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national 3

Terms in this set (126)

Your buyer client, Percival, was pre-approved for the exact amount he needed to buy the home of his dreams, and he made an offer that was accepted by the seller. What's his next step?
Obtain pre-approval from another lender.
Sign a purchase agreement.
Complete a loan application.
Review the underwriter's decision.
Complete a loan application.
After his offer is accepted, he's ready to begin the loan application.
The Adams family is financing their loan through Acme Bank and their agent negotiated a great sales price on their new home. Smith Title Company processed the loan documents. The Adamses must purchase mortgage insurance. Who does the insurance protect?
Acme Bank
Smith Title
The Adamses
The realtor
Acme Bank

Private mortgage insurance is protection for the lender in the event of buyer default; it is used when the borrower does not have a large enough (usually 20%) down payment.
Your client is purchasing a single-family home with a conventional loan. The listing price is $150,000. Does this situation require a licensed or certified appraiser?
No, since conventional financing does not require an appraisal.
No, since the sales price is less than $250,000.
Yes, properties with sales prices of less than $175,000 require a certified appraiser.
Yes, all property transfers require an appraisal.
No, since the sales price is less than $250,000.

Federal law exempts this property from the certified appraisal requirement because the sales price is less than $250,000. However, it's always a good policy to pay for the best available service or product, regardless of the lender's legal obligation.
Your home inspector Mason found some discoloration in the attic and near the windows on the second floor. Why does he think this may be a concern?
It means that the homeowners haven't insulated well.
It could be a sign of fire damage.
Dark stains in the attic could mean plumbing problems.
It's indicative of insect activity.
It could be a sign of fire damage.

Discoloration in the attic or around windows and doors can be signs of a previous fire. The discoloration could be from smoke moving to the highest level of the house or escaping out openings in the home.
Which of the following is a true statement about FHA financing?
FHA loans have more stringent requirements than conventional loans do.
FHA is best for borrowers who have large down payments.
FHA loans are available to all borrowers, regardless of credit history.
An FHA loan is usually more attractive to borrowers who have lower credit scores and down payments.
An FHA loan is usually more attractive to borrowers who have lower credit scores and down payments.

An FHA loan is typically more attractive to borrowers with less-than-stellar credit or who have saved a minimal amount for a down payment.
Which entity services rural development loans?
HUD
FSA
FNMA
GNMA
hud

The Farm Service Agency, an agency of the USDA, administers this program.
Adamsburg, a bedroom community outside the city, is growing by leaps and bounds. There's been a boom in the number of children under age 12. Mia wants to open an in-home daycare, but she lives in a neighborhood that isn't zoned for home occupations. She applied for a/n _________ and, after a public hearing, was granted one to operate the daycare.
Area variance
Special use permit
Moratorium
Use variance
Use variance

A special use permit, also called a conditional use permit, requires a public hearing and may be granted as long as the use is in harmony with zoning ordinances and doesn't adversely affect the community.
Martin placed all of his real estate investments in a trust, and the proceeds will be distributed through the trust to his son Nathan. In this situation, Nathan is the ________.
Trustor
Beneficiary
Trustee
Fiduciary
Beneficiary

The individual who reaps the rewards of the trust is called the beneficiary (because they benefit from the trust).
The Siegels are purchasing a commercial investment property and plan to use straight-line depreciation on their financial statements and tax calculations. Which of the following would NOT be included in the Siegel's depreciation basis calculations?
The price that they paid for the property, minus any land costs
The loan origination and lender fees that they paid at closing
The prorated property taxes that they paid at closing
The cost of the electrical system upgrades they did after purchase
The prorated property taxes that they paid at closing

Depreciation basis is composed of the sales price plus any acquisition costs and capital improvements. The loan origination fee is an acquisition cost, and the electrical system upgrades are capital improvements.
Cedric is opening a model railroad shop, but he knows that he'll only run the store until his partner finishes law school. He signed a three-year lease, after which the lease will terminate. What kind of leasehold is this?
Estate at sufferance
Estate at will
Estate for years
Periodic estate
Estate for years

An estate for years is a lease with a fixed termination date. It may be for one month, three months, or three years, but at the end of the lease period it automatically terminates.
When referring to private land use restrictions, fence height, additional structures, and architectural design are generally categorized under ______.
Contingencies
Covenants
Conditions
Codes
Covenants

Fence height, additional structures, and architectural design typically would be categorized under covenants (HOA restrictions are typically set up as covenants).
Select the statement that correctly exemplifies the covenant term.
The covenant of warranty promises that the grantor has the capacity to convey title.
The covenant of quiet enjoyment promises that the grantee won't be disturbed by a title defect the grantor passes on.
The covenant for further assurances assures the grantee that there are no undisclosed encumbrances on the property.
The covenant against encumbrances is the grantor's guarantee that he or she owns the property being conveyed.
The covenant of quiet enjoyment promises that the grantee won't be disturbed by a title defect the grantor passes on.

The covenant of quiet enjoyment promises that the grantee won't have his enjoyment of the property hampered by claims against the title.
Lucas, Ivan, Chad, and Trace own a property as joint tenants. After a few years, Ivan sells his interest to Tom. Chad dies intestate but is survived by a wife, Amy. Trace also then passes away but wills his property to Monique. Who owns the property after Trace's death?
Lucas, Monique, and Amy
Lucas, Tom, Amy, and Monique
Lucas
Lucas and Tom
Lucas and Tom

Joint tenants are allowed to sell their interests, so Tom became a property owner when Ivan sold his interest. However, joint tenancy is not inheritable but instead includes the right of survivorship. Trace's and Chad's interests passed to Lucas and Tom.
Select the situation that correctly represents a true conflict of fiduciary duties.
Nikki's seller client has instructed her not to present offers that are less than the listing price. This is a conflict of Nikki's duty of disclosure, which requires her to present all offers, and her duty of obedience.
Kai learns that her buyer clients' inspector will be reporting a furnace issue to the buyers. She doesn't want to break the news to them. Her duty of confidentiality to the seller and her duty of loyalty to her buyers are in conflict.
Terrance's buyer clients don't want him to share with the seller that they're having trouble coming up with the down payment. Terrance's duty of loyalty to his clients is in conflict with his duty of disclosure.
Renee's clients don't want showings on weekends. Renee knows this may reduce market exposure and she feels it's not in her client's best interests. This is a conflict of her duty of loyalty and her duty of obedience.
Nikki's seller client has instructed her not to present offers that are less than the listing price. This is a conflict of Nikki's duty of disclosure, which requires her to present all offers, and her duty of obedience.

