Florida Real Estate Final Exam (Latest 2023/ 2024 Update) Questions and Verified Answers| 100% Correct| Already Graded A
Florida Real Estate Final Exam (Latest 2023/
2024 Update) Questions and Verified
Answers| 100% Correct| Already Graded A
Q: For all intents and purposes, subagents are agents of the _.
Answer:
a. Buyer
b. Seller
c. The buyer’s broker
d. The listing broker
b. Although a subagent may bring an unrepresented buyer to the transaction, the subagent is an
agent of the seller.
Q: Can a new licensee specialize in the sale of farm and ranch property?
Answer:
a. Not until the licensee has at least five years of experience in agricultural real estate
b. Not until the licensee passes additional courses in agricultural real estate
c. Yes, a new licensee can specialize in agricultural real estate
d. Yes, as long as the new licensee has a degree in agriculture
c. Specialization doesn’t require additional coursework or credentials. The licensee must be
competent in any specialization, however.
Q: Jacqueline is a licensee working with a property near a Superfund site. Which of these
statements is true?
Answer:
a. A portion of the sale price must go to the EPA to fund clean-up of the site.
b. She must disclose potential health threats to anyone in the area when showing the property.
c. She must disclose the existence of an environmental hazard in the area.
d. The property can’t be sold until the site is removed from the NPL.
c. A property with a known Superfund site in the vicinity requires disclosure, as this is a material
fact.
Q: Curtis wants to do a 1031 exchange. He just closed on his property. How many days does he
have to identify a new property?
Answer:
a. 180
b. 30
c. 45
d. 60
c. Investors who want to use the 1031 tax-deferred exchange must identify the new property
within 45 days of closing and must close on that property within 180 days from the date of sale
of the first property.
Q: Which option describes a real property tax lien?
Answer:
a. General and involuntary
b. General and voluntary
c. Specific and involuntary
d. Specific and voluntary
c.
Q: A buyer representation agreement establishes an agency relationship between which parties?
Answer:
a. Buyer and broker
b. Buyer and salesperson
c. Seller and broker
d. Seller and salesperson
a. You may hear a buyer representation agreement called the buyer/broker agreement. This is a
contract between the buyer and the broker. Remember, all real estate activities are conducted
under the broker’s license.
Q: What must be filed for the eviction process to begin after a landlord has waited three days
and serves a tenant a notice to pay or vacate the premises?
Answer:
a. A complaint for eviction
b. A writ of possession
c. Evictus nuncus
d. The lease
a. The eviction process is handled by the court, and it begins when a landlord files a complaint
for eviction with the county court.
Q: Which of the following could an investor who sells an apartment house buy using a 1031
exchange?
Answer:
a. Duplex, office building, or warehouse
b. Duplex only
c. Office building only
d. Warehouse or office building only
a. Any of these would be allowed with a 1031 exchange.
Q: Gene and Alex bought a property that backed up to a neighborhood park. The previous
owner mentioned that ever since the park was built eight years ago, the next door neighbor who
works at the park has cut through the yard to get to the park rather than going around via the
streets, which saves about half a mile. What kind of easement is this?
Answer:
a. Easement by prescription
b. Easement in gross
c. Express easement
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Bradley is acting as a finder for Emma. What’s Bradley’s role?
To introduce the buyer and seller, but not provide representation
Which type of zoning classification regulates the intensity of use in an area that typically includes warehouse and manufacturing?
Industrial
Which of the following is a contract that exists based on an understanding or assumption, rather than on specifically defined terms?
Implied contract
Your seller clients, the Jones family, complain that the buyer’s financing fell through. “The buyer was pre-qualified! How can this happen?” they ask. You answer __
“Pre-qualification does not equal pre-approval.”
Minnie owns a small parcel of land in northern Minnesota. Minnie’s great aunt transferred the property to Minnie 10 years ago. At the time of the transfer, the land was registered with the county court, and evidence of ownership was given to Minnie. Now Minnie wishes to sell the property and needs to produce a marketable title. Which of these is she most likely to provide?
Certificate of title
Which of the following is required before a prospective Minnesota salesperson applicant can submit a licensing application?
Completion of Courses 1, 2, and 3
Hal and Sara own a 212-acre farm. Their property is landlocked, but they have permitted water rights to use the stream located six miles away for irrigation purposes. What kind of water rights do they hold?
Prior appropriation
Alana and Michael want to build a 5,000-square-foot ranch home on two acres of land they just bought. Once the house is built, how many acres of land will remain unbuilt?
