QBank Test Flashcards
(116 cards)
1
Q
A broker who is the agent of the buyer should do which of the following?
A
Advise the buyer if the listing price of the seller’s house is unrealistic.
As part of the fiduciary duties owed a principal, an agent for the buyer should disclose to the buyer if the property is overpriced.
2
Q
All of the following are treated as personal property EXCEPT
A
an installed dishwasher
Once an item of personal property is attached to real property, it becomes real property. The two exceptions are trade fixtures and emblements.
3
Q
A deed must be signed by the
A
grantor and grantee
4
Q
Rental listing referral agents are licensed to engage in which of the following activities?
A
Collecting rental information for the purpose of referring prospective tenants to rental units or locations of rental units.
5
Q
Sally applies to the municipality for permission to open an adult day-care facility in his neighborhood. He may be grant a(n)
A
condition-use permit.
6
Q
What is a conditional-use permit?
A
A conditional-use permit usually is granted a property owner to allow a special use of property that is defined as an allowable conditional use within that zone.
7
Q
Land
A
Earth’s surface to the center of the earth and the airspace above the land, including the trees and water.
8
Q
Real Estate
A
Land plus permanent human-made additions.
9
Q
Real Property
A
Real estate plus “bundle of legal rights”
10
Q
Improvement
A
An improvement is any artificial thing attached to land, such as a building or fence, or improvements such as streets, utilities and sewers.
11
Q
What is included in ownership rights of real property?
A
- Right of possession
- Right to control the property within the framework of the law
- Right of exclusion (to keep others from entering or using the property)
- Right of disposition (to sell, will, transfer or otherwise dispose of or encumber the property)
12
Q
Title
A
- The right to ownership of the land, including the owner’s bundle of legal rights; and
- Evidence of that ownership by a deed. Title refers to ownership of real property, not a printed document. The document by which the owner transfers title to the real property is the deed.
13
Q
Deed
A
The document by which the owner transfers title to the real property.
14
Q
Appurtenance
A
An appurtenance (runs with the land) is a right or privilege associated with the property, although not necessarily a party of it.
Typical appurtenances include parking spaces in multiunit buildings, easements, water rights, and other improvements.
An appurtenance is connected to the property and ownership of the appurtenance normally transfers to the new owner when the property is sold.
15
Q
Examples of an Appurtenance
A
Parking spaces in multiunit buildings
Easements
Water rights
and other improvements.
16
Q
Surface Rights
A
are the rights to use the surface of the Earth.
17
Q
Subsurface Rights
A
are the rights to the natural resources lying below the earth’s surface.
18
Q
Can an owner transfer surface rights without transferring subsurface rights?
A
Yes.
19
Q
Mine Subsidence is
A
the process of downward land shifts due to the collapse of underground mine shafts and groundwater flows, usually resulting in sinkholes or troughs.
20
Q
Air Rights
A
the rights to use the space above the earth, may be sold or leased independently, provided the rights have not been preempted by law.
21
Q
Water Rights
A
are special common-law rights held by owners of land adjacent to rivers, lakes, or oceans and are restrictions on the on the rights of land ownership.
22
Q
Personal Property
A
sometimes called personalty, is property that can be owned and dos not fit the definition of real property.
Personal property is movable.
23
Q
Chattels
A
items of personal property including such tangibles as chairs, tables, clothing, money, bonds, and bank accounts.
24
Q
Fixture
A
an article installed by a tenant under the terms of a lease and removable by a tenant before the lease expires.
an item of personal property that has been converted to real property by being permanently affixed to the realty.
item of personal property converted to real estate by attaching it to the real estate with the intention that it becomes permanently a part thereof; may not be removed by tenant.
25
Trade Fixture
item of personal property attached to real estate that is owned by a tenant and is used in a business; legally removable by a tenant.
26
Manufactured Housing
is built at the factory under the following U.S. Department of Housing and Urban Development (HUD) specifications:
1. Nonremoveable steel chassis
2. At least 8 ft wide and 40 ft long
3. At least 320 sq ft of living space
4. Capable of being lived in with or without a permanent foundation
5. Contains a red label indicating that the home has been built in compliance with HUD construction and safety standards
27
Emblements
(fructus industriales) annual cultivated crops of fruit, vegetables and grain generally considered personal property
28
Severance
changing an item of real estate to personal property by detaching it from the land; for example, cutting down a tree.