The duty of disclosure requires that licensees present all offers to their clients, but Nikki's client has asked that she not present all offers, creating a conflict between her duties of disclosure and obedience.
Gregory and Dianne are American citizens of Cuban origin, and when their home loan is denied, they suspect discrimination. Which of the following acts prohibits lender discrimination on the basis of the protected class of national origin?
Home Mortgage Discrimination Act
Consumer Credit Protection Act
Community Reinvestment Act
Equal Credit Opportunity Act
Home Mortgage Discrimination Act

The Equal Credit Opportunity Act prohibits lender discrimination on the basis of an applicant's protected class status, such as national origin.
How would you calculate the transfer tax if it's $.35 per $1,000 of the sales price ($400,000)?
400,000 x .35 x 1,000
(400,000 ÷ 1,000) x .35
(400,000 ÷ 1,000) x 35
400,000 ÷ 35 x 1,000
(400,000 ÷ 1,000) x .35

Divide the sales price by 1,000 (400,000 ÷ 1000= 400), then multiply by .35 (400 x .35 = 140).
The Goldmans are buying the Kraskis' house for $415,000, and closing is set for March 15. The Kraskis have a loan balance of $230,000 at a rate of 4.7% and have prepaid property taxes ($2,506) and insurance ($1,400), and they also have mortgage interest to consider. Using a 365-day proration method, calculate the prorated amount the Goldmans will owe the Kraskis at closing. (Assume February has 28 days this year).
$3,113.46
$160.65
$792.54
$604.95
$3,113.46

Calculate daily rates for taxes and insurance to be prorated: ($2,506 ÷ 365 = $6.87) and ($1,400 ÷ 365 = $3.84). The Kraskis pay the first 74 days: (74 x $6.87) + (74 x $3.84) = $792.54. $2,506 + $1,400 - $792.54 = $3,113.46 owed by the Goldmans.
A buyer with a $242,000 loan has a monthly principal and interest payment of $1,317.66. If $1,033.54 is interest, what's the new principal balance after the first payment is applied?
$240,682.34
$241,715.88
$241,672.12
$241,976.21
$241,715.88

If $1,033.54 of the $2,102.36 is interest, that leaves $284.12 for principal. Subtract $284.12 from $242,000 for a new principal balance of $241,715.88.
What's the minimum number of business days prior to closing that lenders have to provide borrowers with the Closing Disclosure form?
Five
Four
Three
Two
Three

Lenders must provide the Closing Disclosure form to borrowers a minimum of three business days before closing on the mortgage loan so that borrowers have time to compare the final terms and closing costs to the Loan Estimate they received at application.
A living trust differs from a testamentary trust in that a living trust is established to convey property as well as to ______.
Transfer ownership before death and avoid probate
Hasten the probate process
Shelter income from taxation
Dictate terms of care in the event the trust creator becomes incapacitated
Transfer ownership before death and avoid probate

A living trust avoids the entire probate process.
Which of the following would make the 'Choose Your Neighbor' flier an allowable strategy for finding prospective buyers?
With seller consent
For property located in a gated community
For rural properties greater than 20 acres
As part of a comprehensive marketing strategy that doesn't limit or restrict potential buyers
As part of a comprehensive marketing strategy that doesn't limit or restrict potential buyers

The 'Choose Your Neighbor' flier would be allowed only in conjunction with other marketing strategies that make the property available to all types of buyers.
What's the purpose of a chain of title?
To establish proof of insurance
To insure the policy owner against financial loss if the title to the real estate has covered defects
To establish history of past ownership
To determine whether encroachments exist and to determine the boundaries of the property
To establish history of past ownership
A strip mall valued at $850,000 has a $67,500 annual net operating income. What is the capitalization rate for the strip mall?
7.9%
8.67%
9.2%
12.59%
7.9%

The cap rate formula is: net operating income ÷ value = rate (I ÷ V = R). So $67,500 ÷ $850,000 = .079 or 7.9%. This formula can work in reverse as well: value (purchase price) × cap rate = net operating income (V × R = I).
seller. Real estate licensees may also prepare broker price opinions.
Question 9
The Gatlins' lender tells them they can afford a monthly payment of $1,830 on their new home loan. What interest rate are the Gatlins getting if this is an interest-only loan with a principal balance of $349,000?
0.524%
6.29%
6.39%
5.24%
6.29%

Annual payment ÷ loan balance = interest rate. $1,830 x 12 to get the annual payment of $21,960. Then divide the annual payment by the loan amount: $21, 960 ÷ $349,000 = .0629, or 6.29%.
What type of timeshare involves a buyer agreeing to a one-time purchase price and an annual maintenance fee, and in return getting their selection of accommodation time and having the right to use the unit for a specified number of years?
Lifelong
Vacation
Renewable
Permanent
Vacation

Vacation ownership is basically a way to prepay for a vacation rather than renting it.
One cyber scam that targets the real estate industry in particular is ______.
Trojan viruses
Wire transfer fraud
Malware programs
Phishing scams
Malware programs

Because wire transfers are often required in real estate transactions, wire transfer fraud is particularly prevalent in real estate.
Ellen and Isaac have a timeshare near the Grand Canyon. They'll be able to use it for two weeks every September, for the next eight years. What type of timeshare is this?
Timeshare use
Periodic estate
Timeshare estate
Fee simple timeshare
Timeshare use

A timeshare use, also known as a right-to-use timeshare, grants the right to possession for some specified number of years.
Lowell used to own 17 acres of property on the bay. After last year's hurricanes, Lowell now owns 15.5 acres of bayfront property. Which natural process was responsible for Lowell's loss of acreage?
Avulsion
Reliction
Erasure
Accretion
Avulsion

Avulsion is the loss of land by a sudden, large-scale change in water flow. A hurricane would create a sudden large change in water flow.
A loss in value caused by an undesirable or hazardous influence offsite is which type of depreciation?
Physical depreciation
Functional obsolescence
Economic and material
External depreciation
External depreciation

External depreciation or economic obsolescence is a loss in value caused by an undesirable or hazardous influence offsite.
Woody has a lease with an option to buy on his penthouse apartment. Each month, 20% of his lease payment goes toward ________.
Maintenance and utilities
A down payment toward the purchase price
Property taxes
The option fee
A down payment toward the purchase price

The option fee is typically a one-time fee that the buyer will forfeit if the right to purchase isn't exercised. If a portion of the monthly rent is set aside, it's usually applied toward the property's purchase price.
Millie is a buyer who has given her agent an earnest money check for $10,000 with an offer to purchase. When will the check be deposited?
Immediately upon receipt by her agent
After the purchase offer is accepted by the seller
At least 10 days prior to closing on the sale
After Millie receives loan approval for the purchase
After the purchase offer is accepted by the seller

Earnest money funds are typically deposited after the seller accepts the buyer's offer.
Nate represents Elena in the purchase of a house. Katherine represents the seller, Timothy. Which of the following statements accurately reflects the agency duties owed?
Katherine owes Elena the duty of loyalty.
Each licensee owes all fiduciary duties to both clients.
Nate owes Timothy the duty of disclosure.
Nate owes no duties to Timothy, and Katherine owes no duties to Elena.
Nate owes Timothy the duty of disclosure.

