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Questions and Answers
An individual who is limited to showing properties, soliciting and listing properties for sale as well as assisting a broker in managing property is known as a/an:
An individual who is limited to showing properties, soliciting and listing properties for sale as well as assisting a broker in managing property is known as a/an:
If the earnest money deposit is tendered by a buyer directly to the listing broker instead of the selling broker, who assumes escrow duty?
If the earnest money deposit is tendered by a buyer directly to the listing broker instead of the selling broker, who assumes escrow duty?
The listing broker shall assume the escrow duty
A salesperson wishes to include his nickname in newspaper ads for his listings. This is permitted if the salesperson included his nickname on his license applications or biennial renewal applications.
A salesperson wishes to include his nickname in newspaper ads for his listings. This is permitted if the salesperson included his nickname on his license applications or biennial renewal applications.
True
All of the following would cause a broker's license to be revoked or suspended except:
All of the following would cause a broker's license to be revoked or suspended except:
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In Pennsylvania, any representation agreement that requires a buyer to pay a fee for the services a broker provides must include a standard agreement form in writing.
In Pennsylvania, any representation agreement that requires a buyer to pay a fee for the services a broker provides must include a standard agreement form in writing.
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The Smiths purchase a cooperative on the Gold Coast. At closing they will receive shares of stock and a __________ lease.
The Smiths purchase a cooperative on the Gold Coast. At closing they will receive shares of stock and a __________ lease.
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In some states, the right of a husband to gain ownership of property when his wife dies can be described as:
In some states, the right of a husband to gain ownership of property when his wife dies can be described as:
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Land movement due to an earthquake is called?
Land movement due to an earthquake is called?
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Which gives a government the right to take private property for public use provided the owner is given just compensation?
Which gives a government the right to take private property for public use provided the owner is given just compensation?
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Developer George sued for the value of the land he purchased after the zoning board refused to rezone it. This type of legal challenge is known as?
Developer George sued for the value of the land he purchased after the zoning board refused to rezone it. This type of legal challenge is known as?
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According to USPAP, what is the definition of market value?
According to USPAP, what is the definition of market value?
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For the income approach to appraisal, debt service refers to:
For the income approach to appraisal, debt service refers to:
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Which term best describes combining two or more parcels of land into one larger parcel to increase value?
Which term best describes combining two or more parcels of land into one larger parcel to increase value?
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Jack buys Don's property, which is subject to a mortgage. After five years of payment, Jack defaults. What is the appropriate remedy for the original mortgagor?
Jack buys Don's property, which is subject to a mortgage. After five years of payment, Jack defaults. What is the appropriate remedy for the original mortgagor?
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What is NOT part of the secondary market?
What is NOT part of the secondary market?
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An owner's interest or value in property, over and above the mortgage debt, is known as?
An owner's interest or value in property, over and above the mortgage debt, is known as?
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What is NOT required of a veteran to obtain a VA-guaranteed loan?
What is NOT required of a veteran to obtain a VA-guaranteed loan?
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The most common type of FHA-insured mortgage is called Section?
The most common type of FHA-insured mortgage is called Section?
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Upon arrival, the listing agent dealing with an elderly lady realizes she would be happy receiving an offer for much less than market value. What duty has the agent breached?
Upon arrival, the listing agent dealing with an elderly lady realizes she would be happy receiving an offer for much less than market value. What duty has the agent breached?
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When should the agent have disclosed their representation of the seller to the buyer?
When should the agent have disclosed their representation of the seller to the buyer?
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What type of agency relationship exists when a broker manages real property for the owner?
What type of agency relationship exists when a broker manages real property for the owner?
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What should the agent recommend if a prospective buyer with limited knowledge of rural properties comments on the growth of healthy grass in a small patch of the yard?
What should the agent recommend if a prospective buyer with limited knowledge of rural properties comments on the growth of healthy grass in a small patch of the yard?
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A defect is considered ____________ or material if the buyer would not discover it in a reasonably thorough inspection of the property.
