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Olivia took out a 15-year loan secured with a deed of trust. She worked two jobs in order to pay the loan back and finally made her last payment this month. What happens now? - CORRECT ANS- - Because the property deed was held by a third-party trustee instead of the lender, the trustee grants a reconveyance deed to Olivia. Warren signed a contract with the Samsons for the sale of property he didn't own. What type of contract is this? - CORRECT ANS- - A party can't promise to do something impossible in a contract. Doing so makes the contract void. Which amendment to CERCLA says that "innocent landowners" aren't responsible for clean-up of hazardous contamination? - CORRECT ANS- - The Superfund Amendments and Reauthorization Act, or SARA, says that innocent landowners aren't responsible for clean- up of hazardous contamination. With the cost approach to value, what is the replacement cost? - CORRECT ANS- - The replacement cost reflects the cost to build a functionally equivalent improvement, as opposed to the reproduction cost, which is the cost to build an exact replica of the subject, with the same materials and deficiencies. Antje's clients closed on their property yesterday, but Antje still has some paperwork that she needs to deliver to them as soon as possible. Under which fiduciary duty is Antje acting? - CORRECT ANS- - The duty of accounting may continue even after the transaction closes. The agent must account for any documents or money belonging to the client until it is delivered to the appropriate party.
When real estate licensee Brian discovered that Arnold was using a 'Choose Your Neighbor' letter to market a property without also listing the property in the MLS, in the local paper, or even putting a for sale sign in the yard, what charge could he bring against Arnold to the National Association of REALTORS®? - CORRECT ANS- - REALTOR® Brian could charge Arnold with violating Article 10 of the Code of Ethics, which prohibits REALTORS® from agreeing to discriminate against people belonging to a protected class. What is estate at sufferance? - CORRECT ANS- - Estate at sufferance is when a tenant remains on the property after the lawful authority has expired (a holdover tenant), after which the landlord may evict. Which entity typically enforces the code restrictions and licensing and insurance requirements for contractors, thereby enforcing the building code? - CORRECT ANS- - While builders and developers self-regulate to some degree, they're not responsible for enforcing the building code. This is the local building department's responsibility. Under which types of agency agreement may a buyer and agent operate? - CORRECT ANS-
- Open, exclusive right to represent, and exclusive agency What is a survey? - CORRECT ANS- - A survey is used to create, verify, or correct a legal description. It's a professional on-site measurement of the lot lines and dimensions of a property. Melisa's mother gave her house to Melisa, along with a signed copy of the deed granting ownership to Melisa. Years later, Melisa decides to downsize by selling the property. The title company shows that the property is still in Melisa's mother's name. What does Melisa have to do to clear this up? - CORRECT ANS- - To preserve the chain of title, Melisa needs to record the signed deed. Then future records will show an unbroken chain of title. Prior to the ______, there was no legal protection for women who endured sexual harassment from landlords and sellers when they attempted to obtain housing. - CORRECT
As part of the sales contract, Garth, the seller, was supposed to provide a copy of the seller's disclosure to the buyer, Melanie, but he failed to do so. What type of contract is this? - CORRECT ANS- - A voidable contract can be cancelled by one or more parties because it's missing an essential element. In this situation, Melanie, the buyer, has the right to cancel the contract and have her earnest money refunded. How are principal meridians and baselines used in the rectangular government survey system? - CORRECT ANS- - Each legal description in this system originates at the intersection of a principal meridian and a baseline. When the lender gathers all kinds of information about the borrower's assets, debts, income, employment history, and pulls their credit report, the buyer is ___________________. - CORRECT ANS- - This is all part of the application process. In which of the following situations would the state be able to use its power of escheat? - CORRECT ANS- - Escheat occurs when a property owner dies without a will in place, and no heirs or creditors can be found. Which of these situations might be addressed by limitations or a subject to clause in the deed Jane is using to convey property to Moira? - CORRECT ANS- - A great example of deed limitations is the restrictions that may be placed on a property by an owners association. A subject to clause may refer to an easement held by a neighboring property to get to a road or water source. Hannah wasn't able to get the financing to open her boutique, so her mother came on as a silent partner and provided additional cash. Hannah and her mother have an agreement that states Hannah's mother can't be held financially or legally liable if there are any problems with the store. What type of contract clause is this? - CORRECT ANS- - Indemnifying one of the contract parties releases that party from all liability or loss.