29
Annexation
the process of converting personal property into real property
30
Accession
acquiring title to additions or improvements to real property as a result of annexation of fixtures or the accretion of alluvial deposits along banks of streams
31
List the 4 Economic Characteristics of Land that affect its value as a product in the marketplace
1. Scarcity
2. Improvements
3. Permanence of Investment
4. Location or area preference (situs)
32
List the 3 Physical Characteristics of Land
1. Immobility
2. Indestructibility
3. Uniqueness (non-homogeneity)
33
True or False: Real Property is the legal rights of ownership that attach to the physical surface of the land, to what lies above and below it, and to what is permanently attached to it.
True. Real property is the legal rights of ownership (the "bundle of rights") that attach to the physical surface of the land, to what lies above and below it, and to what is permanently attached to it.
34
True or False: Real Estate is defined as land at, above, and below the earth's surface, and all things attached to it, whether permanent or chattel.
False. Real estate is defined as land at, above, and below the earth's surface, and all things permanently attached to it, whether natural or artificial.
35
True or False: Land is defined as earth's surface extending downward to the center of the earth and upward into space, excluding permanent natural objects such as trees and water.
False. Land is defined as the earth's surface extending downward to the center of the earth and upward into space, including permanent natural objects such as trees and water.
36
True or False: A property's air rights are considered unlimited, extending upward into the farthest reaches of outer space.
False. Before air travel was common, a property's air rights were considered unlimited, extending upward into the farthest reaches of outer space. Today, however, the courts permit reasonable interference with these rights. Pennsylvania law permits local government authorities to obtain aviation easements.
37
True or False: Something that is affixed to the land to be part of the real estate is a fixture.
True. An article that was once personal property but has been affixed to the land or a building in such a way that the law construes it to be a part of the real estate is a fixture.
38
True or False: Land is defined as the earth's surface extending downward to the center of the earth and upward into space, excluding permanent natural objects such as trees and water.
False. Land is defined as the earth's surface extending downward to the center of the earth and upward into space, including permanent objects such as trees and water.
39
True or False: Trees and crops are generally considered in two classes. Perennials are considered personal property. Annuals, including emblements, are generally considered real estate.
False. Trees, perennial bushes, and grasses that do not require annual cultivation are considered real estate. Annual plantings or crops of wheat, corn, vegetable, and fruit, known as emblements, are generally considered personal property.
40
True or False: Real estate posses two basic characteristics that define its nature and affect its use: economic and developmental.
False: Real estate posses seven basic characteristics that define its nature and affect its use. These characteristics fall into two general categories: economic and physical.
41
True or False: Something that is affixed to the land to be a part of the real estate is a fixture.
True. An article that was once personal property but has been affixed to the land or a building in such a way that the law construes it to be a part of the real estate is a fixture.
42
True or False: An owner my use a property in a manner that does NOT comply with current zoning by obtaining a conditional-use permit.
True. Each time a plan or zoning ordinance is enacted, new land-use requirements could inconvenience property owners. One way for an owner to use a property in a manner that does not comply with current zoning is to obtain a conditional-use permit. A conditional-use permit authorizes a property to be used for a special purpose.
43
True or False: The planning commission of a municipality is responsible for enacting the comprehensive plan, zoning, and subdivision ordinances in accordance with procedures in the Pennsylvania Municipalities Planning Code.
False. The governing body of a municipality is responsible for enacting the comprehensive plan, zoning and subdivision ordinances in accordance with procedures in the Pennsylvania Municipalities Planning Code. The governing body may appoint a planning commission to be responsible for formulating the recommended plans and ordinances. Public hearings must be held before their enactment by the government body.
44
Margot is a licensed real estate salesperson. Her written contract with broker George specifies that she is not an employee. In the last year, just less than half of Margot's income from real estate activity came from sales commissions. The remainder was based on an hourly wage paid by George. Using these facts, it is MOST likely that the IRS would classify Margot as which of the following for federal income tax purposes?
a. Part-time real estate salesperson
b. Employee
c. Self-employed
d. Independent contractor
b. Employee
Because her earning were more than half in noncommissions, the IRS would not see her as self-employed but could treat her as an employee.
