Post License Course (Barney Fletcher) Exam Questions and Answers, Exams of Real Estate Management

Download Post License Course (Barney Fletcher) Exam Questions and Answers and more Exams Real Estate Management in PDF only on Docsity! POST LICENSE COURSE (BARNEY FLETCHER) EXAM NEWEST 2024 ACTUAL EXAM 350 QUESTIONS AND CORRECT DETAILED ANSWERS (VERIFIED ANSWERS) |ALREADY GRADED A+ Within the first five years around ___% of agents leave the real estate business - ANSWER-80-90% For buyers what are the five steps of the pre-qualification process - ANSWER-1. Urgency 2. Motivation 3. Financial Ability 4. Wants and Needs 5. Agency For sellers what are the five steps to the first appointment - ANSWER-1. Urgency 2. Motivation 3. Concerns 4. Expectations 5. Hesitations A person who may be willing to engage in a real estate transaction - ANSWER-Prospect A person who is willing to perhaps have a conversation but has no real desire to engage in a real estate transactions - ANSWER-Suspect In determining whether a person is a suspect or a prospect we must consider - ANSWER-Urgency and motivation When setting goals, its important they be - ANSWER-Specific Measurable Attainable Realistic Timely Most common type of target market is a particular neighborhood of homes - ANSWER-Farming A ______ analysis can be helpful in analyzing your strengths and weaknesses, which can sometimes help you pick the target market that is best for you - ANSWER-SWOT The primary objective of any type of real estate prospecting is to - ANSWER-Generate an appointment The ratio that is computed by dividing the number of homes sold in a year by the total number of homes in the farms - ANSWER-Turnover ratio A method of prospecting that will involve the telephone, but only as part of a mix of different types of contacts - ANSWER-Circle prospecting A ______ agent has more control than a _____ agent - ANSWER-Listing/selling This involves only one appointment with the prospective sellers. Licensee makes the presentation, show the recommended price through CMA and try to get sellers to sign the listing contract - ANSWER-1-step listing presentation What is the best way to establish a personal brand in real estate - ANSWER-To develop a good reputation What type of software is designed specifically to avoid "one and done" prospecting - ANSWER-customer relationship management (CRM) when trying to get a listing from a seller whose previous listing was expired, which of the following choices are recommended to solicit a listing contract from that seller - ANSWER-provide a free service, such as analysis of current market conditions Situations where on party represents another party - ANSWER-law of agency The laws regarding agency come from what three sources in the US - ANSWER-common law, statutory law, and administrative or regulatory law Stems from British laws which applied to the colonies before the Revolutionary War (precedents) - ANSWER-Common law Laws passed by the state legislature or the Congress and signed by the governor. - ANSWER-statutory laws Refers to the rules and regulations adopted by various regulatory bodies - ANSWER-Administrative or regulatory law The person who hires the agent to represent them in a transaction - ANSWER-principal The person hired to represent the principal - ANSWER-agent in real estate practice, the ______ is considered the agent - ANSWER-broker represents the principal in all aspects of the principal's dealings, - ANSWER-universal agent less authority than a universal agent but may represent the principal in an ongoing series of continuous events, usually in one general field of endeavor. In real estate, property managers - ANSWER-general agent represents the principal in one specific transaction. - ANSWER-special agent acts as agent for an agent and has the same duties and obligations as the agent - ANSWER-subagent a position of trust and must put the interest of his client (Steve) above those of all others, including and especially those of himself. - ANSWER-fiduciary obligations This means that the agent is required to act in the best interest of the client and must not put anyone else's interests ahead of those of the client. - ANSWER-loyalty Agents are only required to follow the ________instructions of their client. - ANSWER-lawful In simple terms, this means that the licensee must perform the duties of the agent as would a competent real estate professional and without any negligence. - ANSWER-reasonable care and diligence If you are showing property you are listing and tell a prospective buyer that "...this property is the best for you," the relationship created could be interpreted as: - ANSWER-implied agency Under common law, a broker who has a listing is in a position of trust and must put his or her interests above those of all others. This describes what type of obligation? - ANSWER-fiduciary What is the greatest risk in a case where a buyer's agent submits offers on several homes simultaneously? - ANSWER-. The buyer could be contractually obligated to buy more than one house and could face damages if defaulting on any of the contracts. The duty of an agent to follow the instructions of the client applies to each of the following instructions, EXCEPT: - ANSWER-. "Do not reveal to any buyers that my roof leaks." The state law that specifies which types of contracts must be in writing to be enforceable is called the: - ANSWER-Statute of Frauds. What offers must a listing broker present to a seller? - ANSWER-All offers received prior to closing. Which of the following actions by a licensee who is working with a consumer as a non-client could cause the creation of an agency by implication? a. Filling in the blanks on a pre-printed offer to purchase real property. b. Showing homes to a consumer which meet the consumer's specified needs and desires. c. Making arrangements for a home inspection to take place. d. Making a recommendation about whether to make or accept a counteroffer. - ANSWER-Making a recommendation about whether to make or accept a counteroffer. A seller contacted 3 brokers and asked each to suggest the listing price for his property. Broker A said $78,000. Broker B said $79,000. Broker C said $91,000. The seller listed with Broker C and the house later sold for $76,000. Broker C is guilty of violating which of his or her agency responsibilities? - ANSWER-reasonable care Broker Bob has a buyer agency agreement with Buyer Bill. The agreement calls for Buyer Bill to pay a 3% commission upon closing of the purchase of a home. Buyer Bill purchases Seller Sally's house. Seller Sally gave an exclusive right to sell listing agreement to Broker Betty and agreed to pay a 6% commission. In a typical transaction of this nature, how much commission will Buyer Bill have to pay to Broker Bob? - ANSWER-nothing A real estate licensee represents himself to a customer as the agent of a seller without the knowledge of the seller. The customer makes an offer on the property, which the licensee then presents to the seller. The seller accepts the offer and agrees to pay a commission to the licensee. This is an example of: - ANSWER-agency by ratification What is the purpose or effect of the equal dignities rule? - ANSWER-To require that if the underlying contract must be in writing, any related contracts must be in writing. Select one: a. When the buyer moves into the property. b. When the seller moves out of the property. c. When the closing is completed. d. Whenever the seller says it is ok to do so. - ANSWER-c. When the closing is completed. When legal dual agency exists, the agent is required to maintain the confidences of: Select one: a. The buyer only. b. Both the seller and the buyer. c. The seller only. d. Neither the buyer nor the seller. - ANSWER-b. Both the seller and the buyer. Fred and Wilma gave a listing contract to Broker Bob to sell their home and both signed the contract. Prior to receiving any offers, Fred died in an unfortunate bowling accident. What is the effect of Fred's death on the listing contract? Select one: a. The contract remains in effect. b. The contract would be automatically terminated by law. c. The contract would be in default. d. The contract would only be enforceable in a community property state. - ANSWER-a. The contract remains in effect. Funds in the escrow account may be dispersed for any of the following reasons EXCEPT when: Select one: a. All principals to the transaction agree in writing to the disposition. b. A court orders disbursement of the funds. c. The seller demands forfeiture of the earnest money deposit. d. The transaction is consummated. - ANSWER-c. The seller demands forfeiture of the earnest money deposit. The death of a seller would terminate which of the following contracts? Select one: a. A purchase contract. b. A listing contract. c. Both of the above. d. None of the above. - ANSWER-b. A listing contract A broker could return the buyer's deposit from the escrow account back to the buyer in which of the following cases? Select one: a. The offer expired without any acceptance by the seller. b. The seller rejected the buyer's offer. c. The transaction was cancelled because of the buyer's inability to meet the financing contingency and the seller consented to returning the deposit. d. Each of the above. - ANSWER-d. Each of the above. The maximum fine for an individual for a violation of the Sherman Antitrust Act is: Select