Drew and Hank were camping at Hank's riverfront cabin. Hank told Drew that he so rarely used the cabin that he was thinking of selling it. Drew said that he'd buy it from Hank for $80,000, and Hank agreed that was a fair price. It's two months later, and Hank is upset that Drew now says he won't buy it. Why isn't this contract enforceable? - CORRECT ANS- - The statute of frauds requires that real estate contracts be in writing. Drew's offer was oral, and thus didn't create an enforceable contract. Local authorities lack police power over which of the following? - CORRECT ANS- - Local authorities have police power over budgeting, zoning, and subdivision development, but they lack police power over federal government construction projects. Darren and Natalie are first-time buyers who have decided to purchase a newly built townhouse. Their agent Jenner tells them that they're required to purchase a third-party home warranty. Which of the following conditions must be true? - CORRECT ANS- - All loans that are either FHA-insured or VA-guaranteed require a home warranty to protect both the buyer and the home's value. What are the two types of physical depreciation? - CORRECT ANS- - Two types of physical depreciation are curable and incurable depreciation. Travis has made the final payment on his loan according to the loan terms. What must the note holder do to acknowledge that the debt has been repaid? - CORRECT ANS- - When the note has been paid off, the holder must sign the note, mark it as paid in full, and return it to the maker. The satisfaction of mortgage is recorded with the county land office, removing the associated lien from the property. What factors affect an adjustable rate mortgage? - CORRECT ANS- - Rate, index, and margin Casey signed a contract form offering a purchase price of $309,000 on Karen's home, and gave his agent a $5,000 earnest money deposit. Karen's out of town, though, and her agent can't reach her. At this point what does Casey have? - CORRECT ANS- - Until the terms are
situation is true? - CORRECT ANS- - Property managers owe fiduciary duties to their clients (the landlord) and the community as a whole, not to individual residents. The MARIA acronym helps to identify the five tests of a fixture. Which of the following tests refers to how and whether the item is attached to the property? - CORRECT ANS- - Method of annexation refers to how and whether the item is attached to the property. This is the M in MARIA. Lowell used to own 17 acres of property on the bay. After last year's hurricanes, Lowell now owns 15.5 acres of bayfront property. Which natural process was responsible for Lowell's loss of acreage? - CORRECT ANS- - Avulsion is the loss of land by a sudden, large-scale change in water flow. A hurricane would create a sudden large change in water flow. Easements are a type of encumbrance that can affect a property. Which of the following is true about easements? - CORRECT ANS- - Easements are a type of encumbrance that can affect a property. Which of the following is true about easements? Dean and Michael have an oral contract. Dean said he would sell Michael his bike in return for Michael's vinyl album collection. What does the record collection represent? - CORRECT ANS- - Consideration, which is an essential element of a contract, is something of value which is given from one party to the other party in exchange for goods or services. Virginia is finally living her dream—she bought a coffeehouse in a charming college town. After she closed on it, her attorney sat down with her to discuss various business licensing and legal requirements she'll have to meet. Virginia was surprised to learn that her five- table establishment is affected by the Americans with Disabilities Act. What must be true about the coffeehouse? - CORRECT ANS- - If a business in a constructed building that serves the public, then it falls under the ADA. What does "Beginning at the corner of State Route 61 and Hallowell Road" represent? - CORRECT ANS- - Bounds are physical features that define the boundaries of the property.
Combined with directions and distances (metes), these form the basis of a metes and bounds legal description. When property changes hands, the deed is recorded. There's a fee for recording, so why would anyone choose to pay this fee? - CORRECT ANS- - Recording and possession give the public constructive notice that ownership has changed hands. It also protects the buyer from others' claims on the property. Elaina and Allen just purchased a home using a deed of trust. Which of the following is most likely true about their home loan? - CORRECT ANS- - When a deed of trust secures a loan, a trustee holds the title until the loan is paid. Because the right to sell in the event of a default is part of the deed of trust's language, a non-judicial foreclosure may be used. Turns out that there are hazardous materials that need to be cleaned up first. Latrell took the prior owners to court, and the court ruled that Latrell is responsible for the costs of cleanup. What kind of liability is this? - CORRECT ANS- - In strict liability, the owner is responsible for cleanup, regardless of who created the initial problem. Sondra thinks the new business contract she's signed with her business partner is valid. Both parties are legally competent, the purpose is a business transaction so it's a legal purpose, an offer was made and accepted, and a fee has been negotiated and documented. Which essential element of a valid contract has Sondra not yet considered? - CORRECT ANS- - The only element Sondra hasn't considered is whether the consent to enter into the contract was voluntarily given. Only real estate contracts have to be in writing, and parties are legally competent to enter into contracts from the age of 18. Esmerelda makes regular monthly payments on her loan. In addition to paying interest, she's slowly paying down the principal of the loan. With each payment she makes, more will go towards the principal and less to interest. What type of loan does she have? - CORRECT ANS- - Amortized mortgages are paid off in periodic regular payments of interest and principal. Over time, the portion of the payment made toward principal increases as the portion used to pay interest decreases.
