Real Estate Sales Practice Exam Results PDF

REAL ESTATE SALES - NATIONAL + OHIO Dashboard Cameron's Stuff You completed this session Here's how you did on Dec 9, 2024, 5:00:37 AM: 125 90 Total Correct Questions...

REAL ESTATE SALES - NATIONAL + OHIO Dashboard Cameron's Stuff You completed this session Here's how you did on Dec 9, 2024, 5:00:37 AM: 125 90 Total Correct Questions Category Progress Missed 35 0 Marked for 72% Review Property Ownership 7 Total Questions 4 Correct 3 Missed ★ 0 Marked for Review 👎 Question (5 of 7) What lien attaches to a property to prevent the transfer of title when there is a pending lawsuit that may affect the title? CORRECT ANSWER: attachment YOUR MISSED ANSWER: lis pendens RATIONALE Lis pendens is the publicly recorded notice of the lawsuit. To prevent the transfer of title for property that may be affected by pending litigation, one would file with a court for an order of attachment, creating an attachment lien. Note some states call the lien "Lis Pendens." If the question is looking for lis pendens, attachment lien will not be on the list; so lis pendens would be correct. Some states allow the listing broker to attach a lien to the title of a property to secure the commission. A mechanic's lien is attached by a contractor or subcontractor for work done on the property. ID: 10249  👎 Question (6 of 7) A wife and husband may not hold title to their home as CORRECT ANSWER: tenants at will YOUR MISSED ANSWER: tenants in common RATIONALE Tenancy at will is a leasehold estate. ID: 10189 👎 Question (7 of 7) ABC Remodeling, Inc. buys a new warehouse for its trucks and excess building materials. How will it take title? CORRECT ANSWER: tenancy in severalty YOUR MISSED ANSWER: tenancy by the entireties RATIONALE Since it is the sole owner, and the law regards it as a single entity, the owner would take title in severalty. ID: 10206 Land Use Controls and Regulations 4 Total Questions 3 Correct 1 Missed ★ 0 Marked for Review 👎 Question (1 of 4) The taking of private property for public use is called CORRECT ANSWER: condemnation YOUR MISSED ANSWER: eminent domain RATIONALE Taxation is the process of a government levying a charge on people or things. Escheat is when property reverts to the state after a person dies without leaving a valid will and without heirs. Eminent domain is the power of the government to take private property for public use, while condemnation is the act of taking private property for public use. Eminent domain is the "right;" condemnation is the "act."@@Make sure to understand if the question asks for the power or for the verb. ID: 12029 Valuation and Market Analysis 6 Total Questions 3 Correct 3 Missed ★ 0 Marked for Review  👎 Question (1 of 6) A property has been renting for $750 per month. Based on comparables, the GRM is 110. What is the indicated value of the property? CORRECT ANSWER: $990,000 YOUR MISSED ANSWER: $82,500 RATIONALE The indicated value using a GRM (Gross Rent Multiplier) is the (monthly rent x 12 (months)) x GRM. In this case, ($750 X 12) x 110 = $990,000. ID: 3545 👎 Question (4 of 6) Effective gross income best describes CORRECT ANSWER: gross income minus a figure for vacancy and collection losses YOUR MISSED ANSWER: income minus debt service RATIONALE Effective gross income is income generated by a property, plus miscellaneous income, minus a figure for vacancy and collection losses. ID: 13559 👎 Question (6 of 6) Which term best describes value being attributed to a property because of its desirable location? CORRECT ANSWER: situs YOUR MISSED ANSWER: site RATIONALE A site is a piece of land that has been enhanced and is ready for a structure. Situs is an area of preference, which can attribute value. Assemblage is the joining of several parcels of land. Plottage is when the property is joined to increase value. ID: 13582 Financing 8 Total Questions 5 Correct 3 Missed ★ 0 Marked for Review 👎 Question (2 of 8) What document uses legal title to real property to secure debt?  CORRECT ANSWER: mortgage YOUR MISSED ANSWER: trustee's deed RATIONALE The promissory note is the instrument of obligation secured by the mortgage, with the homeowner pledging the legal title to real property as security for payment of the promissory note. A trustee's deed is used to transfer property a trustee is holding in a trust situation. A chattel mortgage uses personal property, not real property, as collateral. A mortgage uses legal title to real property to secure debt. ID: 6907 👎 Question (6 of 8) A property generated $135,000 income per year. A vacancy and collection loss of 5% is normal for the area. The building expenses are $8500. What was the gross income? CORRECT ANSWER: $135,000 YOUR MISSED ANSWER: $129,000 RATIONALE Gross income is the total amount a property generates in income before expenses are removed. ID: 76227 👎 Question (7 of 8) How would a developer/builder typically finance a development? CORRECT ANSWER: blanket YOUR MISSED ANSWER: wraparound with a partial release clause RATIONALE A wraparound mortgage is a second mortgage written to cover the first and second mortgages on one property. An interest-only mortgage is usually a very short-term loan with the payments going only to the interest on the loan. A blanket mortgage covers more than one property, with the development and its parcels released as they are sold. A fully amortized conventional loan covers one parcel only, with part of the payment going toward interest and part going toward principal. ID: 6905 General Principles of Agency 10 Total Questions 9 Correct 1 Missed ★ 0 Marked for Review 👎 Question (1 of 10) Which would be considered evidence of the agency relationship between broker and seller?  CORRECT ANSWER: listing agreement YOUR MISSED ANSWER: buyer-broker contract RATIONALE The listing agreement gives actual authority to the broker to represent the seller. ID: 2004 Property Condition and Disclosures 8 Total Questions 7 Correct 1 Missed ★ 0 Marked for Review 👎 Question (6 of 8) Real estate agent Sue is showing a buyer client a house. The house is full of antique furniture, fixtures, and decorations. In the largest bedroom is a wall-sized wardrobe which covers the wall between the bedroom and the bathroom. A slow leak behind the bathtub has caused chronic moisture in the plaster of this wall. Sue should CORRECT ANSWER: tell the buyer about the latent defect YOUR MISSED ANSWER: tell the seller to disclose the potential damage and hazards RATIONALE A defect is considered latent or material if the buyer would not discover it in a reasonably thorough inspection of the property. The buyer is not required to move heavy pieces of furniture. A patent defect is obvious at a reasonable inspection level. An agent can't tell the seller what to disclose, but it is the agent's duty to disclose what is hidden. ID: 10680 Contracts 14 Total Questions 8 Correct 6 Missed ★ 0 Marked for Review 👎 Question (4 of 14) Specific performance is CORRECT ANSWER: a legal remedy available to the buyer to enforce the terms of the contract YOUR MISSED ANSWER: an executed contract in which all elements of the contract have been specifically fulfilled RATIONALE When one party has the right to cancel the contract, the contract is voidable. When the terms of the contract have been specifically fulfilled, the contract is said to be executed. The action of a court of law to make a seller specifically perform the obligations called for in the contract is called specific performance. ID: 6623 👎 Question (5 of 14) A broker who deposits clients' money in the same bank account as the brokerage's operating funds is guilty of CORRECT ANSWER: commingling YOUR MISSED ANSWER: conversion RATIONALE The major reason for establishing and maintaining a separate non-interest-bearing account is to avoid any commingling of funds (The broker mixing their money with other peoples' money). Conversion (The broker using a client's money) is against the law. Merger refers to one method of eliminating a dominant or servient easement-by the acquisition of the adjacent tract by a property owner. Blending has very little to do with real estate. ID: 6600 👎 Question (7 of 14) When a buyer has a right of preemption, he has a right to CORRECT ANSWER: all of the answers listed YOUR MISSED ANSWER: have the first chance to buy or lease property RATIONALE A right of preemption is the right to have the first chance to buy or lease property, but only if the owner decides to sell or lease it. This is sometimes referred to as a right of first refusal. If a third party makes an offer to buy or lease, and the owner is willing to accept it, the preemption right holder must match the terms of that offer in order to acquire the property. ID: 6606 👎 Question (8 of 14) A deed restriction is applicable to: CORRECT ANSWER: all owners present and future YOUR MISSED ANSWER: the neighbors of a stated property RATIONALE Deed restrictions apply to all present and future owners of a property that has a deed restriction. ID: 77080 👎 Question (10 of 14) John, the buyer, signs a contract that would give the seller 48 hours to accept or reject the offer. The seller has had the offer for 24 hours, but no decision has been reached. Aware the offer has not yet been accepted, John instructs the real estate agent to withdraw the offer. Can this be done legally?  