one: a. $0, since individuals are not subject to the Act - only companies are subject to the Act. b. $250,000. c. $500,000. d. $1,000,000 - ANSWER-d. $1,000,000 Who is required to comply with the Civil Rights Act of 1866? - ANSWER-d. Everyone, without exception. Larry Licensee runs an ad for one of his listings. The ad contains the phrase "nearby St. Andrew Roman Catholic Church." This would be considered: - ANSWER-a. Acceptable advertising if true; A disparate impact case has gone to trial. The plaintiffs have shown that a particular policy has had a disparate impact on a particular protected class. However, the defendant has shown that the policy serves a legitimate business necessity. What will be the next step? - ANSWER-c. The plaintiff will have to show that other policies might have served the same business necessity with less disparate impact on protected classes; Adeline is selling her own home as a For Sale By Owner (FSBO). On Sunday, a full price offer is made by an Asian couple. Adeline refuses the offer made by the couple. On Monday, Adeline accepts an offer, $4000 below the asking price from a Caucasian family. Has Adeline violated any laws and if so which one? - ANSWER-Adeline has violated the Civil Rights Act of 1866; One of the recent emerging issues in Fair Housing complaints has been the issue of excluding applicants on the basis of having a record of criminal convictions. Why is this the case? a. There is a new protected class of people with criminal convictions; b. African-Americans and Latinos have a disproportionately higher rate of having criminal conviction records than Caucasians. c. There is an increasing interest in prison reform; d. Due to provisions of the Dodd-Frank Act. - ANSWER-b. African-Americans and Latinos have a disproportionately higher rate of having criminal conviction records than Caucasians. The purpose of the Fair Housing Amendments Act of 1988 was to: Select one: a. Add two new protected classes; b. Repeal the Civil Rights Act of 1866; c. Remove two protected classes; d. Establish complaint procedures. - ANSWER-a. Add two new protected classes; Recent years have seen increasing complaints centering on fair housing problems having to do with REO properties. What is typically the complaint? Which of the following documents may include a question about the applicant's race? Select one: a. A mortgage application only; b. A rental application only; c. Both a mortgage application and a rental application; d. Neither a mortgage application nor a rental application. - ANSWER-a. A mortgage application only; If a prospective buyer (who is of a minority group) asks an agent to show her properties, the agent should: Select one: a. Show her properties in areas that are predominantly of the same minority group; b. Refer her to an agent in the firm of the same minority; c. Advise her that the firm does not handle people of her minority group and refer her to another brokerage d. Show her any property for which she is financially qualified - ANSWER-d. Show her any property for which she is financially qualified A victim of discriminatory conduct files a lawsuit and wins the case. Part of the judgment in the case is for emotional distress and loss of a housing opportunity. This part of the judgment is called: Select one: a. Consequential damages; b. Punitive damages; c. Injunctive relief; d. Declaratory relief. - ANSWER-a. Consequential damages; When HUD sends a complaint to a respondent, that respondent has how many days to submit an answer to the complaint? Select one: a. 5 days; b. 10 days; c. 15 days; d. 30 days; - ANSWER-b. 10 days; If a dark-skinned African-American refused to rent an apartment house to a lighter-skinned AfricanAmerican, that would be considered: Select one: a. Discrimination on the basis of race only; b. Discrimination on the basis of color only; c. Discrimination on the basis of both race and color; d. Not to be a violation of the Fair Housing Act. - ANSWER-b. Discrimination on the basis of color only; Each of the following would be considered a "person with a disability," EXCEPT: Select one: a. An individual who currently uses illegal drugs; b. A person with a past history of mental impairment; c. A person with a learning disability; d. A person who has difficulty walking. - ANSWER-a. An individual who currently uses illegal drugs; If a landlord or property manager treats Caucasian tenants better than Latino tenants, that would be an example of: Select one: a. Overt evidence of disparate treatment; b. Comparative evidence of disparate treatment; c. Evidence of disparate impact; d. Both A and B above. Feedback - ANSWER-b. Comparative evidence of disparate treatment; A fair housing complaint on the basis of excluding those with a record of criminal conviction may be based on allegations of: Select one: a. Disparate impact; b. Disparate treatment; c. Either of the above; d. None of the above. - ANSWER-Either of the above; Information gathered because of the Home Mortgage Disclosure Act would most likely be used for which type of discrimination lawsuit? Select one: a. Overt evidence of disparate treatment; b. Comparative evidence of the disparate treatment; c. Either of the above; d. Evidence of disparate impact. - ANSWER-d. Evidence of disparate impact. If the Administrative Law Judge finds that a landlord had violated the Fair Housing Act in the current case, and has been found guilty of two other violations in the past seven years in other cases, the respondent could be ordered to pay a maximum fine of approximately: Select one: a. $16,000; b. $20,000; c. $50,000; d. $100,000. - ANSWER-A person who had previously violated the Act two or more times in the past seven years could be fined up to $100,554. In what circumstance is the owner required to pay any costs associated with a reasonable accommodation? Select one: a. In no cases; In a fair housing investigation, "testers" are most often used to find: Select one: a. Overt evidence of disparate treatment; b. Comparative evidence of disparate treatment; c. Evidence of disparate impact; d. Both A and B above. - ANSWER-b. Comparative evidence of disparate treatment; When must the owner of an apartment complex grant a reasonable accommodation to a disabled tenant? Select one: a. When the disability is readily apparent and the accommodation is not an undue burden on the owner; b. Whenever the tenant requests one; c. When the tenant requests one and the request does not place an undue burden on the owner; d. At no time, since reasonable accommodations are always voluntary. Feedback - ANSWER-When the tenant requests one and the request does not place an undue burden on the owner; A disparate impact case has gone to trial. The plaintiffs have shown that a particular policy has had a disparate impact on a particular protected class. However, the defendant has shown that the policy serves a legitimate business necessity. What will be the next step? Select one: a. The case will be dismissed. b. The plaintiff will have to show that the policy involved a discriminatory intent on the part of the defendant; c. The plaintiff will have to show that other policies might have served the same business necessity with less disparate impact on protected classes; d. The defendant will have to prove that there was no discriminatory intent when it set the policy. - ANSWER-The plaintiff will have to show that other policies might have served the same business necessity with less disparate impact on protected classes; Claims filed with HUD for alleged Fair Housing violations must be filed within: Select one: a. 90 days; b. 180 days; c. 1 year; d. 2 years. - ANSWER-c. 1 year; Which of the following documents may include a question about the applicant's race? Select one: a. A mortgage application only; b. A rental application only; c. Both a mortgage application and a rental application; d. Neither a mortgage application nor a rental application. - ANSWER-a. A mortgage application only; A property owner creates the following policy: There shall be no "loud and boisterous activity on the premises, music played loud and/or with too much bass, a continuous or excessive number of guests, noisy children, or vehicles with very loud exhaust system." Is this policy likely to be found to be enforceable? Select one: a. No, primarily because of the reference to noisy children; b. Yes, it is reasonable and serves a legitimate business necessity; c. No, primarily because of the reference to loud music; d. No, primarily because of the reference to automobiles. Feedback - ANSWER-a. No, primarily because of the reference to noisy children; Sally owned a rental home which she has never occupied. Under the federal Fair Housing Act, under what circumstance might she be able to sell this rental property and be exempt from the Fair Housing Act? Select one: a. As long as she uses the services of a real estate licensee; b. As long as she discloses the exemption from the Fair Housing Act in any advertisement; c. Under no circumstances; d. As long as she does not sell more than one such property in any two-year period. - ANSWER-As long as she does not sell more than one such property in any two-year period. A victim of discriminatory conduct files a lawsuit and wins the case. Part of the judgment in the case is for emotional distress and loss of a housing opportunity. This part of the judgment is called: Select