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Exam 2

Terms in this set (103)

what's designed to protect buyers from financial loss if the title to the property has defects?
title insurance
with which approach to value does the appraiser analyze a properties ability to earn future income?
income approach
what is a foreclosure
the forced sale of a property due to the borrower defaulting on the mortgage loan
what's the primary difference between reproduction cost and replacement cost
reproduction cost is estimated using an exact duplicate of the subject property versus a similar property
for an investor, purchase price plus closing expenses is known as
Basis
which of these is a system that many state use to determine lien priorirtu?
first in time, first in right
when a higher quality property is adjacent to a lower quality property, it can increase the lower quality property value. what economic principle is this?
progression
the purpose of the truth in lending act (TILA) is to
require lenders to make disclosures that allow consumers to compare the costs of making a purchase using credit from different lenders, and to compare those with the cost of using cash
in which of the following situations would an agent be representing a customer in a real estate purchase
never
you have clients who are interested in purchasing a property in a floodplain. as their agent, what do you want to ensure they are aware of?
their lender may require flood insurance, which may affect the affordability of the home
How should you respond to a buyer who says the following? "I know that you technically can't show me just the white neighborhoods, but I'm paying for your help. My time is valuable, and I don't want to waste it going to showings in neighborhoods I don't want to see. If you won't screen properties for me the way I want you to, I'll find someone else who will."
"I'm sorry that you feel that way. If I can't change your mind, I think we should terminate our agreement, and you can look for another real estate professional."
what must happen if to or more people own a piece of property and one wants to sell?
the property must be partitioned or sold according to the owners portion or share of interest
violators of the Sherman antitrust act may be subject to fines. for what amount may corporations and individuals be liable?
up to $100 million for corporations and $1million for individuals
which of these is an example of voluntary alienation
a property owner intentionally transfers property to another
which of the following is appropriate to include in a buyer agency agreement
a list duties the agent owes to the buyer
appraiser Niles uses ______ to determine a range of values based on comparing a subject property to comparable sales. he makes sure to use some comparable that lack features of his subject property, and others that have even more desirable features, to balance out comparison
bracketing
determines a probable range of property value 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
what's another term for deed in lieu of foreclosure?
voluntary conveyance
Archie wants to buy Claire's membership share in cooperative. which of the following statements is true?
the cooperative board must approve Archies application before Claire can sell her membership share to him
which of the following is the best piece of advice you would give to a licensee for avoiding legal concerns over any contract?
proofread carefully and ensure the form is complete
how are property taxes calculated in South Carolina
fair market value x assessment ration x millage rate
Agatha helped her client Rufus complete the _______, which documents Rufus's purchase offer to the seller for the property he is interested in buying
sales contract
in state without full disclosure requirements, whose responsibility is it to review disclosures, ask questions, and obtain a home inspection?
buyer
when assigning a contract, what should the assignor ensure is permitted in the purchase contract?
assignability
as an agent, you owe fiduciary duties to your client, among these are loyally, reasonable skill and care, confidentiality, accounting and disclosure. what fiduciary duty is missing from he list?
obedience
which of the following statements describes laws and ethics?
laws are made by the government, and ethics are dependent on conscience and values
you represent a seller as a single agent, what's it called when you're simultaneously working for the buyers best interests in the transaction without the sellers knowledge?
dual agency
the goal of this agency is to find a balance among public interest and use, development and conversation of coastal areas in South Carolina
ocean and coastal resource management
which of these is an example of a rectangular survey system description
S 1/2 SE 1/4 Section 2, township Clarkson
Jermaine, who lives in Atlanta is selling his Hilton head condo to Janet, who lives in South Carolina. what percentage of Jermaines net gains will be withheld
7%
which of the following describes commingling
placing trust funds into a business account
same, the appraiser is most likely to use the cost approach for which of the following parties?
a movie theater
what is the type of possession in which a tenant stays after the right to possess has terminated
estate sufferance
Joe and Emma parsons begin informally working with their neighbor Kyle, who's a real estate licensee, to find a bigger house. the parties have not signed any agreement or discussed the arrangements. this is an example of an ______ agency agreement
implied
what might the financial implications be if a buyer needed to use individual retirement account funds toward a down payment?
first time homebuyers can use up to $10,000 of their IRA funds penalty free for down payment and closing costs
which of the following is true about a condominium ownership?
a condo is a single family dwelling
ownership in a planned unit development consists of
a parcel of land, the structures on it, and shared common areas
in South Carolina, it is legally permissible to fax an offer acceptance to the buyer or buyers agent?
yes this is legally acceptable way to communicate an accepted offer
the ____ isn't used in states that were part of the original 1 3 colonies, or in TX,WV, and KY
rectangular government survey system
you're obligated to preserve all the confidential info you receive from a seller client. this obligation _____
continues even after your relationship with the client ends
South Carolina salespersons or brokers may perform real estate activities under what circumstances?
while associated with a broker in charge
Lacey purchased a home in South Carolina for $415,000. What's the state portion of the deed recording fee for this transaction?
