PSI
Which of the following is a lien on real estate?
Recorded mortgage
A sales contract was signed by a minor. Which term describes this contract?
Voidable
A real estate professional receives a check for. earnest money from a buyer and deposits the money in the real estate professional's personal interest-bearing checking account over the weekend. This action exposes the real estate professional to a charge of
commingling
A borrower takes out a mortgage loan that requires monthly payments of $875.70 for 20 years and a final payment of $24,095. This is what type of loan?
Balloon
A real estate professional signs a contract with a buyer. Under the contract, the real estate professional agrees to help the buyer find a suitable property and to represent the buyer in negotiations with the seller. The buyer may not sign an agreement with any other real estate professional. What kind of agreement has this real estate professional signed?
Exclusive buyer representation agreement
A grantor conveys property by delivering The deed. The deed contains five covenants. this is MOST likely
a general warranty deed
A real estate professional does not show non-Asian clients any properties in several traditionally Asian neighborhoods. The real estate professional bases this practice on the need to preserve the valuable cultural integrity of Asian immigrant communities. Which statement is TRUE regarding the real estate professional's policy?
The real estate professional's policy is steering and violates federal and state fair housing laws regardless of motivation.
A woman grants a life estate to her son-in-law and stipulates that, upon his death, the title to the property will pass to her grandson. The grandson's interest is known as
a remainder
A primary benefit of property held in joint tenancy is
the right of survivorship.
A licensed real estate sales associate has a written contract with the employing broker that specifies that the sales associate will not be treated as an employee for federal tax purposes. The sales associate's entire income is from sales commissions rather than an hourly wage. Based on these facts, the sales associate will be treated by the IRS as
a qualified real estate agent
The states in which the owner gives up legal title of mortgaged real estate are known as
title theory states
The form of tenancy that will expire on a specific date is
a tenancy for years
A large home that lacks sufficient indoor plumbing suffers from which condition?
Functional obsolescence
A developer built a structure that has six stories.
Several years later, an ordinance was passed in that area banning any building six stories or higher.
This building is
a nonconforming use
A real estate broker specializes in helping both buyers and sellers with the necessary paperwork involved in transferring property. Although not an agent of either party, the broker may not disclose either party's confidential information to the other.
The broker is BEST described as
a transaction broker
Three friends owned a house as joint tenants. In the year 2009, one died. Last month, another died. Based on these facts, which of the following correctly describes the surviving friend's ownership interest in the house?
Severalty
Private controls of land use include
deed restrictions
A buyer is purchasing a condominium unit in a subdivision and obtains financing from a local bank. In this situation, which term BEST describes this buyer?
Mortgagor
Which of the following BEST describes a capitalization rate?
Rate of return an income property will
produce
A prospective buyer signs an offer to purchase a residential property. The offer will automatically terminate if
the seller makes a counteroffer
A buyer purchased a home under a land contract.
Until the contract is paid in full, or the buyer meets statutory requirements, the buyer
has equitable title in the property
A buyer and a seller sign a contract for the sale of real property. A few days later, they decide to change many of the terms of the contract, while retaining the basic intent to buy and sell. The process by which the new contract replaces the old one is called
novation
Whose signature is necessary for a signed offer to purchase real estate to become a contract?
Buyer's and seller's
A borrower has just made the final payment on a mortgage loan. Regardless of this fact, the records will still show a lien on the mortgaged property until which event occurs?
A mortgage satisfaction document is recorded
A real estate professional enters into a listing agreement with a seller in which the seller will receive $120,000 from the sale of a vacant lot and the real estate professional will receive any sale proceeds exceeding that amount. This is what type of listing?
Net
under a cooperative form of ownership, an owner
is a shareholder in the corporation
A known defect or a cloud on the title to property may be cured by
obtaining quitclaim deeds from all appropriate parties
A seller signed an exclusive right-to-sell agreement with a real estate professional. If the seller finds a suitable buyer with no assistance, the real estate professional is entitled to
full compensation from the buyer
Under the terms of a net lease, a commercial landlord would usually be responsible for paying
mortgage debt service
The Civil Rights Act of 1866 prohibits discrimination based on
race
What is the difference between a general lien and a specific lien?
