When land is conveyed to a trustee, the trustee may
do whatever is permitted under the trust agreement.
The economic characteristics of land are
scarcity, location, and durability.
Tenants are still in their rental property even though their lease has expired. The landlord has given them written notice to quit and refused to accept rent. They are
tenants at sufferance.
The land description T3N, R4W Principal Meridian refers to what method of property description?
A homeowner is willing to let his neighbor park an RV in his backyard. He does NOT want to make the permission permanent in case he dislikes others who might move next door in the future. What should he give his neighbor?
Real property can be converted to personal property by
A property is encumbered by a first mortgage of $60,000 and a second mortgage of $23,500. The property has just been sold at a foreclosure auction to a speculating investor for $88,000. Assume that all costs of the foreclosure sale are included in these balances. Which of the following statements is FALSE regarding the distribution of funds?
The second mortgagee receives nothing unless he forced the foreclosure auction.
If conditions for purchase are included in a deed and these conditions are violated, what is the penalty?
Return of the property to the original owner.
The terms "littoral," "riparian," and "appropriative" refer to
A deed restriction is applicable to the activities of
all owners, present and future.
A lawsuit for inverse condemnation may be brought by
Which of the following BEST illustrates the concept and intent of a buffer zone?
Garden apartments located between a singlefamily residential neighborhood and a shopping center.
An Environmental Impact Statement (EIS)
projects the impact on the environment of a proposed project.
New sidewalks installed only on one particular street will probably be paid for by
a special assessment.
A commercial property lost value because a recently constructed highway moved traffic away from the property. This is an example of
economic or external obsolescence.
The gross rent multiplier for a single-family home is calculated by dividing the sales price of the property by
its gross monthly rent.
An appraiser MUST be licensed or certified to handle Federally related work on residential property valued at more than
Which of the following is NOT a consideration in the definition of market value?
Buyer and seller must agree to appraised value.
All of the following are methods to calculate the reproduction or replacement cost of a building EXCEPT the
A competitive market analysis takes into consideration
square footage of the subject property.
When preparing a market data estimate of value, which of the following categories of adjustment is NOT essential?
The original cost of the building.
The purpose of usury laws is to regulate
interest rates charged by lenders.
Which of the following statements about discount points is FALSE?
They are computed as a percentage of the selling price.
When is flood insurance REQUIRED in order to obtain a loan?
hen the property is located in a Flood Hazard Zone.
A borrower has defaulted on the mortgage. The mortgage contains an acceleration clause. This permits the lender to
demand immediate payment of the entire note.
A buyer made an offer on a property that was listed at $350,000. She wanted to put $35,000 down and make payments to the seller, allowing the seller to retain title until the principal was paid off. The seller accepted, and the buyer became a
An adjustable rate loan should include all of the following elements EXCEPT
Which of these Federal laws regulates the advertisement of a lender's credit terms (rates, payment, etc.)?
The FHA functions MOST like
an insurance company.
A salesperson lists a property with a contract that allows for subagency and dual agency. The salesperson is
an agent to the broker and a subagent to the principal
A realty firm has just entered into an agreement to represent a home builder in the sale of a new subdivision. The firm has located several potential buyers and five homes have been sold to purchasers that the firm's agents have contacted. The realty firm has an agency relationship with
A broker lists a property, with a listing contract allowing subagency and dual agency. One of the broker's salespersons shows the property. The salesperson would be classified as
a subagent of the seller.
Under the terms of their listing contract, the owners may sell their house themselves and pay no commission. If their agent sells it, a commission will be due. What kind of listing contract do the owners have?
Exclusive agency listing.
Which of the following events would AUTOMATICALLY cancel a listing agreement?
Property owner's death.
A broker has brought a ready, willing, and able buyer to a seller. In MOST listing contracts, the broker has earned his commission when
the seller accepts the offer.
A broker supplies the financing for a project to build condominiums with the stipulation that he has the exclusive right to sell the completed condos. Which of the following BEST describes this relationship?
Agency coupled with an interest.
The day after a broker's listing on a house expired, it was listed with another broker and offered in the MLS. Several days later, a third licensee called the first broker and asked for the key to show the home. The broker should inform the caller that
he is no longer the listing agent.
During the listing presentation, the seller questions the amount of commission to be paid and is told
the amount of commission is negotiable.
The relationship in which the agent is placed in the position of trust and confidence to the principal is known by the term
A seller tells the listing agent that her home was treated for termites 10 years ago, so there are no termites now. Before listing the property, the agent should
tell the seller to disclose the termite treatment on the property disclosure.
A seller mentions to his agent that the previous owners of his property may have dumped hazardous waste on the site. Under the C omprehensive Environmental Response, C ompensation, and Liability Act (C ERC LA), who is liable for damages from the dumping prior to the sale of the property?
Without checking the facts, a broker who is the seller's agent tells a buyer that the property taxes in a particular neighborhood are among the lowest in the area. The buyer relies on the broker's statement and makes an offer on a house in the neighborhood. Before closing, it is determined that the taxes are actually among the highest in the area. The buyer could seek to rescind the contract on the basis of
At the time of listing, the seller tells the listing agent they are moving because the neighbor has loud parties every weekend. The agent should
tell potential buyers about the parties.