CORRECT ANSWER: Yes, John can rescind the offer at any time prior to the seller's acceptance without any penalty whatsoever YOUR MISSED ANSWER: No, John cannot rescind the offer until the expiration of the 48 hours RATIONALE Any offer may be rescinded by the offeror at any time before the offer has been accepted and that acceptance has been communicated back to the offeror. There is no commission until the seller accepts the offer. ID: 6625 👎 Question (13 of 14) The essential elements of a real estate contract include offer, acceptance, valuable consideration, and CORRECT ANSWER: contractual capacity YOUR MISSED ANSWER: earnest money RATIONALE A real estate sales contract includes the following essential elements: offer, acceptance, valuable consideration, lawful and possible objective, and contractual capacity. An example of good consideration is love and affection, which will not support a contract. Earnest money is not needed for a real estate contract, and breach is the violation of a contract. ID: 6590 Transfer of Title 6 Total Questions 6 Correct 0 Missed ★ 0 Marked for Review Practice of Real Estate 10 Total Questions 5 Correct 5 Missed ★ 0 Marked for Review 👎 Question (1 of 10) Kyle was on a showing appointment with a potential buyer who wanted to make an offer on the property. Kyle had a purchase agreement in his car. The buyer signed the offer and Kyle promised to send the buyer copies when he gets back to the office. Which statement best describes the situation? CORRECT ANSWER: Kyle and his broker may be subject to disciplinary action YOUR MISSED ANSWER: Kyle has done nothing wrong RATIONALE A party is entitled to receive copies of everything he signs at the time of signing. ID: 6047 👎 Question (2 of 10) A buyer's agent is paid a percentage of the gross sale price. When negotiating a contract, the agent should CORRECT ANSWER: negotiate the lowest possible price for the client YOUR MISSED ANSWER: get the highest price possible for the highest commission RATIONALE An agent must work in the client's best interest, not the agent's own. ID: 6011 👎 Question (4 of 10) When a broker received an unexpected bill, they deposited a client's earnest money check into their personal account to cover the expense. This best describes CORRECT ANSWER: conversion YOUR MISSED ANSWER: commingling RATIONALE Commingling is the broker mixing their funds with other peoples' funds. In this instance, the broker is using someone else's money. This would be conversion, which is a crime. ID: 6017 👎 Question (7 of 10) When counseling sellers/clients, an agent should NOT CORRECT ANSWER: prepare a market analysis that shows a high price for the property, because one never can tell what a buyer might pay YOUR MISSED ANSWER: query the sellers as to their motivations and urgency before recommending an asking price RATIONALE Agents must be careful to study all factors influencing value. For some sellers, time on market is more critical than price. A market analysis should always reflect the most realistic situation. ID: 6022 👎 Question (10 of 10) Homeowners with both a first and second mortgage decide to ask their primary lender to accept a short sale offer on their home. The primary lender allows the short sale. The listing agent should warn the seller of the CORRECT ANSWER: second mortgage holders rights YOUR MISSED ANSWER: tax consequences  RATIONALE While the first mortgage holder could allow the owner to take a short sale, there is no rule saying the seller gets to walk away with all debt forgiven. A short sale typically takes months to negotiate and so the listing agent would not have to warn the client of a quick transaction. The second mortgage holder can turn the debt over to a collection agency. Tax advice should come from an accountant not a real estate agent. Legal advice should always come from an attorney. ID: 6036 Real Estate Calculations 8 Total Questions 8 Correct 0 Missed ★ 0 Marked for Review State Governance of the Real Estate Profession 4 Total Questions 3 Correct 1 Missed ★ 0 Marked for Review 👎 Question (1 of 4) How often are appointments to the Real Estate Commission made and by whom? CORRECT ANSWER: every year, by the governor YOUR MISSED ANSWER: every four years, immediately after statewide elections, by the governor RATIONALE The governor appoints all five members of the Real Estate Commission to serve five-year terms. By law, "annually, upon the qualification of the member appointed in that year, the Commission shall organize itself by electing officers, etc." ID: 3679 Licensing Requirements 6 Total Questions 5 Correct 1 Missed ★ 0 Marked for Review 👎 Question (4 of 6) How many times may an applicant for an Ohio real estate salesperson's license retake the state licensing examination? CORRECT ANSWER: no limit YOUR MISSED ANSWER: three RATIONALE There is no limit on the number of times an applicant for a salesperson's license may retake the examination.  ID: 18629 License Law and Rules of the Ohio Real Estate Commission 16 Total Questions 12 Correct 4 Missed ★ 0 Marked for Review 👎 Question (7 of 16) Seller Staci was approached by a real estate agent Jeff who offered to put Staci's house on the Multiple Listing Service for a flat fee of $995. In addition to the Listing Agreement, the Lead Disclosure, and the Consumer Guide to Agency, what other form does Staci need to sign? CORRECT ANSWER: waiver of duties statement YOUR MISSED ANSWER: purchaser agency agreement RATIONALE Anytime a broker is going to limit the services they perform on behalf of either buyer or seller, there must be the waiver of duties statement illustrating the understanding of the parties. ID: 524 👎 Question (9 of 16) Which statement regarding revocation of a license is TRUE? CORRECT ANSWER: the licensee may submit a reapplication, which may be denied by the Ohio Real Estate Commission YOUR MISSED ANSWER: It can happen only after the third offense RATIONALE The commission can revoke a license after a first offense if the offense is serious. All disciplinary actions are eligible for appeal. Since the reinstatement is discretionary upon application, the commission may deny the reapplication. ID: 503 👎 Question (12 of 16) The principal Broker has the following duties EXCEPT? CORRECT ANSWER: Prepare listing agreements YOUR MISSED ANSWER: Comply with office requirements RATIONALE Under H.B. 532 Brokers have obligations to have and compliant offices. ID: 58672  👎 Question (13 of 16) For which violation of Ohio Civil Rights law must the Real Estate Commission suspend a real estate license for a minimum of two months, or revoke it? CORRECT ANSWER: second violation YOUR MISSED ANSWER: first violation RATIONALE The commission may revoke the license after the second offense but this violation is the only one with a mandated minimum punishment which is 2 months suspension. ID: 507 Brokerage Relationships (Agency Law) 14 Total Questions 9 Correct 5 Missed ★ 0 Marked for Review 👎 Question (3 of 14) A salesperson went on a listing appointment and negotiated an Exclusive Agency agreement with the seller. What documents did the seller sign? CORRECT ANSWER: Listing agreement, Waiver Of Duties Statement, Consumer Guide, Lead Paint Disclosure, Residential Disclosure YOUR MISSED ANSWER: Listing agreement, agency Disclosure, Consumer Guide, Lead Paint Disclosure, Residential Property Disclosure RATIONALE In an Exclusive Agency agreement, the seller is doing most of the tasks a listing agent would in an Exclusive Right to Sell listing agreement. In the event of an Exclusive Agency agreement, the state needs the seller to execute a Waiver of Duties statement so there is evidence that the seller knew the broker would not be marketing the property. ID: 1067 👎 Question (4 of 14) What is the duty of a licensee serving as the agent of a seller? CORRECT ANSWER: provide the seller with a copy of any agency disclosure statement signed by a purchaser YOUR MISSED ANSWER: seek purchase offers at prices and on terms acceptable to the licensee RATIONALE Among other duties, an agent for the seller is required to provide the seller with a copy of any Agency Disclosure form signed by the purchaser prior to presenting the seller with an offer to purchase.  ID: 1037 👎 Question (6 of 14) The salesperson will have a buyer sign an Ohio State Agency Disclosure Form CORRECT ANSWER: prior to writing an offer YOUR MISSED ANSWER: prior to showing properties RATIONALE The Agency Disclosure is transaction-specific and is filled out at the point of deciding to write an offer. Answers A, B, and D are triggers that mandate the presentation of the Consumer Guide to Agency Relationships. ID: 1057 👎 Question (12 of 14) An example of a subagent includes the CORRECT ANSWER: listing salesperson YOUR MISSED ANSWER: selling broker RATIONALE A subagency relationship is one formed between a licensee and the client of another licensee. Therefore, in a listing obtained by a salesperson in the name of her broker, the broker would be the agent of the seller/client and the salesperson would be both an agent of the broker and a subagent of the broker's seller/client. ID: 1031 👎 Question (14 of 14) A buyer is about to make a written offer on a listing. The sales agent says that, under Ohio law, $1,000 in earnest money must accompany the offer. The sales agent is guilty of CORRECT ANSWER: misrepresentation YOUR MISSED ANSWER: fraud RATIONALE In all likelihood, the sales agent is guilty of misrepresentation. Even though many sales agents believe the law requires earnest money with all offers, this is not true. If the sales agent knew that such a law did not exist, then he would have been lying, and guilty of fraud. ID: 1056 Leasing and Property Management 4 Total Questions 3 Correct 1 Missed ★ 0 Marked for Review 👎 Question (2 of 4) When can a property manager use a self-help eviction? CORRECT ANSWER: Only in non-residential tenancies YOUR MISSED ANSWER: Never RATIONALE A landlord may only use a utility shut-off or lockout against a non-residential tenancy. ID: 3278  REAL ESTATE SALES - NATIONAL + OHIO Dashboard Cameron's Stuff You completed this session Here's how you did on Dec 7, 2024, 2:48:00 AM: 125 67 Total Correct Questions Category Progress Missed 58 0 Marked for 54% Review Property Ownership 7 Total Questions 3 Correct 4 Missed ★ 0 Marked for Review 👎 Question (1 of 7) A couple is engaged to be married. Any real estate they own at the time the marriage takes place remains that spouse's property in severalty, and property acquired after the marriage belongs equally to both of them. This type