CORRECT ANS- - CERCLA established a trust fund to finance both cleanup and enforcement actions. This fund is sometimes called the Superfund. Alluvion describes new deposits of land that are the result of what natural process? - CORRECT ANS- - Alluvion, or new deposits of land, is the result of the process of accretion. Robert is the general contractor for a home being constructed in a new development. The foundation has been poured, and he's working with the homeowners to make some decisions that weren't identified in the blueprints he's working from. Which of the following details will be guided by local building codes? - CORRECT ANS- - Electrical safety standards are typically a component of building codes in almost any location. An example of this type of leasehold estate is a month-to-month lease. - CORRECT ANS- - A periodic estate automatically renews at the end of its lease term, such as at the end of a given month. Which of these guarantees is offered by a general warranty deed but not a special warranty deed? - CORRECT ANS- - With a general warranty deed, the seller will defend against all claims on title; with a special warranty deed, the seller warrants only those claims that stem from when he owned the property. Jane and Micah are seller and buyer of Jane's property, respectively. What must occur for Jane to effect a transfer of title to Micah? - CORRECT ANS- - The seller (grantor) must deliver a marketable title. The grantee isn't required to sign. A buyer, hoping to beat out all other offers, included a clause in the offer that reads, "Buyer to beat all competing offers by $1,000 up to a price of $700,000. Seller to provide copies of competing offer to buyer on acceptance." What type of offer is this an example of? - CORRECT ANS- - This is an example of an escalator offer.
All of the homes on Elm Street are currently on septic systems. However, the county plans to extend the sewer lines to Elm Street within the next two years. What's the biggest reason why it's important for your buyers to know this? - CORRECT ANS- - While construction traffic may be an annoyance, the real reason it's important for prospective buyers to know about the sewer extension is that it could be costly for residents. Localities may charge up to $10,000 for a home to tie into the sewer system—and in many cases, it's required, not optional. Moira has delivered a counter-offer to some potential buyers for her property. Which of these best states the time frame for the buyers' acceptance? - CORRECT ANS- - The buyers must respond by the time and date specified in the counter-offer. You represent the buyer, and another licensee from your brokerage represents the seller in the same transaction. What type of agency relationship do you and the other licensee have with your clients? - CORRECT ANS- - You and the other licensee from your firm are in a dual- licensee dual agency relationship. The broker is the dual agent and has designated you to represent the buyer and the other licensee to represent the seller. Another term for a valuation is ______. - CORRECT ANS- - Another term for a valuation is a formal appraisal. This is a professional appraiser's unbiased opinion of value. What is bulk zoning? - CORRECT ANS- - Bulk zoning regulates density by mandating setbacks as well as limits on building heights and lot widths. Fred is an agricultural lender who helps the ranchers and farmers in his community by providing credit for purchasing land, making repairs to their buildings, and improving their agricultural property. What agency offers guaranteed loans? - CORRECT ANS- - The USDA Farm Service Agency offers guaranteed loans to agricultural lenders. The MARIA acronym helps to identify the five tests of a fixture. In MARIA, what do the two As stand for? - CORRECT ANS- - The two As in MARIA stand for adaptability of the item to the land's use and agreement of the parties.