$1,079
The South Carolina deed recording fee is $1.85 per $500 (or portion of $500) of real property value. the STATE portion of this fee is $1.30. $415,00 / $500 = 830 X $1.30 = $1,079
one of mrs. palms tenants is leaving in a few months. under South Carolina law, when must mrs. palm return the deposit to her tenant
within 30 days of the tenant vacating
the ________makes it illegal to send unsolicited commercial solicitations via fax without the recipients permission or an established relationship
junk fax prevention act of 2005
Kent purchased a home in South Carolina for $378,000. What's the county portion of the deed recording fee for this transaction?
$415.80
what's the primary purpose of bulk zoning
to reduce density
which buyer negotiation strategy is unlikely to work in a hot market?
ask the seller to pay closing costs
how do discrimination tests work?
they send two different applicants whose only difference is status within a protected class, and test whether the applicants are treated differently
Mary, who's suffering from Alzheimer's disease, signs a contract to buy Edgar's home. Before the deal closes, it's determined that Mary lacks legal capacity to enter into a contract. Which party is permitted to void the contract?
only the buyer, mary
Your clients, the Samsons, ask you to provide them with an appraisal in order to determine a list price for their property. Since you're not an appraiser, what should you do?
tell them you're not an appraiser, but you can provide them with a comparative market analysis, which can be useful for determining an appropriate list price
Friday is practicing dual agency, and neither party seems to mind, even though she didnt obtain informed consent. is this legal?
no, without informed consent, dual agency is illegal
what happens when a married couple who owns a property as tenants by entirety divorce?
their ownership reduces to tenancy in common or joint tenancy
when preparing the sales contract, when is it acceptable for a licensee who is not an attorney to offer legal advice to the client?
never
what is a general lien
a claim against a person and all of that persons property
which of the following financing types involves the sale of personal property with real property?
package
what option best defines voluntary alienation
a property owner intentionally transfers property to another
what instrument is generally used to convey property?
deed
a set of guidlines for the ethical conduct of real estate licensees is called a
code of ethics
what's alienation with regard to real estate>
transferring ownership of a property
which type of REIT receives most of its revenue from rental of their properties?
Equity REIT
_____ is a process in which an appraiser determines a probable range of values for a property 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, transaction price, etc.
bracketing
why does HUD test for housing discrimination
to uncover hidden discrimination
Franklin wanted to sell his condo, so he contracted with James to be his listing agent. He accepted a purchase offer and was two weeks away from closing when he decided not to go through with the sale. Does he owe James any compensation?
yes, James earned his commission the moment Franklin was not under contract
Janice's life tenant, Jacob, is currently living on her property. Once Jacob dies, Janice has made arrangements that the property will go to the School for the Gifted. What interest does the School for the Gifted currently have?
Remainder
this document is filled with a condos building masters deed and details such as items as ownership meetings and common elements maintenance log
bylaws
Dana has signed a lease agreement that contains a right-to-access provision. There's a leak in the bathroom that, if left unattended, will cause significant damage. What does this mean for Dana?
Dana should notify the landlord and work with the landlord to schedule a time to allow a plumber access to fix the problem before it gets worse.
Seller Randy signed a listing agreement with Barbara, who worked very hard to find him a buyer. Randy's cousin decided to purchase the house during the listing period. Is Barbara owed a commission?
yes, if she has an exclusive right to sell agreement
which mortgage market comprises lending institutions that Lend directly to the consumer
primary market
to determine the net operating income of a property, subtract the total operating expenses from the
effective gross income
Frank took out a mortgage from First National Bank in order to purchase a new home. In a lien theory state, who or what retains the title to the property?
frank, the borrower
n real estate contracts, which are required: legal descriptions or street addresses?
Legal descriptions are required, because they provide less ambiguous and more complete descriptions of properties than street addresses provide.