of ownership is referred to as CORRECT ANSWER: community property YOUR MISSED ANSWER: tenancy in common RATIONALE Joint tenancy is the ownership of real estate by two or more people with the right of survivorship. In a cooperative, the purchaser is a stockholder and receives a proprietary lease to the apartment for the life of the cooperative. Tenancy in common refers to real estate owned by two or more people and each owns an undivided fractional interest in the property. Community property consists of all property, real and personal, acquired by either spouse during the marriage. ID: 10197  👎 Question (2 of 7) Which is NOT an example of a freehold estate? CORRECT ANSWER: periodic tenancy YOUR MISSED ANSWER: fee simple RATIONALE A periodic tenancy is a leasehold estate. ID: 10181 👎 Question (5 of 7) In some states the right of a husband to gain ownership of property when his wife dies can be described as CORRECT ANSWER: curtesy YOUR MISSED ANSWER: dower RATIONALE The wife's interest in a deceased husband's property is "dower," the husband's interest is called "curtesy." Entireties is a type of co-ownership for married people in some states. To devise is to give real property as a gift in a last will and testament. ID: 10221 👎 Question (6 of 7) A wife and husband may not hold title to their home as CORRECT ANSWER: tenants at will YOUR MISSED ANSWER: tenants in common RATIONALE Tenancy at will is a leasehold estate. ID: 10189 Land Use Controls and Regulations 4 Total Questions 1 Correct 3 Missed ★ 0 Marked for Review 👎 Question (2 of 4) Which gives a government the right to take private property for public use provided the owner is given just compensation? CORRECT ANSWER: eminent domain  YOUR MISSED ANSWER: condemnation RATIONALE Escheat is the power of the government to take property when one dies intestate and without heirs. Condemnation and appropriation describe the act of taking property. The power of the government to take private land for public use is called eminent domain. ID: 12032 👎 Question (3 of 4) Billy has a two-acre lot that is zoned agricultural. He asks his real estate agent if she could tell him how to go about building a house on the land. Billy's agent tells him that he needs CORRECT ANSWER: a use variance YOUR MISSED ANSWER: an area variance RATIONALE Zoning restrictions are issued by the local government. Declarations and bylaws are the rules that govern a condominium. A planned unit development involves more than one kind of land use. An area variance is just permission from the government to deviate from the zoning rule. A use variance is permission from the government to use the land for something different than what is it zoned for. ID: 12034 👎 Question (4 of 4) Developer George purchased five acres of residential land on the edge of town with frontage on the main highway. When the zoning board and city council refused to rezone the property to accommodate a commercial development, George sued for the value he would have received had the land been rezoned to a higher classification. This type of legal challenge is known as CORRECT ANSWER: inverse condemnation YOUR MISSED ANSWER: spot zoning RATIONALE Inverse condemnation occurs when a property owner sues the government, asking the court to order the government either to pay compensation or loosen land use restrictions. It may or may not be frivolous to do this. Eminent domain is the power of government to take private land for public use. Spot zoning is changing the zoning classification of a specific parcel of land. ID: 12024 Valuation and Market Analysis 6 Total Questions 4 Correct 2 Missed ★ 0 Marked for Review  👎 Question (1 of 6) When the appraiser looks at the home Sandy just purchased, they notice it has a fireplace and the comparable homes do not. They make a $3,000 upward adjustment on their sales comparison approach worksheet. The $3,000 adjustment is based on what appraisal principle? CORRECT ANSWER: contribution YOUR MISSED ANSWER: conformity RATIONALE This is the amount the fireplace "contributes" to the value. It is not necessarily the cost to install the individual item. ID: 13571 👎 Question (4 of 6) While determining the net operating income of an investment property, an appraiser will not take into account CORRECT ANSWER: interest expense YOUR MISSED ANSWER: income from vending machines RATIONALE Although tax deductible, the amount of interest an owner pays is not used to calculate the net operating income. Remember, anything related to debt service is an owner's expense. ID: 13568 Financing 8 Total Questions 4 Correct 4 Missed ★ 0 Marked for Review 👎 Question (1 of 8) A note that calls for periodic payments of principal only, with a balloon payment at the end of the loan term, is called a(n) CORRECT ANSWER: installment note YOUR MISSED ANSWER: adjustable rate note RATIONALE A straight note calls for interest-only payments with a balloon payment at the end of the loan term. In an amortized note, principal and interest are paid together. An adjustable rate note permits the lender to periodically adjust the rate of interest according to fluctuations in the cost of money (interest). An installment note calls for periodic payments of principal only, with a balloon payment at the end of the loan term. ID: 6880  👎 Question (3 of 8) If a property sells for $240,000 and two brokers participated in the sale, how much is the selling salesperson be paid if the rate was 7% and the broker and salespersons shared commissions equally? CORRECT ANSWER: $4,200 YOUR MISSED ANSWER: $8,400 RATIONALE $240,000 x.07 / 4 = $4200 ID: 76234 👎 Question (5 of 8) A court order instructing an official (e.g., a sheriff) to sell property in order to pay a judgment is called CORRECT ANSWER: writ of execution YOUR MISSED ANSWER: foreclosure RATIONALE Foreclosure is the proceeding that declares a mortgage void and forces the sale of property to satisfy the debt. The court order directing an official to seize and/or sell the property is called the writ of execution. An order of attachment would happen when the court needs to seize property owned by a debtor. A deficiency judgment is what the lender asks a court for when a sheriff sale does not yield enough to pay off the note. ID: 6890 👎 Question (8 of 8) What rate of interest was charged on a loan amount of $30,000 with monthly interest payments of $275? CORRECT ANSWER: 11% YOUR MISSED ANSWER: 10% RATIONALE $275 x 12 month / loan amount = 11% ID: 76226 General Principles of Agency 10 Total Questions 3 Correct 7 Missed ★ 0 Marked for Review 👎 Question (2 of 10) An agent's duties to all customers include CORRECT ANSWER: good faith and fair dealing YOUR MISSED ANSWER: all of the answers listed RATIONALE The only duty to a customer is that of good faith and fair dealing. The agent/customer relationship is not a fiduciary one. It's important to know the difference between client and customer. ID: 2000 👎 Question (3 of 10) A buyer is found for a seller/client of a broker. How did the agency relationship terminate? CORRECT ANSWER: accomplishment of purpose YOUR MISSED ANSWER: operation of law RATIONALE Agency ends by accomplishment of purpose (the correct answer) when the listing sells during the listing period. Expiration is when the listing expiration date arrives. Mutual release is when broker and seller agree to end the relationship before it expires. Operation of law is when the broker or seller becomes incapacitated or dies, or if the building is destroyed. ID: 2033 👎 Question (4 of 10) A broker has a policy that agents will not be dual agents in in-company transactions or when the agents sell their own listings. Which would a potential buyer be to the listing agent if the buyer wants to buy the agent's listing? CORRECT ANSWER: customer YOUR MISSED ANSWER: agent RATIONALE A dual agent is a broker or salesperson who represents both buyer and seller. A client is a party represented by a broker. An agent is someone a client hires to represent them like a broker. The customer is the party in the transaction that is not represented. ID: 2029 👎 Question (6 of 10) What type of relationship best describes how a real estate broker represents their principal in the sale of the principal's single-family home? CORRECT ANSWER: special or specific agency YOUR MISSED ANSWER: dual agency RATIONALE A real estate agent works as a special agent, while a property manager would most likely be a general agent. A universal agent is one who can do anything on behalf of someone (e.g., an attorney in fact). A broker is a dual agent when they represent both buyer and seller in the same transaction.  