What's it called when all parties sign a contract, but before the seller's acceptance is delivered to the buyer? - CORRECT ANS- - Acceptance occurs when all parties have signed a given contract. Binding acceptance occurs when the accepted offer is delivered. Your buyer client, Percival, was pre-approved for the exact amount he needed to buy the home of his dreams, and he made an offer that was accepted by the seller. What's his next step? - CORRECT ANS- - After his offer is accepted, he's ready to begin the loan application. Which entity enforces subdivision covenants? - CORRECT ANS- - Covenants are enforced through the court system if an agreement can't be otherwise reached. Taxes, insurance, and maintenance are property expenses that are sometimes covered in a tenant's lease payment. These are collectively referred to as the ________. - CORRECT ANS-
- These three items together are known as the nets—or you can use the acronym TIM for taxes, insurance, and maintenance. What does Aesthetic zoning regulate? - CORRECT ANS- - Ensure the architectural and/or visual integrity and cohesiveness of a given area. Jerrica is set to close on the property she's buying on Friday. Because of other delays in the closing date, Jerrica's interest rate as of the day of closing will increase by 1/4 of a percent. What impact does this have on the closing? - CORRECT ANS- - Any interest rate change of more than 1/8 of a percent requires a new Closing Disclosure, triggering a new three-day waiting period. Which of the following can be defined as what a property is worth? - CORRECT ANS- - Value means worth. It is different from cost and price. In the sales comparison approach, using comparables that are five and 15 years old when appraising a subject that is 10 years old is an example of what? - CORRECT ANS- - Bracketing is a process in which an appraiser determines a probable range of values for a
property by comparing a group of comparable sales to the subject. The appraiser attempts to include both superior and inferior units of comparison such as age, transaction price, etc. Stu is buying Freddie's property. What must occur for the transfer of title to take place? - CORRECT ANS- - Freddie must intend to convey the property to Stu. The seller (grantor) must deliver a marketable title. The grantee isn't required to sign. When an area uses its zoning powers, what must be followed? - CORRECT ANS- - An area's comprehensive plan outlines future development plans and goals of the area. Zoning decisions should follow this plan. Marcus listed his property with Home Sweet Home Realty and one of its listing agents, Ron Savage. About a month later, Ron filed for bankruptcy. Which of these statements about this situation is true? - CORRECT ANS- - Bankruptcy of the broker (not the agent) or the principal terminates an agency agreement by force of law. Sylvia, 15, and her neighbor, Marge, 24, agree that Sylvia will babysit Marge's toddler for the summer for $10 an hour. What type of contract is this? - CORRECT ANS- - A voidable contract appears to be valid but because of legal principal, one or both parties have the right to rescind the contract. In this case Sylvia can enforce the contract against Marge but Marge cannot enforce against Sylvia. In addition to fines, individuals who violate antitrust laws may face imprisonment for up to what length of time? - CORRECT ANS- - Individuals who violate state antitrust law may be liable for $100,000 and up to 10 years of imprisonment. "Why would I need a warranty?" he wondered. "Didn't the home inspection identify all of the issues, which have now been fixed?" What's the agent's best response to Lamar's question? - CORRECT ANS- - A home warranty often covers items that weren't inspected. Also, even the systems that WERE inspected are subject to problems or failure.
Which of the following can have an extremely adverse effect on the time and cost of a development project? - CORRECT ANS- - If the EPA determines that hazardous contamination has occurred on a project site, it is authorized to shut down development and begin remedial action. This impacts development time and cost, and can negatively affect the investor's return. Which of these statements about the homeowner's rights of redemption is true? - CORRECT ANS- - Because of the length of time it takes to process a property after the foreclosure sale, the homeowner's redemption period may have expired before the lender puts the REO on the market. Victor buys a property from Yolanda for $200,000. Using a land contract, Victor agrees to pay Yolanda in monthly installments of $4,000 over the course of 50 months. Until Victor pays Yolanda the $200,000, who retains the title? - CORRECT ANS- - The seller retains the title in a land contract. When the loan balance is paid in full, the seller gives the buyer title. Brandon has a right-to-use timeshare. What can he NOT do with this type of timeshare? - CORRECT ANS- - A right-to-use timeshare conveys the right of possession, but it isn't ownership and therefore can't be sold or passed on to another individual. When appraisers look past how a property is being used to determine a more optimal function, what are they determining? - CORRECT ANS- - Highest and best use looks past the current use (if there is one) to determine if there is another use that provides a higher value. When considering loan risk, which two items will lenders consider in equal measure? - CORRECT ANS- - The property's value (as underlying collateral) and the borrower's ability to repay the loan will be equal considerations for the lender. what does "north for 314 feet" represent? - CORRECT ANS- - Metes (measures) are the direction and distance of a line forming the boundary of the property.