one: a. Consequential damages; b. Punitive damages; c. Injunctive relief; d. Declaratory relief. Feedback - ANSWER-a. Consequential damages; In past years, fair housing complaints involving insurance companies typically involved complaints regarding: Select one: a. Steering; b. Redlining; c. Blockbusting; d. Discriminatory pricing. - ANSWER-b. Redlining; A real estate licensee who works only with buyers has told a Latino buyer that the local school district is very good but offers no English as a Second Language program. The same licensee tells Caucasian buyers that the local school district is great. This licensee has: Select one: a. Done nothing wrong; b. Engaged in steering; c. Engaged in redlining; a. 5 days; b. 10 days; c. 15 days; d. 30 days; - ANSWER-b. 10 days; If a seller is held liable for the actions of a real estate licensee representing that seller, that would be an example of: Select one: a. Vicarious liability; b. Indirect liability; c. Subsidiary liability; d. Employment liability. - ANSWER-a. Vicarious liability; What is the next step if a lawsuit shows conclusive evidence that a particular policy of a lender or municipal government has had a disparate impact on a protected class? Select one: a. The judge then determines the monetary damages to be paid to the plaintiffs. b. The case is then referred to HUD or the DOJ for criminal prosecution; c. The plaintiff will then have to show that the policy is illegal; d. The defendant will then have to show that the policy serves some business necessity - ANSWER-d. The defendant will then have to show that the policy serves some business necessity A disabled tenant makes a request for a reasonable accommodation which the property owner believes to be unreasonable. What further obligation does the owner have to the tenant at that point? Select one: a. To investigate the possibility of a different accommodation that would achieve the same objective but create less burden for the property owner; b. To submit to mediation; c. To submit the request to a court for further consideration; d. None whatsoever. Feedback - ANSWER-a. To investigate the possibility of a different accommodation that would achieve the same objective but create less burden for the property owner; In today's economy, which of the following factors have most frequently been involved in fair housing complaints against insurance companies? Select one: a. Insurance companies have denied coverage or charged higher premiums to property owners who accept housing choice vouchers; b. Connecticut law which requires property owners to accept housing choice vouchers; c. Both of the above; d. None of the above. - ANSWER-c. Both of the above; Which of the following words or phrases in an advertisement would be considered a violation of the Fair Housing Act? Select one: a. Walking distance to public transit; b. Exclusive neighborhood; c. Desirable neighborhood; d. Mother-in-law suite. - ANSWER-b. Exclusive neighborhood; In 1968 the Supreme court ruled in the Jones vs. Mayer Co. case. The courts' decision upheld the law which provides protection on the basis of: Select one: a. Sexual discrimination; b. Racial discrimination; c. Discrimination on the basis of national origin d. Religious discrimination - ANSWER-b. Racial discrimination; Which of the following phrases in a rental advertisement would be deemed discriminatory against the disabled? Select one: a. Attractive independent living; b. Walking distance to shopping; c. Accessible for the disabled; d. None of the above. - ANSWER-a. Attractive independent living Adeline is selling her own home as a For Sale By Owner (FSBO). On Sunday, a full price offer is made by an Asian couple. Adeline refuses the offer made by the couple. On Monday, Adeline accepts an offer, $4000 below the asking price from a Caucasian family. Has Adeline violated any laws and if so which one? Select one: a. There is no violation because homeowners selling their own property are exempt from Federal Fair Housing laws; b. Adeline has violated the Federal Fair Housing Act of 1968; c. Adeline has violated the Civil Rights Act of 1866; d. Adeline has violated the state license laws. - ANSWER-c. Adeline has violated the Civil Rights Act of 1866; The 1988 Amendment to the Federal Fair Housing Act, Title VIII, declared it unlawful to discriminate: Select one: a. Against households with children under 18 years of age; b. On the basis of age; c. Because of sexual orientation; d. On the basis of the sex of the buyer or renter - ANSWER-a. Against households with children under 18 years of age; d. Restrictions against group homes for the disabled in residential neighborhoods. - ANSWERRestrictions against group homes for the disabled in residential neighborhoods. Sally owned a rental home which she has never occupied. Under the federal Fair Housing Act, under what circumstance might she be able to sell this rental property and be exempt from the Fair Housing Act? Select one: a. As long as she uses the services of a real estate licensee; b. As long as she discloses the exemption from the Fair Housing Act in any advertisement; c. Under no circumstances; d. As long as she does not sell more than one such property in any two-year period. - ANSWER-d. As long as she does not sell more than one such property in any two-year period. What determines whether a person is a member of the familial status protected class? Select one: a. Whether a couple is married; b. Whether a person has (or will soon have) custody of a child under the age of 18; c. Whether the household includes at least three people; d. All of the above. - ANSWER-b. Whether a person has (or will soon have) custody of a child under the age of 18; In what circumstance is the owner required to pay any costs associated with a reasonable accommodation? Select one: a. In no cases; b. In all cases; c. Only if the owner receives operating subsidies from the government, such as Section 8 vouchers; d. Only if the property was built after 1991. - ANSWER-b. In all cases; Which of the following statements is/are true regarding the addition of sexual orientation and the gender identity as members of a protected class? Select one: a. It is based on a Supreme Court decision and a Presidential Executive Order; b. It is based on the protected class of sex; c. Both of the above; d. None of the above. - ANSWER-c. Both of the above; A fair housing complaint on the basis of excluding those with a record of criminal conviction may be based on allegations of: Select one: a. Disparate impact; b. Disparate treatment; c. Either of the above; d. None of the above. - ANSWER-c. Either of the above; A lawsuit has been filed alleging discrimination in housing against a person based on a disability. The defendant has argued that the plaintiff is not disabled under the definition of a disability in the Fair Housing Act. The court considered this argument and issued an order stating that the individual is indeed disabled under the definition of a disability in the Act. This court order is an example of: Select one: a. Injunctive relief; b. Punitive relief; c. Consequential relief; d. Declaratory relief. - ANSWER-d. Declaratory relief. Which of the following choices would be an example of a member of the "familial status" protected class under the Fair Housing Amendments Act? Select one: a. Any married couple; b. A single mother with a 19-year old child; c. A married couple with two grown children; d. A pregnant woman. - ANSWER-d. A pregnant woman. If a landlord or property manager treats Caucasian tenants better than Latino tenants, that would be an example of: Select one: a. Overt evidence of disparate treatment; b. Comparative evidence of disparate treatment; c. Evidence of disparate impact; d. Both A and B above. - ANSWER-b. Comparative evidence of disparate treatment; One of the recommended fair housing practices is that real estate brokerage firms should review and evaluate the location of homes shown and sold. What is the fair housing purpose for doing this? Select one: a. To determine if steering is going on; b. To comply with the requirement to report this data to the federal government; c. Both of the above; d. None of the above. Feedback - ANSWER-a. To determine if steering is going on; Information gathered because of the Home Mortgage Disclosure Act would most likely be used for which type of discrimination lawsuit? Select one: a. Overt evidence of disparate treatment; b. Comparative evidence of the disparate treatment; c. Either of the above; d. Evidence of disparate impact. c. By specifying underwriting standards; d. By requiring HUD-approved loan counseling. - ANSWER-a. By requiring a license, which can be suspended or revoked; Which statement is FALSE regarding duress? Duress: Select one: a. Can take any number of forms; b. May force a person to do something against his or her will; c. Duress is caused by a party who benefits under the contract; d. Covers situations of forcing someone's assent by legal means - ANSWER-d. Covers situations of forcing someone's assent by legal means Which of the following statements is the most accurate statement regarding the difference between ethical standards and legal standards: Select one: a. Ethical standards guide us on what we should (or should not) do; b. Legal standards guide us on what we should (or should not) do; c. There is no relationship between legal standards