ID: 2020 👎 Question (8 of 10) An agent is showing a house to a customer. The agent tells the buyer that the seller is desperate for an offer. Which duty has the agent breached? CORRECT ANSWER: loyalty YOUR MISSED ANSWER: disclosure RATIONALE An agent must have the client's permission to reveal such a motivation to a customer. ID: 2008 👎 Question (9 of 10) An agent has entered a written agreement with a buyer to search for a home, that also has a beginning date and an ending date. What agreement would be used? CORRECT ANSWER: A buyer broker agreement YOUR MISSED ANSWER: A listing agreement RATIONALE A buyer would sign a buyer broker agreement when working with an agent to find a home. Buyer Broker agreements have a beginning date and an ending date ensuring an agent would be paid a commission if they achieve the goals in the agreement for a buyer purchasing a home. These are usually not mandatory and are used at each agents discretion. However they should be used for everyone's best interest. ID: 69210 👎 Question (10 of 10) A salesperson has a direct fiduciary duty to the CORRECT ANSWER: broker YOUR MISSED ANSWER: client RATIONALE The salesperson always has a duty to the broker. The broker always has a duty to the client. ID: 1993 Property Condition and Disclosures 8 Total Questions 4 Correct 4 Missed ★ 0 Marked for Review 👎 Question (2 of 8) What is the legal process by which potentially responsible parties who contributed to contamination at a Superfund site can be required to reimburse the trust fund for money spent during any clean up actions by the federal government? CORRECT ANSWER: cost recovery YOUR MISSED ANSWER: Core Program Cooperative Agreement RATIONALE The Core Program Cooperative Agreement is an assistance agreement whereby the EPA transfers money, property, services, or anything of value to a state for the accomplishment of authorized activities. Corrective action is the EPA's requirement for treatment, storage, and disposal facilities handling hazardous waste. A cost/benefit analysis is a quantitative evaluation of the costs which would be incurred by implementing an environmental regulation versus the overall benefits to society of the proposed action. Cost recover is the legal process by which potentially responsible parties who contributed to contamination at a Superfund site can be required to reimburse the government for any money spent during clean up. ID: 10686 👎 Question (3 of 8) What insulating material was pumped into houses until its ban in the 1970s? CORRECT ANSWER: urea-formaldehyde insulation YOUR MISSED ANSWER: asbestos RATIONALE The insulation pumped into houses was urea-formaldehyde insulation. ID: 10669 👎 Question (4 of 8) A lead-based paint disclosure form is required for all residential dwellings built before January 1, 1978. When applicable, who must sign the form? CORRECT ANSWER: buyer, seller, and both agents YOUR MISSED ANSWER: seller and buyer RATIONALE All parties must sign the disclosure form. Both agents are equally liable for compliance. ID: 10664 👎 Question (5 of 8) Real estate agent Sue is showing a buyer client a house. The house is full of antique furniture, fixtures, and decorations. In the largest bedroom is a wall-sized wardrobe which covers the wall between the bedroom and the bathroom. A slow leak behind the bathtub has caused chronic moisture in the plaster of this wall. Sue  should CORRECT ANSWER: tell the buyer about the latent defect YOUR MISSED ANSWER: tell the seller to disclose the potential damage and hazards RATIONALE A defect is considered latent or material if the buyer would not discover it in a reasonably thorough inspection of the property. The buyer is not required to move heavy pieces of furniture. A patent defect is obvious at a reasonable inspection level. An agent can't tell the seller what to disclose, but it is the agent's duty to disclose what is hidden. ID: 10680 Contracts 14 Total Questions 9 Correct 5 Missed ★ 0 Marked for Review 👎 Question (2 of 14) A seller places his home on the market on Tuesday. On Wednesday, his agent calls and says there are four offers on the property and he would like to present them at 7 p.m. After looking at all the offers and comparing them, what should the seller do? CORRECT ANSWER: accept one offer or counteroffer one offer YOUR MISSED ANSWER: counteroffer all the offers at a higher price RATIONALE The seller has no obligation to accept any of the offers, but could accept one of them. It need not be the one with the highest price. If making a counteroffer, he should counter only one offer at a time. ID: 6627 👎 Question (4 of 14) Archie and Bert mutually agree to terminate a contract. The buyer, Bert, asks for the earnest money back and the seller, Archie, consents. This is an example of CORRECT ANSWER: rescission YOUR MISSED ANSWER: unilateral agreement RATIONALE Cancellation occurs when both parties agree to terminate the contract. However, any consideration tendered would be kept by the seller. Rescission allows the buyer to receive the earnest money back. This would be a bilateral agreement to terminate a contract, not a unilateral one. Anticipatory repudiation is the breach of a contract before the contract even commences. ID: 6597  👎 Question (8 of 14) Emily had signed a one-year lease, but after living in the apartment for three months, she transferred her right of possession for the remainder of the lease to her friend. Which type of arrangement does Emily have with her friend? CORRECT ANSWER: assignment YOUR MISSED ANSWER: novation RATIONALE A gross lease describes the arrangement between landlord and tenant. In a sublease the tenant will regain possession before the tenancy ends. A novation would require the consent of the landlord and the withdrawing tenant would be relieved of liability. In an assignment the tenant will not regain possession of the lease before it ends. ID: 6639 👎 Question (9 of 14) An offer to purchase that states the offer will remain open for 72 hours CORRECT ANSWER: may be withdrawn by the offeror at any time before the offer is accepted YOUR MISSED ANSWER: may be withdrawn within 72 hours, only with the approval of the offeree RATIONALE An offer is just an offer. It does not become a contract until it is accepted. Thus, even if the offer said it would remain open for 72 hours, it is not binding upon either party as it is not a contract. On the 72nd hour the offer will expire. ID: 6621 👎 Question (13 of 14) Broker Blair wants to attempt to enforce a broker protection clause of a listing agreement. Which must she do at the expiration of the listing? CORRECT ANSWER: give the seller a list of prospects that viewed the listing during the listing period YOUR MISSED ANSWER: take down the sign and collect the lock box RATIONALE Under the terms of a listing agreement the broker often negotiates a broker protection period. In order to enforce the agreement, upon expiration of a listing, the broker must present to the seller a list of prospects who viewed the property. ID: 6637 Transfer of Title 6 Total Questions 4 Correct 2 Missed ★ 0 Marked for Review  👎 Question (2 of 6) Prorated taxes are shown on the settlement statement as a CORRECT ANSWER: credit to buyer and debit to seller YOUR MISSED ANSWER: debit to buyer and credit to seller RATIONALE Prorated taxes are a credit to the buyer and a debit to the seller. The seller is responsible for taxes payable through the date of closing. Since (in most states) homeowners pay taxes in arrears of one year, the seller would have to bring the taxes current and give that money to the buyer as a credit. ID: 10780 👎 Question (5 of 6) To inherit is to receive title CORRECT ANSWER: through a last will and testament YOUR MISSED ANSWER: to real property through a deed RATIONALE If a deed was used the grantor and grantee must be alive as this is a requirement for a valid deed. If a deed says "by love and affection" it was a gift and, again, both parties are alive. Receiving title by reversion is the result of the measuring life ending in a life estate. When one is a devisee, they inherit the title through the certificate of transfer as a result of a valid last will and testament. ID: 10798 Practice of Real Estate 10 Total Questions 8 Correct 2 Missed ★ 0 Marked for Review 👎 Question (5 of 10) Based on the Civil Rights Act of 1866, what is the maximum amount of punitive damages that can be awarded? CORRECT ANSWER: no limit YOUR MISSED ANSWER: $100,000 RATIONALE There is no limit for the amount of punitive damages that can be awarded. ID: 6004 👎 Question (9 of 10) An out-of-state prospect asks an agent to locate a diverse neighborhood for him. The agent should  CORRECT ANSWER: explain that research of this nature is beyond the agent's scope of authority YOUR MISSED ANSWER: show the prospect a diverse neighborhood RATIONALE A real estate agent has no duty or obligation to provide demographic data that would have the effect of limiting housing choices. An agent can provide resources for the consumer to explore on their own (i.e. www.census.gov). ID: 6002 Real Estate Calculations 8 Total Questions 5 Correct 3 Missed ★ 0 Marked for Review 👎 Question (2 of 8) Dave wishes to sell a piece of land at a 15% net profit. He purchased the land for $95,500. Rounding your answer to the nearest dollar, what will he have to sell the land for to receive a 15% profit after paying the selling broker a 7% commission on the sale price? CORRECT ANSWER: $118,091 YOUR MISSED ANSWER: $115,149 RATIONALE This is a two-part calculation. First, determine the 15% profit on $95,500 ($95,500 x 0.15 = $14,325; $14,325 + $95,500 = $109,825, or $95,500 x 1.15 = $109,825). Next, factor in the commission fee of 7%: 100% - 7% = 93% net to owner. Now, use the percent formula: Whole (Total/Gross Sale price) = Part (Net amount + Expenses) / Percent (100% minus deductions) and plug in the known variables. $109,825 / 0.93 = $118,091.39. Rounded, Scott should sell his piece of land for $118,091 to make a 15% profit. ID: 9002 👎 Question (7 of 8) A parcel of land is purchased for $234,000 and later sold for $256,300. What is the percent of profit? CORRECT ANSWER: 9.5% YOUR MISSED ANSWER: 9% RATIONALE This is a two-part calculation. First, determine what was made; $256,300 - $234,000 = $22,300. Now, plug these numbers into the formula; Percent Profit = Made / Paid or $22,300 / $234,000 = 0.0953. The percent of profit was 9.5%. ID: 8972  👎 Question (8 of 8) 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? CORRECT ANSWER: $36,000 YOUR MISSED ANSWER: $53,000 RATIONALE The difference between what you own and what you owe on what you own is your equity. So, $155,000 - $119,000 ($94,000 + $25,000) = $36,000. The cash down payment should be ignored. The equity in the home is $36,000. ID: 9004 State Governance of the Real Estate Profession 4 Total Questions 3 Correct 1 Missed ★ 0 Marked for Review 👎 Question (4 of 4) What happens when a vacancy occurs on the Real Estate Commission? CORRECT ANSWER: the governor appoints someone to serve the remainder of the former commissioner's term YOUR MISSED ANSWER: the Superintendent appoints an interim replacement commissioner to serve out the year RATIONALE Should a vacancy on the Real Estate Commission occur, it would be filled in the manner prescribed for regular appointments to the Commission. The replacement appointee will serve the remainder of the predecessor's term. ID: 3680 Licensing Requirements 6 Total Questions 1 Correct 5 Missed ★ 0 Marked for Review 👎 Question (2 of 6) When a real estate broker wishes to associate himself with another broker as a real estate salesperson, how does the Division handle this transfer? CORRECT ANSWER: by placing the broker's license on deposit and issuing a salesperson's license YOUR MISSED ANSWER: by merely changing the address on the broker's license RATIONALE A licensed broker may request that his broker's license be placed on deposit and that a salesperson's license be issued in its place.  