A licensee owes all parties the duty of disclosing material facts, as well as honesty, fairness, and accounting. Only a client would be owed obedience, loyalty, and confidentiality.
Several actions take place on the secondary mortgage market. Which of these is a common activity?
Issuing loans to consumers
Packaging loans into mortgage-backed securities
Setting loan origination fees
Regulating primary lenders
Packaging loans into mortgage-backed securities

Loans are commonly packaged into MBSs and sold to investors.
What's the rate of capitalization of a property generating net property income of $25,000 per year that's valued at $312,500?
12%
6%
8%
10%
8%

The capitalization formula is value = income ÷ rate of capitalization. To determine rate of capitalization, divide Income by value ($25,000 ÷ $312,500 = 8%).
Which of these is an example of a sub-agency relationship?
Greta refers a buyer client to a more experienced colleague, asking for a referral fee from the colleague.
Aldrich accepts a designated agency appointment from his broker so his firm can represent both the buyer and the seller.
Morris, who's licensed independently, finds a buyer customer for Greg's listing with Marvel Homes and is obligated to act in the best interest of Marvel Homes' client.
Blaine represents the buyer in a transaction with an unrepresented seller.
Morris, who's licensed independently, finds a buyer customer for Greg's listing with Marvel Homes and is obligated to act in the best interest of Marvel Homes' client.

Sub-agency refers to a licensee from one firm who brings an unrepresented buyer for a property listed by another firm. The sub-agent represents the seller in this situation.
Sophie received title to her grandmother's farm last spring. For almost 100 years, Sophie's family has kept cows and goats on the 120-acre property. The deed came with a caveat: Sophie is never to raise pigs on the farm. If she does, then the property is transferred to her brother. What did Sophie's grandmother create?
Restriction
Condition
Covenant
Abatement
Condition


This situation describes a deed condition, which is a contingency placed on property ownership. If the condition is violated, ownership is lost.
Which of the following is a legitimate and legal way that an exclusive right-to-sell listing agreement may terminate without the seller owing a commission?
The seller has a change of heart.
The seller decides to sell the property without an agent.
The seller locates a buyer.
The listing agent stops working on the listing.
The listing agent stops working on the listing.

The only valid reason listed here is listing agent abandonment, which is when the listing agent stops working on the listing.
Which clause in a contract states that one or more parties won't be held liable if there are losses or expenses related to the contract?
Severability clause
Indemnification clause
Time of performance clause
Choice of law clause
An indemnification clause is a contractual shift of liability and obligations off of a given party.
Indemnification clause

An indemnification clause is a contractual shift of liability and obligations off of a given party.
To make valid computations of adjustments for the sales comparison approach to value, elements of comparison must be applied in a specific order. Which element is applied first?
Physical characteristics
Conditions of sale
Market conditions
Financing terms and cash equivalency
Financing terms and cash equivalency

When using the sales comparison approach, appraisers consider elements in a specific order: financing terms and cash equivalency, conditions of sale, market conditions at the time of contract and closing, location, and physical characteristics.
Jared has a 70/30 split with his brokerage firm, and his firm has a 50/50 split with cooperating brokerages. Last month, he earned $12,239.50 in commissions from his home sales, which totaled $538,000. What is the brokerage's commission rate?
7.6%
3.8%
2.3%
6.5%
6.5%

Jared's take of $12,239.50 is 70% of the commission, so his firm's commission is $12,239.50 ÷ .70 = $17,485. Multiply that amount by two to get the total commission the firm grossed: $34,970. Divide that amount by the total sales amount to find the brokerage's commission rate: $34,970 ÷ $538,000 = 0.065, or 6.5%.
The assessed value for your buyer clients' new purchase is $209,000. They feel they got a great deal since they're purchasing the property for $175,000. They've asked you to estimate their monthly property taxes. You know the rate for their jurisdiction is .52%.
$75.83
$90.57
$101.12
$121.98
$90.57

Multiply the assessed value by the tax rate and divide by 12 to calculate monthly taxes. ($209,000 x .52%) = $1,086.80 ÷ 12 = $90.57
In title theory states, which of the following is a true statement?
The mortgage creates a lien against the property used as security for the loan.
It's generally much easier for a lender to foreclose on a property.
A promissory note creates a lien against the property used as security for the loan.
The lien makes non-judicial foreclosure typical.
It's generally much easier for a lender to foreclose on a property.

In a title theory state, the lender holds the legal title to the property (usually through a third-party trustee) until the loan is paid off. This makes it easier for the lender to foreclose.
Kennie Mae's neighbor, Buzz, wants to sell his house but doesn't want to sign an agency agreement. Kennie Mae works with Buzz to list and show the property and negotiate offers. After the property sells, Buzz discovers that Kennie Mae didn't present all offers to him, and he sues Kennie Mae. Kennie Mae claims that because she didn't have an agency agreement with Buzz, she wasn't required to perform all fiduciary duties. What legal principle applies here?
Law of agency, because Kennie Mae defined her agency relationship with Buzz through the tasks she performed.
The doctrine of estoppel keeps Kennie Mae from disavowing the agency relationship because she provided agency tasks for Buzz.
Agency after the fact, because Kennie Mae continued to perform tasks for Buzz through the closing date.
The ratification doctrine states that Kennie Mae ratified her relationship with Buzz by signing the closing paperwork.
The doctrine of estoppel keeps Kennie Mae from disavowing the agency relationship because she provided agency tasks for Buzz.

The doctrine of estoppel prohibits an individual from making an assertion that's in opposition to actions or to a previous statement. Kennie Mae acted as if she was Buzz's agent, so she can't later disavow that behavior.
Chevy is an optionee. What's his sole responsibility?
Exercise the option.
Make monthly payments.
Make an offer.
Pay the option fee.
Pay the option fee.

An optionee's only responsibility is payment of the option fee. That can be any amount agreed to by the parties.
Beneficiary interest in land that's part of a land trust is considered ______.
Real property
Personal property
Protected from creditors
Subject to partition
Beneficiary interest is considered personal property, even though what the interest conveyed is in real property.
Personal property

Beneficiary interest is considered personal property, even though what the interest conveyed is in real property.
Jackson Elementary School is undergoing some major renovations during the summer while school is out of session. The renovation crew has a detailed list of requirements for the disposal and drainage of wastewater and sewage. These requirements are likely part of the ________ with which the renovators must comply.
Zoning regulation
Deed restriction
Safety laws
Building code
Building code

Building codes specify construction standards to ensure the health and safety of those using the buildings. Sanitary drainage and disposal is a common building code standard.
If an appraiser has found the value of a property to be $250,000 using a cap rate of 10%, what was the property's net operating income?
$10,000
$25,000
$2,500
$2.5 million
$25,000

The formula for determining value using the income approach is value = income/rate, which means that income = rate x value. When you multiply a percentage by a number, you're finding the percentage of that number, so 10% of $250,000 is $25,000.
Which of these is NOT one of the ways in which an agency relationship may be terminated without penalty for either the agent or the principal?
Phyllis listed her home with Brad. Brad put the property on the MLS, but Phyllis hasn't heard from him in over two months.
Delaney signed a buyer's representation agreement with Martha. After Delaney made an offer on a house, she changed her mind and terminated the agency agreement.
Richard listed Ole's ski chalet for sale. Two weeks later, an avalanche destroyed the property.
Martha listed Sonja's home for sale. Martha helped Sonja negotiate an offer and performed the other tasks required of her. The closing has taken place.
Delaney signed a buyer's representation agreement with Martha. After Delaney made an offer on a house, she changed her mind and terminated the agency agreement.