1.89 acres, One acre is equal to 43,560 square feet, so their parcel is 87,120 square feet (43,560 x 2). Subtract the house’s 5,000 square feet from that, and you get 82,120 square feet. Divide that by 43,560, and you end up with approximately 1.89 acres.
What does the parol evidence rule state?
In certain cases, oral evidence can be used to support or complete an otherwise incomplete or ambiguous contract.
Which of these is an example of conversion of funds?
Monica used funds from the firm’s trust account to pay her firm’s rent, Conversion means that a licensee or brokerage firm uses trust funds for personal or operating purposes.
Your client, Ray, is worried about title issues that may arise after closing. Remind Ray of his secret protection: __.
Title insurance, Title insurance protects the buyer from title defects covered by the policy. If a defect is found, and it’s covered, the insurance policy will reimburse the buyer for losses, up to the amount specified in the policy.
Eloise is interested in buying a bungalow on the outskirts of the city. Her agent is reviewing the property details and informs her that there are several easements on the property. In particular, the gas company has a right of way because the natural gas line for the neighborhood runs through the back of the lot. What type of easement would this be?
Easement in gross, An easement in gross is granted to a specific individual or company—in this case, the gas utility company.
Before closing, the __ should get a home inspection.
Buyer
A middleman is another term for a _.
Finder
Georgia received her initial license as a residential appraiser in Minnesota 21 months ago, and the renewal deadline is approaching. How many continuing education hours must she submit with her renewal application?
15 hours, Appraisers who earned their license for the first time within the last six to 24 months need to complete 15 hours of continuing education.
A house in Minnesota is located near a nursing home. In which of these transactions would the seller be required to disclose this information?
The seller isn’t required to disclose that the property is located near a nursing home, Sellers don’t need to disclose that a property is located near a nursing home or other adult-based residential facility. The type of transaction isn’t a factor.
Arlene is the vendor in a contract for deed arrangement. The vendee is not making his monthly payments. What is the process Arlene can use to reclaim equitable title of the property?
Termination, If the buyer defaults, the seller can terminate the contract. The foreclosure process doesn’t apply to contract for deed arrangements. Once the contract has been terminated, Arlene could pursue eviction to take back physical possession.
Meg is considering a move to a foreign country and wants to deed her property to her son, Christian, who’s 16. Which of these must occur to make this transfer legal?
Meg must sign the deed and have her signature acknowledged, As the grantee, Christian doesn’t have to sign the deed, and he doesn’t have to be legally competent or of legal age. The property can be conveyed only if some consideration is in place, but it doesn’t have to have a monetary value.
What’s the minimum number of business days prior to closing that lenders have to provide borrowers with the Closing Disclosure form?
Three, Lenders must provide the Closing Disclosure form to borrowers a minimum of three business days before closing on the mortgage loan so that borrowers have time to compare the final terms and closing costs to the Loan Estimate they received at application.
Valerie is converting an existing building into a new condominium project. Under Minnesota law, she must __.
Provide blueprints showing the size, boundaries, and location of each unit, Owners of existing buildings or developers of new, unimproved land who want to create a condominium project are required by the Minnesota Uniform Condominium Act to provide blueprints showing the size, boundaries, and location of each unit.
Steven owns 114 acres of wooded, rural land. The abundance of wildlife on his property means that his friends are always asking for permission to hunt on it during various game seasons. If Steven gives a friend permission to hunt on his land, it can be said that he has given his friend a __.
License, A license is permission to do something on another’s land without actually possessing any interest or ownership in the land.
Which of these is a member of the primary mortgage market?
citibank
Your client, Eric, is interested in purchasing an industrial property to start a new business. You’ve recommended that soil, air, and water testing be done, but Eric is on a tight budget and doesn’t feel these tests are necessary. What should you do?
Keep records of your recommendations and a written response from Eric.
When the property is financed, who is named as an additional insured entity on the homeowner’s insurance policy?
Lender
Why is it important that the legal description appears in real estate documents?
It precisely locates the property and its boundaries.
A __ is a limit placed on a private owner’s use of land.
Restrictive covenant, A restrictive covenant is a part of a deed or lease to real property that limits what the owner of the land or lease can do with the property.
Which fiduciary duties does a finder owe?
A finder doesn’t owe any fiduciary duties.
There are three types of listing agreements. They are exclusive right to sell, exclusive agency, and _____.
Open listing, The third type of listing agreement is the open listing agreement, in which a seller may contract with many real estate licensees to locate a buyer.
Besides the appraisal, what’s a common hurdle as transactions approach closing?