A specific lien is a lien against a certain parcel of real estate or other property, while a general lien covers all of a debtor's property
In an option to purchase real estate, which statement is TRUE of the optionee?
The optionee has no obligation to purchase the property during the option period
A village board has decided that a parking lot near the central business district would enhance the beauty, safety, and vitality of the community by keeping cars from parking on the busiest streets.
Unfortunately, a house is located on part of the land best suited for the new parking lot. Based on these facts, which statement is TRUE?
The village may tear down the house if it first pays the homeowner fair value after meeting legal requirements
A home is the smallest in a neighborhood of large, expensive houses. The effect of the other houses on the value of the small home is known as
progression
A lien that arises as a result of a judgment, estate or inheritance taxes, a decedent's debts, or federal taxes is what type of lien?
General
An offer to purchase real estate is terminated by
revocation by the offeror communicated to the offeree before acceptance
Two homeowners are joint tenants. One of the owners sells that interest to another person. What is the remaining owner's relationship to the new tenant regarding the property?
Tenants in common
Two friends enter into a six-month oral lease. If one friend defaults, the other may
bring a court action because six-month leases need not be in writing to be enforceable
On Monday, a prospective buyer offers to purchase a vacant lot for $25,000. On Tuesday, the owner counteroffers to sell the lot for $29,000. On Friday, the owner withdraws the counteroffer and accepts the buyer's original offer of $25,000.
Under these circumstances, which statement is TRUE?
No valid agreement exists because the seller's counteroffer was a rejection of the buyer's offer, and once rejected, it cannot be accepted later
A homeowner's neighbors use the homeowner's driveway to reach their garage, which is on their property. The homeowner's attorney explains that the neighbors have the right to use the driveway. the home owner's property is
the servient tenement
A deed conveys ownership to the grantee "so long as the existing building is not torn down." What type of estate does this deed create?
Fee simple determinable estate
Local zoning ordinances have an indirect effect on
market value of a property
A real estate professional took a listing and later
monastery
discovered that the client had been declared incompetent by a court. What is the current status of the listing?
The listing is of no value to the real estate
settlement?
professional because the contract is void
After a borrower's default on home mortgage loan payments, the lender obtained a court order to foreclose on the property. At the foreclosure sale, the property sold for $164,000; the unpaid balance on the loan at the time of foreclosure was $178,000. If state law permits, what must the lender do to recover the $14,000 that the borrower still owes?
Seek a deficiency judgment
Which activity is forbiden by the federal Fair Housing Act?
Limitation by religion and nationality in
the sale of a single-family home where the property is listed by a licenced real estate profesional
A real estate professional arrives to present a purchase offer to a seller who is seriously ill and finds the seller's two adult children also present.
The children angrily urge the seller to accept the offer, even though it is much less than the asking price for the property. If the seller accepts the offer, the seller may not be bound by it because
the seller was under undue influence from the seller's children, so the contract is voidable
A property is sold. The deed of conveyance contained only the following guarantee: "This property was not encumbered during the time the seller owned it except as noted in this deed." What type of deed makes such a covenant?
Special warranty
An unmarried couple own a parcel of real estate.
Each owns an undivided interest, with one owning one-third and the other owning two-thirds. The form of ownership under which the couple own their property is
tenancy in common
A real estate professional listed a house for $247,900. A member of a racial minority group saw the house and was interested in it. When the prospective buyer asked the real estate professional the price of the house, the real estate professional said that it was listed for $253,000 and that the seller was very firm on the price. Under the federal Fair Housing Act of 1968, such a statement is
illegal because the terms of the potential sale were changed for the prospective buyer
Property was placed in a trust. When the owner died, the owner's will directed the trustee to sell the property and distribute the proceeds of the sale to the named heirs. The trustee sold the property in accordance with the will. What type of deed was delivered at settlement?
