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WorksheetsReal estate
Total questions: 93
Worksheet time: 2hrs 19mins
An owner builds a recreation room onto her house. Her neighbor feels the new addition will violate setback lines established in city buildina codes. Does the neighbor have the right to request an injunction to stop
construction?
No, an injunction may be obtained only by the city planning and zoning commission
No, the neighbor forfeited this right when the owner began construction
Yes, but only if a majority of homeowners in the neighborhood sign a petition supporting the neighbor's action
Yes, under these circumstances the neighbor my justifiably ask for an injunction
To comply with the Statute of Frauds, a sales contract is enforceable if it is
In english
In writing
Acknowledged
Record
The owner of an apartment building has just signed a management contract with a real estate firm. In this situation, has an agency been formed?
Yes, agency is formed whenever one party delegates to another the right to act on their behalf in certain transactions
yes, because the agreement between a property owner and a real estate firm creates a universal agency
no, because an agency is formed only with a listing agreement between a seller and a real estate broker
no, because an agency with a broker is formed only in situations of buying and selling, not managing real estate
Falk had a property for sale for $129,000. Murphy made an offer of $123,000. Falk made a counteroffer of $127,000. Which of the following statements is NOT true regarding this situation?
Falk's counteroffer terminated the first offer
With the second offer, Murphy would become the offeree
The counteroffer would be binding on Murphy
The original offer, Murphy was the offeror
A fixture
is personal property
was once real property that is now personal property
was at one time personal property
is removed upon the sale of a property
A 16-year-old bought a piece of property. The seller found out that he was a minor and wanted to void the deal. Couid he do so?
Yes, because the buyer is not of legal age
Yes, because the buyer did not inform the seller of his correct age
No, only the buyer could void the contract
No, because both buyer and seller must agree.
Two single persons want to take title to a property. They want each to have an undivided interest in the property and if one dies, the interest will pass to the other. Which of the following ways of taking title BEST accomplishes their objectives?
Tenants in common
Joint tenants with the right of survivorship
Co-owners
Owners in the severalty
After listing a home with a broker, a seller told the broker NOT to disclose a major structural defect in the house. The broker should
follow the seller's instructions and refrain from telling prospective buyers of the defect
require the seller to disclose the defect, not the broker
tell the buyer only if asked about any property defects
inform the seller that the broker must disclose the defect or refuse to take the listing
To create a joint tenancy relationship in the ownership of real estate, there must be unity of
grantee, grantor, claim of right and possession
title, interest, encumbrance and survivorship
possession, time, interest and title
ownership, possession, heirs and title
A seller had his home listed with a broker. During the listing period, the seller found his own buyer and refused to pay the broker's commission. The broker then sued the seller and won. What type of listing did the broker most likely have?
Exclusive right to sell
Exclusive agency
Net listing
Open listing
A property manager normally is charged with all the following duties except
negotiating leases
preparing a budget
developing a management pian
repairing a tenant's fixture
In 1994, John Smith built a 3-story apartment building. To comply with the Federal Fair Housing
handicap tenants need access to at least the first floor
he could advertise the name of the local church
he could refuse to rent based on applicants' race
he would have to allow all tenants applying for residency
Dole refused to sell his land to the local park district. He felt that the price the park district offered for the land was not sufficient consideration. If the park district were to pursue the matter in court, what proceeding would it institute to try to force Dole to sell his land?
Escheat
Forclosure
Probate
Condemnation
The Rose family owns a home in a semi-rural area that is about five years old. They recently announced plans for a new regional airport that will place their home directly in line with the main runway, about one mile from its end. If the airport is constructed, will this diminish the value of the Rose home?
Yes, because of functional obsolescence
Yes, because of external obsolescence
No, value would most likely increase due to the airport location
No, noice from the aircraft is not a true factor that affects property value
Which best describes the sale price for a property in an option agreement?
The sales price would be determined when the option is exercised
The buyer is guaranteed a fixed price when the option is signed
The buyer can purchase the property by matching any other offer
The buyer is obligated to pay the sale price even if the option is not exercised
ABC Realty employs Mary as a salesperson. It does not require her to attend sales meetings nor spend certain hours in the office. Mary is not reimbursed for normal expenses and is responsible for paying her own income and social security taxes. Her status is best described as that of
Employee
•Independent contractor
broker/salesperson
•sales associate under the 100% commission plan
The value of a property was $125,000 but listed with a broker for $145,000. The seller told the broker he would take $115,000. The broker told this information to a buyer who promptly offered $117,000 that the seller accepted. What could the seller do when he learned of this?