45
A land contract provides for the
a. sale of unimproved land only
b. conveyance of legal title at a future date
c. sale of real property under an option agreement
d. immediate transfer of reversionary rights
b. conveyance of legal title at a future date
In a land contract, the seller, or vendor, retains legal title to the property.
46
The right of a defaulted taxpayer to recover property before its sale for unpaid taxes is the
a. statutory right of reinstatement
b. statutory right of assessment
c. equitable right of appeal
d. equitable right of redemption
d. equitable right of redemption
Equitable rights of redemption exist because it is only fair (equitable) that a person be permitted to save his or her property before tax sale-or even foreclosure sale-by paying in full.
47
Homeowners may deduct all of the following expenses when preparing their income tax return EXCEPT
a. some origination fees
b. mortgage interest
c. homeowner's association dues
d. real estate taxes
c. homeowner's association dues
Real estate taxes, mortgage interest, points for loans, and some origination fees can be deducted on income tax returns.
48
A parcel of property was purchased by two friends, Kevin and Zelda. The deed they received from the seller at closing conveyed the property "to Kevin and Zelda" without further explanation. Kevin and Zelda took title as which of the following?
a. Community property owners
b. Tenants by the entirety
c. Joint tenants
d. Tenants in common
d. Tenants in common
When joint tenancy is not clearly prescribed by the deed, grantees take title as tenants in common-to avoid the results of accidental join tenancy. Friends are unable to hold community property or be tenants by the entirety as those are both for married couples.
49
Each room of Jan's house was preassembled at a factory, driven to the building site on a truck, and then lowered onto its foundation by a crane. Later, workers finished the structure and connected plumbing and wiring before Jan moved in. Which term BEST describes the type of home Jan owns?
a. Converted
b. Mobile
c. Manufactured
d. Modular
d. Modular
Complex components (parts) that are assembled to create a large object are called modules. When room-sized components are manufactured for later assembly on-site, modular housing is the result.
50
The sales comparison approach to value would be MOST important when estimate the value of a(n)
a. existing residence
b. new residence
c. apartment building
d. retail location
a. existing residence
A new residence requires the sales comparison approach to be used when applying for mortgages, and existing residences also require the use of the sales comparison approach. While both are correct, the existing residence answer may be most correct since the new residence can also use the cost approach for close support. Also, the cost approach for an existing residence is not as reliable as it is for the new residence with no depreciation.
51
General real estate taxes levied for the operation of the government are called
a. improvement taxes
b. assessment taxes
c. ad valorem taxes
d. special taxes
c. ad valorem taxes
Confusingly, the general real estate tax-the ad valorem tax-creates a specific lien! The word general in this context distinguishes this tax from the special assessment that is for a specific project or neighborhood.
52
All of the following will provide protection against the possibility of mechanics' liens being filed against property by subcontractors EXCEPT
a. a stipulation against liens filed at the prothonotary's office
b. a waiver of liens in a construction contract
c. mechanic's lien insurance
d. a release of liens document
b. a waiver of liens in a construction contract
A waiver of liens in a construction contract protects the title from liens being filed by the general contractor, not subcontractor. A recorded stipulation against liens, a release of liens document, and mechanic's lien insurance can all be used as a means of protecting the property against claims of subcontractors or suppliers.
53
Kyle and Ursula own a property together. Ursula dies and Kyle now owns the property with her heirs. They owned the property
a. in severalty
b. as tenants in common
c. as join tenants
d. as shareholders in their own corporation
b. as tenants in common
Under tenancy in common, when a co-owner dies, the tenants undivided interest passes according to the will.
54
A tenancy in which the tenant continues in possession after the lease has expired, without the landlord's permission is a
a. tenancy for years
b. tenancy at will
c. periodic tenancy
d. tenancy at sufferance
d. tenancy at sufferance
Tenants who stay after the end of their lease without their landlord's permission hold a tenancy at sufferance.