ID: 18637 👎 Question (3 of 6) Within what time period must a broker return the license of a salesperson when requested by the division? CORRECT ANSWER: 3 business days YOUR MISSED ANSWER: 10 days RATIONALE License law requires the broker to send the license back within 3 days. ID: 18664 👎 Question (4 of 6) If an applicant for a real estate license has completed all requirements for examination, has been approved to sit for the examination, and has received notice of the approval, then fails to pass both portions of the examination within the required one-year period, what will happen? CORRECT ANSWER: He will have to re-apply and pay another application fee YOUR MISSED ANSWER: He will have to pay another application fee plus a fine RATIONALE An applicant for licensure will have only the 12-month eligibility period to successfully pass both portions of the examination. If the applicant fails to pass both portions of the examination in that period, he must submit a new application, plus the processing fee payable to the testing vendor. The applicant may then re-take the examination. ID: 18633 👎 Question (5 of 6) If the license of a salesperson is suspended or revoked, what are the permissible activities that the licensee can undertake? CORRECT ANSWER: cannot practice real estate at all YOUR MISSED ANSWER: can only complete transactions already underway RATIONALE No person shall engage in any act or acts for which a real estate license is required while that person's license is placed in an inactive status, is suspended, or is revoked. ID: 18636 👎 Question (6 of 6) The fee for branch office licensing each year is  CORRECT ANSWER: $15 YOUR MISSED ANSWER: $14 RATIONALE Brokers that maintain branch offices must pay a fee of $15 per office per year. ID: 18659 License Law and Rules of the Ohio Real Estate Commission 16 Total Questions 10 Correct 6 Missed ★ 0 Marked for Review 👎 Question (3 of 16) A salesperson first obtained his license in 2002 after completing the required classroom hours of pre- licensure education and passing the examination. He completed the 10-hour post-licensure course, but failed to renew the license at the first renewal date. After a year, the license was revoked. If, at a later date, the salesperson wants to reapply to obtain a license, how many years will he be able to do so before having to retake the pre-licensure classroom instruction? CORRECT ANSWER: 10 years YOUR MISSED ANSWER: 1 year RATIONALE A person who has provided evidence of completing the pre-licensure classroom instruction within a 10-year period immediately preceding his current application for licensure will be considered to have completed the hours of each course taken. ID: 447 👎 Question (4 of 16) May a consumer who has been harmed by a licensee acting under her license as a real estate salesperson or broker immediately file a claim for payment from the Real Estate Recovery Fund? CORRECT ANSWER: No, the consumer must file a lawsuit, get a final judgment, and attempt to collect YOUR MISSED ANSWER: No, the consumer must first attend an informal meeting RATIONALE Upon obtaining a final judgment in any court of competent jurisdiction, the consumer must have diligently pursued other remedies available. No more than one year may pass since final adjudication of the judgment. ID: 451 👎 Question (5 of 16) If the amount available in the Real Estate Recovery Fund is less than _____, the Ohio Real Estate Commission must impose a special assessment of up to $10 on each licensed real estate broker, brokerage, or a salesperson who files a notice of license renewal. CORRECT ANSWER: $500,000 YOUR MISSED ANSWER: $1,000,000 RATIONALE The Dodd-Frank Reform Act lowered the threshold amount in the Real Estate Recovery Special Account to $500,000. ID: 523 👎 Question (6 of 16) Sandy, an apartment manager in Florida, meets the owner of an apartment building in Cleveland, Ohio at a vacation hot spot in Miami. Sandy gets the owner to hire her to manage the apartment building in Cleveland for a flat fee. After several months, Sandy receives a Cease and Desist order from the Ohio Real Estate Commission but Sandy ignores it. How much per day can Sandy be fined by the Ohio Real Estate Commission? CORRECT ANSWER: $1000 YOUR MISSED ANSWER: $50 RATIONALE For every day that the order is ignored after receiving a Cease and Desist Order, the Commission can fine an individual $1,000. ID: 521 👎 Question (8 of 16) A person who is under the supervision of a licensed broker working with residential rental property may work without a license so long as her duties are limited to CORRECT ANSWER: furnishing published information and exhibiting rental units to prospects YOUR MISSED ANSWER: all of the answers listed RATIONALE As long as the unlicensed employee at a residential rental property works under the supervision of a licensed broker and is compensated by salary or on an hourly basis, she can perform maintenance, clerical or administrative support, collect rents and security deposits, exhibit or show rental units, furnish published information, supply applications and leases, and receive applications and leases for submission for approval. ID: 454 👎 Question (15 of 16) A copy of a real estate purchase contract must be given to the involved parties CORRECT ANSWER: upon signing YOUR MISSED ANSWER: within three business days RATIONALE  Ohio Revised Code 4735.18 states that a copy of a contract must be given to the parties at the time they sign it. ID: 487 Brokerage Relationships (Agency Law) 14 Total Questions 4 Correct 10 Missed ★ 0 Marked for Review 👎 Question (2 of 14) A salesperson went on a listing appointment and negotiated an Exclusive Agency agreement with the seller. What documents did the seller sign? CORRECT ANSWER: Listing agreement, Waiver Of Duties Statement, Consumer Guide, Lead Paint Disclosure, Residential Disclosure YOUR MISSED ANSWER: Listing agreement, agency Disclosure, Consumer Guide, Lead Paint Disclosure, Residential Property Disclosure RATIONALE In an Exclusive Agency agreement, the seller is doing most of the tasks a listing agent would in an Exclusive Right to Sell listing agreement. In the event of an Exclusive Agency agreement, the state needs the seller to execute a Waiver of Duties statement so there is evidence that the seller knew the broker would not be marketing the property. ID: 1067 👎 Question (3 of 14) Joe, a salesperson from Happy Days Real Estate, sold a house listed by Better Days Real Estate. What part of the Agency Disclosure Statement would Joe and Better Days Real Estate fill out? CORRECT ANSWER: Section I YOUR MISSED ANSWER: Section II RATIONALE A transaction involving two brokers is a Section I transaction. An in-company transaction is a Section II type. A transaction where one licensee is selling his own listing would require filling out Section III. There is no section IV. ID: 1061 👎 Question (5 of 14) In becoming an agent, a licensee becomes a fiduciary and owes clients the duties of accountability, reasonable skill and care, loyalty, obedience, confidentiality, and full disclosure. When might other licensees in the same brokerage become involved in that agency relationship? CORRECT ANSWER: when the other licensees receive confidential information from the agent of the client YOUR MISSED ANSWER: when the buyer signs a buyer agency agreement RATIONALE When a licensee in a brokerage receives confidential information concerning a client of an affiliated licensee in the same brokerage, the licensee receiving the information also becomes an agent of that client. Otherwise, other agents in a brokerage do not automatically become agents of an affiliated agent's client. ID: 1035 👎 Question (6 of 14) Agent Andy was so excited to be writing and presenting his first offer to the seller and listing agent that he forgot to make the offer contingent on the sale of the buyer's current residence. After an investigation and disciplinary hearing, all of the following could happen EXCEPT CORRECT ANSWER: six months probation YOUR MISSED ANSWER: proof of 10-hours of post-license training RATIONALE There are a number of disciplinary actions that can be taken against a licensee ranging from a simple reprimand to permanent revocation of license. Criminal actions would only take place after indictment and prosecution. ID: 1059 👎 Question (7 of 14) Jim is a property manager. He has a commercial park that he leases offices in, and he also has a 200 unit residential building with tenants in yearlong leases. Jim decides to put his own personal residence up for sale, as well as a warehouse. Which property would require the use of the Consumer guide to agency relationships form? CORRECT ANSWER: His personal residence YOUR MISSED ANSWER: the 200 unit residential building RATIONALE The consumer guide to agency relationships form must be provided on one to four residential dwelling units. It is not required for commercial buildings. ID: 1077 👎 Question (8 of 14) A salesperson takes a call at the office. The caller is a buyer who says he has a trust fund and wants to buy a house. The house the caller is interested in is a house personally owned by the real estate agent. Which situation is not possible? CORRECT ANSWER: the salesperson can represent