PERRY REAL ESTATE AND INVESTMENT FINAL EXAM

If I am makes an offer on a house and the seller excepts in writing. What is the current status of this relationship? - ANS- Because the seller has promised to sell and the buyer has promised to buy, it is clearly a bilateral contract. It is express because they announced their intentions in writing. This contract is executory because the sale has not closed yet Additional conditions that must be satisfied before a sales contract is fully enforceable are called - ANS- contingencies If I'm in allows a woman to back out of the contract, returned the earnest money to her, and both are back to the positions they held before the contract, the contract has been - ANS- Rescission allows both parties to return to their original possessions before the contract, so any monies exchange must be returned A buyer makes an offer to buy a sellers house. Pursuant it to this offer, the buyer is obligated to perform only if the buyer is first able to sell her condo. This is an example of - ANS- A property sale contingency protects a buyer who has to sell a property in order to buy the sellers property On March 7 a buyer and a seller execute a contract for the purchase of the sellers property. Closing is set for June 10. On April 15 the property is struck by lightning and destroyed by the resulting fire. If the uniform vendor and purchase or risk act has been adopted by the state in which the property is located, which party bears liability for the loss? - ANS- In states that have adopted the uniform vendor and purchaser act, the seller remains responsible for the property until the day of closing The term statue of limitation is best described as the limitation on the - ANS- Every state limits the right during which parties to a contract may bring a legal action to enforce their rights. Rights not enforced within the Applicable time period Are lost In case the buyer decides not to buy for no legal reason, the contract may provide at the earnest money is there as - ANS- Liquidated damages limit the compensation available to the injured party should a breach of contract occur What is minimum consideration in a valid contract - ANS- Anything the parties agree is good and valuable What is an example of a unilateral contract - ANS- In a unilateral contract only one party is obligated to perform. The optionor-owner of the property must sell at the agreed-upon price only if the optionee he decides to buy A woman is buying a man's house and wants to take over the mortgage. The lender releases the man from the obligation substituting the woman as the party liable for the debt. This new agreement is called - ANS- Novation A real estate broker in ounces to the sales people in her office that she will pay $1000 bonus to the top selling sales person each quarter. This contract is an - ANS- The offer of a bonus to the top selling sales person each quarter is an express contract because the broker clearly stated her intentions and words to the sales people. It is unilateral contract because she's obligated to keep her promise but the sales people are not obligated to perform A testamentary trust is created by - ANS- A will In any Township what is the number of the section designated as the school section - ANS- 16 Lonnie conveys the ownership of his house to his mother and stipulates that upon her death he will recapture ownership. The interest Lonnie has in the property is a - ANS- reversionary interest If a creator of a life estate chooses not to name my remainderman the creator has - ANS- The property will revert back to the creator A descendent left a will giving his neighbor the right to use a well on the descendents land as long as the neighbor lived. The neighbors interest in the property is properly called - ANS- An easement in gross is an individual interest in someone else's land A lawsuit to terminate an easement is called an action to - ANS- Action to quiet title If an adjacent public land use diminishes the value of your property you may claim compensation under which theory - ANS- Inverse condemnation The process by which government can acquire ownership of private land for public use is - ANS- Condemnation A partnership which is for a long-term arrangement is called - ANS- Syndicate This is a special type of zoning used to control density by imposing restriction such as setbacks - ANS- Bulk zoning A manufactured home can be turned into real estate by what process - ANS- AFFIXATION A developer grants a local power company the right to install necessary transmission lines. This right is an example of a - ANS- Easement in gross The beneficiary of a land trust is also commonly - ANS- The trustor Homeowner Gurnee acquired ownership of land that was deposited by a river running through his property by - ANS- Accretion Many states determine the order of water rights according to which users of the water hold recorded beneficial use permits. This allocation of water rights is controlled by - ANS- If an owner has a beneficial use for scarce water, this falls under the