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WRA LICENSING EXAM
A seller signs a listing contract with a firm. Who is the agent and who is the principal? - correct answer The seller is the principal. The firm is the agent. A buyer asks a listing agent to draft an offer. The buyer does not sign a buyer agency agreement. Is the buyer a customer or a client? - correct answer he buyer is a customer. What kind of agency is a firm practicing if the firm represents just one party in the transaction? - correct answer Single agency When can a firm engage in multiple representation? - correct answer Written consent of both parties, agency disclosure to both parties In what kind of transactions must a firm provide agency disclosure? - correct answer All transactions (residential, commercial, vacant land etc.) By when must a firm provide agency disclosure to a client? A customer? - correct answer Before or at the time of entering into the agency agreement By when must a buyer's agent disclose the buyer agency relationship to the seller or the listing firm? - correct answer The earliest of first contact, a showing, or any other negotiations with the seller or the listing firm. What are a listing firm's agency disclosure obligations when working with a customer who wants to write an offer on a duplex? What if the buyer wants to write an offer on a commercial warehouse? - correct answer Provide agency disclosure to buyer for duplex and ask that buyer to sign the agency disclosure because this is a 1-4 family transaction. Provide agency disclosure to buyer for commercial warehouse but you do not have to ask that buyer to sign because it is not a 1- family property.
When does a property manager need to have a real estate license? - correct answer If signing or negotiating leases on behalf of the property owner. If a licensee is representing a family member who is writing an offer on a property, what are the licensee's disclosure obligations? customer? - correct answer Disclose the relationship in writing and obtain consent of both parties. What are a licensee's disclosure obligations if the licensee is going to receive a fee from referring a lawn maintenance company? What if the licensee is a listing agent who is referring a client to a buyer's agent? - correct answer For the lawn maintenance company, disclose the potential referral fee in writing before or at the time of making the referral. Referral fees from license to license do not need to be disclosed. When must a licensee disclose that the licensee holds a real estate license when selling the licensee's own home? What if the licensee is selling commercial property owned by the licensee? - correct answer The earliest of first contact, a showing, or any other negotiations. The disclosure shall be in writing and is the same whether selling personally owned home or commercial property. What tie-in arrangements are legal? - correct answer Legal tie-ins Condition the sale of vacant land owned by the licensee upon the buyer's agreement to use a specific builder if the builder co-owns the property with the licensee. Condition the sale of vacant land owned by the licensee upon the buyer's agreement to use a specific builder if the builder and the licensee are the same person. Condition the sale of vacant land owned by the license upon the buyer's agreement to use a specific builder if the agreement to use the builder is a legitimate effort to maintain developmental quality/ architectural uniformity and no compensation passes from the builder to the licensee. Who can retain an unlicensed personal assistant? Who can retain a licensed personal assistant? - correct answer Unlicensed personal assistant - anyone. Licensed personal assistant - just the firm. Which agency duty survives the transaction? - correct answer Confidentially
When a firm has a multiple representation relationship with designated agency, to whom will each salesperson provide information, opinions, and advice? - correct answer Their respective clients. How should a client withdraw consent to a multiple representation relationship? - correct answer In writing. How should a client waive a firm's duty of negotiation? - correct answer In writing and the firm must provide disclosure language regarding waiver of negotiation. What type of agency relationship is created with written words? - correct answer Express What type of agency relationship gives an agent the authority to represent a principal in more than one transaction? - correct answer General What are the seven ways to terminate an agency relationship? - correct answer Death or incapacity of principal Destruction of condemnation of the property Expiration Mutual agreement Breach Operation of law Completion Which listing contracts do not require the seller to pay a commission to the listing firm when the buyer is procured? - correct answer Exclusive agency, one-party listing, open listing What type of listing contract is illegal in Wisconsin? - correct answer Net What are the six requirements to create a valid agency agreement? - correct answer Description of the real estate;