and ethical standards; d. Legal standards and ethical standards are the same. - ANSWER-a. Ethical standards guide us on what we should (or should not) do; Each of the following items on a loan application is a possible red flag for mortgage fraud, EXCEPT: Select one: a. The employer's address is a PO Box; b. The accumulation of assets seems excessive in relation to income; c. Same telephone number for the borrower and the employer; d. A family with small children is purchasing a larger house. - ANSWER-A young family purchasing a larger house would not be a red flag. If the house being purchased seems to small for the number of occupants, that might be a red flag. The correct answer is: A family with small children is purchasing a larger house. Which of the following rules is NOT used by consumers to reduce the chances of identity fraud? Select one: a. Know what is in the credit file; b. Monitor credit file so notification occurs when credit inquiry made; c. Sign all new credit cards upon receipt; d. Shredding is not needed for records of account details. - ANSWER-The false statement is that shredding is not needed. The correct answer is: Shredding is not needed for records of account details. Which statement best describes duress? Select one: a. Duress is when a person is asked to do something willingly; b. If duress was caused by party gaining from contract, court will not recognize it; c. Duress covers situations that involve forcing someone's assent by illegal threats; d. Duress includes falsifying a required document. - ANSWER-c. Duress covers situations that involve forcing someone's assent by illegal threats; If a property has been sold multiple times in the past several years, what type of mortgage fraud might that indicate: Select one: a. Fraud for property; b. Equity skimming; c. Property flipping; d. Cash back on closing. - ANSWER-c. Property flipping; Mr. Jones owns a house worth $150,000, on which he owes $100,000. He also owes an additional $150,000 to various creditors, including credit card companies and other unsecured lines of credit. He sells the home to his daughter for $110,000 and shortly thereafter files for bankruptcy. The bankruptcy court is likely to view this sale to his daughter as: Select one: a. A prudent business move; b. A fraudulent transfer; c. An unethical, but not illegal transaction; d. None of these choices. - ANSWER-Since the property was sold for less than fair market value shortly before the bankruptcy filing, it will most likely be viewed as a fraudulent transfer. The fact that the sale was to a family member reinforces this likelihood. The correct answer is: A fraudulent transfer; Which of the following statements is NOT true of mortgage fraud-for-property? Select one: a. The applicant might overstate his or her income; b. The applicant often has no intention of ever repaying the loan; c. The transaction might involve a "silent second;" d. The applicant often makes significant misrepresentations on the application. - ANSWER-In a fraud- forproperty scheme, the applicant usually fully intends to repay the loan. The applicant is lying in order to get a loan for which the applicant would not otherwise qualify. They typically intend to live in the property and intend to make the required payments. The correct answer is: The transaction might involve a "silent second;" The "ability to repay" test of the Dodd-Frank Act was designed to address: Select one: a. The foreclosure crisis; b. Abuses in the subprime mortgage market; c. High interest rates; d. Excess competition. - ANSWER-b. Abuses in the subprime mortgage market; Charlie is paid $10,000 to pretend to be the purchaser of a home. He fills out the loan application and attends the closing, but the property is actually owned by someone else. Charlie has acted as a: b. Targeting; c. Redlining; d. Capping. - ANSWER-a. Steering; Which of the following documents would be considered part of the mortgage process under the Georgia Residential Mortgage Fraud Act? Select one: a. The Uniform Residential Mortgage Loan Application; b. Payroll stubs; c. Bank statements; d. All of the above. - ANSWER-d. All of the above When people violate their ethical standards, they often try to explain that the action was not unethical, or at least was a lesser violation than what it might first appear to be, through a process called: Select one: a. Justification; b. Rationalization; c. Explanatiion; d. Normalization. - ANSWER-b. Rationalization; Fred, a homeowner, gets behind on his mortgage payments. Seth targets Fred because he needs to sell his home quickly to avoid foreclosure. Seth promises to take over Fred's payments, but when the deed to the home is signed over, Seth rents the home, and never assumes the loan nor makes any payments. Seth is practicing: Select one: a. Equity stealing' b. Equity skimming; c. Equity scamming; d. Equity mortgaging. - ANSWER-b. Equity skimming; Francis recognized a cash-back at closing scam. What should she do? Select one: a. Not interfere; this is not her concern; b. Inform only the licensees about the scheme; c. Call the lender immediately; d. Francis should offer to assume the negotiations with the seller. - ANSWER-c. Call the lender immediately; A scammer might artificially inflate the value of a home in order to: Select one: a. Obtain a larger loan; b. Get cash back at closing c. Obtain a larger loan and/or to get cash back at closing d. Justify a higher fee for an appraiser - ANSWER-c. Obtain a larger loan and/or to get cash back at closing When mortgage fraud occurs, if the borrower has no intention of ever repaying the mortgage, this would most likely involve: Select one: a. Fraud for profit; b. Fraud for property; c. Fraud for hire; d. Either fraud for profit or fraud for property. - ANSWER-a. Fraud for profit; Predatory lenders tend to target: Select one: a. Elderly borrowers; b. Non-English speaking borrowers; c. Less educated borrowers; d. Each of these groups. - ANSWER-d. Each of these groups. Which type of predatory lending practice often results in fraudulent property transfers: Select one: a. Steering; b. Loan modifications; c. Targeting; d. Prepayment Penalties. - ANSWER-Many loan modifiers will convince defaulting borrowers to sign documents which transfer title to the loan modifier. The correct answer is: Loan modifications; "The intentional use of deception to cause another person to suffer loss" is most accurately the definition of the term: Select one: a. Fraud; b. Misrepresentation; c. Negligence; d. Incompetence. - ANSWER-a. Fraud; Appraisal fraud is MOST likely to occur in: Select one: a. Property flipping; b. Cash back at closing; c. Credit repair scams; d. Pay up front scams. - ANSWER-a. Property flipping; d. Misrepresentation. - ANSWER-a. Title fraud; Which of the following statements is the LEAST important determinant of whether a loan is suitable to a particular mortgage loan applicant: Select one: a. The borrower's likely future income; b. The borrower's financial reserves; c. The borrower's financial sophistication; d. The compensation to the mortgage loan originator. - ANSWER-d. The compensation to the mortgage loan originator. The "throw away second:" Select one: a. Is typically recorded, but sellers are asked to sign a release at closing table; b. Has payments that are always made and are expected to be paid; c. Has three different contracts of sale; d. Is a scheme with 3 settlements sheets and commission on lower selling price. - ANSWER-A "throw away second" involves a recorded second mortgage, but the seller agrees to sign a release at the closing table and the funds are never advanced and the loan is never repaid. The correct answer is: Is typically recorded, but sellers are asked to sign a release at closing table;` A large law firm would most likely seek to lease: Select one: a. An executive suite; b. Open space; c. A traditional office space d. Class C properties - ANSWER-The correct answer is: A traditional office space In an appraisal, what is the difference between a condition of sale adjustment and a market condition adjustment? Select one: a. Market conditions adjustments relate to whether the sale was an arm's length transaction where conditions of sale usually related to how long ago the sale occurred. b. Conditions of sale adjustments relate to whether the sale was an arm's length transaction where market conditions usually related to how long ago the sale occurred. c. There is no difference between the two. d. Conditions of sale relate to the type of property interest conveyed while market conditions relate to the financing of the property. - ANSWER-Conditions of sale adjustments relate to whether the sale was an arm's length transaction where market conditions usually related to how long ago the sale occurred. The correct answer is: Conditions of sale adjustments relate to whether the sale was an arm's length transaction where market conditions usually related to how long ago the sale occurred. he formula used to calculate the value of a property under the income approach is: Select one: a. Potential gross income divided by capitalization rate = value. b. Effective gross income divided by capitalization rate = value. c. Net operating income divided by capitalization rate = value. d. Net operating income divided by potential gross income = value. Feedback - ANSWER-The formula for determining the value under the