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National Exam Review 80 Q&A's (FlashCards)
Terms in this set (79)
the difference between the value of a property and the total amount of liens against it is known as:
When a prospective buyer asks about a property's location in regard to a flood zone, the licensee SHOULD direct the buyer to
obtain an up-to-date flood map from FEMA
If the value of a property is affected by negative forces outside the property, which are beyond the control of the owner, this is referred to as
A licensee places earnest money deposits into an operating account. This is an example of:
commingling of funds
A broker charges a leasing fee of one-half of the first month's rent and a management fee of 8% of all rents collected. The broker negotiates a two-year lease at a monthly rental of $550. Which of the following amounts will the broker earn on this lease?
When a contract states that "time is of the essence," the contract MUST be delivered and presented:
If a prospective buyer is concerned about the electric service on a property, the buyer's licensee SHOULD:
recommend that the buyer insert an inspection contingency in the purchase agreement
A visually-impaired person with a service animal completes an application for rental of an apartment that has a vigorously enforced "no pets" policy in the building. According to the Federal Fair Housing Act, the owner MAY:
require the person to restore any damage to the apartment that results from the animal
A licensee crafts an online advertisement for a beachfront property in which the licensee describes the property as having "the best ocean view in town." This is MOST LIKELY an example of:
The owners of a house sign a listing agreement and later tell the licensee that the garage roof leaks. If they tell the licensee not to reveal the roof's condition to any prospective buyers, the licensee MUST
advise the sellers that they must disclose the condition of the roof to prospective buyers
Which of the following situations BEST demonstrates an example of an encroachment?
A storage building that extends over the boundary line onto an adjacent property.
When using the cost approach to determine the value of a residential dwelling, an appraiser SHOULD:
determine replacement value less depreciation
Which of the following terms BEST describes personal property that, by its attachment to real property, is regarded as real estate?
If the purchase price on a condominium unit is $60,000, the amount being mortgaged is $55,200, and there are 2.5 points on the mortgage, which of the following percentages is the loan-to-value ratio on the following transaction?
Which type of mortgage loan has provisions for periodic changes in the amount of the payment, the interest rate, the maturity date, and the remaining balance owed?
A property manager works in the BEST interests of the:
A listing salesperson MUST disclose what information to potential buyers?
Any zoning changes made after the property was listed
K and R bought a house as tenants in common. If K dies, which of the following statements about ownership of the house is CORRECT?
It is divided, with R retaining R's original interest and the balance going to K's estate.
A lender's title policy will protect the:
lender against existing, undiscovered title defects
A portion of an advertisement reads: "New four-bedroom, two-bath home for sale in a family neighborhood. Yours for only $1,100 per month." This advertisement violates the provisions of the:
Truth in Lending and Fair Housing Acts
In stating a seller's price and terms to a prospective buyer, the seller's broker is required by the law of agency to state ONLY those terms that are
included in the listing agreement
The brokerage fee charged by a listing broker is determined by the:
broker and the principal
ccording to the Federal Fair Housing Act, which of the following individuals is permitted to reside in housing with a familial status exemption?
A 63 year old employed postal worker
The donation of private land for public use is called:
An illegal lending practice whereby a bank refuses to make mortgage loans in a certain neighborhood based on the ethnic makeup of that area is known as:
Which of the following forms of ownership may be mortgaged, taxed, sold, or otherwise transferred in ownership, separately and independently of all the other units in a structure?
A licensee is contacted by a potential buyer interested in purchasing a commercial property as an investment. The licensee has no experience with this type of property. What SHOULD the licensee do?
Advertise the property for sale.
A lot measuring 110 feet wide by 140 feet deep has a required setback of 30 feet in front, 20 feet in the rear, and 20 feet on each side. If a builder wants to put a one-story building on the lot, the MAXIMUM square footage it can contain is
6,300 square feet
A broker lists a property. The broker advertises and shows the property several times, but after each showing, the owners call the broker with a list of unreasonable restrictions they want placed on the showing of the property. The broker decides not to continue the listing. In this situation, the broker:
may rescind the listing contract without obtaining permission from the owners
If buyers purchased a home for $142,500 and secured a loan for 100% of the purchase price, which of the following types of loans did they MOST LIKELY obtain
A house with a market value of $80,000 is located where property is assessed at 70% of market value. If the tax rate is $4 per $100 of assessed value, the property taxes are:
In order for a property manager to determine net operating income on a property, which of the following fees is subtracted from the effective gross income?
The income approach is MOST likely to be used when determining the value of a(
f XYZ Company defaults on its unexpired lease and abandons the rented premises, the property manager SHOULD:
notify XYZ that it is responsible for the remaining lease payments
Under which circumstances is a licensee permitted to use a client's money for personal use?
Under no circumstances
A broker lists a property, and the seller does not want the broker to show it to anyone with children because the seller's neighbor does not like them. The broker SHOULD:
instruct the seller regarding fair housing and possibly decline the listing
homeowner who plans to travel for a year asks a real estate firm to rent the house for this period and indicates a preference for a white family rather than a black family "if at all possible." Under the Federal Fair Housing Act, the broker SHOULD inform the owner that these instructions:
annot be followed because they violate the Act
A minority couple asks a licensee to show them a listed house. What is the licensee guilty of if the licensee suggests that they look at houses in areas with larger minority populations than that of the listed house?
Before advertising a property through social media, a licensee MUST obtain written authorization from the:
The presence of government-regulated wetlands on a building lot:
is a material fact
ailure of homeowners to pay for labor and materials to repair their home MAY result in a
Which of the following clauses in a conventional mortgage instrument entitles the lender to accelerate the loan if the loan is assumed?
