1. A real estate licensee has a buyer agency agreement. What is the seller in this situation?
A. a customer
B. a client
C. a fiduciary
D. an
... [Show More] agent - ✔✔ A. There's an important distinction between client and customer. Unless there is a specific agreement to the contrary, licensees represent only one side in a transaction. In this case, it's the buyer who is the client and it's the licensee's obligation to negotiate a deal that's in that person's best interests, not the one that's "fairest" to both parties.
2. An optionor and an optionee make a contract for an option on a commercial piece of property. If the optionee decides to exercise his option, when must he perform?
A. He must exercise his option within 6 months under state law.
B. He must exercise his option under the terms of the option contract.
C. He must exercise his option when the optionor demands it.
D. He can exercise his option whenever he wants. - ✔✔ B. Options are generally concerned with only two things: time and price. Whatever the parties agree to in those regards defines the terms of the option and the obligations of the parties.
3. When can a landlord evict a disabled blind or disabled tenant from the premises?
A. If the tenant gets a dog and the apartment policy does not allow pets
B. If the tenant insists on a handicapped parking place
C. If the tenant makes modifications to his unit at his expense
D. If the tenant has loud parties and makes too much noise - ✔✔ D. The law requires "reasonable accommodation"--for example, allowing a guide dog for a blind person even if there's a "no pets" policy. However, that does not mean that all rules are suspended. Noise, safety, and "use of premises policies" may still be enforced.
4. Broker Carr, with ABC Real Estate Company, listed the property with a seller. Broker Smith, with XYZ Real Estate Company, called Broker Carr, and disclosed that he was a Buyer Agent. Broker Smith wrote a contract with a buyer for the sale of the property. What, if any, is the relationship between the buyer's broker, the seller and the listing broker?
A. There is not a relationship between the parties. Broker Carr represents the Seller and
Broker Smith represents the Buyer.
B. customer
C. agency
D. dual agency - ✔✔ A. Since each broker represents separate sides in the transaction, no relationship exists.
5. A buyer bought a property without telling the seller of his intended purpose for the property. The contract contains no contingency clauses and it is a properly executed contract. After the closing, the buyer is unable to obtain the zoning he needs for his commercial project. What is the contract at this stage?
A. void
B. voidable
C. breach
D. enforceable - ✔✔ D. Since there were no contingency clauses, and no restrictive covenants of record. If the buyer cannot secure a change of zoning , the contract is perfectly valid as stands and is enforceable between the parties.
6. The seller and the buyer finally agreed to a purchase price of $203,500 with the closing to occur on June 15, 2011. The taxes for the year 2011 in the amount of $2,500 have not been paid by the seller. (Taxes are paid in arrears). How much would the tax proration amount to, and how would it appear on a full settlement statement? Base your answer on a 365 day year, and the buyer is responsible for the day of settlement.
A. $1,130.14 debit the seller and credit the buyer
B. $1,130.14 debit the buyer and credit the seller
C. $2,500 credit the seller and debit the buyer
D. Nothing. The seller does not owe since the buyer is buying - ✔✔ A. The seller would owe money, and the buyer would receive money, because the seller has not paid the taxes. $2,500 divided by 365 is $6.849315 times the actual days of 165 is $1,130.14.
7. A seller listed his home for six months on February 26. On April 29, a buyer made an offer on the property. The listing broker presented the offer to the seller on April 30. The seller accepted the offer on May 1, with the closing to occur on June 15. Assuming the closing took place on June 15, when did the listing expire?
A. 26-May-04
B. 15-Jun-04
C. 26-Aug-04
D. 15-Dec-04 - ✔✔ B. Listing contracts set forth the terms and conditions under which a broker will sell a property for his or her client. When the closing takes place, the terms of the contract have been fulfilled and it expires automatically.
8. The sellers listed their property for six months on February 26 for $104,500. They agreed to pay the listing broker a 7% commission at closing on the agreed upon sale price. A buyer made an offer on the property on March 29 for $102,000. The seller countered the offer on April 1 at $103,500, and the buyer accepted the counter offer with the closing to occur on June 15. How much commission did the seller owe the listing broker, and how would it appear on the settlement statement?