The buyer’s financing falls through.
Which of the following statements is true regarding a partially performed sales contract that otherwise contains all of the essential elements?
The contract is voidable, If a party to a contract does some, but not all, of what the party has agreed to do, it’s considered partial performance. The wronged party can agree to the partial performance or can choose to terminate the contract.
A central element of an antitrust violation is __.
Conspiracy, Antitrust involves conspiracy among competitors.
The Goldmans are buying the Kraskis’ house for $415,000, and closing is set for March 15. The Kraskis have a loan balance of $230,000 at a rate of 4.7% and have prepaid property taxes ($2,506) and insurance ($1,400), and they also have mortgage interest to consider. Using a 365-day proration method, calculate the prorated amount the Goldmans will owe the Kraskis at closing. Assume February has 28 days this year. The sellers own the day of closing.
1,997.62, Calculate daily rates for taxes to be prorated: $2,506 ÷ 365 = $6.87. The Kraskis pay the first 74 days (January 1 through March 15): 74 x $6.87 = $508.38. $2,506 – $508.38 = $1,997.62 owed by the Goldmans.
A 4-bedroom, 4-bath 4,875 square feet house was listed at $445,000. Andreas, the seller, accepted an offer that was 95% of the listing price. What price per square foot did he get for the house?
$86.72, The price per square foot = price ÷ area. So first, find the sale price. $445,000 x .95 = $422,750. Then, to find the price per square foot, $422,750 ÷ 4875 sq. ft = $86.7179, or $86.72 per sq. ft.
Jacqueline is a licensee working with a property near a Superfund site. Which of these statements is true?
She must disclose the existence of an environmental hazard in the area, A property with a known Superfund site in the vicinity requires disclosure, as this is a material fact.
In a real estate transaction, which of the following is established when parties enter into an agreement voluntarily with full understanding of the contract terms?
Consent, Consent occurs only when the parties enter into the agreement voluntarily with full understanding of the contract terms.
What’s the Real Estate Education, Research, and Recovery Fund fee for an initial license applicant in Minnesota?
$30
Mavis is a buyer’s agent working with Blaine, an unrepresented seller. Mavis’s buyer, Cintra, makes an offer on Blaine’s property. Mavis assists Blaine with the paperwork. What’s Mavis’s relationship to the parties?
She’s an agent to Cintra, and the seller is her customer.
In a contract, consideration is the giving of __.
Something of value in exchange for something of value
You’re working with buyers who are pre-approved for a loan of as much as $200,000. Assuming they lock in a 5.25% interest rate at closing, how much of their first payment will go toward interest?
$875, The formula is loan balance × interest rate ÷ months per year. Loan balance is: $200,000 × .0525 = $10,500; $10,500 ÷ 12 = $875
How do you calculate the daily rate for annual taxes using a calendar year?
Divide by 365
In 2010, what agency banned Freon® as a refrigerant?
The EPA
On January 1, 2010, the EPA, under Title VI of the Clean Air Act, mandated that refrigerant R-22 (commonly known as Freon®) be replaced by 410A (commonly known under the brand name Puron®).
Johnnie and Mary each own a unit in a new condominium complex. According to Minnesota law, in which element do they NOT have an undivided ownership interest?
Condo units, Condo owners are each entitled to a percentage of undivided interest in common areas, such as lobbies, parking lots, pools, and recreational areas. Minnesota statute defines common elements as any area of the condominium other than the units.
What are the three primary acts that impact mortgage loan disclosure?
RESPA, TILA, and Dodd-Frank, RESPA, TILA, and Dodd-Frank are the three primary acts that impact mortgage loan disclosures. TRID is an acronym for TILA-RESPA Integrated Disclosures (the LE and CD).
What is a good way to avoid the risks associated with dual agency?
Refer one party to another agent.
One way to avoid risk is to refer one party to another licensee.
According to the EPA, at what level does radon become a health concern requiring mitigation?
Although there is no safe level of radon, once the level reaches above 4.0 picocuries per liter of air, the EPA recommends radon mitigation.
An inheritable freehold estate that’s a fee simple defeasible (where the grantor can reclaim ownership) is also known as __.
Qualified fee, A qualified fee is an inheritable freehold estate that’s defeasible, where the grantor can terminate the title.
When considering loan risk, which two items will lenders consider in equal measure?
Borrower and property, The property’s value (as underlying collateral) and the borrower’s ability to repay the loan will be equal considerations for the lender.
In a purchase offer, is earnest money required to have a binding contract?