doctrine of prior appropriation Jamal Morton an herb are joint tenants in a parcel of land. Herb conveys his interest to his longtime friend Walid. After the conveyance Jamall and Morton - ANS- Remain joint tenants owning a two thirds interest One of the drawbacks of a corporation is - ANS- Double taxation A syndicate may be set up as - ANS- A trust a partnership or a corporation Rights granted to owners along a river or stream are known as - ANS- Riparian rights A trust is a legal arrangement in which title to property is held for the benefit of a third-party by a - ANS- trustee PITT stands for - ANS- Possession Interest Time Title The term "metes" refers to - ANS- Distance Mary received a life estate in 310 Broadway. Mary died in 2011. This means that the life estate - ANS- A life estate is a freehold estate limited in duration to the life of the owner or some other designated person He governments payment to a landowner for seizure of his or her property is called - ANS- Just compensation Ownership of real estate by one individual is called - ANS- Severalty The amount a property increases in value after successful assemblage is - ANS- Plottage The cost approach estimates accrued depreciation using the - ANS- Straight line method A business in which real estate investors pull the resources to own a particular property is called - ANS- Syndicate Adjusted cost basis includes all the following except - ANS- Taxes For income producing property is the amount remaining after all expenses have been paid is known as - ANS- Cash flow All of the following are associated with a 1031 tax exchange except 1. Like kind 2. Boot 3. Qualified intermediary 4. The elimination capital gains taxes - ANS- 4 The equal credit opportunity act primarily deals with what - ANS- Discrimination in lending Once HUD approves the ruling the parties have blank days to appeal the case to the appropriate federal court of appeals - ANS- 30 Our local government subject to the restraints of the fair housing act - ANS- Yes, land use regulations, including zoning provisions in special use permit cannot effectively prohibit groups of disabled individuals from living in the residence of their choice The federal fair housing act prohibits discrimination on the basis of all the following except - ANS- Sexual orientation The equal credit opportunity act of 1974 prohibits discrimination on the basis of all the following except - ANS- Familial status If hud files charges, the aggrieved party has blank to exercise an election to take this matter to federal court for a jury trial - ANS- 20 days Among other classifications the fair housing act of 1968 made it illegal to discriminate on the basis of - ANS- Race, color, religion, or national origin In applying the balancing test the courts appear to favor the blank except under extreme circumstances - ANS- Handicapped person A private action alleging discrimination must be brought within - ANS- two years of the alleged discrimination. If a mortgage lender refuses to make a mortgage loan to a woman because she is a single mother the lender has violated what law - ANS- ECOA A convent refuses to allow members of other face to rent their room. This is - ANS- Legal According to the Supreme Court there are no exceptions regarding which protected class - ANS- Racial discrimination A landlord is required To permit a tenant at the blank expense to make a reasonable modification of the living space in order to have full use and enjoyment of the premises - ANS- Tenants An occupancy requirement is exempt from familial status protection under the fair housing act if the housing is intended to be occupied by - ANS- persons 62 years of age or older. Or for occupancy and 80% of its units by at least one person 55 years of age or older At closing the virus is credit for accrued items. What expenses could these have been - ANS- Accrued items are bills to be paid by the buyer Disturbing blank during remodeling a renovation creates dangerous airborne particles that pose a health risk - ANS- Asbestos What was banned in 1978 ever is associated health risk for discovery but it remains an ongoing going concern - ANS- Asbestos At closing the listing broker commission is typically shown as a - ANS- Debit to the seller If a real estate agent suspects mold in a property what should he or she recommend - ANS- An inspection can uncover the presence of mold I lead-based paint disclosure form must be attached to all sales contract involving which of the following properties built before 1978 - ANS- Residential Residential - ANS- Who owns the building that is erected on land that has a ground lease - ANS- lessee A woman rents an apartment from a man under a one-year written lease. The expiration date of the lease is May 1. How much notice must a man give a woman to recover possession when the lease expires - ANS- none A tenant signed a one-year lease with a landlord on April 10. On the following March 1, the landlord asked the tenant whether the lease will be renewed. The tenant did not respond but was still in the apartment