income approach is net operating income divided by capitalization rate = value. The correct answer is: Net operating income divided by capitalization rate = value. For the years from 2000 through 2015, what was the highest percentage of home sales purchased by institutional investors? Select one: a. 12% b. 9.6% c. 8.25%. d. 7.5%. - ANSWER-b. 9.6% A law firm which represents high-level corporate clients would most likely rent space in which of the following types of office buildings? Select one: a. Class A; b. Class B; c. Class C; d. Class D - ANSWER-a. Class A; According to the International Council of Shopping Centers (the ICSC), what percentage of retail spending occurs within the walls of a physical store? Select one: a. 75%; b. 83%; c. 89%; d. 94% - ANSWER-d. 94% Which of the following properties would most likely be considered an investment property rather than a commercial property: Select one: a. An office building; b. A warehouse; c. A shopping center; d. A single-family residence purchased by an institutional investor. - ANSWER-d. A single-family residence purchased by an institutional investor. A retail center needs exterior paint. The cost of painting the structure is estimated at $20,000. An appraiser expects that this would add $25,000 to the value of the property. This would be an example of: Select one: a. Tax benefits during the holding period and appreciation in the future; b. High levels of positive cash flow; c. Tenants who will buy the house after a stated period of years; d. All of the above. - ANSWER-a. Tax benefits during the holding period and appreciation in the future; The largest of the industrial buildings, often with ceilings of 50 feet or more are: Select one: a. Warehouses; b. Distribution centers; c. Light manufacturing d. Flex buildings. - ANSWER-b. Distribution centers; The economic rent of a property or a unit is also known as the: Select one: a. Market rent. b. Contract rent. c. Actual rent. d. Statutory rent. - ANSWER-a. Market rent. The article cited in the text about hotel investment makes each of the following points, EXCEPT: Select one: a. First time hotel investors would be best advised to build a new hotel rather than purchasing an existing one; b. Investors carefully investigate the town in which to place a hotel before considering specific sites; c. Hotels should not be considered a passive investment; d. Marketing efforts are crucial for any hotel - ANSWER-a. First time hotel investors would be best advised to build a new hotel rather than purchasing an existing one; What is the impact of the "strict liability" standard for cleanup of environmental contamination? Select one: a. It means that the current and all past owners of a property must share in the clean-up costs of any contamination. b. It means that only the owner which caused the contamination is liable for the clean-up costs of any contamination. c. It means that the current owner is responsible for the clean-up costs of any contamination regardless of which owner caused the contamination. d. It means that no owner is responsible for the clean-up costs of any contamination unless it can be determined who was responsible for the contamination. - ANSWER-c. It means that the current owner is responsible for the clean-up costs of any contamination regardless of which owner caused the contamination. The most common type of industrial property in the United States is: Select one: a. Distribution centers; b. Warehouses; c. Light industrial; d. Flex buildings. Feedback The most common type of industrial property in the United States is light industrial. The correct answer is: Light industrial; - ANSWER-c. Light industrial; A subject property has 1,500 square feet of living space. A nearby comparable sale has 1,650 square feet of living space. The appropriate adjustment would be $5,000. This adjustment would be: Select one: a. Added to the sale price of the subject property. b. Subtracted from the sale price of the subject property. c. Added to the sale price of the comparable sale. d. Subtracted from the sale price of the comparable sale. - ANSWER-d. Subtracted from the sale price of the comparable sale. After an appraiser has made the appropriate adjustments when using the sales comparison approach, the appraiser will: Select one: a. Reconcile the indicated values. b. Average the indicated values. c. Stabilize the indicated values. d. Find the mean of the indicated values. - ANSWER-a. Reconcile the indicated values. Which of the following types of retail centers would draw its customers from the population within 3 miles of the store? Select one: a. Strip center; b. Neighborhood center; c. Community center; d. Regional mall. - ANSWER-b. Neighborhood center; What is subtracted from potential gross income to arrive at the effective gross income in a commercial building? Select one: a. Vacancy losses only. b. Collection losses only. c. Neither vacancy losses nor collection losses. d. Both vacancy losses and collection losses. - ANSWER-d. Both vacancy losses and collection losses. What is an estoppel certificate? Select one: d. Regional mall. - ANSWER-c. Community center; The Environmental Protection Agency estimates that what percentage of dry cleaners currently in operation have contamination issues? Select one: a. 45%. b. 55%. c. 65%. d. 75%. - ANSWER-d. 75%. The discounted cash flow approach to appraising income properties is based on the concept of: Select one: a. Substitution. b. Disintermediation. c. Contribution. d. Time value of money - ANSWER-d. time value of money Why do lenders require higher financial reserves for loans for a rental house? Select one: a. To discourage loan applications for rental properties; b. Due to the requirements of federal law; c. As a matter of tradition; d. Because of the risk of a vacancy causing an extended period of time with no rental income. - ANSWER-If the tenant leaves and it takes several months to get a new tenant, the owner could go a long period of time with no rental income, so financial reserves become very important. The correct answer is: Because of the risk of a vacancy causing an extended period of time with no rental income. A call center which never gets in-person visits from consumers or customers would be most likely to rent space in which of the following types of office buildings? Select one: a. Class A; b. Class B; c. Class C; d. Class D Feedback Since there is no need to impress clients or customers at this location, it would be most likely to rent space in a Class C building, which is the lowest of the ratings. There is no Class D space. The correct answer is: Class C; - ANSWER-Since there is no need to impress clients or customers at this location, it would be most likely to rent space in a Class C building, which is the lowest of the ratings. There is no Class D space. The correct answer is: Class C; In what circumstance will some of the interest paid on a mortgage securing a rental house NOT be tax deductible: Select one: a. In all cases; b. If the owner is in the highest tax bracket; c. In no cases; d. If there has been a "cash-out" refinancing. - ANSWER-Interest on a mortgage on a rental property is normally tax deductible except to the extent there has been a "cash-out" refinancing. The correct answer is: If there has been a "cash-out" refinancing. In the market for single family residences, an "institutional investor" is one who: Select one: a. Invests at least $1 million per year for 5 years; b. Purchases at least 5 homes in a year c. Purchases at least 10 homes in a year d. Invests at least $3 million per year for 5 years. - ANSWER-c. Purchases at least 10 homes in a year A retail center that typically has between 30,000 and 125,000 square feet of retail space and is anchored by a supermarket is known as a: Select one: a. Strip center; b. Neighborhood center; c. Community center; d. Regional mall. - ANSWER-b. Neighborhood center; A single family residence rents for $1,500 and recently sold for $187,500. What is its monthly gross rent multiplier? Select one: a. 125. b. 135. c. 150. d. 155. - ANSWER-a. 125. A Phase I Environmental Site Assessment would include each of the following, EXCEPT: Select one: a. An onsite inspection of the property. b. Interviews of knowledgeable persons such as previous owners and managers who would know the past history of the property. c. A check of local government records to review past land uses and building permits. d. Taking soil samples and obtaining lab tests. - ANSWER-d. Taking soil samples and obtaining lab tests. If you purchase a unit in a cooperative complex, what do you own? Select one: a. Your individual unit only; Select one: a. A building that needs exterior paint. b. A retail center with an insufficient number of public bathrooms. c. A commercial structure in a city whose water supply has been contaminated. d. A property that has lost value due to increased traffic at a local airport. - ANSWER-b. A retail center with an insufficient number of public bathrooms. What is the primary significance of the Uniform Commercial Code in regard to a commercial real estate transaction? Select one: a. It allows lenders to place a lien against personal property, which could be significant if the sale includes personal property such as equipment or inventory, for instance. b. It is the primary federal law governing the sale of commercial properties in the United