price tends to fall The market becomes stagnant

Price tends to fall

What deed contains 5 covenants?

Warranty

What is TRUE concerning a property held in joint tenancy A - A maximum of two people can own the real estate B - The fractional interest of the owners can be different C- Additional owners may be added later D - There is always rights of survivorship

A real estate broker specializes in helping both buyers and sellers fill in the blanks and negotiate the terms of the contract. Because the broker is an agent of both parties he may not disclose either parties confidential information to the other the broker is acting as A) buyers agent B) sellers agent C) transactional broker D) dual agent

The portion of the value of an owners property that exceeds the amount of the owners mortgage debt is called

Equity

A buyer has an 80/20 LTV (loan to value ratio) and a $5,000 earnest money deposit which will be used at closing to cover part of the down payment. If the purchase of the home is $250,000 how much additional funds must the seller bring to complete the down payment? A) 45,000 B) 50,000 C) 75,000 D) 20,000

A) 250,000 x 80% = 200,000 20% down = 40,000 + earnest money

A seller wants to net $165,000 from the sale of her house after paying the sponging broker fees of 5% the seller gross sales price will be?

$174,684 165,000 * 5% = 8,250 165,000 + 8,250

How many square feet are in 3 acres?

130,680

The fair housing act of 1968 prohibits discrimination based on

Race

If a borrower must pay $6,000 for points on a loan how many points what is the lender charging for this loan?

``` Points = divide 6,000/150,000 = 4% ```

How many acres are there in the N ½ of the NE ¼ and the NE ¼ of the SE ¼ of a section? A) 20 B) 40 C) 80 D) 120

N ½ of the NE ¼ is 2 x 4 = 8; 640 ÷ 8 = 80 acres; NE ¼ of the SE ¼ is 4 x 4 = 16; 640 ÷ 16 = 40 acres; 80 acres + 40 acres = 120 acres.

A property has a monthly net income of $3,600 and an expected rate of return 9% using the income approach, what is the value of the property?

A) 40,000 B) 640,000 C) 48,500 D) 480,000 3,600 x 12 (months in a year) = $43,200 43,200 / .09 = $480,000

What is a mortgage?

A written contract pledging real property owned to secure a debt

What is agency by ratification?

Agreement formed bw agent and principal after sale is confirmed

When an agent is invested in project outsid did their normal duties is

Agency couple with interest

When a broker is given the right to collect commission no matter what is what type of agency?

Exclusive

What is a quitclaim deed?

Release rights to property in order clear title

Why is the term for restrictions, easements, or liens that give others right to property?

Encumbrances

What is the right to acquire ownership of private real estate for public use?

Eminent domain

Upon sale the instrument that conveys ownership rights to personal property ____ and that dealing with real property is _____

Bill of sale, deed

What is the term for pledging something as a security for a loan without necessity of giving it up?

Hypothecation - allows a property owner to use the property as security for the loan while still occupying it

What is the right to use another land

Easement

What are annual crops planted on real property but considered personal?

Emblements Think agricultural, think of emblem- attached to land

An estate that is indefinite duration is called

Freehold

Fair market value cannot be established unless considered in?

arms length

Value in use is?

Added property value Based on specific person using it for specific purpose

What % is discount point

How many acres are there in the N ½ of the NE ¼ and the NE ¼ of the SE ¼ of a section?

120 N ½ of the NE ¼ is 2 x 4 = 8; 640 ÷ 8 = 80 acres; NE ¼ of the SE ¼ is 4 x 4 = 16; 640 ÷ 16 = 40 acres; 80 acres + 40 acres = 120 acres. 640 is one section.

What is gross lease?

Tenant pays rent and landlord pays taxes, insurances, and repairs.

What is net lease?

Tenant pays rent PLUS taxes and insurance

What type of brokerage is when an individual can be paid for brokering a real estate transaction yet represent nether buyer or seller

Transactional

A property has a fair market value $95,000 as asses at 50% of value. The tax rate is $55 per $1,000 assessed. What is the real estate tax for his property?

$2,612.50 $95,000 x 0.50 = $47,500 47,500 / 1,000 (points) = 47.5 55x47.5

Owner of a lot is interested in selling the is 99 x 100. If similar property sells for $36,000 what is the selling price?

9,000. 43,650 in 1 acre. 99 x 110 = 10,890 10890/43650 = 0.25 36,000 (similar) x 0.25

A property sells for 85,000, existing mortgage balance is $17,000 and the sellers closing cost is $1600. What will the broker fee be at 6.5%?

60,875 85,000 x .65 = 5525 85k -17k - 1600 - 5525

What months have 30 days?

April, June, September, and November.

What is police power

Inherent authority to create regulations needed to protect health, safety and welfare.

A regulatory tool that helps communities regulate and control Howland is used

Zoning

A planned unit development pud is a development where land

Is set aside for mixed use purposes such as residential commercial and public areas zone regulations may be modified for pud

What do municipalities used to ease transition from one used to another

Buffer zones Example hiking trails

What is non-conforming use

It is allowed to continue legally as long as it complies with the regulations covering non-conformity‘s in the local ordinance or until the improvement is destroyed or torn down or the current use is abanded

What is a conditional use permit

It is granted to a property owner to allow a special use of property defined as an allowable conditional use within that zone such as a daycare center in a residential district

What is a variance

A variance provides relief is zoning regulations deprived on owner of the reasonable use of the property

What is a plat map

A plat map is a detailed map that illustrates the geographic boundaries of individual lots. It shows the blacks sections streets public easements and monuments in the perspective subdivision

What is density zoning

Restrict the average maximum number of houses per acre that maybe built within a particular subdivision

Restrictive covenants

Are limitations to the use of property imposed by a pass owner or the current owner and are binding on future grandnties

Land uses controls and regulated through

Public restrictions private or non-governmental restrictions and direct public ownership of land

A subdivision declaration reads, “ no property within the subdivision maybe further subdivided for sale or otherwise and no property maybe use for any purpose other than single-family housing” is an example of

A - an illegal reverter clause B- R1 zoning C - conditional use clause D - restrictive covenant D

Landowner who wants to use property in a manner prohibited by local zoning ordinance but which would benefit the community can apply for