Trustee's deed
An appraiser has been hired to prepare an appraisal report of a property for loan purposes. The property is an elegant old mansion that is now used as a restaurant. Which approach to value should the appraiser probably give the greatest weight when making this appraisal?
income
A borrower applies for a mortgage, and the loan officer suggests that the borrower consider a term mortgage loan. Which statement BEST explains what the loan officer means?
The entire principal amount is due at the end of the term
A condominium community has a swimming pool, sauna, and tennis courts. These facilities are MOST likely owned by
the unit owners in the form of percentage undivided interests
At closing for a typical real estate transaction, the buyer's earnest money deposit is
a credit to the buyer only
At closing for a typical real estate transaction, property tax not yet due is
a credit to the buyer, debit to the seller
Real property can become personal property by the process known as
severance
A property owners gives a friend permission to park a camper in the yard for a few weeks. The friend is not charged rent for the use of the yard.
The property owner has given the friend
a license
A seller signs a listing agrement with a real estate professional. A second real estate professional from a different firm obtains a buyer for the property, and the first real estate professional does not receive a commission. The first real estate professional does not sue the seller, even though the seller compensated the second real estate professional. The listing agreement between the seller and the first real estate professional was probably which type?
open
Antitrust laws allow
brokers to impose a standard commission rate on all transactions handled by the sales associates employed by the office
A tenant leased an apartment from a property owner. Because the owner failed to perform routine maintenance, the apartment building's central heating plant broke down in the fall. The owner neglected to have the heating system repaired, and the tenant had no heat for the first six weeks of winter. The tenant reported this problem repeatedly to the owner. Although eight months remained on his lease, the tenant moved out of the apartment and refused to pay any rent. If the owner sues to recover the outstanding rent, what would be the tenant's BEST defense?
The landlord's actions resulted in constructive eviction
Under joint tenancy,
there is usually a right of survivorship
According to the statute of frauds, an oral three-year lease is
unenforceable
A cloud on the title to a property may be cured by
obtaining quitclaim deeds from all interested parties
Real property includes all of the following rights
EXCEPT
Chattels
Which of the following items is usually prorated between the seller and the buyer at the closing?
recording charges
For a deed to be valid, it must be signed by
the grantor
A residential disclosure is a defense shield for
real estate licensees
The listing broker has been marketing a house for sale at the price of $198,750. An African American couple saw the house and was interested in buying it. When they asked the price of the house, the broker told them it was $210,000. According to the federal Fair Housing Act of 1968, such a statement is
illegal because the terms of the potential sale were changed for the African American couple
A real estate loan that includes both personal property and real property as collateral is called
a package loan
The local power company wishes to convert the present electric pole lines that run in front of the houses to a buried system that will cross through the backyards of 50 houses. The power company will need to obtain
an easement in gross
A portion of a building that was inadvertently built on another person's land is called
encroachment
The special form of joint tenancy called tenancy by the entirety is appropriate for
newlyweds purchasing their first home
The sellers have been told that the sewer backup is caused by tree roots in the sewer line to the street.
This is an example of
a latent defect
Which of the following items is a lien on real estate?
A recorded mortgage
A residence with outdated plumbing is suffering from
functional obsolescence
After the borrowers indicate that they want to proceed with the loan, the lender may require
information about the buyers' income
A contract signed under duress is
voidable
Several years after a five-story building was completed, a city ordinance was passed prohibiting any structure taller than three stories. In this situation, the structure
is a nonconforming use
The document that shows the record of ownership from the time the property was granted to the first owner is
the chain of title
The duties of care, obedience, accounting, loyalty, and disclosure to a principal are specified as part of
a fiduciary relationship
An insurance company agreed to provide a developer with financing for a shopping center at a below-marker interest rate in exchange for an equity position in the property. This type of arrangement is called
shared appreciation loan
What is the role of the Federal Housing Administration (FHA)?
It insures real estate loans made by approved lending institutions
Who is responsible for explaining the details of Your Home Loan Toolkit?
no one
On Monday, a seller offers to sell his residence to a buyer for $152,000. On Tuesday, the buyer counteroffers to buy the property for $150,500.
On Friday, the buyer withdraws his counteroffer and accepts the seller's original price of $152,000.