States. c. The Uniform Commercial Code governs the use of mortgages in a commercial real estate transaction. d. The Uniform Commercial Code is never an issue in any real estate transaction. - ANSWER-The Uniform Commercial Code allows lenders to create a lien against personal property, which could be an issue if the purchase of a commercial property includes significant items of personal property, such as equipment or inventory. The correct answer is: It allows lenders to place a lien against personal property, which could be significant if the sale includes personal property such as equipment or inventory, for instance The cubic foot method of estimating construction costs would most likely be used to estimate the cost to build which of the following structures? Select one: a. A warehouse. b. A shopping center. c. A four-plex. d. A convenience store. - ANSWER-a. A warehouse. A title commitment from a title insurance company for an ALTA policy would show which of the following: Select one: a. Liens against the property. b. Easements or encroachments affecting the property. c. Both of the above. d. None of the above. - ANSWER-c. Both of the above. A Phase II Environmental Site Assessment would include: Select one: a. Soil samples. b. Water samples. c. Subsurface soil borings. d. All of these choices. - ANSWER-d. All of these choices. The cost approach to appraisal is based primarily on the principle of: Select one: a. Anticipation. b. Substitution. c. Progression. d. Contribution. - ANSWER-b. Substitution. What is the formula for calculating depreciation under the age-life approach? Select one: a. Effective age divided by actual age. b. Effective age divided by economic life. c. Actual age divided by economic life. d. Economic life divided by actual age. - ANSWER-b. Effective age divided by economic life. What is the purpose of an access agreement in the purchase of commercial property? Select one: a. To prevent any modifications to the access areas of the property prior to closing of the purchase. b. To allow the seller access to the property for a specified period of time after closing to remove any remaining personal property. c. To allow the buyer access rights to the property before the closing so that desired inspections can be made. d. To allow local building inspectors access to the property. - ANSWER-c. To allow the buyer access rights to the property before the closing so that desired inspections can be made. A corporate investor who is considering the purchase of a commercial building would use the Weighted Average Cost of Capital to determine the: Select one: a. Capitalization rate. b. Discount rate. c. Remainder rate. d. Sample rate. Feedback The Weighted Average Cost of Capital (WACC) is used to determine the discount rate in a discounted cash flow analysis. The correct answer is: Discount rate. - ANSWER-The Weighted Average Cost of Capital (WACC) is used to determine the discount rate in a discounted cash flow analysis. The correct answer is: Discount rate. The recapture of depreciation is taxed at what rate? Select one: a. 25%; b. The taxpayer's ordinary income rate; c. The taxpayer's short term capital gains rate; d. 10%. - ANSWER-a. 25%; When "baseball arbitration" is used in negotiating the rent for a lease extension, which of the following choices best describes the process? Select one: a. It is a form of mediation involving several rounds of negotiations. b. It involves hiring an appraiser to determine the fair market rent. c. It requires a panel of three different owners of similar properties setting an appropriate rent level. d. Each party submits a recommended solution and the arbitrator chooses which one is more reasonable. - ANSWER-In "baseball arbitration" each party submits a recommended solution and the arbitrator chooses which one is more reasonable. The correct answer is: Each party submits a recommended solution and the arbitrator chooses which one is more reasonable. The type of escalation clause that would require periodic appraisals of the property is: Select one: a. Step up rent increases. b. Indexed rent increases. c. Market rent increases. d. None of the above. - ANSWER-Market rent increases are tied to the value of the property and therefore require periodic appraisals of the property. The correct answer is: Market rent increases. Which of the following statements is true regarding recourse loans? Select one: a. In general, commercial mortgage loans are more likely to be recourse loans than are residential mortgage loans. b. A lender can foreclose against the property only if the loan is a recourse loan. c. Recourse loans are permitted for mortgages used to purchase a personal residence in all 50 states. d. None of the above. - ANSWER-Commercial loans are far more likely to be recourse loans (where the lender can get a deficiency judgment against the borrower if the foreclosure sale does not generate enough money to fully repay the loan). Many states prohibit deficiency judgments against loans to finance the purchase of a residential mortgage. The correct answer is: In general, commercial mortgage loans are more likely to be recourse loans than are residential mortgage loans. Which of the following statements is most accurate regarding the remedy for a landlord whose tenant commits a non-material breach of the lease contract? Select one: a. The landlord could evict the tenant. b. The lease contract should specify the remedy for a non-material breach. c. There are no remedies for a non-material breach. d. The amount of rent charged would become subject to renegotiation. Feedback - ANSWER-The correct answer is: The lease contract should specify the remedy for a nonmaterial breach. If there is a year-end reconciliation clause in a percentage lease, when might the tenant be entitled to a rent refund of some amount? Select one: a. If the sales exceeded the breakpoint every month of the year. b. If the annual sales exceeded 12 times the monthly breakpoint. c. If sales exceeded the monthly breakpoint several times but total annual sales did not exceed the monthly breakpoint times 12. d. In each of these cases. - ANSWER-If sales exceeded the monthly breakpoint several times but total annual sales did not exceed the monthly breakpoint times 12. Mezzanine financing is best defined as: Select one: a. The use of a second mortgage as part of the initial financing. b. The type of financing used for particular types of industrial buildings. c. An intermediate financing between the property owner and the mortgage lender. d. A type of financing using the issuance of preferred stock by the corporation buying the property. - ANSWER-c. An intermediate financing between the property owner and the mortgage lender. A use and occupancy clause in a commercial lease prohibits a tenant from committing "waste." In this context, waste means: Select one: a. Excessive amounts of garbage which raises the landlord's operating costs. b. Using excessive amounts of water or electricity. c. A change in the condition of real property caused by a tenant that damages or destroys the value of the property. d. None of the above. - ANSWER-The correct answer is: A change in the condition of real property caused by a tenant that damages or destroys the value of the property. Each of the following statements about markets is correct, EXCEPT: Select one: a. A market is a medium that allows buyers and sellers of a specific good or service to interact in order to facilitate an exchange. b. Many markets exist in physical locations. c. All markets require personal interaction between the buyer and the seller. d. There are both wholesale and retail markets. Feedback - ANSWER-c. All markets require personal interaction between the buyer and the seller. The simplest, most desirable type of mezzanine financing, and the one least often available is: Select one: a. Assignment of the ownership. b. A cash flow note. c. A second mortgage. d. An equity position. Feedback - ANSWER-c. A second mortgage. A retail space includes 12,000 square feet of usable square feet and 15,000 square feet of rentable square feet. What is the load factor? Select one: a. 30%. b. 25%. c. 15%. d. 10%. Feedback - ANSWER-Start with the rentable square footage of 15,000; divide that by the 12,000 square feet of usable square feet for a result of 1.25; subtract 1 for a result of 0.25, then multiply that by 100 for a result of 25%. The correct answer is: 25%. Question 19 Incorrect 0.00 points out of 1.00 Flag question Question text When a small business takes out a Section 504 loan, the business must up a down payment of at least: Select one: a. 25%. b. 20%. c. 15%. d. 10%. Feedback The minimum down payment for a Section 504 loan is 10%. The correct answer is: 10%. - ANSWER-The minimum down payment for a Section 504 loan is 10%. The correct answer is: 10%. The monetary policy of the United States government is determined by: Select one: a. The President and the Congress. b. The Federal Reserve Board. c. The Department of the Treasury. d. All of the above. - ANSWER-b. The Federal Reserve Board. Which of the following actions would reduce (or decrease the growth of) the money supply? Select one: a. Buying government securities and lowering the discount rate. b. Buying government securities and raising the discount rate. c. Selling government securities and lowering the discount rate. d. Selling government securities