Unless Martha agrees to terminate the agency agreement with Delaney, Delaney may still owe Martha the agreed-upon compensation for breaching this agreement.
Which legislative act prohibits certain types of electronic communication?
SPAM-CAN
NO-SPAM
SPAM-JAM
CAN-SPAM
CAN-SPAM

The Controlling the Assault of Non-Solicited Pornography and Marketing Act (CAN-SPAM) prohibits junk email and requires an "unsubscribe" option in any email marketing messages.
The doctrine of laches refers to the ______ of restrictive covenants/deed restrictions.
Types
Enforcement
History
Creation
Types

The doctrine of laches refers to the enforcement of restrictive covenants. If property owners don't protect their rights to enforce these covenants, they can lose them.
When an area uses its zoning powers, what must be followed?
The state's zoning codes
The area's comprehensive plan
Federal zoning codes
Universal design standards
The area's comprehensive plan

An area's comprehensive plan outlines future development plans and goals of the area. Zoning decisions should follow this plan.
Nico is buying a home for $625,000. His earnest money deposit is 8%. He wants to avoid private mortgage insurance (PMI) on his conventional loan, and he owes 5% in closing costs. How much money should he bring to closing?
$81,250
$31,250
$106,250
$156,250
$106,250


Conventional loans often require 20% down to avoid PMI ($125,000), and Nico has paid a $50,000 deposit ($625,000 x .08). Closing costs are $31,250 ($625,000 x .05). He needs $106,250 to close ([$125,000 - $50,000] + $31,250).
Randolph has a leasehold estate that automatically renews at the end of each lease period. What type of leasehold estate does Randolph hold?
Periodic estate
Estate for months
Renewable estate
Estate at will
Periodic estate

A periodic estate may be for any specified period of time, often monthly.
Which type of buyer agency may limit the amount of representation but offers the flexibility to work with multiple agents?
Exclusive right to represent
Exclusive agency
Open agency
Limited agency
Open agency

Open agency offers buyers with the most flexibility to work with multiple agents.
An attorney receives a request to have an appraisal performed on a property inheritance that she is transferring from her deceased client's estate to his heir. Which of these statements is true?
A licensee or certified appraiser must always appraise estates that are inherited, but other types of estates are exempt.
Appraisals performed for attorneys for any reason must be performed by a certified appraiser.
Estate-related property transfers always require a certified appraisal.
This isn't a federally related transaction and under federal law an appraisal isn't required.
This isn't a federally related transaction and under federal law an appraisal isn't required.

Since this isn't a federally related transaction, federal law doesn't require a licensed or certified appraiser. However, state law may be more stringent.
Which statement correctly identifies a federal fair housing law and what it addressed?
Title VIII of the Civil Rights Act of 1968 prohibits housing discrimination based on race, color, national origin, and religion.
The Housing and Community Development Act of 1974 added marital status to the list of protected classes.
The Civil Rights Act of 1866 made it illegal to discriminate on the basis of age and gender.
The Fair Housing Act of 1968 attempted to eliminate discrimination based on gender.
Title VIII of the Civil Rights Act of 1968 prohibits housing discrimination based on race, color, national origin, and religion.

Title VIII of the Civil Rights Act of 1968 (aka the Fair Housing Act) prohibited housing discrimination based on race, color, national origin, and religion.
Why does the closing agent review the purchase contract?
To ensure that all contract signatures are in place
To gather closing-related information agreed to in the contract
To ensure that both parties are protected by clauses in the contract
To check for contract errors
To gather closing-related information agreed to in the contract

The closing agent uses the purchase contract to be sure that the closing process and prorations follow the parties' wishes as agreed to in the contract.
What's the best definition of land?
Everything that's not real property
Land, plus all things permanently attached to it, naturally or artificially
Real estate, plus all of the interests, benefits, and rights included in ownership
The earth's surface, extending downward to the center of the earth and upward to infinity, including permanently attached natural objects
The earth's surface, extending downward to the center of the earth and upward to infinity, including permanently attached natural objects

Land is defined as the earth's surface extending downward to the center of the earth and upward to infinity, including permanently attached natural objects.
Once Greg and Caitlin were married, they decided to purchase a home together. The most likely form of co-ownership under which they would make this purchase is ________.
Tenancy in common
Joint tenancy
Tenancy by the entirety
Estate in severalty
Tenancy by the entirety is concurrent ownership between two married people.
Tenancy by the entirety

Tenancy by the entirety is concurrent ownership between two married people.
Lenore makes a 95% offer on a townhouse that's listed at $285,000 and includes an earnest money deposit for 10% of her offer, which the seller accepts. She brings to closing a cashier's check for $35,025 comprising the balance of her 20% down payment and closing costs. What's the amount of her total down payment?
$62,100
$54,150
$35,025
$57,000
$54,150

Lenore's offer is $270,750 which is 95% of the list price ($285,000 x .95 = $270,750 ). Her total down payment is 20% of her accepted offer of $270,750, which is $54,150 (or $270,750 x .2).
Richard is interested in purchasing some rural land and included outbuildings. When reviewing the legal description, he sees the name of a principal meridian. What type of legal description is this?
Rectangular government survey
Lot and block
Metes and bounds
Monument and benchmark
Legal descriptions that use the RGSS usually include the state, name of the principal meridian, township, and range designations with compass directions and section numbers.
Rectangular government survey

Legal descriptions that use the RGSS usually include the state, name of the principal meridian, township, and range designations with compass directions and section numbers.
What makes a 'Choose Your Neighbor' marketing letter potentially discriminatory?
It limits the availability of the property for sale to those who are "pre-approved" by neighbors.
There's no requirement for the number of neighbors who receive the letter.
It prevents illiterate neighbors from participating in selection of buyers.
The letters don't allow neighbors to agree on the actual buyer.
The 'Choose Your Neighbor' marketing letter is discriminatory when it limits or restricts the type of buyers who have access to the property.
It limits the availability of the property for sale to those who are "pre-approved" by neighbors.

