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Questions And Answers
Addendum - correct answer ✅When Dashiell received the purchase offer for his bungalow, he was surprised to see a page added to the contract requesting that an attorney review the contract. What is Dashiell looking at? Place a lien on the property Unpaid taxes become a lien on real estate. - correct answer ✅What might the government do if property owners fail to pay taxes on their property? Ajit may be liable if he operates in a state that requires licensees to make a reasonable effort to discover adverse material facts. Licensees must follow state laws regarding disclosure of all material facts, but typically there's no distinction between disclosure of material facts or adverse material facts. Ajit may be liable even if the seller didn't disclose the fact, depending on state law. - correct answer ✅A former client has filed a formal complaint against Ajit, claiming he failed to properly disclose a material fact
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that the seller didn't disclose. Which of these statements about Ajit's liability is true? 1, Only finished above-ground space should be counted in Bonnie's MLS listing. That means the square footage of the upper floor plus the main floor (minus the unfinished laundry area). Bonnie should report 1,425 square feet (450 + 1,200 - 225). - correct answer ✅Bonnie is calculating the square footage of a listing. The upper level of the home is 450 square feet. The main floor is 1,200 square feet, including an unfinished laundry area that's 225 square feet. The 1,200-square-foot basement is finished. Bonnie's MLS system disregards below-grade square footage. What square footage will Bonnie mention in her MLS listing and marketing materials? Indestructibility Indestructibility is the physical characteristic that states that while improvements may deteriorate, land can't be destroyed. - correct answer ✅Sander and Ginny bought an old industrial site and
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Minimum rent = Operating expenses + Owner expenses + ROI Margin. ROI margin is the owner's initial investment x ROI. In this example $32,000 ($400,000 x .08). The minimum rent to achieve the owner's goals is $98,000. - correct answer ✅A rental property owner purchased a property for $400,000 and pays $36,000 in ownership expenses, plus $30,000 in operating expenses. The owner would like to achieve an ROI of 8%. What's the minimum annual rent that would accomplish this? Reduced consumer confidence makes new buyers wary of purchasing and homeowners hesitant to trade up. - correct answer ✅Many market conditions impact housing prices. Which of the following is a true statement? Identify data needed. The first step is to state the problem so the appraiser can then identify the data that is needed. - correct answer ✅Identifying the purpose of the appraisal leads the appraiser to do what next?
Questions And Answers
correct answer ✅An owner purchased a rental property for $750,000. What annual cash flow would result in a return on investment (ROI) of 7%? Rescind When two parties agree to back out of a contract, they're agreeing to rescind the contract. - correct answer ✅Stan decides to not sell his property to Crandall, even after they've signed a legal sales contract. Crandall found a property he likes better, so they mutually agree to ______ the contract. Develop, implement, and train firm members on policies and procedures. Having policies and procedures in place and training staff on them may be the best preventive measure. - correct answer ✅You're a real estate broker supervising 24
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federal landlord-tenant legislation. What responsibility does the property manager have related to this? Eminent domain Eminent domain is the power of the government to take private land for public use. - correct answer ✅Smalltown is building a new interstate exchange to facilitate access to shopping and restaurants. In order to do so, it purchased two homes and tore them down so the ramps to and from the interstate could be constructed. What principal allowed Smalltown to do this? The Sherman Antitrust Act of 1890 The Sherman Antitrust Act of 1890 expressly prohibits collusive acts that result in an unreasonable restraint of trade or reduced competition. - correct answer ✅The two real estate firms in one small town, Vineyard Realty and Homestead Homes, agree to charge the same commission rate to avoid the possibility of clients selecting a firm
Questions And Answers
based simply on price. What specific federal legislation prohibits this? Making an application for a loan This is all part of the application process. - correct answer ✅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 ___________________. Client data can be compromised if the brokerage's computer system is compromised. Brokerage and licensees are responsible for the safety and proper use of client information. Your clients' data can be compromised if the brokerage's computer system is compromised. - correct answer ✅Which of the following is true about the security of your clients' information? Inform Margaret about required property condition disclosures.