Statement of the price; Statement of the commission; Statement of the term; In writing; and Signed by the person who will pay the commission. In an unmodified WB-36 Buyer Agency/Tenant Representation Agreement, does a buyer's firm have to be directly involved in negotiations in order to earn a commission? - correct answer No - if the buyer buys or enters into an enforceable contract for sale, the firm earns a commission. What are the three remedies if an agent breaches an agency agreement? - correct answer Rescission Forfeiture of commission Sue for damages A seller sold his home for $180,000 and paid a 6% commission. What is the listing firm's commission after giving 40% to the selling firm? - correct answer 180, X.06 = 10,800 total commission $10,800 x .6 = $6480 (listing firm) $10,800 x .4 = $4320 (selling firm) The seller of a property nets $90,000 on the sale of a parcel of land after paying the listing firm a 10% commission. What was the selling price of the property? - correct answer 100% - 10% for firm's commission = 90% 90% of sale price = $90, d. $90,000/.9 = $100, The listing agent earned an $8,000 commission. The seller agreed to pay the listing firm 8% commission. A cooperating firm was not involved. The listing firm and listing agent have agreed to a 50/50 split. What was the selling price of the home? - correct answer Listing agent commission = $ Listing firm commission = $ Total commission = $16, Sale price x .08 = $16,
How many days does the seller have to provide the new listing firm with the previous listing firm's protected buyer list? - correct answer Seven days, line 161 Where in the WB-1 Residential Listing Contract does the client indicate the agency model the client wants to structure the relationship with the firm? - correct answer Lines 113- On what line of the WB-1 Residential Listing Contract does it state that the buyer may accompany inspectors? - correct answer Lines 260- Where in the WB-36 Buyer Agency/Tenant Representation Agreement does the client indicate the agency model the client wants to structure the relationship with the firm? - correct answer Lines 117- Where in the WB-36 Buyer Agency/Tenant Representation Agreement do the parties indicate if the agreement terminates upon the purchase of the property? - correct answer Line 336 When is a licensee associated with a firm allowed to advertise without mentioning the firm's name in the advertisement? - correct answer Advertising for tenants for personally owned rental property What must a licensee do with the results of a third party's inspection report? What must a licensee do if the licensee's own knowledge or observation of the property is contradictory to the report? - correct answer Provide a copy to all parties. If the licensee haw information that contradicts the report, the licensee must disclose it. Within how many days does a condominium seller have to provide condominium documents to a buyer? - correct answer Within 10 days of acceptance, no later than 15 days prior to closing Sellers of what types of property must complete the Real Estate Condition or Disclosure Report? - correct answer Residential (1-4 family) and vacant land Which sellers are exempt from providing a real estate condition or vacant land disclosure report? - correct answer Exceptions to RECR/VLDR
Personal representatives, trustees and other court appointed officials who have never lived on the property New construction Transfers exempt from the transfer fee A licensee is showing a property to a buyer and observes what may be a material adverse fact. The seller did not mention the problem in the seller's real estate condition report. What should the licensee do? - correct answer Disclose in writing to all parties in a timely manner What information is a licensee is NOT required to disclose, even if asked? - correct answer Information in a 3rd party report provided to all the parties (like a home inspection report) Stigmatized factors (haunted/crime) Group homes and nursing homes Sex offenders as long as give DOC website and phone number for sex offender registry If a buyer does not receive a real estate condition report within 10 days of acceptance, how many days does the buyer have to rescind the contract? How should the buyer rescind? - correct answer Two business days, rescind in writing A seller becomes aware of a defect after an Offer to Purchase has been accepted. Does the seller have to amend the real estate condition report and deliver a copy to the buyer? - correct answer Disclose in writing to all parties in a timely manner A seller of target housing wants to accept an offer without the lead-based paint attachment. The licensee tells the seller that is fine. Is this a permissible act by the licensee under the LBP disclosure law? - correct answer No. Lead based paint disclosure must be a part of all transactions involving target housing (pre- housing). Which in-use underground storage tanks must be tightness tested every two years?
