A tenant rented an apartment, signing a 15-month lease. After the lease expired, the
tenant paid 1 month's rent and got a receipt. What kind of leasehold does the tenant have?
a) Gross lease
b) Proprietary lease.
c) Tenancy at sufferance
d) Tenancy at Will
Unrepresented buyers ask the licensee who listed the home whether they should order a property inspection as a part of their due diligence for the purchase of the home. Which of the following would be the most appropriate way for the listing agent to respond?
a) If you feel it is in your best interest, please do so.
b) Since I represent the seller I am not able to answer your question.
c) I am not aware of any issues that such an inspection would identify.
d) Since the seller has provided a property disclosure, there should be no need for any further inspection.
A prospective seller asks a salesperson to recommend a listing price for a property. The salesperson should suggest
a) listing the property at the price the owner believes it is worth.
b) listing the property at least 30% above the current mortgage.
c) a competitive market analysis to determine the property's value.
d) setting the price at the value of the most recent sale in the neighborhood.
The Department of Housing and Urban Development estimates that most private homes built before 1978 contain potentially dangerous levels of lead. Because of this, some Federal agencies, such as FHA
a) will no longer lend or guarantee loans on these older properties.
b) require evidence of testing for and disclosure of any type of lead contamination before they will lend or guarantee loans on such properties.
c) require funds to be escrowed for lead abatement as a condition of lending or guaranteeing loans on such properties.
d) require the buyer to acknowledge disclosure of the presence of any known lead paint.
If all other factors are equal, in which location is a parking lot likely to bring the highest sales price?
a) Residential district zoned for two-story apartments
b) Business district zoned for a two-story commercial building.
c) Business district zoned for a six-story office building.
d) The price for the parking lot will be the same regardless of area and zoning.
An example of a contract terminated due to inability to perform would be one in which the
a) purchaser had suffered financial reverses so that she could not make payment as required by the contract.
b) seller had died after the contract became binding but before the closing.
c) seller had contracted for sale of the entire property without the knowledge or consent of the other joint tenant.
d) property had been severely damaged by fire after the contract became binding but before the closing.
In helping a buyer to select a lender, if the buyer believes he has good credit and his income is documentable as a salary and by tax returns, the licensee might recommend a mortgage banker, instead of a mortgage broker, for all of the following reasons EXCEPT
a) closing costs may be lower.
b) loan originator has knowledge of the underwriter's policies.
c) more variety of loan programs available.
d) originator and lender are part of same company.
A property management plan may serve different purposes for different owners, and generally has to strike a balance between preservation of the property's value and generation of income. Which of the following owners would MOST likely prefer a property manager who emphasizes cash flow or income over the maintenance of value?
a) An individual entrepreneur who owns several apartment buildings.
b) The Department of Housing and Urban Development.
c) A bank acting as a trustee.
d) A cooperative corporation.
A minority couple come to a salesperson looking for a house. The salesperson has some properties for which the couple qualify but avoids showing or mentioning these listings. Instead, the salesperson shows only properties in low-priced and integrated neighborhoods. This practice is known as
a) steering.
b) blockbusting.
c) redlining.
d) conciliation.
A written agreement in which a purchaser agrees to buy and a seller agrees to sell is called
a) an agency.
b) an assessment.
c) a contract.
d) a fiduciary obligation.
Which of the following real estate contracts is a service contract?
a) a purchase agreement
b) a listing agreement
c) an option contract
d) a mortgage
A borrower has defaulted on the mortgage. The mortgage contains an acceleration clause. This permits the lender to
a) confiscate the borrower's personal assets.
b) demand immediate payment of the entire note.
c) report the borrower to the Federal Housing Administration.
d) force the borrower to vacate the premises.
An agency relationship between a property owner and a property manager is usually created by
a) a management agreement.
b) payment of a management fee.
c) an exclusive agency agreement.
d) an independent contractor agreement.
Even with title insurance, the policyholder may still suffer losses arising from
a) forged documents.
b) incompetent grantors.
c) defects found in recorded public records.
d) land use change due to zoning ordinances.