A defect is considered ____________ or material if the buyer would not discover it in a reasonably thorough inspection of the property.
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The transfer of rights under a contract without the release from obligation is known as?
The transfer of rights under a contract without the release from obligation is known as?
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The essential elements of a real estate contract include offer, acceptance, valuable consideration, and?
The essential elements of a real estate contract include offer, acceptance, valuable consideration, and?
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The agency of the federal government that administers fair housing law is?
The agency of the federal government that administers fair housing law is?
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Homeowners with both a first and second mortgage decide to ask their primary lender to accept a short sale offer on their home. What should the listing agent warn the seller about?
Homeowners with both a first and second mortgage decide to ask their primary lender to accept a short sale offer on their home. What should the listing agent warn the seller about?
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A property sale will close on April 30, 2010; taxes are $1,575 per year and are paid through the last half of 2009. Calculate the seller's share of taxes using a 365-day year.
A property sale will close on April 30, 2010; taxes are $1,575 per year and are paid through the last half of 2009. Calculate the seller's share of taxes using a 365-day year.
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If a seller has a $94,000 first mortgage and a $25,000 second mortgage and agrees to sell for $155,000 with a $22,500 cash down payment, what is the equity in the home?
If a seller has a $94,000 first mortgage and a $25,000 second mortgage and agrees to sell for $155,000 with a $22,500 cash down payment, what is the equity in the home?
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Disintermediation refers to?
Disintermediation refers to?
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The ____________ clause (sometimes known as the 'due on sale' clause)
The ____________ clause (sometimes known as the 'due on sale' clause)
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A clause used in a mortgage allowing the lender to call for the full payment of the mortgage because the owner transferred ownership of the property to a third party is known as the ________ clause.
A clause used in a mortgage allowing the lender to call for the full payment of the mortgage because the owner transferred ownership of the property to a third party is known as the ________ clause.
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USPAP =
USPAP =
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What is the problem, if any, regarding Mary's negotiation with the seller?
What is the problem, if any, regarding Mary's negotiation with the seller?
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What is assessment value?
What is assessment value?
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What is the agent's duty if a large vertical crack is noticed in the basement wall?
What is the agent's duty if a large vertical crack is noticed in the basement wall?
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What is the total acreage for a 1 mile by 1 mile section?
What is the total acreage for a 1 mile by 1 mile section?
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The contract that gives one party the right to do something without obligation is called a(n)
The contract that gives one party the right to do something without obligation is called a(n)
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If a property sold for $350,000 and the conveyance fee is $2.00 per thousand, how much is the transfer tax?
If a property sold for $350,000 and the conveyance fee is $2.00 per thousand, how much is the transfer tax?
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What are the two main categories of licensure?
What are the two main categories of licensure?
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According to Pennsylvania License Law, when may a salesperson candidate engage in the activities for which a license is required?
According to Pennsylvania License Law, when may a salesperson candidate engage in the activities for which a license is required?
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What describes the act of a broker depositing a client's earnest money check into his personal account?
What describes the act of a broker depositing a client's earnest money check into his personal account?
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The real estate license of a salesperson must be:
The real estate license of a salesperson must be:
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What should the agent do if Tommy asks for a lease agreement instead of a purchase agreement?
What should the agent do if Tommy asks for a lease agreement instead of a purchase agreement?
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How much notice must the Pennsylvania Real Estate Commission give to the broker of record when they inspect a real estate office?
How much notice must the Pennsylvania Real Estate Commission give to the broker of record when they inspect a real estate office?
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What should a salesperson do if given a check from a home warranty company after settlement?
What should a salesperson do if given a check from a home warranty company after settlement?
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The licenses of all salespersons employed by the broker must be maintained at the main office.
The licenses of all salespersons employed by the broker must be maintained at the main office.
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According to Pennsylvania License Law, a salesperson candidate may engage in activities once they have been issued a license by the state.
According to Pennsylvania License Law, a salesperson candidate may engage in activities once they have been issued a license by the state.