Under these circumstances, there is
no valid agreement because the buyer's counteroffer was a rejection of the seller's offer, and once rejected, it cannot be accepted later.
The law that requires lenders to inform both sellers and buyers of all closing fees and charges is
the Real Estate Settlement Procedures Act
A mortgage loan that requires monthly payments of $639.05 for 20 years and a final payment of $49,386.63 is called
A balloon loan
Real estate salespeople may
act under the supervision of the employing broker
After a snowstorm, a property owner offers to pay $10 to anyone who will shovel her driveway. This is an example of
a unilateral contract
A buyer is purchasing a home under the terms of a land contract. Until the contract is completed, the buyer has
equitable title in the property
The Equal Credit Opportunity Act makes it illegal for lenders to refuse credit or otherwise discriminate because an applicant is
a single person
The important economic principles that affect the value of a property include all of following
EXCEPT
Demographics
Which of the following leasehold estates automatically renews itself?
Estate from period to period
A landlord has sold a building to the state so that a freeway can be built. The tenant's lease has expired, but the landlord is letting the tenant remain until the building is torn down. The tenant continues to pay the same rent as indicated in the original lease.
This is
a tenancy at will
A default party who pays her debt after a foreclosure sale has the right to regain the property under which of the following concepts?
Statutory right of redemption
Which of the following situations would NOT be a violation of the fair housing laws?
The insistence of a widowed woman on renting her spare bedroom only to another widowed woman
When a person dies without leaving a will but does have heirs, the state determines the disposition of the estate according to
the statute of descent and distribution
When the title to real estate passes to a third party upon the death of a life tenant, the third partys interest in the property is
a remainder interest
The approach to value used MOST often for residential properties is
the sales comparison approach
At the settlement, the lender requires the borrower to pay $345, which will be kept in an escrow account. This money is MOST likely held
for taxes and insurance
The type of hazardous substance that has the greatest effect on very young children is
lead-based paint
In a sale-and-leaseback arrangement,
the buyer becomes the lessor of the property
Two licensees are affiliated with the same realty.
One has a new listing, and the other has a buyer-client interested in purchasing it. Both licensees have full responsibility to promote and protect the best interests of their separate clients. Apparently, their state allows for
designated agency.
What replaced caveat emptor?
owner disclosures
What type of lease establishes a set rental payment and requires the lessor to pay for the taxes, insurance, and maintenance on the property?
gross lease
A parcel of ground over which an easement runs is called
the servient tenement
A borrower defaulted on home mortgage loan payments, and the lender obtained a court order to foreclose on the property. At the foreclosure sale, however, the property sold for only $144,000, while the unpaid balance of the loan at the time of the foreclosure was $164,000. The lender can make an attempt to recover the $20,000 that the borrower still owes by
seeking a deficiency judgment
The difference between a general lien and a specific lien is that
a specific lien is a lien against a certain parcel of real estate, while a general lien covers all of the debtor's property
In an option to purchase real estate, the optionee
has no obligation to purchase the property during the option period
A broker took a listing and later discovered that a client had previously been declared incompetent by the court. The listing is now
of no value to the broker because the contract is void
A broker receives a check for earnest money from a buyer and deposits it in an escrow or trust account to protect herself from the charge of
commingling
What is steering?
Leading prospective homeowners to or away from certain areas
An estate (or tenancy) for years is a tenancy
that expires on a specific date
The Civil Rights Act of 1866 prohibits in all cases discrimination based upon a person's
race
All of the following are included in the typical monthly payment EXCEPT
title insurance premiums
An individual seeking to be excused from the dictates of a zoning ordinance should request
a variance
A borrower's real estate loan documents indicate that if she sells her property, she must immediately pay her lender in full. This clause is called
an alienation clause
The hazardous substance that has created the biggest problem in schools and office buildings is
asbestos
In the deed of conveyance, the seller's only guarantee was that the property was not encumbered during the time he owned it, except as noted in the deed. The type of deed used in this transaction was
a special warranty deed
In the appraisal of a building constructed in the 1930s, the MOST difficult part of the cost approach to value is
estimating accrued depreciation
Which of the following occurrences is NOT a violation of the Real Estate Settlement Procedures
Act (RESPA)?