- correct answer 1,100 gallons or greater Asbestos is considered most dangerous when it is: - correct answer Friable
When is it permissible to mention a protected class in an advertisement? - correct answer Affirmative marketing designed to attract people who may not know property is available such as "accessible unit," "ADA complaint." Telling existing homeowners that a certain class of people will lower property values in an effort to obtain listings is a form of - correct answer Blockbusting Under fair housing when is it permissible to refuse to sell a property to someone because of the person's age? - correct answer Housing for older people Under fair housing laws, when can an advertisement contain a gender preference? - correct answer Rent a room in your own home and shared living space Who is responsible to provide and pay for auxiliary aids and services under the ADA? - correct answer The firm Describe the process of market analysis and how it establishes market value. - correct answer Use comparables (active, pending, sold, expired) to arrive at market value for the subject property. Market value = what we think a buyer is going to pay. Market price = what a buyer actually pays. A licensee is trying to determine value for a property. The subject property is surrounded by smaller properties that are not in as good of shape. The surrounding properties are bringing the value of the subject property down. This is an example of: - correct answer Regression The primary principal of value used by a licensee when conducting a market analysis is: - correct answer Substitution Which party tends to be more concerned with the seller's opinion of value, the appraiser or the licensee? - correct answer Licensee A seller is listing a parcel for $86,000. The parcel is 9.5 acres. What is the price per acre? What is the price per square foot? - correct answer $86,000/9.0 = $9052.62 per acre 43560 square feet per acre
9.5 x 43,560 = 413820 square feet $86,000/413820 = $.21 per sq. foot A seller is listing a house for $285,000. The house is 30 feet wide and 40 feet long. It is a two-story house without a basement. What is the square footage of the house? What is the price per square foot? - correct answer Area = length x width Area = 40 ft x 30 ft 1200 sq feet but you have to double that for a two-story property so square footage = 2400 sq. feet. Price per square foot $285,000/2400 = $118. What rights are in the bundle of legal rights? - correct answer Dispose (sell it, give it, leave it to your heirs) Encumber (liens, encroachments, easements, taxes, etc.) Exclude Possession Quiet enjoyment Control What forms of ownership allow title to pass to the surviving owner(s) without probate? - correct answer Property to surviving owner without probate Joint tenancy with a right of survivorship (anyone can use this) Survivorship marital property (special ownership just for married people) A condominium unit is generally held under what type of ownership? - correct answer Severalty (everyone else's interest are severed) How do condominium owners hold ownership of the common elements? - correct answer Tenants in common An owner of property receives a proprietary lease under what form of ownership? - correct answer Cooperative (co-op)
A property has a market value of $136,000 and is assessed at 90% of value. The mill rate in the community is 20. What is the annual tax bill? - correct answer Tax bill $136,000 x .90 = $122, $122,400 x .02 = $ The owners of a property paid a tax bill of $10,725. The assessed value of the property is $325,000. What is the mill rate? - correct answer $10,725/$325, A seller's property sold for $150,000. How much was the transfer fee? - correct answer $150,000 x .003 = $ A buyer just purchased a property for $210,050. What was the transfer fee? - correct answer Transfer fee Round up to $210, Multiply by. $630. What is the purpose of a comprehensive plan? - correct answer Guide and coordinate growth, health and safety and welfare, accounting for existing and future needs, morals, order, convenience, prosperity, general welfare How does one determine the permitted uses for a particular area? - correct answer Zoning ordinance What type of zoning allows land to be used in a way that was already in existence when a zoning ordinance was enacted but does not comply with current zoning regulations? - correct answer Non-conforming use A vacant parcel of land that was zoned residential has been re-zoned to conservancy. What type of zoning has occurred? - correct answer Downzoning
An owner of a property would like to transfer title. Will the existing deed conditions stay in place or are they terminated upon transfer of title? - correct answer Stay in place, they "run with the land." Describe a planned unit development. - correct answer A zoning district written and negotiated specifically for the subject property. It may allow a developer to cluster buildings together The buyers have a home inspection. The buyers are wondering if some of the information disclosed on the report constitutes a defect and if they should give notice to the seller. Can the licensee give them advice on whether there is a defect?