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What is the requirement for any person proposing to engage in a real estate transaction of a promotional nature first?
What is the requirement for any person proposing to engage in a real estate transaction of a promotional nature first?
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In which instance is a seller's property disclosure statement not required?
In which instance is a seller's property disclosure statement not required?
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What should the listing agent do when a seller makes a counteroffer and wants to hold the earnest money?
What should the listing agent do when a seller makes a counteroffer and wants to hold the earnest money?
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When negotiating a contract, what should a buyer's agent do?
When negotiating a contract, what should a buyer's agent do?
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What fee is commonly given to individuals who help agents find leads?
What fee is commonly given to individuals who help agents find leads?
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What could the presence of a sewage treatment plant next to a property cause?
What could the presence of a sewage treatment plant next to a property cause?
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How should an appraiser reconcile three different adjusted sale prices?
How should an appraiser reconcile three different adjusted sale prices?
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What is the property basis after 10 years of depreciation for a rental property originally worth $150,000?
What is the property basis after 10 years of depreciation for a rental property originally worth $150,000?
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What appraisal principle is based on making adjustments for unique features like a fireplace?
What appraisal principle is based on making adjustments for unique features like a fireplace?
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What financing method does NOT use an income ratio and a debt ratio for qualification?
What financing method does NOT use an income ratio and a debt ratio for qualification?
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What is the lender in a mortgage agreement called?
What is the lender in a mortgage agreement called?
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How may the Real Estate Recovery Fund shortfall be compensated?
How may the Real Estate Recovery Fund shortfall be compensated?
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If the loan value is 80%, how much would a purchaser be allowed to borrow on an appraised property worth $86,500?
If the loan value is 80%, how much would a purchaser be allowed to borrow on an appraised property worth $86,500?
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What should a salesperson do if they receive money from a home warranty company for a referral?
What should a salesperson do if they receive money from a home warranty company for a referral?
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What is the license renewal continuing education requirement for brokers and salespersons?
What is the license renewal continuing education requirement for brokers and salespersons?
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What is an individual called who negotiates an option contract for another and receives a fee?
What is an individual called who negotiates an option contract for another and receives a fee?
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An optionor is a person giving an option in an option contract.
An optionor is a person giving an option in an option contract.
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According to License Law, may an investor sell properties without a real estate license?
According to License Law, may an investor sell properties without a real estate license?
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What lien attaches to a property to prevent the transfer of title when there is a pending lawsuit?
What lien attaches to a property to prevent the transfer of title when there is a pending lawsuit?
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What is the publicly recorded notice of a lawsuit?
What is the publicly recorded notice of a lawsuit?
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Study Notes
Negotiation and Agency
- Mary cannot negotiate directly with the property owner as she must go through the listing agent to avoid bypassing the listing broker.
- The seller must approve the actions regarding offer negotiations.
Property Assessment and Taxes
- Assessment value refers to the valuation of a property used to determine tax rates.
- Properties sold at $350,000 with a conveyance fee of $2.00 per thousand incur a transfer tax based on this formula.
Licensing and Continuing Education
- The two primary categories of real estate licensure are salesperson or broker.
- Salesperson candidates must wait until their license has been issued by the state to engage in licensed activities.
- Continuing education requirement for license renewal is 14 hours biennially.
Ethical and Legal Responsibilities
- Salespersons should retain ethical practices and avoid conflicts of interest in transactions, such as not accepting rewards for referrals without proper disclosure.
- A broker cannot withdraw funds from an escrow account to cover personal costs, as this would be a violation.
Property and Real Estate Transactions
- A home’s value affected by external factors, such as proximity to a sewage treatment plant, is an example of economic obsolescence.
- The seller's property disclosure statement is not required for the sale of a single-office commercial property.
Financial Transactions and Calculations
- A property can be appraised differently; an appraiser may adjust sale prices using weighted averages.
- A real property transfer fee of 1 mill on a sale priced at $63,500 would total $63.50 in taxes.