The 'Choose Your Neighbor' marketing letter is discriminatory when it limits or restricts the type of buyers who have access to the property.
Which entity typically enforces the code restrictions and licensing and insurance requirements for contractors, thereby enforcing the building code?
Local building department
Builder/developer
Department of Health
Department of Environmental Conservation
Local building department

While builders and developers self-regulate to some degree, they're not responsible for enforcing the building code. This is the local building department's responsibility.
The Swansons left the family property to their son, Jason, with the stipulation that he not build upon it. The type of estate Jason holds is ______.
Qualified lease
Fee simple absolute
Fee simple defeasible
Leasehold
Fee simple defeasible

This is a fee simple defeasible estate.
Related to title insurance, what is "subrogation"?
The process by which the lender receives coverage under a title insurance policy the borrower has purchased.
A covered party grants permission to the title company to pursue the party who caused a claim or loss.
The act of conveyance when the seller turns over all property rights to the buyer with a clear, marketable title.
The process by which the title policy pays out any claims to the buyer or lender.
A covered party grants permission to the title company to pursue the party who caused a claim or loss

When the title company is forced to pay a claim against the policy, the covered parties give the title company permission to pursue the party who caused the loss. The covered parties are said to "subrogate" their rights to the title company.
Victor's family has always owned this particular lake house. When he was little, he remembers the "beach" being no more than four feet wide before the waterline. Now Victor brings his own children to the lake house, but the beach is almost seven feet wide. What natural process could explain the beach being bigger?
Riparian
Reliction
Alluvion
Avulsion
Reliction

Reliction is the process by which water gradually recedes, which reveals new land.
In which of these situations is Ronna's fiduciary duty of reasonable skill and care at odds with her duty of obedience?
Ted, Ronna's broker, insisted that she teach a contracts class, even though she's a new agent.
Jefferson insists that Ronna interpret the implications of him breaching his contract with a buyer.
Ronna's buyer client asked her to keep his financial situation confidential.
Though her customer was adamant, Ronna turned down a commercial listing because it was outside her area of expertise.
Jefferson insists that Ronna interpret the implications of him breaching his contract with a buyer.

Ronna's duty of reasonable skill and care prohibits her from providing legal advice and supersedes her duty of obedience to Jefferson, her client.
Which of these statements accurately represents one of the required elements in a deed?
The grantee must be of legal age.
The deed includes an act of conveyance and may include a habendum clause.
The grantee must be legally competent.
The grantee must sign the deed and provide consideration.
The grantor is the seller; the grantee is the buyer. The grantor must sign the deed, be of legal capacity, and be positively identified. The deed must include the habendum clause and an act of conveyance.
The deed includes an act of conveyance and may include a habendum clause.

The grantor is the seller; the grantee is the buyer. The grantor must sign the deed, be of legal capacity, and be positively identified. The deed must include the habendum clause and an act of conveyance
Clint was looking for alternatives to the traditional vacation condo rental for his family. He purchased the right to use a given set of facilities at any point throughout the year. What did Clint purchase?
Campground membership
Condo estate
Timeshare use
Timeshare estate
Campground membership

A campground membership gives the purchaser the right to use all of the campground facilities, such as water or electric hookups, restrooms, and recreational facilities like pools or playgrounds. Members may use the facilities at any time during the year.
Sam is a licensee who believes strongly in adhering to fair housing laws. When his broker asks him to "just lighten up a little" and work with a client who's refusing to sell to a certain buyer because of her religion, what's the potential consequence to Sam of sticking to his beliefs?
He may have to deal with ridicule or disdain from his broker.
He may never be able to find another client who will work with him.
He may lose his license for not following his broker's directions.
.
He may have to deal with ridicule or disdain from his broker.

He may be reprimanded by HUD.
Sam may have to deal with some uncomfortable reactions from his broker, but that's better than losing his license
Ken, Barbie, and Trixie owned a property as a joint tenancy. When Trixie moved out of state, she sold her interest to Skip. Two years later, Ken died. How is the interest in the property divided?
Barbie and Trixie each own 50%
Barbie owns two-thirds and Skip owns one-third
Barbie and Skip each own 50%
Barbie, Skip, and Ken's heirs each own one-third
Barbie owns two-thirds and Skip owns one-third

Joint tenancy includes the right of survivorship, so Ken's interest will pass to the other tenants. But because Skip bought in later than the others, he isn't considered a joint tenant. Ken's share will therefore pass entirely to Barbie.
Select the situation that's an example of designated (appointed) agency.
Michele is the firm's managing broker. She's the designated dual agent in all dual agency transactions.
Jacob, a broker, acts as the dual agent and appoints Mark to represent the buyer and Todd to represent the seller in the same transaction.
Meredith's broker appoints her to represent both the buyer and the seller in a single transaction.
Marvel's broker at Homeworks Realty appoints her as the buyer's agent in a transaction. Tim's broker at Great Homes Real Estate appoints him as the seller's broker in the same transaction.
Jacob, a broker, acts as the dual agent and appoints Mark to represent the buyer and Todd to represent the seller in the same transaction.

In the context of a dual agency situation, designated agency means that the firm's broker assumes the role of the dual agent and designates one of the firm's licensees to represent the buyer and different licensee to represent the seller, keeping the entire transaction in house.
If the responsible parties refuse to clean up hazardous contamination, the EPA can hire its own contractors and seek damages in court for ______.
Up to 10 times the actual clean-up costs
Up to 100% of the actual clean-up costs
Up to five times the actual clean-up costs
Up to three times the actual clean-up costs
Up to three times the actual clean-up costs

If those who are responsible for the contamination refuse to pay for the clean-up of the site, the EPA can hire its own contractors, then seek damages in court for up to three times the actual clean-up costs.
Kendra made an offer on Sam's property. Sam rejected Kendra's offer, but made a counter-offer. Kendra is now considering the counter. What is Kendra in this scenario?
Offeror
Executor
Offeree
Examiner
Offeree

The seller considering a buyer's offer is an offeree, but if that seller makes a counter-offer, then the seller becomes the offeror and the buyer becomes an offeree.
If the private individual owner doesn't own more than three single-family homes at one time, which exemption from the Fair Housing Act could apply?
Single-family housing sold or rented without the use of a broker
Housing designated for senior use
Owner-occupied buildings with no more than four units
"Mrs. Murphy" exemption
Single-family housing sold or rented without the use of a broker

Single-family housing sold or rented without the use of a broker is exempt, provided the owner doesn't own more than three single-family homes at one time.
Lyle is a developer who placed a number of restrictions on the Happy Valley subdivision when he built it in 2003. Sara bought a home in Happy Valley in 2009 and was surprised to learn that storage sheds weren't allowed. Now Sara has noticed that sheds are popping up here and there throughout the neighborhood. Which of the following is most likely to be true?
The homeowners have all applied for waivers to the existing restrictive covenant.
The homeowners so desperately need storage that they're willing to face fines or legal action.
The sheds are made of a new material that hadn't been invented or prohibited in 2003.
Lyle set up the restriction to expire after a certain number of years.
Lyle set up the restriction to expire after a certain number of years.

Lyle probably set up the deed restriction to expire after 15 years. Restrictions can run forever, or with a given time limitation.
Which of the following is an example of a universal agent?
Conservator
Escrow officer
Buyer's agent
Listing agent
Conservator

A universal agent has broad authority to act on behalf of the principal, such as a person with a power of attorney or a conservator.
Tim and Tina Wells bought a home with absolutely beautiful perennial gardens in the back. The plantings were designed to bring birds, bees, and butterflies and to provide color for most of the year. When they did the final walkthrough, they were dismayed to see that many of the shrubs and flowering plants had been removed. They expected these plantings to be considered part of the real property because of the ________.
Method of annexation
Intention in placing the item
Agreement of the parties
Adaptation to the land
Method of annexation
Ted wants to estimate the value of a commercial property leased to four retail tenants. In order to find the GIM he can use for his subject property, what's the minimum number of comparable properties he should try to find?
10
7
5
3
10

Finding the right comparables is an essential part of using GIM or GRM to estimate property value, so a minimum of 10 is recommended.
Which of the following is true about down payment grants?
They are repaid on a specific schedule.
There are no eligibility requirements.
They don't need to be repaid.
They come with high interest rates.
They don't need to be repaid.