Conditional use permit

What is not included in public land use controls

Restrictive covenants

Under its zoning authority what may a town legally regulate

The number of buildings

The purpose of a building permit is to

Ensure compliance with municipal regulations

Zoning powers are conferred on municipal governments by

Enabling state acts

A town enacts news zoning code under the new code commercial buildings are not permitted with 1000 feet of the lake a commercial building that is permitted to continue in its former use even though it is built on the Lakeshore is an example of

Nonconforming use

To determine whether location can be put to future use as a retail store one would examine the

List of Permitted nonconforming uses

Is the allowable ethic origins of purchasers illegal deed restriction

A restriction in a sellers deed may be enforced by

A court injunction

A man owns a large tracts of land after an adequate study of all the relevant facts the man legally divides the land into 30 lots suitable for residence in the situation the man is acting as the

Sub divider

A map illustrating the sizes and locations of streets and lots in a subdivision is called a

Plat

What is the difference between a plat and a survey

A survey will show any dwellings, buildings or improvements (driveways, fences, pools) located on the property; A plat usually shows the dimensions of the property before the improvements are made.

In one city developers are limited by law to constructing no more than average of three houses per acre in any subdivision what does this restriction regulate

Gross density

What are common zoning classifications | CAR

commercial, residential, and agricultural

Permitted land uses housing projections transportation issues and objectives for implementing future control development would all be found in a communities

Comprehensive plan

What is PUD

A development where land is set aside for mixed use purposes such as residential commercial and public areas

Under the federal law designed to protect the public from fraudulent interstate land sales a developer involved in the interstate land sales of 100 or more lots must

Provide each purchaser with a printed report disclosing details of the property

Enabling statues in Illinois

Grants county cities and villages the power to make and enforce local zoning ordinances

Is zoning wi passed by a village conflicts with an existing county zoning law both of the village and the county are home units of government in this situation what is true

The villages law will prevail because municipal ordinances supersede county ordinances under the Illinois constitution

How many hours of pre-licensing do you need in IL

75 hours

Lori has agreed to transact Real estate Business on behalf of Alex with Alex’s authority. Lori is

An agent

Ownership of real property for an undetermined length time is called

Freehold estate

A subdivision has a Rule that each home in the neighborhood be at least 2,500 SF this is an example of

Restrictive covenant

What describes a transaction broker?

Broker does not represent ether party, but provides general information and services to each

Reversion of title is a feature of what type of interest

Fee simple determinaable

Lumber for a deck that has not been built is

Personal property

The transfer disclosure statement is required on

The of one to four unit residential property

A lessor is

(Landlord)

Which is a broker NOT required to have visible on office sign

Address

Tenant pays landlord monthly rent but NOT responsible for Taxes or insurance is what type of lease

Gross

What is net lease

Net lease tenant pays rent PLUS taxes and insurance

What is a Swing loan

Bridge or gap loan - short term loan that allows borrowers to borrow against their current property in order to buy a new one

What is the purpose of regulation Z

States APR - To let the borrowers know the true cost of credit

Is sellers points a finance charge

When Real estate agents represent the buyer and not the seller of a piece of property, they are engaging in

Buyer agency

Some states have _____ that require agents to disclose who they are representing to buyers

Agency disclosures laws

Potential gross income minus vacancy and collection losses is

Effective gross income

An example of black west thing you would be

When real estate agent alert residence of a neighborhood that their area is changing due unwanted people moving in And they should sell before value fails

Involuntary methods of conveying a property include all of following except: Escheat Averse possession Quitclaim clause Condemning

Quitclaim clause

You sold the home near an large airport The flight patterns have been permanently changed with The addition of a new runway resulting in a 25% loss and property values This is an example of

Economic absolunce

What lien takes priority

This year’s tax real estate

The rights of defaulting a borrower to keep title to a property by satisfying the debt prior to the close of foreclosure is

Equitable redemption

One loan was obtain using 12 properties as Security this type of mortgage is called

A blanket mortgage

A bill of sale is a document used for what

Personal property

What legal description describes a property by starting with an identifiable point and then describe the succeeding sides by direction and length

Metes and bounds

What is the primary purpose of a deed

Transfer title rights

type of real estate that is all inclusive

Fee simple absolute

Ownership of real property for an undetermined length of time is called

Freehold estate

A freehold estate is

Ownership of real property for an undetermined length of time.

A nonfreehold estate has

Determinable end

When does escrow deposit deadline

By the next day

Tenancy by the entireties convey title at the same time must be

Husband & wife

What determines if there is encroachment on a property

Survey

Ripiran rights

Property borders moving water such as river or stream

What document outlines environmental effects caused by new development

Environmental impact report

interest paid on the accrued interest as well as principal is known as

Compound interest

Reversion of title is a feature of what type of interest

Fee simple determinable

An unlawful detainer action is instigated by

A lessor

Reverse mortgage

- someone with a lot of equity - someone without a lot of capital - someone elderly Lender gives money to the borrower using the home as collateral

Disposition

Act of selling, willing, transferring, disposing and encumbrancing property

Special purpose property

Churches, schools, cemeteries, govemernt held

Section is measured

640 acres (1 mile x 1 mile)

1 acre is how many square feet

43,560

What Is a Judgment Lien?

liens created by court ir judge

What is severance

Changing of an item from real estate to personal property