John and Michelle received a general warranty deed when they purchased their house from Ted. A couple of months after they moved in, their neighbor, Bryant, drove his four-wheeler across their property to access the lake front. John discovered that Ted and Bryant agreed to an easement over Ted's property several years earlier. Which general warranty deed covenant does this represent? - CORRECT ANS- - The covenant against encumbrances assures the grantee that no encumbrances exist other than those that are publicly recorded or noted in the deed. Jordan works as a property manager for several residential property owners. When she receives security deposits from tenants, how long does she have to deposit them into an escrow account? - CORRECT ANS- - Trust funds, which include security deposits, must be deposited within the length of time outlined in each state's laws and regulations. This is typically one, two, or three business days from receipt, but may be longer in some cases. Which of these is an example of severability? - CORRECT ANS- - Severability refers to the concept that a court can strike down one or more contract terms whiile leaving the remainder in place. Damien and Sandy bought a lot with a condemned house. They want to tear it down and build a duplex, so that they can live on one side and rent out the other. Unfortunately, the property is zoned single-family residential. If they can make a case for economic hardship, they may apply for and be granted a ________. - CORRECT ANS- - This would be a use variance. The existing zoning only allows single-family homes, so a duplex represents a use other than the originally intended use. Nellie and Victor own a suburban ranch home and fell behind on paying their property taxes when Victor lost his job last year. Victor is working again, but they still haven't saved enough to pay their back taxes. They're worried that the county may begin foreclosure proceedings. What type of lien is this? - CORRECT ANS- - Property tax liens are specific, because they represent a lien against a specific piece of property.
John's property is shaped like a triangle. The street side is 185 feet, and from the street to the longest point of the triangle is 225 feet. How do you calculate the square footage of John's property? - CORRECT ANS- - You can calculate the area of a triangle in several ways. One way is to multiply the triangle's base measurement by .5, then multiply that answer by the triangle's height [(185 × .5) x 225]. What is true about a material fact that a licensee must disclose? - CORRECT ANS- - Information is material if it affects a buyer's decision to buy a given property. Different information will be weighed differently based on the buyer. Which of these would void a deed intended to convey property? - CORRECT ANS- - The grantor must be mentally competent and of legal age. What forms the boundaries of a township? - CORRECT ANS- - The boundaries of townships are township lines, which run parallel to baselines meridian, and range lines, which run parallel to principal meridians. Ashton, an appraiser, is estimating value using the sales comparison approach. He applies more weight to two comparables over several others he used. What process is he utilizing?
- CORRECT ANS- - Through a correlation process, the most weight may be given to one or two comparables, or equal weight may be given to all. The term reconciliation is often synonymous with correlation. Ken, Dale, and James are brothers who own more than 100 acres as tenants in common. The relationship between Ken and James disintegrated, and so James initiated a lawsuit. The end result is that the court gave each brother a designated set of acres to own. What was granted by the court? - CORRECT ANS- - Partition is the term used to describe a specific, divided portion of property that's created as part of a co-ownership termination. Betty hires a contractor to replace her gutters. Within days, the gutters leak and flood her basement. She complains to the contractor, who replaces the gutters again. The next time it rains, the gutters leak and flood Betty's basement a second time. Frustrated, Betty
decides to file a lawsuit against the contractor in an attempt to recover the money she's lost. This is an example of ______. - CORRECT ANS- - In this example, Betty is suing for damages as a means of remedying the breach of contract caused by the contractor's failure to adequately address the repairs. Tom and Jim are neighbors. Jim wants to buy Tom's rental property. In the contract that Tom and Jim sign, Jim is identified only as "the neighbor." Which statute or contract element does this violate? - CORRECT ANS- - The statute of frauds requires not only that a contract to convey property be in writing, but also that the contract identify the parties to the contract. John is considering purchasing an office building and is trying to determine whether or not it's a good investment. The methods of income approach he may use when estimating the value are all of the following EXCEPT for which? - CORRECT ANS- - Properties that rely heavily on rental income often use the income approach to estimate their value. Three ways to estimate value are the capitalization method, the gross income multiplier, and the gross rent multiplier. Lynette purchased a property under a bargain and sale deed. Which statement best describes the covenants Lynette's deed provides? - CORRECT ANS- - A bargain and sale deed may come with or without covenants of warranty. Generally, however, it's known for not containing warranties. A mortgage is a legally binding document that creates a lien on a piece of property and gives the lender the right to foreclose on the property if the borrower defaults. Who or what is the mortgagee? - CORRECT ANS- - The lender has the mortgage on the property, so the lender is the mortgagee. Max has a written agency agreement with Rufus in which Max will receive all of the listings in the subdivision that Rufus purchased (with Max's representation) and is developing. One day when Rufus is visiting the site of the subdivision, a work truck accidentally runs him over and he's seriously injured. Rufus can no longer run the development of the