Refuse to pay the broker's commission because the broker violated his obligations
Collect damages from the buyer
Retroactively void the transaction
Sue the MREC
If the seller asked the broker a buyer's race, would the broker have violated fiduciary relationship by respectfully refusing to answer?
Yes. The seller has the right to tell neighbors about the buyers.
Yes. The broker must follow the seller's instructions.
No. Protected classes are not material to the transaction
No. The broker must protect the buyer.
A broker described the boundaries of a property to a prospective buyer without informing her that the boundaries described were not exact. After purchasing the property, the buyer extended a fence within the described boundaries. A neighbor then brought an injunction against the new owner because the fence extended beyond the actual property boundaries. Can the broker be accountable for misrepresentation?
Yes. The broker must present a survey before closing.
Yes. The broker knew the boundaries she cited could be false.
No. The broker's description was oral.
No. The prospective buyer was responsible for obtaining a survey.
Which of the following items allows a sales contract to be voided?
One of the contract contingencies cannot be met
One of the parties did not fully understand it.
One of the parties had not read the entire contract before signing.
The broker had not signed the contract in the seller's presence.
All the following would be considered evidence of marketable title except a(n)
abstract of title with a legal opinion
title commitment or title insurance policy
certificate of title by a real estate broker
certificate of title by a real estate attorney
The elements of value include all of the following except
acquisition cost
utility and demand
demand and transferability
scarcity and utility
A promissory note
may not be executed in connection with a loan on real property
is an agreement to do or not do a certain thing
is the primary evidence of a loan
the term used for a note that is guaranteed or insured by a governmental agency
When a company furnishes materials for the construction of a house and is subsequently not paid, it may file a(n)
deficiency judgment
lis pendens
estoppel certificate
mechanic's lien
A seller and broker sianed an exclusive right to sell listing agreement at 6% commission. The listing expired. A month later, the seller sold the property to a buyer with whom the broker had not had any contact. Would the broker be due a commission?
Yes. The broker is due 3%.
Yes. 6%.
No. The broker did not produce the buyer within the listing period.
No. The broker should have had the seller sign an automatic extension clause in the listing for protection.
A house built in 1920 had a garage that measured 12' x 18'. If today an acceptable garage is 16' x 20', this property suffers from
functional obsolescence
economic obsolescence
physical obsolescence
area obsolenscence
Which of the following is an example of ownership in severalty?
two or more persons have identical interests in the same property concurrently
husband and wife share ownership of the same property property is owned by one person
two or more persons own the same property in any form of title
Property is owned by one person
A broker produces a supposedly ready, willing and able buyer. At closing, the seller is unable to provide marketable title to the property and the buyer cannot come up with the financing to purchase the home. Is the broker due a commission?
Yes. The seller cannot produce marketable title.
Yes. The broker produced a ready, willing and able buyer.
No. The buyer was not ready, willing and able.
No. The transaction did not close.
Which of the following permits the mortgagor to obtain additional funds at the later date without writing a new mortgage
Escalation mortgage
Blanket mortgage
Package mortgage
Open-end mortgage
What is the difference between a variance and nonconforming use?
a variance is not obtained through amending the zoning ordinance: a nonconforming use is obtained through amending the zoning ordinance
a variance applies to construction occurring after zoning codes have been determined; a nonconforming use applies to construction that occurred before zoning codes were determined
a variance is automatically granted to the landowner; a nonconforming use applies to construction that occurred before zoning codes were determined
a variance changes zoning codes; a nonconforming use does not change zoning codes
Baird may soon be awarded a judgment against Carr that would result in the court-ordered sale of Carr's house. As the lawsuit concerning this judgment has not yet begun, what would Baird use to record notice of the suit?
Lis pendens
Option
Caveat emptor
Escheat
In the appraisal process looking at shopping centers, the social fiber of the community and distances from schools is called.
Neighborhood analysis
Market data approach
Site analysis
Social analysis
A person rents a lakeside cabin to a young couple. Every day the lessor comes back to the beach area that he leased, and sells popcorn and hot dogs to people from the public beach nearby. Can the sun-tanners break the lease?
Yes. The tenants are due profit from the sales.
Yes. He destroyed their peaceable possession, warranting a constructive eviction
No. Leasing the cabin did not apply to the surrounding area.
No. But, they could sue for damages.
What type of agency is created by the actions of the parties rather than by an expressed agreement
Oral agency
Seller's agency
Exclusive agency
Implied agency
A new furnace is installed in a home. The furnace is
personal property
Chattel
appurtenance
a fixture
A visiting dignitary, who rented a place to live from May 1, 2021 to July 1, 2021, owns which of the following?