Recommending a particular lender to a buyer
In what time frame, if any, are lenders required to provide the Toolkit booklet to prospective borrowers?
Within three days of loan application
An example of external obsolescence is
vacant and abandoned buildings in the area
The type of loan where the monthly payment may increase or decrease in each adjustment period depending on fluctuations in a selected economic indicator is
an adjustable-rate mortgage
When the buyer signs a purchase offer and the seller accepts it, the buyer acquires in the property an immediate interest called
equitable title
The owner of a large single-family home decided to sell it and move into a small apartment in a cooperative building. Under the cooperative form of ownership, she will
become a stockholder in the corporation
The sellers have been told that a sewer backup is caused by tree roots in the sewer line to the street.
This is an example of
a latent defect
broker would NOT have to prove that he was the procuring cause under which of the following types of listing agreements?
Exclusive right-to-sell listing
A man moved into an abandoned home, made extensive repairs, and installed cabinets in the kitchen for his convenience. When the owner discovered the occupancy, he had the man ejected.
What is the status of the cabinets?
The man cannot get the cabinets back
When placed in a printed advertisement, which phrase complies with the requirements of the Truth in Lending Act (Regulation Z) with regard to interest rates?
"10% annual percentage rate"
On the settlement statement, the cost of the lender's title insurance policy that is required for a new mortgage loan is usually
a debit to the buyer
Which type of mortgage loan requires higher credit scores to get the BEST rates?
Conventional
A broker listed a parcel of raw land at an 8% com-mission. After the property was sold and settlement had occurred, the owner discovered that the broker had been listing similar properties in the area at a 6% commission rate. Based on this information,
the broker has done nothing legally wrong
What is one advantage of FHA and VA programs?
Requires less than 5% down payments
Which starement regarding underground storage tanks is TRUE?
Landowners can be held responsible for cleanup costs plus all damages
A property manager is LEAST likely to
prepare depreciation schedules for tax purposes
A veteran wants to refinance his home mortgage loan with a new VA-guaranteed loan. The lender is willing but insists on three and a half discount points. In this situation, the veteran
can proceed with the refinance loan and pay the discount points
The requirements of the Real Estate Settlement
Procedures Act (RESPA) apply to any residential real estate transactions that involve
a federally related mortgage loan
Which document is always available when searching the public record?
Recorded mortgages
Capitalization rates are
the rates of return that a property will produce
The definition of market value includes all of the following EXCEPT
the sales price is affected by creative financing or sales concessions
With regard to offer and acceptance, which statement is TRUE?
A counteroffer is a rejection of the original offer
A borrower made the final payment on a mortgage loan to the bank. Regardless, the lender will still hold a lien on the mortgaged property until which document is recorded?
A satisfaction
Discount points on a real estate loan are a potential cost to either the seller or the buyer. Such points are
prepaid interest to the lender
One important rule for a metes-and-bounds legal description is that
the boundary must return to the point of beginning
All of the following situations are exemptions to the federal Fair Housing Act of 1968 EXCEPT
the listing of a single-family residence where the listing broker does not advertise the property
Which statement regarding adverse possession is
TRUE?
Occupancy of the property by the person taking possession must be continuous over a specified period of time
What is the current status of the HUD-1, GFE, and TIL disclosures?
Still used for home equity lines of credit
If the landlord of an apartment building breaches a lease with a tenant and the tenant's unit becomes uninhabitable, which event is the MOST likely result?
Constructive eviction
The rescission provisions of the Truth in Lending Act (Regulation Z) apply to
consumer credit
To which of the following transactions must lenders follow TRID requirements?
Most residential loans
A man was given the personal right to cut through a woman's yard to reach the beach and has used this right throughout his life. Before the man dies, he sells this easement to his nephew. What rype of interest does the nephew have in the woman's property?
No interest
At what time before closing must the lender provide the Closing Disclosure?
Three business days
How can buyers protect themselves against future problems if the seller is unaware of a problem?
Determine what is important to them and hire an inspector