on April 11. What can the landlord do - ANS- As an estate for years no notice was required to terminate. If the tenant does not pay rent, it will become a tenancy at sufferance. If the tenant pays rent and the landlord accepts it, it will be a holdover or periodic tenancy, which could be changed into an estate for years if they enter into a year-long lease If a landlord agrees to put part of the tenants rent towards the purchase price the landlord and tenants have agreed to - ANS- A sale leaseback If a licensee receives a complaint from the commission he or she must - ANS- he has 20 days to answer a complaint Eloise is representing a buyer for a property. The buyer looks at a property that is actually owned by Eloise and her husband Lenny and listed by Eloise. Eloise does not mention this fact to the buyer. Eloise is in violation of license law for - ANS- Undisclosed dual agency Danyal has a felony conviction that does not show up on his background check. He does not inform the commission of this conviction. The commission can discipline Danyal's license for - ANS- If Danyal does not disclose his felony he has obtained a license through false means Janet attended nine hours of continuing education in the last calendar year. All of these hours were in law. Which of the following is true - ANS- A licensee must take a minimum of three hours of law but may take more If a licensee has been found guilty of fraud in order to pay restitution the consumer can receive up to blank dollars from the recovery fund - ANS- $20K Donna's license has been canceled. She can have her license renewed as long as she does so within - ANS- One year An earnest money deposit must be placed into escrow within blank days of receipt - ANS- 3 business days All of the following are exempt from licensure except - ANS- A personal assistant is not exempt from licensure but must follow the laws pertaining to personal assistance A personal assistant may give out all of the information about a listed property except - ANS- A personal assistant may not disclose the purchase price on a contract Real estate brokerage includes all of the following activities except - ANS- Acting as a trustee If a licensee is found in violation of license on discipline is ordered the licensee - ANS- Can appeal to circuit court In order to legally sell real estate at auction, to licensees must be present an auctioneer and a - ANS- Broker If a licensee is found to be in violation of license law decommission can order all of the following except - ANS- Fine of $2K Play principal broker is required by law to - ANS- Exercise adequate supervision over their agents By law if an agent is asked to complete the sellers disclosure form the agent must have - ANS- There must be a hold harmless clause If a principal broker fails to return an agents license when asked the principal broker - ANS- It is improper to fail to return an agents license when asked If a Kentucky license he wants to promote an out of state property in the state of Kentucky he or she must - ANS- Seek permission from the commission Tenant security deposits must be placed where - ANS- Separate account A person who complies information on properties that are available for rent in exchange for a fee is exempt from licensure. True or false? - ANS- This person is exempt no matter who pays the fee In designated agency the principal broker or managing broker is a - ANS- Dual agent If a licensee offers a rebate or an inducement to a client this offer must be - ANS- Disclosed in writing Susan makes an offer on an FSBO property. Susan's agent obtained the property disclosure from the seller. The agent has blank hours to present the form to Susan - ANS- 120 The duty of accounting means that a licensee must - ANS- Remit money to the rightful owner A builder has asked a licensee to list a newly built home. The sellers disclosure form is required unless - ANS- The sellers disclosure is not required if the builder provides a warranty Listing agent should present the sellers disclosure form to the seller - ANS- When the listing is signed The information on the sellers disclosure form applies to - ANS- That sellers ownership of the property Where's his listing contract all contain a clause stating that the listing will automatically extend at the expiration of the original term. Wes's contracts are - ANS- Illegal because contracts must have a definite end date Blank is possession without harassment or interference - ANS- Enjoyment The terms land, real estate and real property are synonymous - ANS- False Blank is the ability to legally refuse others interest - ANS- Exclusion After the construction of a building in the air right above a rail road right of way the trains can - ANS- Air rights do not interfere with the use of the land An individual who buys a cooperative receives which of the following - ANS- Proprietary lease Mark has directed a fence to keep trespassers from hunting on his property. Since Mark owns the land he can keep others off under the right of - ANS- Exclusion Demographics include - ANS- Demographics is the study and description of a population. Family size, ratio of adults to children, ages, family income, etc. are all demographic factors that contribute to the amount and type of housing needed Socrates is the founder of what - ANS- Science of ethics A licensee owes the following fiduciary duties to a customer - ANS- Honesty and fair dealing Broker Smith is helping a buyer and seller fill out a sales contract, but it's not representing either party. Broker Smith is a - ANS- Transaction broker Kant is the founder of what - ANS- Modern ethics True or false. Another term for breach of the duty of loyalty is self dealing - ANS- True If a real estate agent is showing a client a house above their price range to get a better commission this breaches the duty of - ANS- Loyalty When making an offer on a 1970 property the buyer should have - ANS- Seller disclosure, agency disclosure, lead paint disclosure and a copy of the offer Blank can be accomplished expressly in writing or orally accepting the ax or by the principal taking the benefits of the past acts - ANS- Ratification If a title has serious defects it is not - ANS- Marketable The blank clause lays out the rules and regulations in the granting instrument - ANS- Habendum Specific liens include - ANS- - vendors' liens, - mechanics' liens, - mortgage liens, - real estate tax liens, - liens for special assessments utilities Lien holders do not own an interest in the property - ANS- False When an owner files a document in the public records this action provides what type of notice to the subsequent purchasers - ANS- Constructive notice A special warranty deed includes which of the following warranties - ANS- Warranty of a title The blank clause follows the granting clause and start out with to have and to hold - ANS- Habendum A Notary is required to acknowledge what? - ANS- Deed Which of these causes outlines the ownership to be enjoyed by the grantee - ANS- Habendum clause A voluntary lien is created by who - ANS- The owner such as taking out a mortgage loan If a review of the circumstances would have revealed the facts about a title what type of notice exist - ANS- Constructive notice Which of the following is not necessary to create a valid deed - ANS- Grantees signature is not necessary In a land contract the vendor - ANS- Retains title until the full purchase price is paid overtime Which of the following Advertisements would violate the truth in lending act - ANS- None of the above Blank limits the amount the lender can require - ANS- RESPA And alienation clause in a loan document will prevent a future buyer from - ANS- Assuming a loan Brandon assumes the loan of seller Frank. Brandon agrees that Frank is free from any liability to pay this debt in the future. This agreement is a - ANS- Novation The federal reserve system consist of blank federal reserve district banks - ANS- 12 The lender my only take a certain amount each month for escrow reserves under which law - ANS- RESPA A veteran wants to refinance a home by changing to a VA guaranteed loan. The lender insist on 3.5 discount points which of the following options are available to the veteran - ANS- Lenders are permitted to charge borrowers discount points on VA loans. He should proceed with refinancing the loan and pay the discount points Pledging property for a loan without giving up possession is referred to as - ANS- Hypothecation Hey borrowers promise to repay the debt is a - ANS- Promissory note The basic role of GINNIE Mae is to - ANS- Ginnie Maes basic role is to resupply capital to primary lenders by guaranteeing repayment of pools of mortgage loans Hey state law provides that lenders cannot charge more than 24% interest on any loan. This kind of law is called - ANS- Usury law The lender on a mortgage is also known as - ANS- Mortgagee At the end of a partially amortized loan the borrower must do what - ANS- Make ballon payment A borrower has just made the final payment on a mortgage loan. Regardless of the fact the record still show a lien on the mortgage property until which of the following occur - ANS- A mortgage satisfaction document must be recorded to remove the lien/show the debt has been paid in full In a lien theory state, if the mortgagor defaults on the loan the mortgagee can only obtain legal title through this proceeding - ANS- Foreclosure The due on sale clause is the - ANS- Alienation clause Belinda agrees to buy Eli's property and take over the mortgage. Belinda's agreement is a - ANS- Assumption Under this type of loan all the personal property in appliances are covered a security along with the real estate - ANS- Package loan When a seller is free of any future liability for a loan assumed by buyer the seller has signed a - ANS- Novation agreement The rescission provisions of the truth in lending act apply to which of the following transactions - ANS- Consumer credit transactions include the rescission provisions of the truth in lending act Consumer credit transactions include the rescission provisions of the truth in lending act - ANS-