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begun! You could have avoided this issue by providing appropriate disclosures, but now that you've created implied agency, what should you do? Uniform Electronic Transactions Act The UETA was brought about by the efforts of the National Conference of Commissioners on Uniform State Laws (NCCUSL) to harmonize state laws regarding the validity of these records and to set more comprehensive rules regarding their use. - correct answer ✅Which of these was enacted to give electronic signatures, records, and contracts legal recognition equal to that of paper records and signatures? $345, The formula for finding net operating income is: gross income - operating expenses = net operating income. So, $674,232 - $329,129 = $345,103. Other expenses like loan interest and debt repayment aren't included in this calculation. - correct answer ✅Giant Industries has a $674,232 gross operating
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income, operating expenses of $329,129, and other expenses totaling $38,719. What is the net operating income? The duty of accounting The duty of accounting requires agents to account for any funds or paperwork received on the clients' behalf. - correct answer ✅Which fiduciary duty requires agents to handle their clients' funds and paperwork properly? Avoid unauthorized practice of law Licensees must avoid unauthorized practice of law. Drafting contractual paperwork with uncertain terms would be a violation. - correct answer ✅Belinda is a licensee whose client asked her to draft an addendum containing complicated terms that even Belinda doesn't fully understand. Belinda should ______. Defaults on the loan
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The loan amount is $254,400 ($318,000 x .8). The first month's interest is $874.50 ([$254,400 x .04125] ÷ 12). - correct answer ✅Gary has an 80% LTVR on his new $318, townhome with an annual interest rate of 4.125%. What's his interest payment the first month? Lenders issue the Loan Estimate within three days of receiving an application, and Closing Disclosure figures should be similar to the Loan Estimate. Lenders first issue the Loan Estimate; borrowers can compare the Closing Disclosure, issued before closing, to the estimate's figures. - correct answer ✅What's the relationship between the Loan Estimate and the Closing Disclosure? Unit owners Condominium ownership includes ownership of an individual unit as well as a share of the common areas. - correct answer ✅Clay is interested in purchasing a condo about a mile from the city center. He went to the city records office to review everything that was filed by the condo developer. In the
Questions And Answers
condominium declaration, he sees how ownership of the common areas is shared among the ________. Perform his contractual obligations within a reasonable time. When a contract doesn't provide specific dates for the terms of the contract that need to be met, performance must take place within a "reasonable time." - correct answer ✅Because there were no deadlines specified in the contract, Myron didn't think there was a problem with his waiting to apply for a loan to help purchase the property. He was therefore a little surprised and not very happy when the seller sued him for breach of contract, stating that the delay was impacting the seller's ability to purchase a new home. What did Myron fail to do? Accounting The duty of accounting requires agents to account for any funds received on the clients' behalf. This means no commingling or conversion of the earnest money, among other requirements. - correct answer ✅Newt's buyer client isn't happy with him. The
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property she purchased with the mortgage. What kind of lien is this? The Fair Housing Amendment Act The Fair Housing Amendment Act added familial status and disability (both physical and mental) to the existing federally protected classes. - correct answer ✅This act added familial status and disability (both physical and mental) to the existing federally protected classes. The duty of reasonable skill and care The duty of reasonable skill and care requires licensees to operate within the scope of their expertise and advise all parties to seek expert advice on matters that are outside of their expertise. - correct answer ✅Phoebe is careful to never act outside of her scope of expertise. She's a real estate professional and proud of it, so when asked for advice about legal matters, inspection results, flaws in construction, or shoddy building materials, she always refers them to a professional in that field. Which duty is Phoebe demonstrating?
Questions And Answers
Until the borrower reaches a 22% equity position PMI is cancelled when a borrower reaches a 22% equity position. This is based on payments of principal made toward the original loan balance and not on current market value. - correct answer ✅How long does the borrower have to pay private mortgage insurance? Their offer is rejected because the seller knows the neighbors don't like children. Rejection of an offer based on familial status is a fair housing violation. - correct answer ✅Annie and George have been saving and are finally ready to purchase their first home for their family (including their two toddlers). They want to make an offer on a sweet little bungalow in a quiet neighborhood. If the sellers are represented by a real estate licensee, which situation would be a violation of fair housing laws?
Questions And Answers
qualifying ratios are 28% for the housing ratio and 36% for the total DTI ratio. What's the maximum housing payment she can afford? File a claim for inverse condemnation. Because downzoning is a reduction in use and can impact property values even in adjacent properties, homeowners in the adjacent areas can file a claim for inverse condemnation. - correct answer ✅If downzoning occurs in one area, reducing property values in adjacent areas, what can the homeowners in those adjacent areas do? Group boycotting - correct answer ✅Johnstone's Realty is a new discount, menu-based brokerage firm. Its approach usually results in a lower listing commission rate than other firms offer. Johnstone's also offers a lower cooperating brokerage split than most other firms. Business is booming for Johnstone's, and the remaining firms in town are concerned. These brokers agree to not show Johnstone's listings to their buyer clients. What is this an example of? Maybe, but they'll have to petition their lender
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Cancellation of PMI happens once the borrower reaches a 22% equity position. This is determined by loan-to-value ratio at the time of the purchase. Unless loan-to-value ratio is now 78% or lower, the Bransons would have to petition to get PMI cancelled. - correct answer ✅The Bransons have a conventional loan for which they were required to obtain private mortgage insurance. Their local real estate market has been going like gangbusters, and their house is now appraised at twice their loan balance! Will their PMI be cancelled? Time is of the essence clause - correct answer ✅Which of the following clauses directs the parties to a real estate sales contract to proceed in good faith, and not unduly delay the process? Arbitration - correct answer ✅Ray purchased a new home and soon discovered an issue with one of the windows. He filed a claim with the warranty provider, but it was denied. After mediation, the issue still remains unresolved. What is the most common next step?
