Real Estate Sales - National + Ohio Practice Questions (Dec 9, 2024) 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