both himself and the buyer YOUR MISSED ANSWER: the salesperson must disclose the agency relationship RATIONALE As of September 2014, no licensee can act as a dual agent when the licensee is a principal in a transaction. ID: 1078 👎 Question (9 of 14) Agent Wendy met potential buyer, Suzie, at a trade show and made an appointment to meet to talk about exclusive buyer representation. At the meeting, Suzie signed a purchaser Agency Agreement and a Consumer Guide to Agency with Wendy. After several weeks of searching, Wendy found a house for Suzie and closed the deal. At closing, Suzie was surprised to see on the Settlement Statement that she was paying a $700 broker fee in addition to the agreed upon commission of 3.5%. Which of the following best describes the situation? CORRECT ANSWER: agent Wendy had a duty to explain all of the fees YOUR MISSED ANSWER: Suzie should have read the purchaser agency agreement more carefully RATIONALE Agency law imposes the duties of obedience, loyalty, disclosure, confidentiality, accountability, reasonable skill, and care in performing any duties contained in an Agency Agreement. It is the duty of the broker and salesperson to make sure that buyer and seller clients understand all of the fees they are being charged. ID: 1060 👎 Question (10 of 14) A licensee who will be working with a seller must make sure that the state-mandated Consumer Guide to Agency Relationships is provided to the seller before CORRECT ANSWER: placing a sign in the seller's yard YOUR MISSED ANSWER: the seller signs the listing agreement RATIONALE A seller's agent must provide the seller with the Consumer Guide to Agency Relationships prior to marketing or showing the property. A yard sign is a form of marketing the property. ID: 1033 👎 Question (11 of 14) A buyer is about to make a written offer on a listing. The sales agent says that, under Ohio law, $1,000 in earnest money must accompany the offer. The sales agent is guilty of CORRECT ANSWER: misrepresentation YOUR MISSED ANSWER: fraud RATIONALE In all likelihood, the sales agent is guilty of misrepresentation. Even though many sales agents believe the law requires earnest money with all offers, this is not true. If the sales agent knew that such a law did not exist, then he would have been lying, and guilty of fraud.  ID: 1056 👎 Question (14 of 14) In an effort to try to force the seller to accept the buyer's offer, the selling agent indicated to the listing agent that their buyer was withdrawing their offer. When can the buyer's agent legitimately do this? CORRECT ANSWER: when instructed by the buyer to do so YOUR MISSED ANSWER: it is standard operating procedure RATIONALE No salesperson or broker has the authority to extend or withdraw offers and counteroffers without instructions from their clients. Instructions should be in writing, indicating the wishes of the client. ID: 1070 Leasing and Property Management 4 Total Questions 4 Correct 0 Missed ★ 0 Marked for Review  REAL ESTATE SALES - NATIONAL + OHIO Dashboard Cameron's Stuff You completed this session Here's how you did on Dec 6, 2024, 11:59:08 PM: 125 88 Total Correct Questions Category Progress Missed 37 0 Marked for 70% Review Property Ownership 7 Total Questions 4 Correct 3 Missed ★ 0 Marked for Review 👎 Question (1 of 7) Which is NOT an encumbrance? CORRECT ANSWER: license YOUR MISSED ANSWER: appurtenant easement RATIONALE Since a license is revocable, it cannot burden the property owner's title. A license does not create an interest in another's land. ID: 10177 👎 Question (5 of 7) A wife and husband may not hold title to their home as  CORRECT ANSWER: tenants at will YOUR MISSED ANSWER: tenants in common RATIONALE Tenancy at will is a leasehold estate. ID: 10189 👎 Question (6 of 7) What is NOT considered when determining whether an item is a fixture or personal property? CORRECT ANSWER: value of the annexed item YOUR MISSED ANSWER: relationship of the parties RATIONALE The value of the item is not considered. Most often the item is valuable. Intention and manner of annexation are the most heavily weighed factors in this decision. ID: 10183 Land Use Controls and Regulations 4 Total Questions 2 Correct 2 Missed ★ 0 Marked for Review 👎 Question (2 of 4) Billy has a two-acre lot that is zoned agricultural. He asks his real estate agent if she could tell him how to go about building a house on the land. Billy's agent tells him that he needs CORRECT ANSWER: a use variance YOUR MISSED ANSWER: an area variance RATIONALE Zoning restrictions are issued by the local government. Declarations and bylaws are the rules that govern a condominium. A planned unit development involves more than one kind of land use. An area variance is just permission from the government to deviate from the zoning rule. A use variance is permission from the government to use the land for something different than what is it zoned for. ID: 12034 👎 Question (3 of 4) Building codes can be enforced by CORRECT ANSWER: the issuance of permits YOUR MISSED ANSWER: zoning laws RATIONALE  Building codes set construction standards; building plans must comply with the code for a permit to be issued. Failure to comply with the permit may result in a stop order, fines, and/or injunctions. Zoning laws set forth permitted uses. Licenses allow certain activities. Letters of approval are not a method of enforcement. ID: 12026 Valuation and Market Analysis 6 Total Questions 4 Correct 2 Missed ★ 0 Marked for Review 👎 Question (3 of 6) When the appraiser looks at the home Sandy just purchased, they notice it has a fireplace and the comparable homes do not. They make a $3,000 upward adjustment on their sales comparison approach worksheet. The $3,000 adjustment is based on what appraisal principle? CORRECT ANSWER: contribution YOUR MISSED ANSWER: conformity RATIONALE This is the amount the fireplace "contributes" to the value. It is not necessarily the cost to install the individual item. ID: 13571 👎 Question (5 of 6) Reproducing a structure best describes building CORRECT ANSWER: an exact replica of the structure YOUR MISSED ANSWER: the functional equivalent of the original structure RATIONALE Building an exact replica means that the new building has the exact look and feel as the original structure. If an historical building were destroyed, the building would likely be reproduced. ID: 13565 Financing 8 Total Questions 7 Correct 1 Missed ★ 0 Marked for Review 👎 Question (4 of 8) A mortgage that has not been recorded CORRECT ANSWER: is effective between the lender and the borrower only  YOUR MISSED ANSWER: has no legal effect RATIONALE While the mortgage may not become a lien unless it is recorded, it is still effective between the lender and the borrower only. It would not be effective against the subsequent purchaser who had no knowledge of the unrecorded mortgage. A mortgagor would still be personally liable under the mortgage and promissory note. ID: 6915 General Principles of Agency 10 Total Questions 8 Correct 2 Missed ★ 0 Marked for Review 👎 Question (1 of 10) John has an open listing on his home with Company X. Paul has an exclusive right to sell listing with the same company. Their contracts have a 30-day protection period. Both listings expire on March 31st. On April 15th, Paul and John view each other's properties for the first time, and decide to swap homes. How much commission is Company X due? CORRECT ANSWER: none YOUR MISSED ANSWER: commission from just Paul RATIONALE No commission is due Company X. Protection periods will protect an agency only in regard to purchasers who have viewed the property during the listing period. ID: 2018 👎 Question (9 of 10) Which would be considered evidence of the agency relationship between broker and seller? CORRECT ANSWER: listing agreement YOUR MISSED ANSWER: buyer-broker contract RATIONALE The listing agreement gives actual authority to the broker to represent the seller. ID: 2004 Property Condition and Disclosures 8 Total Questions 8 Correct 0 Missed ★ 0 Marked for Review Contracts 14 Total Questions 7 Correct 7 Missed ★ 0 Marked for Review 👎 Question (3 of 14) What would cause termination of a real estate contract? CORRECT ANSWER: completion YOUR MISSED ANSWER: fraud RATIONALE The termination of a contract occurs if it is completed (i.e., closed). Fraud makes a contract voidable by the lied to party, but it does not necessarily terminate the contract. Acceptance of an offer would commence the contract, not terminate it. Applying for financing is typically not a cause for termination of a real estate contract. ID: 6596 👎 Question (5 of 14) An offer to purchase that states the offer will remain open for 72 hours CORRECT ANSWER: may be withdrawn by the offeror at any time before the offer is accepted YOUR MISSED ANSWER: may be withdrawn within 72 hours, only with the approval of the offeree RATIONALE An offer is just an offer. It does not become a contract until it is accepted. Thus, even if the offer said it would remain open for 72 hours, it is not binding upon either party as it is not a contract. On the 72nd hour the offer will expire. ID: 6621 👎 Question (7 of 14) Consideration in a real estate sales contract would be CORRECT ANSWER: money in exchange for real estate YOUR MISSED ANSWER: offer and acceptance RATIONALE Valuable consideration (money in exchange for real estate) is an essential element to a real estate contract. Love and affection would be an example of good consideration but is used when gifting property, not when a real estate contract is involved. Offer and acceptance are two of the other essential elements to a contract, as is contractual capacity. ID: 6591 👎 Question (10 of 14) If seller Adam simply decides not to go through with the closing on a sale to buyer William, what can William do about it? CORRECT ANSWER: Sue for specific performance and for damages YOUR MISSED ANSWER: nothing, because the deal has not yet closed RATIONALE A successful lawsuit for specific