55
Police Power
The government's right to impose laws, statues, and ordinances, including zoning ordinances and building codes, to protect the public health, safety, and welfare.
56
The use of privately owned real estate is regulated through
1. land-use planning
2. zoning ordinances
3. subdivision regulations
4. building codes
5. environmental protection legislation
57
Comprehensive Plan
(master plan) a plan created by a local government to guide the long-term (perhaps 20 years or longer) physical development of a particular area
usually covers land use, housing needs, movement of people and goods, community facilities and utilities, and energy conservation
58
What does a comprehensive plan include?
a. a general plan that can be revised and updated more frequently
b. plans for specific areas
c. strategic plans
59
Zoning Ordinances
an exercise of police power by a municipality to regulate and control the character and use of property
local laws implementing the land uses designated in the comprehensive plan and typically cover items such as permitted uses, lot sizes, types of structures, building heights, setbacks, style and appearance of structures, density, and protection of natural resources
classifies property by uses and types, such as commercial, industrial, residential, agricultural, and planned unit development (PUDs)
60
Planned Unit Development (PUD)
a planned combination of diverse land uses, such as housing, recreation, and shopping, in one contained development or subdivision
61
Buffer Zones
a strip of land, usually designated as a park or for similar use, separating land dedicated to one use from land dedicated to another use (e.g. residential from commercial)
62
Inverse Condemnation
an action brought by a property owner seeking just compensation for land taken for public use then the taker of the property does not intent to bring eminent domain proceedings. Property is condemned because its use and value have been diminished due to an adjacent property's public use.
63
Nonconforming use
a use of property that is permitted to continue after a zoning ordinance prohibiting it has been established for the area
64
Conditional-use permit
written governmental permission allowing a use inconsistent with zoning but necessary for the common good, such as locating an emergency medical facility in a predominantly residential area
65
Variance
permission obtained from zoning authorities to build a structure or conduct a use that is expressly prohibited by the current zoning laws; an exception from the zoning ordinances
66
Building Codes
ordinances that specify minimum standards of construction for building to protect public safety and health
67
Certificate of Occupancy
permission by the municipal inspector to occupy a completed building structure after it has been inspected and complies with building codes
68
Developer
one who attempts to put land to its most profitable use through the construction of improvements
69
Dedication
the voluntary transfer of private property by its owner to the public for some public use, such as for streets or schools
70
Impact Fees
charges assessed developers by a municipality that relate to expenses incurred by the municipality for additional improvements necessitated by increased development
71
Plat
a detailed map that illustrates the geographic boundaries of individual lots
72
Density Zoning
zoning ordinances that restrict the average maximum number of houses per acre that may be built within a particular area, generally a subdivision
73
Deed Restrictions
a clause in a deed limiting the future use of the property. Deed restrictions may impose a vast variety of limitations and conditions-for example, they may limit the density of buildings, dictate the types of structures that can be erected, or prevent building from being used for specific purposes or even from being used at all.
74
Restrictive Covenants
a clause in a deed that limits the way the real estate ownership may be used
commonly known as covenants, conditions, and restrictions (CC&Rs).
CC&Rs typically govern the type, height, and size of building that individual owners can erect, as well as land use, architectural style, construction methods, setbacks, and square footage. CC&Rs are enforced by the homeowner's association.
placed by the current owner in deeds and apply to future owners
referenced in the plat and contained in a separate recorded instrument
if there is a conflict with local zoning, generally the more restrictive control applies
75
CC&Rs
Covenants, Conditions, and Restrictions. Private agreements that affect the land use. They may be enforced by an owner of real estate and included in the seller's deed to the buyer.
76
Interstate Land Sales Full Disclosure Act
a federal law that regulates the sale of certain real estate in interstate commerce to prevent fraudulent marketing schemes that may arise when land is sold without being seen by the purchases. The act is regulated by the secretary of HUD through the Office of Interstate Land Sales Registration.
regulates the interstate sale of unimproved lots in subdivisions of 25 or more lots of less than 20 acres each
the law does not apply to subdivisions sold solely to developers
land sales are regulated by state law
77
Eminent Domain
land may be taken for public use through the government's power of eminent domain or condemnation
when the taking of property occurs, the Fifth Amendment to the US Constitution requires that the owner be given just (fair) compensation.