The real estate broker who is listing a house for sale should personally verify
the number of square feet in the building
The Department of Housing and Urban Development estimates that most private homes built before 1978 contain potentially dangerous levels of lead. Because of this, some Federal agencies, such as FHA,
require the buyer to acknowledge disclosure of the presence of any known lead paint.
The real estate contract for a specific property for use as an unlicensed whiskey sales operation was forced to terminate. The termination was the result of
impossibility of performance.
A prospective buyer made an offer to purchase a property. The owner responded with a counteroffer. While the buyer was reviewing the counteroffer, the owner received a better offer. The owner can accept the second offer if
the owner withdraws the counteroffer before it is accepted.
The purpose of requiring an earnest money deposit in a real estate sales contract is to
provide evidence of the buyer's intention to carry out the contract.
Prospective buyers made an offer on a property. The seller did NOT accept, but made a counteroffer. The prospective buyers signed the counteroffer and the real estate agent delivered their acceptance to the seller. In the interim, the same buyers had found another house that they liked better and made an offer on it, which was accepted. Which of the following is TRUE?
Both contracts are valid.
A couple signed a lease on an apartment for a period of 1 year. The lease does NOT contain an automatic renewal clause. The couple plans to move out at the end of the lease rather than renew it. How much notice MUST they give to comply with the lease term?
No notice is required.
An amount of money, agreed to in writing by buyer and seller, that will serve as full compensation if one party does not live up to a sales contract is called
A mentally disabled person who has been declared incompetent by a judge wishes to enter into a contract. Under what conditions can such a person do so?
The person appointed by the court to act for the disabled person must contract on his or her behalf.
A written agreement in which a purchaser agrees to buy and a seller agrees to sell is called
A contract has been drawn which obliges the sellers to convey title to their land to the buyers if the buyers come up with $22,000 on or before December 31st. This is called
an option contract.
A judgment has been properly recorded. Any subsequent purchasers, whether they have actually examined the record or not, have been given
The escrow officer or closing agent MUST give information regarding the sales price and seller's social security number to
When someone has living heirs but dies without leaving a will, the estate is distributed according to the
statute of descent.
The buyer is assuming a mortgage presently on the property in the amount of $110,000. What is the adjustment made at closing?
Credit buyer $110,000; debit seller $110,000.
Depreciation is calculated based on the
cost of the building only.
At the closing on June 15, the buyer is assuming a mortgage presently on the property, on which the monthly interest charge is currently $600. The seller has made the payment due on June 1. Assuming a VA mortgage, what is the adjustment made at closing?
Debit seller $300; credit buyer $300.
Which of the following is NOT usually prorated at closing?
Special tax assessments.
An agent shows a home to a couple and mentions that it has a lovely fireplace in the living room. After buying the home, the buyers and agent discover that the brick fireplace is just a decorative fireplace and is not "wood burning." Which of the following would BEST protect the agent from financial loss?
E & O coverage.
Why was the Jones vs. Mayer decision of 1968 important?
By upholding the Civil Rights Act of 1866, the Supreme Court removed all exceptions to racial discrimination in housing.
Antitrust laws prohibit competing brokers from all of the following EXCEPT
receiving compensation from both the buyer and the seller.
A broker says, while showing a rural property, "This property has the world's purest well water." This would be an example of
an expression of opinion, or puffing, which could lead to misrepresentation.
The buyer wants to make the purchase offer contingent on a complex mortgage arrangement. The buyer's agent who is drawing up the contract should
suggest the buyer ask a lawyer to furnish the wording.
Earnest money should be deposited into a trust account
in a timely manner, according to state laws.
A managing broker can be held responsible for
all real estate activities of salespersons.
A minority couple come to a salesperson looking for a house. The salesperson has some properties for which the couple qualify but avoids showing or mentioning these listings. Instead, the salesperson shows only properties in low-priced and integrated neighborhoods. This practice is known as
According to the Truth-in-Lending Act, if any "trigger terms" are used in an ad, all of the following disclosures MUST appear in the ad EXCEPT the
prepayment penalties and rebates.
A single parent of two preschool children makes an application to rent a condo in a development intended for older persons that is 90% occupied by people over the age of 55. In this case, the Federal Fair Housing Act protects the
condo owner from being forced to rent to the family because of the age of over 80% of the occupants of the development.
On January 15, a seller paid $960 in annual property tax for the current calendar year. A buyer is purchasing the house with the closing set for March 1. What will be the seller's credit for the property taxes already paid if the buyer pays for the day of closing?
A major reason for buying and owning a condominium rather than a detached single-family home is that
a condominium tends to be more affordable
Ownership of common stock in a corporation gives
an interest that is classified as personal property.
A property management plan may serve different purposes for different owners, and generally has to strike a balance between preservation of the property's value and generation of income. Which of the following owners would MOST likely prefer a property manager who emphasizes cash flow or income over the maintenance of value?
An individual entrepreneur who owns several apartment buildings.