performance may compel Adam to perform his responsibilities under the contract, including transferring title to William. In addition, if William can prove other damages due to Adam's refusal to perform, William may also sue to recover those damages. If the contract was executed (completed), William would have obtained equitable title, and it would not matter that closing had not occurred. ID: 6601 👎 Question (11 of 14) Transferring one's rights or obligations under a contract to another and being relieved of liability best describes CORRECT ANSWER: novation YOUR MISSED ANSWER: consideration RATIONALE An assignment does not relieve the withdrawing party of liability; novation does. ID: 6578 👎 Question (13 of 14) Ed makes an offer to buy William's house for $45,000. William counters that he wishes to receive $47,000 for the house. Ed rejects William's counteroffer. William later says he will accept Ed's original offer of $45,000. Which statement is TRUE? CORRECT ANSWER: there is no contract between Ed and William YOUR MISSED ANSWER: there is a bilaterally enforceable contract between Ed and William RATIONALE There is no contract between Ed and William, as a counteroffer is a rejection of the original offer. Once William rejected Ed's offer and made a counteroffer, he could not resurrect Ed's offer by going back and accepting it. A unilateral contract is one that is enforceable, but only by one party. A bilateral contract is a contract enforceable by both parties. ID: 6592 👎 Question (14 of 14) Tommy asks his real estate agent to prepare a lease agreement instead of a purchase agreement now that he has decided to rent rather than buy. The agent should  CORRECT ANSWER: advise Tommy to see his lawyer YOUR MISSED ANSWER: prepare the lease and present the lease RATIONALE A real estate agent may fill in the blanks of a real estate purchase agreement approved by a local bar association. Leases are in the same category as deeds, land contracts, and other legal instruments--the agent cannot prepare these documents. ID: 6636 Transfer of Title 6 Total Questions 4 Correct 2 Missed ★ 0 Marked for Review 👎 Question (3 of 6) The Real Estate Settlement Procedures Act was enacted to CORRECT ANSWER: protect consumers from abusive lending practices YOUR MISSED ANSWER: provide detailed information concerning cost of interest and interest paid over the life of a loan RATIONALE RESPA ensures that consumers are provided with important, accurate, and timely information about the actual costs of selling or closing a transaction, not about the cost of obtaining a loan and interest. The costs of obtaining loans and interest are provided under Regulation Z of the Truth-in-Lending Act. ID: 10786 👎 Question (4 of 6) What type of title insurance coverage protects the holder from damage due to a secret lien? CORRECT ANSWER: extended coverage YOUR MISSED ANSWER: standard coverage RATIONALE Only extended coverage title insurance protects the holder from unrecorded defects in the title. ID: 10775 Practice of Real Estate 10 Total Questions 6 Correct 4 Missed ★ 0 Marked for Review 👎 Question (1 of 10) An out-of-state prospect asks an agent to locate a diverse neighborhood for him. The agent should CORRECT ANSWER: explain that research of this nature is beyond the agent's scope of authority YOUR MISSED ANSWER: research the population trends in the neighborhoods RATIONALE A real estate agent has no duty or obligation to provide demographic data that would have the effect of limiting housing choices. An agent can provide resources for the consumer to explore on their own (i.e. www.census.gov). ID: 6002 👎 Question (4 of 10) Homeowners with both a first and second mortgage decide to ask their primary lender to accept a short sale offer on their home. The primary lender allows the short sale. The listing agent should warn the seller of the CORRECT ANSWER: second mortgage holders rights YOUR MISSED ANSWER: tax consequences RATIONALE While the first mortgage holder could allow the owner to take a short sale, there is no rule saying the seller gets to walk away with all debt forgiven. A short sale typically takes months to negotiate and so the listing agent would not have to warn the client of a quick transaction. The second mortgage holder can turn the debt over to a collection agency. Tax advice should come from an accountant not a real estate agent. Legal advice should always come from an attorney. ID: 6036 👎 Question (8 of 10) Which would be considered exempt under the Civil Rights Act of 1866? CORRECT ANSWER: there are no exemptions YOUR MISSED ANSWER: a private club RATIONALE There are no exemptions under the Civil Rights Act of 1866. ID: 6005 👎 Question (9 of 10) A agent goes on a listing appointment where the owner informs the agent that he has missed a couple of mortgage payments. The property values have declined and now the owner owes more for the property than it's worth. In order for the owner to sell without needing to bring money to the closing table, the agent should suggest that the seller  CORRECT ANSWER: negotiate a short sale with his bank YOUR MISSED ANSWER: offer the bank a deed in lieu of foreclosure RATIONALE For an agent to suggest a deed in lieu of foreclosure would be giving legal advice; this is illegal without a license to practice law. A short sale is when the lender allows the owner to sell the property for less than what's owed on it. A broker is more likely to suggest exclusive agency over the owner selling by themselves. If the agent is not experienced in negotiating short sales he should refer the seller to an agent who is rather than just walk away. ID: 6028 Real Estate Calculations 8 Total Questions 4 Correct 4 Missed ★ 0 Marked for Review 👎 Question (4 of 8) Local ordinance requires a 20-foot rear and front setback. The ordinance also requires a 10-foot side set back. If the lot measures 100' x 200' and a developer wants to build a three-story office building, which is the maximum allowable square footage of the office building? CORRECT ANSWER: 38,400 square feet YOUR MISSED ANSWER: 12,800 square feet RATIONALE From the 100' frontage, subtract the 10' per side setback (100' - 20' = 80'). From the 200' depth, subtract the 20' rear and front setback (200' - 40' = 160'). 80 feet of frontage x 160 feed of depth = 12,800 square feet allowed by local ordinance. Remember, the developer wants to build a three-story building on the lot, so multiply that figure by three floors: 12,800 square feet x 3 stories = 38,400 square feet allowed by local ordinance. ID: 9009 👎 Question (6 of 8) Joan purchased a townhouse for $166,500 and wants to make a 13% profit on the original investment after paying a 6.0% commission. Rounding your answer to the nearest dollar, what must the property sell for to make this profit? CORRECT ANSWER: $200,154 YOUR MISSED ANSWER: $220,350 RATIONALE This is a two-part calculation. First, determine what the 13% profit would be on $166,500 by multiplying it by 113% (the original investment plus 13%) or $166,500 x 1.13 = $188,145. Next, divide the result of $188,145 by 94% (100% minus 6% commission) or $188,145 / 0.94 = $200,154.25. Rounded, Joan must sell the townhouse for at least $200,154.  ID: 9008 👎 Question (7 of 8) The property sale will close on April 15, 2010. Taxes are $4,300 per year and are paid through December 2009. Calculate the seller's share of taxes using a calendar year (365 days). CORRECT ANSWER: $1,236.98 YOUR MISSED ANSWER: $1,362.89 RATIONALE There isn't really a formula for calculating prorations. First, calculate a cost per day, then determine the number of days in which taxes haven't been paid, and then multiply the number of days by the daily tax rate. Substitute numbers for the known factors in the formula. Step 1: Determine the Daily Tax Rate: $4,300 / 365 = $11.7808; Step 2: Determine the Number of Days: January 31 + February 28 + March 31 + April 15 = 105; Step 3: Determine Amount Owed: 105 days x $11.7808 per day = $1,236.984. The seller owes $1,236.98 in taxes. ID: 9014 👎 Question (8 of 8) Bill was thinking of purchasing an apartment building. He wanted an 11% return on his investment and asked to see the books for this building. There are four apartments on each floor of the five-story building. The rent for an apartment on the first floor is $400 a month, and each floor's rent increases $50 per month, per apartment. Bill noticed a loss of rent through vacancy and collection losses of 9%, and when he figured the operating expenses, they averaged $720 a month. With all of this information, what is the most that Bill should pay for this building (round your answer to the nearest thousandth). CORRECT ANSWER: $914,000 YOUR MISSED ANSWER: $897,000 RATIONALE The size of the numbers means nothing! Just remember the formula from a capitalization problem. Figure the gross income (the ideal income): $1,600 (4 x $400) + $1,800 (4 x $450) + $2,000 (4 x $500) + $2,200 (4 x $550) + $2,400 (4 x $600) = $10,000 per month. Multiply $10,000 by 12 to get an annual income of $120,000.