78
Inverse Condemnation
a property owner may claim compensation under inverse condemnation if an adjacent public land use diminished the value of the owner's property but the property has not been condemned for public use
79
True or False: An environmental impact statement (EIS) must be performed on any project that involves more than 25 acres.
False: An environmental impact statement (EIS) must be performed for any federally funded project.
80
True or False: In Pennsylvania, the Department of Health and Human Services oversees the state's laws that deal with environmental problems.
False: Although the EPA was created at the federal level to oversee environmental problems, several other federal agencies' areas of responsibility generally overlap. In Pennsylvania, the Department of Environmental Protection oversees the state's laws.
81
True or False: The Environmental Protection Agency (EPA) provides for the rehabilitation of contaminated properties that have sat idle because of significant pollution associated with their past use.
False: The Uniform Environmental Covenants Act (UEAC) provides for the rehabilitation or recycling of brownfields, contaminated properties that have long sat idle because of significant pollution associated with their prior industrial use.
82
True or False: Federal standards exist for the amount of permissible mold contamination.
False: Currently there are no federal requirements to disclose mold contamination. Buyers should be aware that sellers cannot disclose what they do not know; buyers should be prepared to discover mold contamination, if that is a concern to them.
83
In what year was the use of lead-based paint in residential structures banned?
1978
84
Strips of land six miles wide that run north and south are called
a. latitudes
b. tiers
c. ranges
d. longitutes
c. ranges
The land on either side of a principal meridian is divided into six mile-wide strips that run north and south parallel to the meridian, and the strips of land are called ranges.
85
In reference to license laws and rules and regulations of the commission, what does the term "broker of record" refer to?
a. A sole proprietor who maintains multiple branch offices and hires associate brokers to manage those offices
b. An employing broker who employs other associate brokers to work on his or her behalf
c. An individual broker responsible for the real estate transaction of a partnership, association or corporation who holds a broker's license
d. an associate broker authorized to directly control and supervise activities at a licensed branch office
c. an individual broker responsible for the real estate transactions of a partnership, association, or corporation who holds a broker's license
The broker of record is the individual broker responsible for the real estate transactions of a licensed partnerships, association, or corporation (35.201)
86
Which of the following allows a mortgage to proceed to a foreclosure sale without having to go to court first?
a. hypothecation
b. alienation clause
c. power of sale
d. waiver of redemption right
c. power of sale
A power-of-sale provision in a mortgage permits the lender to foreclose and sell a mortgage property that is in default without petitioning to get the court to conduct the sale. Nevertheless, the procedure is often supervised-although not conducted-by the court.
87
The borrower under a deed of trust is known as the
a. beneficiary
b. trustor
c. trustee
d. vendee
b. truster
A borrower in at the deed of trust system gives a deed of trust to a trustee and a note to the lender, thus becoming a truster on the deed of trust and a maker, or obligor, on the note.
88
When a person obtains a final judgment against a licensee and seeks payment from the real estate recovery fund, what is the time frame for making application for payment from the fund?
a. within six months of the date of violation that resulted in the judgment being issued
b. at any time after termination of the proceeding because no specific time frame is provided by law
c. no more than one year after the termination of the proceedings, including reviews and appeals, in connection with the judgement
d. within 30 days of the initial decision of the court directing the licensee to pay compensation
c. no more than one year after the termination of the proceedings, including reviews and appeals, in connection with the judgment
License law provides that an aggrieved person who has been awarded a judgment by a court of competent jurisdiction must make application to the recovery fund no more than one year after the termination of the proceedings, including reviews and appeals (803(b)(4)).
89
All of the following are economic characteristics of land EXCEPT
a. permanence of investment
b. scarcity
c. area preference
d. uniqueness
d. uniqueness
Uniqueness is a physical characteristic of real estate, along with immobility and indestructibility.
90
Landowner Shelley subdivides her acreage and offers the lots for sale. Broker Ernie tell her that he can sell the lots. After Ernie sells some of the lots, the landowner refuses to pay him a commission. The broker can
a. do nothing
b. file a lien against the landowner's remaining lots
c. sue the landowner for breach of contract
d. report the landowner to the real estate licensing authorities
a. do nothing
Unless the broker as been employed by the seller under a valid contract, the broker is not entitled to a commission.