- Selling a house requires considering mortgage payoff, closing costs, and broker commissions to ascertain the minimum acceptable offer.
Closing and Settlement Procedures
- At settlement, any prepaid expenses such as homeowner's insurance need to be prorated fairly between the buyer and seller.
- Earnest money must be submitted to the appropriate broker as per agreement terms.
Fair Housing and Discrimination
- Under the Federal Fair Housing Act, intoxicated individuals do not qualify as disabled.
- The term "REALTIST" refers to members of the National Association of Real Estate Brokers.
Property Management and Agreements
- An option contract allows one party rights without obligations, and the party granting this is known as the optionor.
- A salesperson operates under a broker and assists in showing properties and managing listings.
Legal Notices and Proceedings
- A lis pendens is a formal notice regarding pending lawsuits that may affect property titles.
License Law and Compliance
- Investors may sell properties they own without a real estate license, exempting them from certain regulations.
- Salespersons may use nicknames in advertising if they are included in their licensed applications.### Proprietary Lease
- Shares of stock and a proprietary lease are received at closing.
Curtesy and Dower
- Curtesy describes the husband’s right to property ownership upon the wife’s death.
- Dower refers to the wife’s interest in property.
Avulsion
- Describes land movement caused by sudden events, such as earthquakes.
Eminent Domain
- Government's right to take private property for public use, compensating the owner justly.
Inverse Condemnation
- A legal challenge where a property owner seeks compensation for government actions restricting land use.
Market Value
- Defined by USPAP as the most probable price a property can bring in the market.
Debt Service
- Refers specifically to mortgage payments in the context of income approach to appraisal.
Plottage
- The process of combining multiple parcels of land to enhance value.
Mortgagor Liability
- In a situation of property sale subject to a mortgage without assumption, the original mortgagor holds liability for the loan.
Federal Universal Mortgage Association
- Not a legitimate entity within the secondary mortgage market; the FHA and Freddie Mac are recognized entities.
Equity
- Represents the owner's interest in property beyond the mortgage debt.
VA-Guaranteed Loan
- No requirement for an upfront MIP premium to obtain a VA-guaranteed loan; applicable only to FHA loans.
FHA Mortgage Type
- The most common type of FHA-insured mortgage is identified as Section 203(b).
Agent Duty Breach
- An agent breached the duty of disclosure by not informing a seller about the cash offer below market value.
Disclosure Timing
- Agents must disclose their representational status before showing a property.
General Agency Relationship
- Exists when a broker manages real property on behalf of an owner, allowing a range of authorized actions.
Well and Septic Inspection
- Recommended for rural properties, particularly if unusual lawn growth is observed, indicating potential septic issues.
Latent Defect
- Refers to defects not discoverable through reasonable inspection; contrasted with patent defects, which are obvious.
Assignment
- The transfer of contract rights without releasing the original obligations, differing from a novation which includes release.
Real Estate Contract Elements
- Essential elements of a real estate contract: offer, acceptance, valuable consideration, and contractual capacity.
Fair Housing Law Administration
- The HUD (U.S. Department of Housing and Urban Development) administers fair housing regulations.
Short Sale Implications
- Listing agents must inform sellers about the rights of second mortgage holders during short sale negotiations.
Tax Calculation on Property Sale
- To determine seller's share of taxes due to closing, calculate based on the number of days until the closing date.
Home Equity Calculation
- In a property selling scenario, equity is the difference between the sale price and existing mortgage debts.
Disintermediation
- Defined as the flow of money from savings accounts to higher-yield investment opportunities.
Alienation Clause
- Also known as the "due on sale" clause, allows lenders to demand full mortgage payment upon property transfer to a third party.
USPAP Definition
- Acknowledges probable value standards in real estate valuation guidelines.
Studying That Suits You
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Description
Prepare for your real estate exam with these flashcards that cover key scenarios and ethical dilemmas. Each card presents a situation that tests your understanding and application of real estate principles. Ideal for anyone looking to strengthen their knowledge before the exam.