A salesperson who completes a written listing agreement with a seller is helping to create a contractual relationship between the:
salesperson's broker and the seller
Title insurance on a property is $1,740.90. The fee for the title search is $375, the cost of preparing papers is $75, and other miscellaneous fees amount to $60.10. If the seller pays 60% of the total charge and the buyer pays the balance, to the nearest dollar, how much MORE will the seller pay than the buyer?
To be certain that a property has no encroachments, an appraiser should check a
Buyers make an earnest money deposit on a property and sign a contract that is contingent on specific financing terms. If a bank commits to the financing, but the buyers change their minds and notify the seller in writing that they do not intend to buy the property, which of the following statements is CORRECT?
he seller may sue the buyers for breach of contract.
A broker lists a seller's property. An unrepresented buyer submits an offer to purchase the seller's house and tells the broker that they will pay more than the offer price if the seller requests it. In this situation, the broker is:
obligated to convey the information to the seller
A licensee preparing a competitive market analysis (CMA) has information on a comparable property that is similar in all respects to the subject property except that, while the subject property is ten years old and has two baths, the comparable property is five years old and has one bath. In this case, the licensee should adjust the:
sale price of the comparable property, down for the age and up for the number of baths
Federal law requires a written disclosure to be provided to purchasers for which of the following environmental hazards?
When a licensee lists a property that is owned by a married couple as joint tenants, the licensee MUST ensure that the listing agreement is signed by:
he broker and both of the spouses
Which of the following actions is an example of blockbusting?
Stating that the presence of certain persons in a neighborhood will increase crime
Which of the following types of legal descriptions identifies a property by outlining its boundaries in terms of a series of directions and distances from a specific point of beginning?
Metes and bounds
What type of insurance would cover a mistake or negligence on a licensee's part that results in financial loss to a client?
Errors and Omissions (E&O) insurance
The price at which a willing and informed buyer would buy and a willing and informed seller would sell is called the:
In reviewing the deed to a listed property, a licensee noted a number of limitations regarding its use. These limitations are commonly known as:
Under a sales contract, the legal remedy that may be used to force the seller to consummate the sale is called:
An agreement between what two parties determines the amount of earnest money during a real estate transaction?
he buyer and the seller
The provision in a mortgage or deed of trust that gives the lender the right to call the entire balance due upon a default in any payment is called a(n):
A contract calls for the buyer to pay $65,000 for a house and 1 acre of land, plus $5,000 for each additional acre of land, subject to a survey. If the survey reveals a total land area of 4.3 acres, the total amount to be paid for the house and land is:
Due to the homeowner's disability exemption, property taxes of $4,000 are reduced to $3,000 in a transaction. However, the listing licensee fails to disclose to the buyer the difference in the amount of property taxes to be paid by the buyer. Failing to disclose this material fact is an example of:
The taxes on a property are based on an assessment ratio of 50% of a market value of $174,000. The tax rate is $4.75 per $100. The amount of the semi-annual tax payment is:
Which of the following credit terms may be included in an advertisement for real estate without further disclosure?
8% annual percentage rate"
A broker who represents a buyer is trying to negotiate on the buyer's behalf in a potential transaction. The broker realizes that by negotiating a reduced price for the buyer, the broker's commission will also be reduced. In this situation, the broker is obligated to negotiate the BEST price for the:
Which of the following documents is usually prepared when a real estate buyer also purchases a seller's riding lawn mower?
bill of sale
When private property is abandoned, the state MAY acquire title to that property under the right of:
A lease that provides for periodic increases of rent at regular intervals is called a:
The continued use of a property that was lawful at the time the use began but now is in violation of a zoning regulation is an example of:
As defined in a real estate contract, the due diligence period allows which of the following parties to thoroughly investigate a property?
Which of the following BEST describes a purpose of general liability insurance?
nsurance that protects a company's assets if someone gets injured on company property.
A developer who leases real property from the owner with the intent of constructing an office building has which of the following interests in the property?
The G's purchased a house from the T's. The G's agreed to the following terms: monthly payments of $650 to the T's and the balance to be paid in full after 7 years. At the time the balance is paid, the T's will give the G's a warranty deed transferring title. In this situation, what type of financing was used?
Contract for deed
Potential buyers tell their licensee that they are worried about the presence of radon gas in a home they are considering buying. What SHOULD the salesperson say?
"I suggest that a radon inspection be performed.
A seller has delinquent property taxes of $572. At closing, the taxes will be a:
debit to the seller of $572
A broker is TYPICALLY considered to be which of the following types of agents?A.
A special agent
A general agent
A universal agent
An individual agent
A verbal sales contract that involves the sale of real estate MAY
not be enforceable in a court action
On Tuesday, buyers make an offer to purchase a house for $250,000 and include a provision to buy the dining room furniture. The offer expires at 5:00 pm on Sunday. On Thursday, the sellers reply in writing that they will accept the offer of $250,000, but they will not include the dining room furniture. While the buyers are considering the counteroffer on Friday, the sellers change their minds and decide to accept the original offer, including dining room furniture, in writing. What is the current obligation of the buyers?
They are not legallly obligated to purchase the house.
An apartment project with 160 units has 8 vacancies. The vacancy rate is:
A veteran is entitled to which of the following benefits upon repayment of the full loan balance of a VA mortgage?
Restoration of eligibility for future use
A listing contract MUST contain the:
beginning and ending dates of the contract
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