91
The final transaction to complete a purchase contract is called a(n)
a. closing in equity
b. installment sale
c. escrow
d. provisional sale
c. escrow
An escrow is a method of closing in which a disinterested third party is authorized to act as escrow agent and to coordinate the closing activities.
92
Whenever the commission is required to satisfy a claim against a licensee with money from the real estate recovery fund, the licensee
a. must repay the full amount plus interest to the account for his or her license to be reinstated
b. must agree to a monthly payment schedule in order to maintain an active license
c. may expect the Pennsylvania Real Estate Commission to foreclose on any property owned by the licensee
d. may continue engaging in real estate activities under the commission's direct supervision
a. must repay the full amount plus interest to the account for his or her license to be reinstated
If the commission pays an amount in settlement of a claim against a licensee, the license of that person is automatically suspended upon the effective date of payment and will not be reinstated until the licensee has repaid the amount in full plus interest at the rate of 10 percent per year (803(f)).
93
A wooded area with biking and hiking trails is situated between old cotton mills and a housing development. This area is considered a
a. utility easement
b. buffer zone
c. designated park required under federal guidelines
d. variance to the existing zoning
c. buffer zone
Buffer zones, such as parks, are used by municipalities to screen residential areas from non-residential zones.
94
With a tenancy for years
a. a 30-day notice is required to terminate the lease
b. the term of the lease must be for at least one year
c. no notice is required to terminate the lease
d. the lessee has a freehold estate
c. no notice is required to terminate the lease
An estate (tenancy) for years is a leasehold estate that continues for a definite period of time. Because it always has specific beginning and ending dates, notice is not required.
95
A broker who has done a proper CMA discussed the probable market value of the property with the seller, and the seller wants an unrealistic price on the property. The broker may do all of the following EXCEPT
a. take the listing at the proposed seller's price planning on reducing the price in the future when the seller is more realistic
b. take the listing with the understanding that price reductions may be needed
c. suggest the seller have a formal appraisal done
d. decline to take the listing at the high price
a. take the listing at the proposed seller's price planning on reducing the price in the future when the seller is more realistic
Whether a CMA is used for a formal appraisal, the figure sought is the property's market value, and while it is the property owner's privilege to set whatever listing price he or she chooses, a broker should consider rejecting any listing that is severely out of line.
96
Three years ago, the Henderson's moved from the house they had owned for 20 years but did not sell it. They decided to travel and bought a mobile home to live in. They now decide to sell the house. How much of the capital gain on the house will be taxable?
a. none of it, if it is less than $500,000
b. all of it, if it is over $500,000
c. 15 percent, depending on their tax bracket
d. 28 percent, depending on their tax bracket
a. none of it, if it is less than $500,000
The Hendersons must have lived in the house two out of the last five years, which they have done, to receive $500,000 exemption from capital gains tax.
97
An unlicensed individual who engages in activities for which a real estate license is required is subject to which penalties upon conviction for a first offense?
a. fine not to exceed $500
b. a fine not to exceed $5,000 and a mandatory prison term not to exceed five years
c. Fine not to exceed $1,000 and one-year imprisonment
d. Civil penalty of $5,000 in addition to other penalties provided by law
a. fine not to exceed $500
Upon conviction for a first offense for practicing real estate without a license, the maximum penalty is a fine not exceeding $500, imprisonment not exceeding three months, or both (303).
98
A suit to quiet title refers to
a. the deposit of a title with an escrow agent
b. a title insurance company's search of title
c. the removal of a cloud on the title by court action
d. a mortgagor relinquishing title after foreclosure
c. the removal of a could on the title by court action
If there is a gap in the ownership chain, then this cloud on the title makes it necessary to establish ownership by court action; this is called a suit to quiet title.
99
The type of insurance that will protect the owner and heirs is called a(n)
a. owner's policy
b. certificate of sale policy
c. leasehold policy
d. lender's policy
a. owner's policy
An owner's policy is issued for the benefit of the owner and her heirs, unlike the lender's policy, which is issued for the mortgage company.