and raising the discount rate. - ANSWER-d. Selling government securities and raising the discount rate. Why is a cash flow note also called a "soft second?" Select one: a. Because it is done without an intercreditor agreement. b. Because the loan payments are not required when the cash flow falls below a specified level. c. Because the loan is secured by the cash flow from the property, not by the property itself, and also because the loan is not recorded and is not a lien against the property. d. Because there is a subordination agreement in place. - ANSWER-Because the loan is secured by the cash flow from the property, not by the property itself, and also because the loan is not recorded and is not a lien against the property. The ratio that shows what percentage return the lender would earn if it had to foreclose against the property before the first payment was made is the: Select one: a. Operating ratio. b. Debt Service Coverage Ratio. c. Loan-to-value ratio. d. Debt Yield Ratio. - ANSWER-d. Debt Yield Ratio. If the money supply grows too slowly, the most likely risk could be: Select one: a. Inflation. b. High interest rates. c. Disintermediation. d. None of the above. - ANSWER-b. High interest rates. What is the benefit to a tenant of the non-disturbance clause in a lease? Select one: a. It gives the tenant some assurance that the tenant will not lose the lease if the property is foreclosed upon. b. It prevents the landlord from excessive on-site inspections. c. It prevents the property from going through a foreclosure. d. None of these choices. - ANSWER-a. It gives the tenant some assurance that the tenant will not lose the lease if the property is foreclosed upon. A provision in a commercial loan that prohibits early repayment of the loan for some period of time is known as a(n): Select one: a. Interest guarantee. b. Lockout. c. Defeasance. d. Step-down. - ANSWER-b. Lockout. b. An FHA loan. c. A first mortgage that is made by a bank and held in its portfolio. d. An agricultural loan. - ANSWER-d. An agricultural loan. If a lender failed to give a borrower the Loan Estimate, the borrower could rescind the loan for up to: Select one: a. 30 days; b. Three years; c. One year; d. The maturity date of the loan. - ANSWER-b. Three years; Each of the following actions are recommended to those who have or are considering a Marketing Services Agreement, EXCEPT: Select one: a. The fees charged should not change unless the services there is an objective change in the services provided. b. The MSA partner should be designated as a "preferred provider" to consumers. c. The market value of the services provided should be determined or verified by a neutral third party. d. The contract should be carefully reviewed by an attorney who is well-versed and experienced with matters dealing with RESPA. - ANSWER-b. The MSA partner should be designated as a "preferred provider" to consumers. The form which replaced the HUD-1 or HUD1-a form is the: Select one: a. RESPA Disclosure. b. Closing Disclosure. c. Uniform Settlement Statement. d. None of these. Feedback - ANSWER-b. Closing Disclosure. Which of the following statements about Marketing Services Agreements (MSAs) is FALSE? Select one: a. The CFPB has released clear guidance on what it considers to be an acceptable MSA. b. When the CFPB reviews an MSA, it will want to see evidence that the promised services were actually provided. c. The CFPB believes that MSAs present the risk of steering consumers to the MSA partner. d. None of these statements is false. - ANSWER-a. The CFPB has released clear guidance on what it considers to be an acceptable MSA. Which of the following choices is the primary determinant of whether or not an affiliated company will be considered a "sham affiliate?" Select one: a. Whether the firm uses a DBA instead of its actual name. b. Whether the referring affiliate's ownership percentage or income distribution is a function of referrals generated. c. Both of the above. d. None of the above. - ANSWER-A sham affiliate is an affiliate where the ownership percentage and/or the income distributions are a function of the referrals given. The correct answer is: Whether the referring affiliate's ownership percentage or income distribution is a function of referrals generate In which of the following loans would the borrower be entitled to a three day right of rescission: Select one: a. A new mortgage used to finance the purchase of a duplex, which will include the personal residence of the buyer; b. A refinance of an existing first mortgage from the same lender; c. A home equity line of credit; d. A commercial loan. - ANSWER-c. A home equity line of credit; If a mortgage broker charges higher fees to so that they can pay a referral fee to a real estate licensee, the borrower could sue the mortgage broker and obtain a judgement for: Select one: a. Three times the amount of the extra fee. b. Three times the amount of the total fee. c. Twice the amount of the extra fee. d. Twice the amount of the total fee. - ANSWER-If a mortgage broker charges higher fees to so that they can pay a referral fee to a real estate licensee, the borrower could sue the mortgage broker and obtain a judgement for up to three times the amount of the total fee, not just the overcharge. The correct answer is: Three times the amount of the total fee. Under the Truth in Lending Act, which of the following phrases in an advertisement would be considered a "trigger term" that would require additional disclosures in the ad? Select one: a. "Only a 5% down payment is required;" b. "FHA loans available;" c. "No down payment required;" d. "No closing costs." Feedback A specific down payment such as 5% would be a trigger term under TILA However, the statement "no down payment" is not a trigger term. The correct answer is: "Only a 5% down payment is required;" - ANSWER-"Only a 5% down payment is required;" When making the disclosures required under the safe harbor provision of the Regulation Z prohibition against steering, the loan originator would be required to consider loan options from all creditors with which the originator regularly does business: Select one: a. In all cases. b. If the loan originator regularly does business with less than three creditors. c. If the loan originator regularly does business with less than five creditors. a. Initial substantive contact. b. Consummation of the loan. c. The consumer's acceptance of the proposed loan. d. Receipt of the application. - ANSWER-d. Receipt of the application. Which of the following practices are recommended when establishing a Marketing Services Agreement (MSA)? Select one: a. Entering into an MSA with an affiliated company. b. Entering into an MSA with a month-to-month term. c. Including fees for allowing access to the firm's sales meetings. d. None of the above. - ANSWER-d. None of the above. What is the CFPB's primary concern about Marketing Services Agreements (MSAs)? Select one: a. These MSAs are flatly prohibited. b. Many of these agreements are, in effect, a way to attempt to circumvent the prohibition against kickbacks and referral fees. c. These agreements need the prior approval of the CFPB, which often does not occur. d. None of these choices. - ANSWER-b. Many of these agreements are, in effect, a way to attempt to circumvent the prohibition against kickbacks and referral fees. Shortly after a loan is consummated an error was discovered in the Closing Disclosure that changed the amount paid by the borrower. The creditor would have _____ to deliver or mail a revised Closing Disclosure. Select one: a. 30 days from the borrower's receipt of the Closing Disclosure. b. 30 days from the creditor's discovery of the error. c. 60 days from the borrower's receipt of the Closing Disclosure. d. 60 days from the creditor's discovery of the error. - ANSWER-b. 30 days from the creditor's discovery of the error. The new Closing Disclosure Form combines what previous forms? Select one: a. The GFE and final TIL. b. The final TIL and HUD-1. c. The final TIL and Special Information Booklet. d. The GFE and HUD-1 - ANSWER-b. The final TIL and HUD-1. Once the Loan Estimate is delivered or mailed, the loan cannot be consummated for at least: Select one: a. 3 business days; b. 5 business days; c. 7 business days; d. 10 business days. - ANSWER-c. 7 business days; A bank owns a large number of REO properties. It maintains a practice that it will only give listings on these properties to real estate licensees who have referred borrowers to that bank. This practice is: Select one: a. Not a violation of RESPA. b. Not a violation of RESPA so long as the licensees use their best efforts to sell the properties. c. A violation of RESPA. d. Not a violation so long as the referral comes after the licensee has sold the property. - ANSWER-c. A violation of RESPA. Each of the following would be considered a loan from a "federally-related lender, EXCEPT: Select one: a. VA loans; b. Mortgage loans made by banks and sold to Fannie Mae. c. Mortgage loans made by private individuals. d. Mortgage loans made by mortgage companies and sold to Fannie Mae. - ANSWER-c. Mortgage loans made by private individuals. If a loan has a demand feature, the lender can: Select one: a. Require financial disclosures from the borrower. b. Require the borrower to make larger escrow account payments. c. Foreclose against the property without