Periodic tenancy
Estate at will
Estate for years
Tenancy at sufferance
In a gift of parcel of real estate, one of the two owners was given an undivided 60% interest and the other received and undivided 40% percent interest. The two owners hold their interest as
Cooperative owners
Joint tenants
Tenancy by the entireties
Tenants in common
A person bought a house and wanted to bring a pet cougar to keep in the backyard. Which would most likely prevent this?
Police power
Urban development regulations
Zoning ordinances
Building codes
A seller is selling his only house. He will neither advertise the property, nor use a broker's services. Can the seller legally refuse to sell the property to a member of a racial minority?
Yes. The seller is exempt because he is selling on his own.
Yes. The seller has not used discriminatory advertising.
No. The seller cannot discriminate on the basis of race.
No. The seller owns fewer than three homes.
Five acres of land were zoned residential and were surrounded by other properties that also were residential. The owner wanted to rezone the five acres so that a commercial building would be built. Which of the following would have to be obtained to allow for the change?
Nonconforming use
Spot zoning
Variance
Aesthetic zoning
A life estate is classified as which of the following?
Fee simple estate
Freehold estate
Defeasible estate
Estate for years
Mary rents an apartment under a two year, written lease from Sarah. Three months later, Mary is transferred to another country for a period of eight months. During this period, Mary leases her interest in the apartment to Brenda, Brenda mails her rent to Mary, who in turn, mails her rent payment to Sarah. In this situation, Brenda has a
lease
sublease
tenancy at will
assignment
Seller Falk lists his home for $40,000 and the broker tells the prospective buyer to submit a low offer because the seller is desperate. The buyer offers $38,000 and the seller accepts. In this situation,
the broker was ethical but since no one was hurt, it was not improper
the broker violated the agency relationship
the broker's action was proper in obtaining a quick offer
any broker is authorized to encourage bidders
If a tenant stays over without the landlord's permission, this is called
estate for years
estate at sufferance
periodic tenancy
tenancy at will
Which of the following is not a customary duty of a property manager?
Report notices of building violations to the owner
Maintain the property
Maintain financial records
Secure tenants of a particular ethnic origin in accordance with the owner's instructions
An owner's equity in property represents
the amount originally paid for the property plus closing costs
the difference between the property's market value and the amount owed on it by the owner
the property's market value minus its original cost
the current appraised value of the property
Which of the following is a fixture?
pasture
pond
fence around a pasture
tractor
Jones, Smith and Rogers own a property as tenants in common. Jones wants to sell the property, but Smith and Rogers do not want to sell. What would be the most likely thing for Jones to do?
Jones would rent his interest to Smith and Rogers
Jones would file a suit to partition to force the sale of the property
Jones would force Smith and Rogers to buy his interest
Jones would back out and become a silent partner with Smith and Rogers
A listing broker had a signed a sales contract on a house. The broker then noticed a corner of the basement wall was crumbling. Which of the following should the broker inform about the wall?
Buyer only
Seller only
Both buyer and seller
Buyer, seller, and title company
ABC Inc. was organized with five stockholders. How would ABC Inc take title to the property?
Tenants in common
Joint tenants
Tenancy by the entirety
Severalty
What type of title does a seller retain in a contract for deed?
Equitable title
Legal title
Joint title
Potential title
A general lien affects the owner's
personal property only
The owners real property only
Both real and personal property of the owner
The owners bank accounts only
When a seller chooses to place a property on the multiple listing service (MLS)
the owner has entered an open listing
only the owner benefits
the owner and broker benefit
the listing always goes to the internet
After closing on a property, the buyer discovered there was an encroachment on the property. What could the buyer do?
nothing, as it was there when the property was purchased
sue for damages
lose the encroachment on the property through adverse possession
wait until the encroachment expires
A customer tells an agent he will pay $150,000 on a property listed for $145,000. What should the agent do?
tell the customer to offer $142,500
tell the seller
not tell the seller
tell the customer to expect a counteroffer
All the following elements have an effect on real estate value except
Zoning ordinances
Topography
Title insurance
Building codes
A borrower has a loan where she pays interest only during the loan period and pays off the principal balance at the end with a balloon payment. This type of loan is
Partially amortized loan
Straight term loan
Fully amortized loan
adjustable rate loan
Licensed salespersons who sell real estate for brokers are either
employees or independent contractors
office staff or field workers
employees or consultants
inside sales agents
A property has several liens against it. Upon foreclosure, which lien would take precedence?
lien with the largest amount of money owed
lien with the least amount of money owed
lien which was first recorded
lien which had the first date on it
Which of the following is an example of functional obsolescence in a commercial building?