100
In a dual agency situation, a broker may represent both the seller and buyer if
a. the broker informs either the buyer or the seller of this fact
b. this is the only option for the broker to sell the property and get paid a full commission
c. both parties are represented by attorneys
d. both parties give their informed consent, usually in writing, to the dual agency
d. both parties give their informed consent, usually in writing, to the dual agency
Dual agency, in states that allow it, requires informed written consent from both parties.
101
Which of the following is a requirement for relicensure of an individual whose license has been revoked by the commission?
a. if relicensure is permitted by the commission, the individual must comply with all current requirements for licensure before the license is issued
b. the individual must complete 14 hours of mandatory continuing education prior to the license's being reissued
c. the individual is not permitted to reapply for licensure for a period of at least ten years after revocation
d. the individual must provide certifications from at least three people attesting to the individual's honesty, integrity and competency.
a. if relicensure is permitted but the commission, the individual must comply with all current requirements for licensure before the license is satisfied
The commission will not authorize relicensure of an individual whose license has been revoked for at least five years. If relicensure is permitted, the individual must comply with current requirements for licensure before the license is issued (35.251).
102
A foreign corporation that owns a building in Pennsylvania decides to sell without listing it for sale. Who may legally handle the transaction on behalf of the corporation?
a. a licensed broker in the state where the corporation is headquartered may handle the sale without being licensed in Pennsylvania
b. A licensed Pennsylvania salesperson may be directly employed by the corporation to handle the transaction
c. Only a licensed Pennsylvania broker may handle the sale of property owned by a foreign corporation
d. An attorney-at-law who renders services to the corporation within the scope of an attorney-client relationship may handle the transaction for the corporation
d. an attorney-at-law who renders services to the corporation within the scope of an attorney-client relationship may handle the transaction for the corporation
An attorney-at-law who receives a fee for rendering services within the scope of an attorney-client relationship is exempt from licensure (35.302(5)) and so may handle the transaction. As an owner, the corporation may designate no more than five of the corporation's officers to act on behalf of the corporation as the owner.
103
What is the difference between a general lien and a specific lien?
a. a general lien affects all of a debtor's property, while a specific lien affects only a certain piece of property
b. a specific lien covers real estate, while a general lien covers personal property
c. a specific lien is held by one person, while a general lien is held by at least two people
d. a general lien cannot be enforced in court, while a specific lien can be enforced
a. a general lien affects all of a debtor's property, while a specific lien affects only a certain piece of property
A general lien affects all of a debtor's property, both real and personal. A specific lien affects only a particular property.
104
The purpose of the Real Estate Settlement Procedures Act (RESPA) is to
a. make real estate brokers more responsive to buyers' needs
b. see that buyers know all settlement costs that will be charged to them
c. help buyers know how much money is required
d. make sure buyers do not borrow more than they can pay
b. see that buyers know all settlement costs that will be charge to them
RESPA seeks to ensure that borrowers will know all settlement costs that will be charged to them.
105
Broker Joan shows properties listed for sale with her company to prospect car. Karl has refused buyer representation. Karl is Joan's
a. customer
b. principal
c. fiduciary
d. client
d. customer
The third party or non represented consumer for whom some level of service is provided is a customer and is entitled to fairness and honesty.
106
Jacob, a bachelor, died owning real estate that he devised by his will to his niece, Koralee. When will full title and possession pass to his niece?
a. immediately upon Jacob's death
b. when Koralee executes a new deed to the property
c. after his will has been probated
d. after Koralee has paid all inheritance taxes
a. after his will has been probated
Koralee is regarded as the owner immediately upon the testator's death, but she will not receive possession (as a devisee) until probate proceedings are complete.
107
Regarding agreements of sale, all of the following statements are true EXCEPT
a. the agreement must contain a statement that access to a public road may require issuance of a highway occupancy permit
b. the licensee must furnish a copy of the sales contract to all signatories at the time of execution
c. the licensee must retain copies in his or her files for three years from the date it was signed
d. the agreement must contain a statement identifying the capacity in which the broker is engaged
c. the licensee must retain copies in his or her files for three years from the date it was signed
The broker is required to keep records relating to real estate transactions for three years following consummation or termination of the transaction. Mandatory inclusions in agreements of sale include the following: copy of sales contract given to signatories, statement regarding broker's services, and statement that access to a public road my require obtaining a highway occupancy permit (statute 608.2 and commission rule 35.333).