@@ The second step reminds us that the income we are showing is ideal, not real. We have to take away rent losses to find out just how much effective gross income is really generated by this building. Subtract the 9% vacancy and collection loss rate from the projected income: $120,000 x 91% (100% - the 9% vacancy and collection loss rate) = $109,200 real income (effective income). Once the investor pays his operating expenses, he'll know how many net dollars his building brings in. $109,200 - $8,640 ($720 x 12 months) = $100,560 net dollars. @@Now the last step: Divide the net income ($100,560) by the rate of return that Bill wants this money to represent, 11% ($100,560 divided by 11% = $914,181.81). Rounded to the nearest thousandth, if Bill pays more than $914,000, he will not make 11% on his investment. ID: 8998 State Governance of the Real Estate Profession 4 Total Questions 2 Correct 2 Missed ★ 0 Marked for Review 👎 Question (1 of 4) Who promotes the Canons of Ethics? CORRECT ANSWER: the Commission YOUR MISSED ANSWER: the Division RATIONALE The Commission, which is all about our education, teaches ethical guidelines to help navigate through common ethical dilemmas. ID: 3692 👎 Question (4 of 4) The power to set continuing education standards is vested with CORRECT ANSWER: the Ohio Real Estate Commission YOUR MISSED ANSWER: the Superintendent of the Ohio Division of Real Estate RATIONALE The Ohio Real Estate Commission is vested with the power to set licensing exam standards and continuing education standards. The Superintendent reports to the Commission, and is charged with administering license laws. ID: 3691 Licensing Requirements 6 Total Questions 4 Correct 2 Missed ★ 0 Marked for Review 👎 Question (3 of 6) What is the minimum passing score needed for each portion of the state license exam? CORRECT ANSWER: 70% YOUR MISSED ANSWER: 75% RATIONALE Starting in January, 2011, a score of 70% or better is a passing score for the state license exam. ID: 18655  👎 Question (6 of 6) If an applicant for a real estate broker's license fails to pass the state examination, how many times may he retake the exam before having to retake the required pre-licensure education? CORRECT ANSWER: no limit YOUR MISSED ANSWER: three RATIONALE There is no limit on the number of times an applicant for a broker's license can retake the examination. ID: 18627 License Law and Rules of the Ohio Real Estate Commission 16 Total Questions 14 Correct 2 Missed ★ 0 Marked for Review 👎 Question (11 of 16) The buyer is making an offer contingent on obtaining financing from the seller and asks the agent to prepare the document. The agent should CORRECT ANSWER: Seek legal counsel YOUR MISSED ANSWER: ask broker for advice RATIONALE An agent can only fill in the blanks of a purchase agreement approved by a local Bar Association. A court could determine that the agent is practicing law to create an addendum to a contract. ID: 527 👎 Question (14 of 16) If a licensee reduces his brokerage commission to facilitate agreement between a seller and buyer, what must happen? CORRECT ANSWER: the licensee must disclose the commission reduction in the purchase agreement YOUR MISSED ANSWER: the licensee must get the seller to sign a "price reduction amendment" to the listing agreement RATIONALE One of the issues for disciplinary action by the real estate commission is "having offered anything of value" as an inducement to a person to enter into a contract for the purchase and sale of real estate. A reduction in commission constitutes an offer of value to induce the seller to sell, and must be disclosed in the purchase agreement. ID: 455 Brokerage Relationships (Agency Law) 14 Total Questions 10 Correct 4 Missed ★ 0 Marked for Review 👎 Question (2 of 14) A real estate licensee, under an exclusive right to sell listing agreement, is CORRECT ANSWER: required to Act solely on behalf of the seller's interest YOUR MISSED ANSWER: required to work exclusively with the listed property and no other property RATIONALE The Agency Disclosure Statement, in explaining seller agency, states that the agent and the brokerage are required to act solely on behalf of the seller's interest to obtain the best price and terms for the seller. ID: 1039 👎 Question (6 of 14) A salesperson takes a call at the office. The caller is a buyer who says he has a trust fund and wants to buy a house. The house the caller is interested in is a house personally owned by the real estate agent. Which situation is not possible? CORRECT ANSWER: the salesperson can represent both himself and the buyer YOUR MISSED ANSWER: the salesperson must disclose the agency relationship RATIONALE As of September 2014, no licensee can act as a dual agent when the licensee is a principal in a transaction. ID: 1078 👎 Question (9 of 14) What should a salesperson do if a buyer-client, who happens to be an Hispanic American, instructs the agent to show him homes in areas where "other Hispanics" live? CORRECT ANSWER: ask the client to specify areas of interest YOUR MISSED ANSWER: call her broker for instructions RATIONALE Obeying a client's lawful instructions is a duty of agency, but identifying areas by national origin of the occupants is steering. The agent should ask for more specific geographic directions and concentrate on features and affordability of the property. ID: 1028  👎 Question (13 of 14) A salesperson went on a listing appointment and negotiated an Exclusive Agency agreement with the seller. What documents did the seller sign? CORRECT ANSWER: Listing agreement, Waiver Of Duties Statement, Consumer Guide, Lead Paint Disclosure, Residential Disclosure YOUR MISSED ANSWER: Listing agreement, agency Disclosure, Consumer Guide, Lead Paint Disclosure, Residential Property Disclosure RATIONALE In an Exclusive Agency agreement, the seller is doing most of the tasks a listing agent would in an Exclusive Right to Sell listing agreement. In the event of an Exclusive Agency agreement, the state needs the seller to execute a Waiver of Duties statement so there is evidence that the seller knew the broker would not be marketing the property. ID: 1067 Leasing and Property Management 4 Total Questions 4 Correct 0 Missed ★ 0 Marked for Review  REAL ESTATE SALES - NATIONAL + OHIO Dashboard Cameron's Stuff You completed this session Here's how you did on Dec 6, 2024, 3:24:29 AM: 125 91 Total Correct Questions Category Progress Missed 34 0 Marked for 73% Review Property Ownership 7 Total Questions 4 Correct 3 Missed ★ 0 Marked for Review 👎 Question (2 of 7) Land movement due to an earthquake is called CORRECT ANSWER: avulsion YOUR MISSED ANSWER: accession RATIONALE Avulsion is a sudden, violent event (such as an earthquake) that tears and moves land. Accretion is the addition of land though the deposit of silt. Accession just means adding something to real property. Alienation is parting with an interest in real property. ID: 10250 👎 Question (3 of 7) What statement regarding condominium ownership is correct?  CORRECT ANSWER: A unit owner may devise the property YOUR MISSED ANSWER: An owner must take title as joint tenants with other owners RATIONALE The owner can give the property away in their will. There is no restriction on how they take title to the unit, but they will be a tenant in common for the common areas. Proprietary leases are for cooperatives, not condominiums. Each unit in a condominium is taxed separately. ID: 10216 👎 Question (6 of 7) What is NOT a limited common area? CORRECT ANSWER: a unit's foyer YOUR MISSED ANSWER: an assigned parking space RATIONALE The foyer in a unit is a part of (a room in) the unit and, therefore, is a part of ownership. Assigned parking, the patio, and the open garage are owned by all but limited to the use a specific owner(s). ID: 10237 Land Use Controls and Regulations 4 Total Questions 4 Correct 0 Missed ★ 0 Marked for Review Valuation and Market Analysis 6 Total Questions 4 Correct 2 Missed ★ 0 Marked for Review 👎 Question (5 of 6) For the income approach to appraisal, debt service refers to CORRECT ANSWER: the mortgage payments YOUR MISSED ANSWER: gross income RATIONALE Anything related to the financing of the investment is debt service; it should not be counted as an expense. ID: 13563 👎 Question (6 of 6) In the sale of a 100' x 150' property at $1.50 per square foot, how much does the owner realize from the transaction if the broker's commission is 6%?  CORRECT ANSWER: $21,150 YOUR MISSED ANSWER: $21,500 RATIONALE To determine the square footage of property, multiply the base by the height. In this example, 100' x 150' = 15,000 square feet. The owner is selling the property for $1.50 per square foot, so multiply 15,000 by $1.50 to come up with a sale price of $22,500. The broker takes a 6% commission, or $1,350; $22,500.00 (sale price) minus the broker's commission of $1,350 leaves the seller a net profit of $21,150. ID: 13578 Financing 8 Total Questions 7 Correct 1 Missed ★ 0 Marked for Review 👎 Question (4 of 8) John is a successful bidder at a sheriff's foreclosure sale. At the sale, he receives a certificate of sale, but does not know what it means. John's lawyer explains that CORRECT ANSWER: he is entitled to a deed upon confirmation of sale by the court, if the land is not redeemed by the original owner during the redemption period YOUR MISSED ANSWER: John is now the owner of the property RATIONALE A certificate of sale is issued to a buyer at a judicial sale (foreclosure action), entitling the buyer to a confirmation of sale by the court if the land is not redeemed during the redemption period. The attorney's opinion of ownership is termed a certificate of title. A certificate of no defense is issued by a bank to state how much principal is still owed on a mortgage; it is not issued by an attorney, but is an "estoppel certificate" from the lender. ID: 6909 General Principles of Agency 10 Total Questions 8 Correct 2 Missed ★ 0 Marked for Review 👎 Question (2 of 10) Upon arrival, the listing agent dealing with an elderly person realizes they would be happy receiving an offer for much less than market value. The agent decides to make a cash offer for the list price the seller chose. The agent then sells the property for market value. What duty has the agent breached? CORRECT ANSWER: disclosure YOUR MISSED ANSWER: no breach has occurred RATIONALE  An agent has a duty to disclose the property's true value. The agent's behavior is regarded as self-dealing or making a secret profit. ID: 1995 👎 Question (10 of 10) Which would a broker call the buyer and seller in a transaction where neither is represented by the broker? CORRECT ANSWER: customers YOUR MISSED ANSWER: dual agents RATIONALE Some states allow for the broker to represent a transaction, not a buyer or seller. In that type of relationship, both buyer and seller are customers of the broker. ID: 2030