Broken elevator
Small windows and cramped office soaces
Gang activity in the surrounding neighborhood
zoning change resulting in non-conforming use
How is interest calculated in mortgage payments?
Simple
Discount
Compound
Floating
Would an appraiser adjust for the area (location) when using comparable properties located in the same neighborhood as the subject property?
Yes, adjustments would be made
Yes, adjustments are routinely made for area
No, adjustments are never made
No, because location differences are already reflected in the comparables
A survey conducted on a property that is in the process of being sold will usually discover:
Lien
Defect in chain of title
Encroachment
Attachment
A seller sold a property to a buyer knowing that a third party had a claim in the property. Would the buyer receive marketable title?
Yes, because no claim was made at the time of transfer
Yes, because he paid the appraised value
No, because there was a cloud on the title
No, property cannot be sold if a third party has a claim on a property
Which of the following mortgage loans allows a person to buy a property with no money down?
Conventional-guaranteed
FHA-insured
Conventional-insured
Va-guaranteed
The purpose of the Truth in Lending Law (Regulation Z) is for all reasons except:
To inform the borrower of the cost of credit before acceptance
To help individual consumers shop more intelligently for credit
to help individual consumers apply for commercial business loans
to disclose finance charge, Annual Percentage Rate and repayment terms on loans
Valuation Approach for 20-Unit Apartment
Market data
Cost
Income
Unit-in-place
When should the agent disclose their license status?
Written disclosure before obtaining financial info
Oral disclosure before obtaining financial info
Full disclosure before showing a home
Disclosure not required unless seller requests
Which is always true about liens?
mortgage lien affects only the parcel of real property in which the mortgagor lives
Judgment lien affects all debtor’s property
Mechanic’s lien affects all real and personal property
Property tax lien affects all personal and real property
Government taking property for highway
Police power
Eminent domain
Escheat
Condemnation
Clause in a blanket mortgage
Escalation
Subordination
Release
Subrogation
Not a Mortgage Purchaser in Secondary Market
FNMA
GNMA
FHLMC
FmHA
Who pays the Salesperson commission?
Seller
Buyer
Both seller and buyer
Broker
Appraising a vacant lot
Highest and best use
Replacement cost
Contribution
Appraisal rates
Legal relationship between broker and seller
Special agency
Replacement cost
Contribution
Appraisal rates
Cost approach used least on
New properties
Special purpose properties
Income properties
Vacant land
Which is a form of riparian rights
Oceanside property
Lakefront property
Flooded property
Customized property by a river
Which is Not Real Property in Warranty Deed
Chandelier
Awnings
Portable gas stove
Furnace
Who issues FHA loans
PMI Company
Federal Housing Authority
Improved lending institution
FDIC
Which Does Regulation Z Not Apply To?
A shoe store in commercial center
A farm
Mobile home
Residential home
Mortgage for a Farm with House, Pond, Tractor
Package mortgage
Blanket mortgage
Graduated mortgage
Second mortgage
Buyer–Broker Relationship (No Dual Agency)
Buyer/Broker
Broker/Client
Broker/Customer
Customer only
Which is a voluntary lien
Mortgage lein
Mechanics lien
Judgement lien
Propert tax lien
Appraising an Office Building (What Not Considered)
Gross potential income
Annual operating expenses
Capitalization rate
Principal & interest payments on loans
. How to Lower Lien Priority
Hypothecation agreement
Satisfaction of mortgage
Subordination agreement
Reconveyance of mortgage
Effect of Increased Money Availability
Interest rates rise
Interest rates drop
No change due to Regulation Z
No change due to RESPA
Fannie Mae’s Role
Makes FHA loans
Buys FHA loans
Services FHA loans
Insures FHA loans
Mineral Rights When Land is Sold
Always pass
Cannot be sold separately
Pass unless otherwise stated
Belong to the government
Example of Ostensible Agency
Principal accepted agent’s actions
Broker sells all properties
Broker sells one property
Sub-agent for another broker
Community Property
Property inherited
Property gifted
Property bought after marriage
Property owned before marriage
Not in Mortgage Loan Clauses
Subrogation
Defeasance
Alienation
Acceleration
Less than freehold estate
Life estate
Leasehold estate
Fee simple
Fee simple determinable
Regulation Z Protection
Disclosure of financial charges and APR
Regulating interest rates
Prohibiting kickbacks
Preventing discrimination