A home grant is also referred to as a "gift," and doesn't have to be paid back as long as the buyer meets certain requirements.
Maxine is purchasing a small craft shop, including the underlying real estate. She applies for a commercial loan from her federally insured bank to complete the purchase. Is Maxine's transaction covered by the Real Estate Settlement Procedures Act?
No, commercial and business loans are exempt from RESPA requirements.
No, RESPA only applies to loans obtained from private lenders.
Yes, all loans secured by real estate are subject to RESPA requirements.
Yes, because she obtains the loan from a federally insured financial institution, the loan is subject to RESPA requirements.
No, commercial and business loans are exempt from RESPA requirements.

Commercial and business loans are exempt from RESPA.
Developer A has a project planned that does not conform to the zoning regulations of the community. The developer would make what kind of change request from which local land use group?
Planning board for a special use variance permit
The town board for a variance
City council for a special use permit
The zoning board of appeals for either a variance or a special use permit
The zoning board of appeals for either a variance or a special use permit

The developer would make a request at the zoning board of appeals for either a variance or a special use permit, depending on the circumstances.
Ashton, an appraiser, is estimating value using the sales comparison approach. He applies more weight to two comparables over several others he used. What process is he utilizing?
Bracketing
Correlation
Conformity
Averaging
Through a correlation process, the most weight may be given to one or two comparables, or equal weight may be given to all. The term reconciliation is often synonymous with correlation.
Correlation

Through a correlation process, the most weight may be given to one or two comparables, or equal weight may be given to all. The term reconciliation is often synonymous with correlation.
The Johnsons have owned a small restaurant for more than 20 years. They're open for lunch and dinner six days a week, and 80% of their weekday revenue comes from the happy hour drink and appetizer specials they offer. The town in which their restaurant is located recently constructed a new middle school and stripped the liquor license from the Johnsons' restaurant, because it no longer complies with the ordinance to be 500 feet from a school property. The Johnsons have accused the town of _____.
Condemnation
Escheat
Eminent domain
Taking
Taking

Taking occurs when private property is regulated by a government, to the detriment of the landowner.
All lenders have different underwriting standards, but traditionally, the housing debt-to-income ratio has been ______%, with a total debt-to-income ratio of ______ %.
25 to 28; 33 to 36
28 to 36; 25 to 33
25 to 33; 28 to 36
33 to 36; 25 to 28
25 to 28; 33 to 36

Although 25% to 28%, and 33% to 36% are often used, the qualifying mortgage rules set total debt-to-income ratio at no more than 43%. While this may seem generous, it's a hard and fast percentage that allows for little lender discretion.
Related to reasonable accommodation of being allowed to have an assistance animal, which statement is true?
The landlord is not obligated to consider the request unless the tenant can produce either the original or a certified true copy of the animal's service certification.
The landlord must consider the request but may require an additional "pet" security deposit.
If the disability for which the tenant is making the request is obvious, the landlord may not ask why it is needed.
If the disability is not obvious, the tenant must provide the landlord with full medical records to support the request.
If the disability is not obvious, the tenant must provide the landlord with full medical records to support the request.

Housing providers may inquire as to the nature of the disability if it's not apparent, and they must permit assistance animals for tenants with documented disabilities without charging an additional pet deposit.
Dean and Michael have an oral contract. Dean said he would sell Michael his bike in return for Michael's vinyl album collection. What does the record collection represent?
A valid contract
Michael's legal competence
An executed contract
Consideration
Consideration

Consideration, which is an essential element of a contract, is something of value which is given from one party to the other party in exchange for goods or services.
Travis has made the final payment on his loan according to the loan terms. What must the note holder do to acknowledge that the debt has been repaid?
Assign the note to Travis.
Sign the note, mark it "Paid in Full," and return it to Travis.
Destroy the note.
Endorse the note and return it to Travis.
Sign the note, mark it "Paid in Full," and return it to Travis.

When the note has been paid off, the holder must sign the note, mark it as paid in full, and return it to the maker. The satisfaction of mortgage is recorded with the county land office, removing the associated lien from the property.
Leon and Beth own 1/13 of a timeshare estate. They own weeks 20 and 21, and 40 and 41. These weeks are inheritable. What type of ownership is this?
Periodic estate
Leasehold estate
Estate for life
Fee simple
Fee simple

Timeshare estates are owned as fee simple estates. They convey all rights of ownership and can be sold or passed down to heirs.
The best way to start comparative market analysis data collection is to use properties that sold in the last ______.
12 to 18 months
Two to three years
18 to 24 months
Three to six months
Three to six months

Properties that sold in the last three to six months are your best bet.
Ned represents Sofia in the sale of her townhome. Luciana represents Sofia's buyer, Arturo. What is Sofia's relationship to Luciana?
Luciana is Sofia's fiduciary.
Sofia is Luciana's customer.
Sofia is Luciana's client.
Luciana is Sofia's customer.
Sofia is Luciana's customer and Ned's client. Arturo is Ned's customer and Luciana's client.
Sofia is Luciana's customer.

Sofia is Luciana's customer and Ned's client. Arturo is Ned's customer and Luciana's client.
Malcolm purchased an old convenience store, and after renovations will open a small vegan grocery. He paid $517,000, of which $417,000 was for the building, and renovations cost him $107,000. What does the amount $524,000 represent?
Depreciable basis
Cash position
Income baseline
Investment basis
The acquisition cost of an investment property plus any improvements or renovations is the investment's depreciable basis.
Depreciable basis

The acquisition cost of an investment property plus any improvements or renovations is the investment's depreciable basis.
Aidan accepted a contract for the sale of his home. The home inspection report reveals that certain aspects of the house don't meet the current building code. What's the most likely result?
The house is probably not required to meet the current code.
Aidan and the purchaser will negotiate the expense of bringing the house up to code.
The contract will fail to close because of code violations.
Aidan must bring the house up to code.
The house is probably not required to meet the current code.

Most municipalities permit existing construction to be sold and occupied without meeting current code, although there are exceptions for some safety considerations
Murphey's farm has been in his family for generations, since his great-great-great-grandfather received it as a land grant in 1862. What's the beginning point of this property's chain of title?
Murphey's great-great-great-grandfather
Murphey's grandfather, the previous owner
The federal government that originally granted the land
Murphey, the current owner
Murphey, the current owner

Chain of title always begins with the current owner and goes back in time.
When a buyer finances a newly built home with a Federal Housing Administration loan, FHA requires the builder to ______.
Provide the buyer with a 30% discount on materials and labor for home repairs
Purchase a third-party home warranty to protect the buyer
Create a fund equaling 20% of the home's cost set aside to cover construction defects for the next 10 years
Provide a builder-backed home warranty
Purchase a third-party home warranty to protect the buyer

The FHA requires builders of new homes to provide a third-party warranty to buyers.
Drew and Hank were camping at Hank's riverfront cabin. Hank told Drew that he so rarely used the cabin that he was thinking of selling it. Drew said that he'd buy it from Hank for $80,000, and Hank agreed that was a fair price. It's two months later, and Hank is upset that Drew now says he won't buy it. Why isn't this contract enforceable?
This wasn't a legal purpose.
There was no offer and acceptance.
Real estate contracts must be in writing.
Drew didn't have the financial resources to make the offer.
Real estate contracts must be in writing.