regard to the normal foreclosure procedures. d. Require the borrower to pay off the loan prior to the scheduled maturity date. - ANSWER-Require the borrower to pay off the loan prior to the scheduled maturity date. John decides to help his brother sell his house. He advises his brother about a market price for his house and helps him advertise the property. Select one: a. This is legal because the person is John's brother. b. This is legal if John receives no compensation for his help. c. This is illegal even if John receives no compensation. d. This is illegal because John is not licensed. - ANSWER-The correct answer is: This is legal if John receives no compensation for his help. Which of the following statements is NOT true about a community association manager? Select one: a. He must have a CAM license. b. He must be associated with a real estate broker. c. The management contract is with the community association manager. a. They must all be licensed. b. They maintain the property. c. They manage relations among tenants. d. They develop budgets. Feedback Property managers who are employed by the owner do not need to be licensed, so choice 'a' is the FALSE statement. The correct answer is: They must all be licensed. - ANSWER-a. They must all be licensed. A broker must disclose the types of agency relationships offered and how compensation might be shared with other brokers. Select one: a. prior to signing a contract for sale. b. prior to showing the property. c. prior to signing a listing agreement. d. within a reasonable time. - ANSWER-c. prior to signing a listing agreement. A firm got a real estate license on December 7th, 2022. The firm's license would expire on: Select one: a. December 7, 2024. b. December 31, 2024. c. December 7, 2026. d. December 31,2026. - ANSWER-d. December 31,2026. A salesperson runs an advertisement which includes the name and phone number of the brokerage firm. Which of the following statements is correct? Select one: a. Only the name of the firm must be printed in a size equal or greater than that of the salesperson. b. Only the phone number of the firm must be printed in a size equal or greater than that of the salesperson. c. Both the name and the phone number of the firm must be printed in a size equal to or greater than that of the salesperson. d. Neither the name nor the phone number of the firm must be printed in a size equal to or greater than that of the salesperson. - ANSWER-c. Both the name and the phone number of the firm must be printed in a size equal to or greater than that of the salesperson. A prospective applicant for a real estate salesperson's license takes the state exam and passes it in September 2020. In October 2021 the person submits his application for a real estate license. Select one: a. This person must pay a fee equal to 2 times the original fee. b. This person must retake the 75 hour required education prior to submitting his application. c. This person must complete post-license education before submitting his application. d. This person must retake the state licensing exam. - ANSWER-The correct answer is: This person must retake the state licensing exam. Which of the following statements about offers is TRUE? Select one: a. An offer becomes a sales contract as soon as it is accepted. b. An offer must be accompanied by earnest money. c. Licensees must present all written and oral offers up to time of closing. d. Licensees must present all written offers up to time of closing. - ANSWER-Licensees must present all written offers up to time of closing. If a landlord and a tenant have a dispute in Georgia Select one: a. they may appeal to the real estate commission for a resolution. b. they must agree to binding arbitration. c. they may sue in a court of competent jurisdiction. d. they must be represented by a licensed Georgia attorney. - ANSWER-c. they may sue in a court of competent jurisdiction. REALTOR® A has a listing on a seller's home and the seller has accepted an offer. The offer is contingent upon the sale of the buyer's current home. REALTOR® B has a buyer who has made an offer. Under the Code of Ethics, what should listing REALTOR® A do? Select one: a. Ignore REALTOR® B's offer since the seller's home is already under contract. b. Reveal the existence of the contract but not the contingency. c. Reveal the existence of the contract and the contingency. d. Present the second offer to the seller without disclosing the existence of the offer or the contingency. - ANSWER-c. Reveal the existence of the contract and the contingency. A REALTOR® has a listing on a client's house. The sellers are getting a divorce and need to sell the home quickly. Under what circumstances can the REALTOR® reveal this fact to a potential buyer? Select one: a. Under no circumstances. b. Without restriction. c. Only if the buyer asks about the seller's motivation for selling. d. Only after getting informed consent from the seller. - ANSWER-d. Only after getting informed consent from the seller. A Realtor® who enters into a brokerage agreement with a buyer is obligated to disclose to the client each of the following issues, EXCEPT: Select one: a. That the seller's agent is forbidden by the Code of Ethics to reveal the terms and conditions of any offer made by the buyer to anyone other than the seller; b. The potential for additional or offsetting compensation from other brokers, from the seller or landlord, or from other parties; c. Any potential for the buyer/tenant representative to act as a disclosed dual agent, e.g., listing broker, subagent, landlord's agent, etc.; Select one: a. If the Realtor® owns 10% or more of the partnership; b. If the Realtor® owns 5% or more of the partnership; c. If the Realtor® owns 1% or more of the partnership; d. In all cases, regardless of the Realtor®'s percentage of ownership. - ANSWER-d. In all cases, regardless of the Realtor®'s percentage of ownership. Under the NAR Code of Ethics, a consumer would be considered a "client" of a Realtor®: Select one: a. If the Realtor® acts as agent for the consumer; b. If there is a legally recognized non-agency relationship with the consumer; c. In either of the above circumstances; d. Any time a Realtor® works for or with a consumer in a real estate transaction. - ANSWER-c. In either of the above circumstances; In Case Study 2-15 the FHA contacted a REALTOR® to discuss a suspicion that local brokers had been engaged in defrauding the FHA by overstating the value of homes in the area. The REALTOR® knew that this was going on and some other brokers who had done so but refused to list any names for fear of retribution. How should the REALTOR® have handled this? Select one: a. Report the issue to the local police. b. Keep the information to himself. c. Report the matter to the Grievance Committee. d. File a criminal complaint to the US Attorney General. - ANSWER-c. Report the matter to the Grievance Committee. REALTOR® who is selling his or her own property is obligated to comply with the duties imposed by the Code of Ethics in which of the following circumstances: Select one: a. When the sale does NOT involve the MLS or cooperation with other licensees. b. When a cooperating broker who is not a REALTOR® is the procuring cause of the sale. c. Both of the above. d. None of the above. - ANSWER-Standard of Practice 1-1 states that REALTORS®, when acting as principals in a real estate transaction, remain obligated by the duties imposed by the Code of Ethics. The correct answer is: Both of the above. Under the Code of Ethics, REALTORS® may act as a dual agent: Select one: a. Under no circumstances. b. Only with informed consent. c. Without restriction. d. Only with the prior specific approval of the state regulatory agency. - ANSWER-Only with informed consent. A set of moral values and principles that provide a measure to determine the "rightness" or "wrongness" of actions are: Select one: a. Standards. b. Ethics. c. Regulations. d. Laws. - ANSWER-b. Ethics. In the Code of Ethics, REALTORS® have obligations to: Select one: a. Clients. b. Customers. c. Other REALTORS®. d. All of the above. - ANSWER-d. All of the above. The Code of Ethics permits REALTORS® to receive compensation from both parties to a transaction: Select one: a. Under no circumstances. b. Without restriction. c. Only with the informed consent of either principal. d. Only with the informed consent of both principals. Feedback - ANSWER-d. Only with the informed consent of both principals. Under what circumstances would the Code of Ethics hold that the termination of a nearby bus stop be an adverse material fact which must be disclosed? Select one: a. Under all circumstances. b. Under no circumstances. c. If it was a heavily used bus stop. d. If the nearby bus stop was a crucial feature to the buyer. - ANSWER-d. If the nearby bus stop was a crucial feature to the buyer. A seller's house is in escrow. The listing broker receives a better offer from another buyer. The seller wants to cancel the current contract and accept this later offer. The Code of Ethics would require this listing broker to: Select one: a. Explain the risks involved and recommend the best option. b. Tell the seller to accept the second offer. c. Tell the seller to seek legal counsel about how to proceed. d. Ask the first buyer to rescind the contract. - ANSWER-: Tell the seller to seek legal counsel about how to proceed.