A. $3,622.50. Debit the seller.
B. $7,140. Credit the seller.
C. $7,315. Debit the seller.
D. $7,245. Debit the seller. - ✔✔ D. Commissions are paid based on the actual selling price, not the listing price. Additionally, since the broker represented the sellers in this transaction, the commission is debited from their side of the ledger.
9. The seller and the buyer agreed to a purchase price of $103,500 with the closing to occur on June 15. The seller's loan balance after the June 1 payment was $39,440. with an interest rate of 10%.The monthly payment was $440 principal and interest. What was the loan balance the day of closing, and how much interest did the seller owe the bank?
A. loan balance $39,440; interest due $10,350
B. loan balance $39,000; interest due $3,944
C. loan balance $39,000; interest due $862.50
D. loan balance $39,440; interest due $164.33 - ✔✔ D. Although many types of loans can become more complex in their calculations of remaining principal and interest at a particular point in time, in this case the interest portion of the payment is calculated simply by multiplying $39,440 by 10% and dividing by twelve. That results in monthly interest of $328.66, with half that amount, or $164.33 added to the principal payment at closing.
10. The buyer and seller agreed to a purchase price of $103,500. The buyer received an 80% loan. How much was the buyer's loan and how did it appear on the settlement statement?
A. $103,500. Credit the buyer and debit the seller.
B. $100,000. Debit both the seller and the buyer.
C. $ 95,000. Credit both the seller and the buyer.
D. $ 82,800. Credit the buyer only. - ✔✔ D. Mortgage monies are credited to the buyer's side of the ledger as a portion of the funds he or she will use to complete the transaction. Once all the funds have been accounted for, the monies (less appropriate deductions) transfer to the seller.
11. A home improvement company was negotiating with a homeowner to add on two rooms to a home. The company agreed to take a second mortgage as long as the homeowner also included the rest of the property in the loan. The company and the homeowner agreed to a price and the company provided the necessary disclosure form on Monday and the homeowner signed the agreement at noon the following day. Assuming that the week had five business days, until what time could the homeowner rescind the loan?
A. Tuesday, midnight
B. Thursday, midnight
C. Friday, midnight
D. There is no rescission on a house. - ✔✔ C. Because agreement was reached and SIGNED documents were provided on TUESDAY, Friday midnight ends the THREE-business-day period
12. The seller under a land contract is called:
A. the grantor.
B. the grantee.
C. the vendor.
D. the vendee. - ✔✔ C. Land contracts are also known as installment contracts. In this type of arrangement, the buyer occupies the property, but the title is held in the name of the seller until some future point in time--often when the last payment is made.
13. On an 8% straight term loan of $6,071, the borrower paid total interest of $1,700. How long did he have the loan?
A. 30 months
B. 36 months
C. 42 months
D. 48 months - ✔✔ C. Eight percent of $6,071 is $486 per year or $40.50 per month. $1,700 divided by $40.50 means the borrower held the loan for forty-two months.
14. The finance charges recorded on the Truth in Lending statements would include all of the following EXCEPT:
A. loan fees charged by the lender.
B. insurance premiums for mortgage insurance payment.
C. discount points and service fees.
D. recording fees and title insurance premiums. - ✔✔ D. These are considered legal, not financing fees and therefore are not part of the Truth in Lending statement.
15. A mortgage broker:
A. arranges loans between borrowers and investors.
B. is a lender.
C. buys mortgages in the secondary mortgage market.
D. buys mortgages and resells them at a profit. - ✔✔ A. Mortgage brokers function much like independent insurance agents and represent a variety of lenders. Their role is to match the circumstances of individual buyers with the mortgage program best suited to their needs.
16. The Smiths' purchased a residence for $75,000. They made a down payment of $15,000 and agreed to assume the seller's existing mortgage, which had a current balance of $23,000. The Smiths' financed the remaining $37,000 of the purchase price by executing a second mortgage whereby the seller became a mortgagee. This type of loan is called a:
A. wraparound mortgage.
B. package mortgage.
C. balloon note.
D. part purchase mortgage. - ✔✔ D. Also known as a "purchase money second," this is a streamlined and often cost-effective financing option. [Show Less]