The statute of frauds requires that real estate contracts be in writing. Drew's offer was oral, and thus didn't create an enforceable contract.
Marsha's title insurance policy was issued on closing day, June 18. The policy lists the standard exclusions as well as requirements for the company to issue the policy, such as paying off existing recorded liens. Which of these will NOT be addressed in the schedule of exceptions?
The local cable company's easement through the property for underground wiring. Marsha disclosed this to the title company.
Karen has an unrecorded lease on the property.
Marsha's second mortgage on the property, which was properly recorded in January.
Smith and Martin Building and Rehab files a mechanic's lien on June 18.
Marsha's second mortgage on the property, which was properly recorded in January.

Title insurance typically covers events or claims filed on the public record before the title insurance policy's effective date but excludes disclosed and undisclosed easements.
The Bransons have a conventional loan for which they were required to obtain private mortgage insurance. Their local real estate market has been going like gangbusters, and their house is now appraised at twice their loan balance! Will their PMI be automatically cancelled?
Yes, because their equity is over 20%
No, because PMI lasts for the life of the loan
Yes, because their equity position is at least 50%
Maybe, but they'll have to petition their lender
Maybe, but they'll have to petition their lender

Cancellation of PMI happens once the borrower reaches a 22% equity position. This is determined by loan-to-value ratio at the time of the purchase. Unless loan-to-value ratio is now 78% or lower, the Bransons would have to petition to get PMI cancelled.
Local authorities lack police power over which of the following?
Budgeting
Subdivision development
Zoning
Federal government construction projects
Federal government construction projects

Local authorities have police power over budgeting, zoning, and subdivision development, but they lack police power over federal government construction projects.
Appraiser Niles uses ______ to determine a range of values based on comparing a subject property to comparable sales. He makes sure to use some comparables that lack features of his subject property, and others that have even more desirable features, to balance out the comparison.
Correlation
Bracketing
Competition
Substituting
Bracketing

Bracketing determines a probable range of property values by comparing a group of comparable sales to the subject. The appraiser attempts to include both superior and inferior units of comparison such as age and transaction price.
Jerome is developing an ad for three properties he has listed in an upscale community. He wants to keep it short and simple. Which of these would NOT trigger full disclosure under TILA?
30-year fixed rate with no points
A monthly payment of $900
10% down payment
Get a low 4.925% APR
Get a low 4.925% APR

An ad can show the APR without requiring all of the other credit terms to be disclosed. But if certain other "trigger" terms are included in the ad, such as down payment, payment amount, number of payments, or interest rate (other than APR), this would re
Curtis wants to do a 1031 exchange. He just closed on his property. How many days does he have to identify a new property?
180
45
60
30
45

Investors who want to use the 1031 tax-deferred exchange must identify the new property within 45 days of closing and must close on that property within 180 days from the date of sale of the first property.
Bob and Sandy want to build a small retirement home with water views. They've identified several large tracts of land for sale that are adjacent to the river. They reviewed surveys that were done when the property was placed on the market earlier in the year. One area of the property is prohibited from any residential construction. This area is likely a ________.
Riverway
Flood plain
Floodway
Coastal zone
Floodway

A floodway is the area of a floodplain where water flows when there is a flood. Residential construction is prohibited in a floodway.
Darren wants to set up a land trust so that his children could benefit from his real estate investments after he dies. He asked his financial advisor Tom to manage the trust, and Tom agreed. How is the trust created?
When Tom distributes income from the real estate investments.
When Darren conveys the real estate to Tom.
When Darren dies.
When Darren purchases the real estate.
When Darren conveys the real estate to Tom.

A trust is created when the trustor conveys property to the trustee with instructions for holding and managing it on behalf of the beneficiaries.
Damien and Sandy bought a lot with a condemned house. They want to tear it down and build a duplex, so that they can live on one side and rent out the other. Unfortunately, the property is zoned single-family residential. If they can make a case for economic hardship, they may apply for and be granted a ________.
Special use permit
Moratorium
Area variance
Use variance
Use variance

This would be a use variance. The existing zoning only allows single-family homes, so a duplex represents a use other than the originally intended use.
property without paying the listing agent.
Question 28
Latrell purchased an old warehouse with the intent to create shared studio space for artists. However, he didn't perform due diligence before the purchase, and it turns out that there are hazardous materials that need to be cleaned up first. Latrell took the prior owners to court, and the court ruled that Latrell is responsible for the costs of cleanup. What kind of liability is this?
Strict liability
Several liability
Retroactive liability
Joint liability
Strict liability

In strict liability, the owner is responsible for cleanup, regardless of who created the initial problem.
In a real estate transaction, which of the following is established when parties enter into an agreement voluntarily with full understanding of the contract terms?
Legal competency
Legal purpose
Consent
Consideration
Consent

Offer and acceptance occurs only when the parties enter into the agreement voluntarily with full understanding of the contract terms.
Home inspector Maura was walking Thad through a property inspection. The frame house, on a slab foundation, had mulch piled up about 18 inches next to the house. Why was Maura noting this as a concern?
Mulch next to wood siding may lead to wood rot.
Mulch is a great nesting material for insects.
That amount of mulch might kill the plants it's meant to protect.
Mulch isn't a sustainable material.
Mulch next to wood siding may lead to wood rot.

Too much dirt, mulch, or other material up against wood frame siding is problematic because it can hold moisture against the siding for long periods of time, leading to wood rot.
Which clause in the listing agreement gives the listing broker the authority and obligates the broker to market the property to other brokers?
Provisionary clause
Broadcast clause
Multiple listing clause
Marketing clause
Multiple listing clause

This is the MLS clause.
Jansen and his listing agent just left the closing on Jansen's house. What kind of notice does Jansen, his agent, the buyer, and the buyer's agent have regarding the sale of Jansen's house?
Personal notice
Legal notice
Constructive notice
Actual notice
Actual notice

All these parties have actual notice of the property's sale because, even though they didn't witness recording of the documents, they attended the closing and observed the documents changing hands.
What does the lot and block system use to develop a property's legal description?
Townships and sections
Compass headings and directions
Principal meridians and base lines
Plat references
Plat references

Lot and block uses plat references to develop a property's legal description.
Hernando, a real estate attorney, is preparing an option contract for his client, Wilma. Hernando asks Wilma what she and the seller have agreed upon for the option period. Wilma said the seller was leaving that up to her, and she wanted to get Hernando's opinion. What should Hernando put into the contract for the option period?
"Indefinite"
"Six months"
"Negotiable"
"N/A"
"Six months"

The typical option period is often six months. Option periods cannot be "forever," or even extended indefinitely. A definite period of time should be stated.
Which of the following scenarios accurately describes the similarities between an open listing and an exclusive agency listing?
In both types of listings, the broker owns the commission regardless of who sells the property.
In both types of listings, the seller won't owe a commission if she finds the buyer herself.
In both types of listings, the seller is required to pay a commission to one or another broker.
In both types of listings, the seller will owe a commission to the broker that brings the buyer.
In both types of listings, the seller won't owe a commission if she finds the buyer herself.