Fiona and her husband, Ed, have just entered into their first-ever agency agreement with their new agent, Ken. The couple is a little nervous, but they like the idea that they have something in writing that explains both their agent's responsibilities and what they're expected to do as part of the relationship agreement. Life is good. What type of agency exists between Ken and his clients?
written express agency
who generally writes a brokers price opinion
a real estate broker for a lender
BPO are generally compiled by a real estate broker in order to give a lender an approximation of market price
Martin believes he's the victim of fair housing discrimination. In order for his complaint to be investigated, he must file it in writing with the Human Affairs Commission within _______ days.
180
Who typically prepares a CMA or a BPO?
real estate licensee
what's another term for voluntary conveyance
deed in lieu of foreclosure
Subprime loans have higher interest rates and fees because borrowers in the subprime market are typically viewed in what way?
higher risk
What effect will a property's utility have on the value if it's currently uninhabitable?
value will be pushed downward
Which term involving trespassing is used when someone other than the owner claims title to real property?
adverse possession
When a lender charges a borrower more than the highest allowable interest rate, it is called ______.
usury
What is the definition of an appraisal?
An estimate of value for a specific purpose, party, and property as of a specific date
Jenna and George are clients of True Star Real Estate Brokerage. They both consented to consider designated agency should the situation arise. Jenna is interested in George's property, so True Star has designated an individual associated licensee to represent each party separately. What needs to happen for this to be legal?
Jenna and George must both sign a designated agency agreement
XYZ Realty was fined after being found guilty of violating antitrust law. Which of these activities performed by the firm is the likely violation?
Requiring a consumer to use a specific mortgage company
What does a credit score tell a lender?
how likely a consumer is to repay a loan
Properly pricing a property that is entering the market will ______.
Increase the chances of a buyer making an offer and potentially reduce the amount of time the home is on the market
sThe Real Estate Settlement Procedures Act is a consumer protection statute that ______.
Requires lenders to provide the consumer with certain disclosures for residential real estate transactions and prohibits kickbacks among settlement service provider
Marcy listed her property with Jennings Homes in March. The market is slow, and Marcy's property isn't in great condition, though she's sure she can get top dollar for it because of its location. Her agent encourages her to either reduce the price or fix the property up, but she refuses. Both Marcy and her agent are frustrated. What's the best option for both of them?
they can mutually agree to terminate the listing
At a business meeting among heads of the top brokerages in town, the keynote speaker discussed a minimum listing fee. What's this is an example of?
price fixing
A(n) ______ is an example of a limited agent.
escrow officer
Heidi qualifies for the South Carolina homestead exemption. She holds fee simple ownership of her residence and had it outfitted with ramps, wide doorways, and lowered counters since she's permanently disabled. What else must be true of Heidi?
she's been a resident of South Carolina for at least one year
what is the purpose of a deed
It's used to transfer real property from one party to another.
Cameron had a listing agreement with a client named Ben. Ben got mad at Cameron and said he was terminating the agreement. Can Ben do this?
yes, but certain terms of the agreement may still be binding upon ben
Florence is a new licensee with Coastal Real Estate, a South Carolina brokerage firm. Which of these would detail the types of agency relationships Florence can practice as a licensee of Coastal Real Estate?
brokerage written manual police
When preparing a purchase agreement, when is it appropriate for a licensee to offer legal advice to the client?
never
Which entity has the authority to represent the state and citizens of the state in antitrust cases?
attorney general
as a real estate licensee, when must you provide agency disclosure to a. consumer>
when the relationship becomes more that causal
Which of the following is an example of a development cost?
increased demand on infrastructure
What's the purpose of testing with regard to fair housing?
to uncover hidden discrimination
Bart and Claire are under contract for Claire to buy Bart's house, but her financing fell through. They decide to cancel the contract just as if it never happened. Which termination method does this describe?
recission
Dominique purchased a timeshare that conveys the right to occupy the property for two weeks each year, continuing for 20 years. However, the timeshare does not convey ownership. This is an example of a ______ timeshare.
right to use
The purpose of the ______ is to promote fairness and transparency for mortgages and other financial products and services through education, enforcement, and research.
consumer financial protection bureau
Why would tenants be willing to sign a lease in which they give a percentage of their sale proceeds to their landlord?
the tenant wants to reduce the base rent
what are the four external forces that may affect value?
physical / environmental, economic, social,political/governemtnal
what's a legal description
a description of the land that specifies the boundaries and location of a specific piece of real property
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