An escheat occurs when
a) property is seized to satisfy a tax lien.
b) property is condemned for a necessary public use.
c) a property owner dies without heirs or a valid will.
d) a property owner fails to perform legally required cleanup of toxic waste.
Antitrust laws prohibit competing brokers from all of the following EXCEPT
a) boycotting other brokers in the marketplace.
b) dividing the market to restrict competition.
c) agreeing to set sales commissions and management rates.
d) receiving compensation from both the buyer and the seller.
A managing broker can be held responsible for
a) all actions of associated salespersons.
b) all real estate activities of salespersons.
c) only those real estate activities the broker is aware of.
d) no activities of independent contractors.
Which rule-of-thumb formula for estimating property value is being offered to an investor who is told that a house renting for $900 a month should sell for about $90,000?
a) CMA
b) IRV
c) NOI
d) GRM
A salesperson lists a property with a contract that allows for subagency and dual agency. The salesperson is
a) an independent contractor to the broker and an agent to the principal.
b) an agent to the broker and a subagent to the principal.
c) a subagent to the broker and an agent to the principal.
d) an agent to the broker and an agent to the principal.
State laws differ on whether a buyer is entitled to know about
a) a suicide that occurred in the house last year.
b) possible lead paint in the property.
c) the flooding of the basement every spring.
d) the fact that the sellers are getting a divorce.
A landowner wishes to build a neighborhood grocery store on a busy street in an area zoned for residential use. Which of the following would MOST likely be used to obtain permission for this store?
a) Deed amendment.
b) Approval of surrounding property owners.
c) Inclusionary zoning.
d) Conditional use permit or zoning variance.
A licensee is listing a property in a known flood plain. The seller flatly denies that the structure and the property have ever been flooded. What is the licensee required to do in this situation?
a) Rely on the face value of seller's statement.
b) Inform the seller of potential legal consequences if this claim is untrue.
c) Inform the seller of the legal obligation to disclose facts regarding flood plains.
d) Refuse to list the property and explain to the seller that all properties in this area flood.
An owner lists his home and agrees to pay a 6% commission provided he nets $10,000 after paying the commission and the balance of his mortgage, which is $75,000. To the nearest dollar, what should the selling price be to net the owner his $10,000?
a) $79,787
b) $80,189
c) $90,100
d) $90,426
During the listing presentation, the seller questions the amount of commission to be paid and is told
a) the amount is set by law.
b) everyone charges the same amount.
c) the amount of commission is negotiable.
d) the agent that charges a lower commission will not do as good a job selling the property.
Salesperson Susan was at the local coffee shop with some agents from other offices. The subject of commissions came up, and agents began to compare their commission rates. Susan should
a) excuse herself from the discussion as this could constitute illegal blockbusting.
b) advise her friends this could constitute a violation of Sherman Antitrust Act.
c) listen carefully so she can be more competitive in the market.
d) be certain her company is charging as much as the others.
A broker supplies the financing for a project to build condominiums with the stipulation that he has the exclusive right to sell the completed condos. Which of the following BEST describes this relationship?
a) Agency coupled with an interest.
b) Specific agency.
c) General agency.
d) Exclusive agency.
A real estate salesperson is representing only the buyer in a transaction. Which of the following actions would be a violation of the salesperson's agency duties to the client?
a) disclosing the price the seller originally paid for the property
b) disclosing the highest price the buyer is willing to pay
c) preparing a competitive market analysis
d) identifying latent property defects
Legal descriptions using the government survey system are NOT generally used in
a) the original 13 states.
b) subdivisions.
c) quitclaim deeds.
d) mortgages or deeds of trust.
Earnest money should be deposited into a trust account
a) in a timely manner, according to state laws.
b) upon removal of all contingencies.
c) at the broker's discretion.
d) according to MLS rules.
If a borrower can afford to make monthly principal and interest payments of $1,000 and the lender will make a 30-year loan at 5-1/2%, or a 20-year loan at 4-1/2%, what is the largest loan (rounded to the nearest $100) this buyer can afford? (BE SURE TO USE THE AMORTIZATION TABLE.)
a) $158,100
b) $158,300
c) $175,900
d) $176,100
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