In both open listings and exclusive agency listings the seller doesn't have to pay a listing agent commission if the seller finds a buyer herself.
Rhonda and her husband filed for bankruptcy five years ago. They want to purchase a new house but don't have the best credit score. They've decided to buy the home using an FHA loan. Which of these is a true statement?
Mortgage insurance is not required.
A minimum down payment of 3.5% is required.
They must have PMI.
The loan-to-value ratio must be less than 80%.
A minimum down payment of 3.5% is required.

Borrowers with an FHA loan must pay a minimum down payment of 3.5% and have MIP. Private Mortgage Insurance (PMI) applies only to conventional loans.
The Richards' farm is located on a 10-acre parcel of land, which is very rare to come by in their area. However, the house is rundown and in need of many repairs. Buyers in the area looking for a move-in ready home would need to either look elsewhere or wait several months for the home to be renovated. Which factors are negatively impacting the value of the Richards' property?
Demand, scarcity, and transferability
Utility and transferability
Demand and utility
Utility, scarcity, and transferability
Demand and utility

Although large parcels in the area are scarce, the low demand of buyers willing to buy and wait to live in a property that needs significant repairs is affecting the value.
In a residential real estate sale involving a federally related loan, who's required to provide Real Estate Settlement Procedures Act disclosures to the consumer?
The settlement officer for the transaction
The consumer's lender
The consumer's mortgage broker
The consumer's real estate broker
The consumer's lender

The lender must provide the borrower with a written disclosure of the estimated and final settlement costs.
What's the relationship between the Loan Estimate and the Closing Disclosure?
Lenders issue the Loan Estimate to verify the figures detailed on the Closing Disclosure.
The Closing Disclosure outlines the lender's responsibilities to the borrower.
Lenders issue the Loan Estimate at application, and Closing Disclosure figures should be similar to the loan estimate.
Loan Estimate figures should match Closing Disclosure figures exactly.
Lenders issue the Loan Estimate at application, and Closing Disclosure figures should be similar to the loan estimate.

Lenders first issue the Loan Estimate; borrowers can compare the Closing Disclosure, issued before closing, to the estimate's figures.
Which of the following is a mortgagor's responsibility?
Charge late payment penalties
Foreclose on the property if in default
Keep the property in good repair
Assign the mortgage
Keep the property in good repair

The mortgagor (borrower) is required to keep the property in good repair.
Carol is performing a market analysis, and is working with three comparable properties to her subject property. How does she account for differences between the subject property and comparables?
If the subject property has a valuable feature lacking in the comparable property, she subtracts this value from the comparable property's sales price.
If the subject property has a valuable feature lacking in the comparable property, she adds this value to the comparable property's sales price.
If the comparable has a valuable feature lacking in the subject property, she deducts this value from the subject property.
If the comparable has a valuable feature lacking in the subject property, she adds this value to the subject property.
If the subject property has a valuable feature lacking in the comparable property, she adds this value to the comparable property's sales price.

Adjustments are made to the comparable property's sales price to account for differences between the comparable and the subject property. Value is added when the feature is missing in the comparable, and deducted when the feature is missing in the subject property.
Stan and Margo want to redevelop an old industrial site in order to create a microbrewery and event space. However, an environmental review found that hazardous chemicals were once used on site, and there is a possibility they will be released during redevelopment. Stan and Margo may not be liable for cleanup, under what federal law?
Wetlands Conservation Act
SARA
EIS
CERCLA
SARA, or the Superfund Amendments and Reauthorization Act, created an innocent landowner defense. Often, the courts will review a SARA case and determine liability.
SARA

SARA, or the Superfund Amendments and Reauthorization Act, created an innocent landowner defense. Often, the courts will review a SARA case and determine liability.
One area of town has maximum building height requirements and setbacks for the front, side, and rear yards. These requirements are all indicative of ______.
Residential zoning
Commercial zoning
Bulk zoning
Density zoning
Bulk zoning

These requirements are all indicative of bulk zoning, which may be seen in both commercial and residential areas, and which decreases density.
What information would the Loan Estimate NOT provide to buyers under the TRID-required disclosures law?
Estimated closing costs
Loan fees
Final closing costs
Loan payment schedule
Final closing costs

Lenders provide the Loan Estimate within three days of receiving a borrower's application. Borrowers receive final closing cost information (on the Closing Disclosure) three days before closing.
The sales price, acquisition costs, and capital improvement costs (such as renovations or additions) of a property combine to make up what?
Debt coverage
Appraisal value
Market value
Basis
Basis is the cost of a property and includes the sales price, acquisition costs, and capital improvement costs (such as renovations or additions).
Debt coverage

Basis is the cost of a property and includes the sales price, acquisition costs, and capital improvement costs (such as renovations or additions).
Julius sold one of his investment properties, and with the proceeds of the sale invested in some equipment for one of his other businesses. Can he defer the capital gains taxes on the sale of the investment property?
No, because capital gains are always due in the same tax year as the sale.
No, because the purchase was not a "like-kind" property.
Yes, because his accountant applied for a waiver.
Yes, because he reinvested the money.
No, because the purchase was not a "like-kind" property.

A 1031 tax exchange, in which taxes are deferred, is only possible if the proceeds from the sale of an investment property are reinvested in a "like-kind" property.
When Emma turned 70 she sold her ranch home and moved to a senior living community. Her one-bedroom apartment is on the third floor of a building that houses a fitness center, convenience shop, music room, and café on the first floor. What type of facility is this?
Planned unit development
Timeshare estate
Gated community
Cooperative
Planned unit development

A senior living community with retail, recreation, and residential spaces in the same building or group of buildings is a planned unit development.
A "Homes for Sale" magazine contains the following ad: "One-bedroom condo. Corner unit with beautiful ocean views. Financing available, 5.25% APR." Which of these statements is true?
The ad is in compliance with TILA because condominiums aren't covered under Regulation Z.
The ad is not in compliance because TILA requires all financing terms to be stated if APR is stated.
The ad is in compliance with TILA because providing the APR doesn't trigger the required disclosure of all credit terms.
The ad is not in compliance with TILA because it mentions financing without including all of the terms of the financing.
The ad is in compliance with TILA because providing the APR doesn't trigger the required disclosure of all credit terms.

The APR can be included in an ad without requiring disclosure of all credit terms. APR figures allow consumers to make an informed comparison between loans, which is TILA's goal.
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