- correct answer Do not answer, refer buyer to the definition in offer and buyer can talk to attorney if needed. What must occur before a licensee gives a third-party buyer's offer to a party holding a right of first refusal? - correct answer Disclose in writing to the potential buyer. When is a licensee prohibited from submitting a personal offer to purchase on a property listed with the licensee's firm? - correct answer If the licensee have knowledge of the term of a pending offer, the licensee cannot submit an offer. A buyer submits earnest money with an Offer to Purchase. The offer is rejected. To whom is the earnest money disbursed? - correct answer The buyer. See lines 67- 69 of the WB-11 Residential Offer to Purchase. When can a licensee refuse to draft or submit any offer? - correct answer If drafting or submitting would be contrary to the party's instructions. Any income, taxes or expenses shall accrue to the seller and be prorated through: - correct answer Day prior to closing. See 364 of the WB-11 Residential Offer to Purchase. When the buyer is drafting the WB-11 Residential Offer to Purchase and wants to represent that the buyer has reviewed a seller's real estate condition report, where will buyer indicate this? - correct answer Line 107 of the WB-11 Residential Offer to Purchase.
During a land contract, what type of title does the seller hold? What type of title does the buyer hold? - correct answer The seller has legal title and the buyer has equitable. Private mortgage insurance is typically required when a borrower does not have what percentage of the loan for a down payment? - correct answer Less than 20% down payment Are FHA loans guaranteed or insured? - correct answer Insured Provide an example of secondary mortgage fraud. - correct answer A buyer writes an offer for $10,000 over asking price and makes a deal with the seller whereby the seller will return $10,000 to the buyer after closing to address needed repairs. What federal law prohibits the payments of kickbacks? - correct answer Real Estate Settlement Procedures Act (RESPA) What form would a seller use to propose a change in terms of an accepted offer to purchase? - correct answer WB-40 Amendment to Offer to Purchase What form would a licensee use to notify a secondary buyer that the secondary offer was being elevated to primary position? - correct answer WB-41 Notice Relating to Offer to Purchase What is the form a seller would use to negotiate with more than one buyer at the same time? - correct answer WB-46 Multiple Counter-Proposal The seller issues an amendment to the buyer, which the buyer rejects. What is the status of the contract? - correct answer No change. An amendment only changes terms of an offer to purchase if both parties sign it. What is the legal effect of a counter-offer? - correct answer A counter-offer is a rejection of the offer and presentation of a new offer.
How is a counter-offer numbered? - correct answer Sequentially What form will the parties use to mutually agree to cancel and release each other from an agreement? - correct answer WB-45 Cancellation Agreement & Mutual Release Which party or parties sign the WB-41 Notice Relating to Offer to Purchase? - correct answer The party initiating it Which party is obligated under the WB-24 Option to Purchase? - correct answer The seller must sell if buyer exercises the option. Which form transfers the personal property interest of one person in a real estate transaction? - correct answer WB-25 Bill of Sale Give an example of a bilateral contract. - correct answer Listing contract, offer to purchase, buyer agency Give an example of a unilateral contract. - correct answer Option property is owned by two sellers. The listing agent presented the offer to Seller #1. Seller #1 signed the offer as "Seller #1" and then also signed as "Seller #2." Seller #1 returned the signed offer to the listing agent who delivered it to the buyer. Is the contract valid? - correct answer No. Seller #2's signature is arguably forged. Seller #1 should sign as Seller #1 and then sign again as Seller #1, Agent of Seller
What are the buyer's remedies against a seller that has breached a contract? - correct answer Buyer remedies, seller breacha.. Sue for specific performanceb. Terminate offer and request earnest money to be returnedc. Terminate offer and sue for damagesd. Terminate offer and request return of earnest money and sue for damages According to the terms of the offer to purchase, may a seller keep the buyer's earnest money and sue the buyer for damages? - correct answer No, the seller can seek the earnest money or sue for damages but not both.