108
The following legal description contains how many acres: the S1/2 of the SE1/4 of the NW1/4 of the NE1/4 of Section 7?
a. 20 acres
b. 2.5 acres
c. 10 acres
d. 5 acres
d. 5 acres
Multiply all denominators: 2x4x4x4 = 128; 640 (acres is a section) / 128 = 5
109
Which statement is TRUE regarding agency relationships between licensees and consumers?
a. a broker may not represent both a buyer and seller as an agent in the same transaction
b. if a broker chooses to represent both buyers and sellers under agency relationships, the broker must adopt a policy appointing designated agents
c. all agency relationships must be expressly created by written agreements
d. an open listing agreement creating an agency relationship between a seller and broker may be an oral agreement
d. an open listing agreement creating an agency relationship between a seller and broker may be an oral agreement
Agency relationships may be created either orally or in writing. A written agreement is necessary when the broker is providing a service for a fee. Brokers may represent buyers and sellers in the same transaction with written consent from both parties (606.1(b)).
110
Margie listed her real estate for sale at $100,000. If her cost was 80 percent of the listing price, what will her percentage of profit be when her real estate is sold for the listing price?
a. 25 percent
b. 10 percent
c. 15 percent
d. 20 percent
a. 25 percent
$100,000 (listing price) x 80 percent (cost) = $80,000;
$100,000 - $80,000 = $20,000 (profit);
$20,000 / $80,000 = 25% profit
111
All of the following factors would be important in comparing properties under the sales comparison approach to value EXCEPT differences in
a. appearance and condition
b. dates of sale
c. original cost
d. financing terms
c. original cost
None of the approaches to appraisal considers the original (historical) cost of a property. The other three factors would be relevant to the sales comparison approach-sometimes called the market data approach. Original cost, however, is used in computation of book-value depreciation.
112
A licensed salesperson obtains a listing. Several days later, the salesperson meets prospective buyers at the property and tells them, "I am the listing agent for this property, and so I'm very familiar with it." He then proceeds to engage in a substantive discussion about their needs and motivations as he shows them the property. Under these circumstances, the sales person has
a. failed to comply with state law regarding disclosure of agency relationships
b. properly disclosed his agency relationship with the seller
c. created a dual agency, which is a violation of the Pennsylvania Real Estate License and Regulation Act
d. made a substantial misrepresentation because the listing belong sot the broker
a. failed to comply with state law regarding disclosure of agency relationships
The salesperson has failed to comply with state law. Prior to engaging in a substantive discussion, the licensee is required to provide the consumer with a consumer notice disclosing information required by law (608).
113
Immediately upon passing the salesperson licensing examination, which activity may an individual legally engage in?
a. holding open houses for the public under the direct supervision of a broker
b. preparing and presenting a comparative market analysis to a prospective seller
c. selling business opportunities to the public
d. negotiating a loan on real estate on behalf of a broker
c. selling business opportunities to the public
A real estate license is not required for the sale of business opportunities. Upon passing the license exam, a candidate is qualified to apply for a license. Until the license is issued by the state, an individual may not engage in any activity for which a license is required. Such activities including holding open houses for the public, preparing comparative market analyses, and negotiating loans on real estate.
114
A bill of sale is used to transfer the ownership of
a. real property
b. appurtenances
c. fixtures
d. personal property
d. personal property
Personal property is conveyed by a bill of sale, while real property is conveyed by deed.
115
Money that serves to compensate a seller in the event of a buyer default is known as
a. liquidated damages
b. consideration
c. escrow funds
d. actual damages
a. liquidated damages
When parties agree that a certain amount of money will compensate the non-breaching party, that money is called liquidated damages. Earnest money typically serves as liquidated damages in case the buyer defaults.
116
What is the formula to find the Capitalization Rate?
NOI (Net Operating Income | Gross Annual Income - Expenses) / Current Market Value