No, because the buyer’s consideration is the promise to buy. Earnest money isn’t required to have a binding sales contract (although it’s usually required by the seller!). If no earnest money is provided, the prospective buyer’s only consideration is the promise to pay the purchase price.
Which of these actions would cause a property to become an REO?
The bank doesn’t get an acceptable bid at a foreclosure sale and takes ownership of the property. An REO, or real estate-owned property, is a property that a bank or lender owns because it failed to receive an acceptable bid at a foreclosure sale.
In order for Minnesota homeowners to qualify to homestead their residence, which of the following must be true?
It must be their primary residence. Minnesota homeowners can homestead their primary residence.
You’re working with buyers who are interested in trying to get a bargain in the form of a foreclosure. What should you tell them?
Buyers should take special care to ensure that any title issues are addressed. Foreclosures may have a higher incidence of title issues, and buyers should take special precautions to ensure that all issues are addressed and that they purchase the homeowners level of title insurance.
Linda recently sold a Minnesota home that has an underground storage tank on the lot. She has __ to register the change of ownership with MPCA.
30 days
Which form of real property ownership (for owners other than married couples) means there’s equal ownership shares with undivided possession rights?
Joint tenancy, Joint tenancy provides equal ownership shares with undivided possession rights and requires four ownership unities: time, title, interest, and possession. Joint tenancy includes the right of survivorship.
If closing is July 7, how many days will the seller be responsible for paying using a statutory year?
187 days, January – June is six months. In a statutory year, there are 30 days in each month (6 × 30 = 180 days). Because the closing is happening on the seventh day, we need to add seven more days (180 + 7 = 187 days).
When are property taxes due in Minnesota?
May 15, Tax statements are mailed to homeowners by March 31. The first installment is due on May 15. The final installment is due on October 15.
What’s one benefit of the government using the power of escheat?
It allows the government to take the property and put it back into use for the public good.
Which of the following best describes a “person” as defined in Minnesota license law?
A natural person, partnership, firm, corporation, or association, and its agents, directors, officers, and employees
Which of the following is considered a “responsible person” per Minnesota license law?
The general partner of an LLP, A responsible person is a natural person who may be an officer of a corporation, partner of a partnership, general partner of an LLP, or the manager of an LLC.
Which of the following best describes a lease agreement’s purpose?
It identifies the terms of a lease transaction between the landlord and the tenant. The purpose of the lease agreement is to identify the terms and conditions under which the lease agreement between the landlord and tenant will be executed.
There are three types of listing agreements. They are ___, exclusive agency, and open listing.
Exclusive right to sell. The third type of listing agreement is the exclusive right to sell agreement, in which the listing agent receives a specific commission, no matter who brings the buyer to the seller, as long as the property sells within the agreement’s term.
The cost of a parcel of land is 50 cents per square foot. Candace wants to purchase one acre. How much will this cost?
$21,780. The buyer wants one acre, which is 43,560 square feet. Multiply 43,560 times the cost per square foot (50 cents) and you get $21,780.
Not wanting to delay closing, Alice, the seller’s agent, didn’t disclose when the seller informed her a week before closing that the hot water heater needed to be replaced. Which fiduciary duty to the customer is Alice violating?
Honesty and fair dealing
Leon and Beth own 1/13 of a timeshare estate. They own weeks 20 and 21, and also weeks 40 and 41. These weeks are inheritable. What type of ownership is this?
Fee simple. Timeshare estates are owned as fee simple estates. They convey all rights of ownership and can be sold or passed down to heirs.
Which of the following involves permission to do something on another’s land without actually possessing any interest or ownership in the land?
License
A real estate licensee is acting as what type of agent when assigned by the broker to represent one party in an in-house transaction?
Designated, The licensee is acting as a designated agent and owes duties to the client to whom he has been assigned.
A Minnesota licensee is drafting a new advertisement. What must the licensee keep in mind?
The real estate brokerage name must be clearly and conspicuously displayed
Which of the following is the best example of a tie-in arrangement?
A business requires its clients to also purchase services from another business. Tie-in arrangements are antitrust violations that involve predicating one service on the consumer purchasing another from another company.
Which zoning type is used solely for developing home?
Residence district
Carly’s closing on an REO property was suddenly delayed due to an internal audit. What does this mean?
The lender has requested a title audit to ensure that the foreclosure was properly handled. Lenders may request a title audit to ensure that the bank that owns Carly’s property performed the foreclosure correctly.
Tom and Jim are neighbors. Jim wants to buy Tom’s rental property. In the contract they sign, Jim is identified only as “the neighbor.” Which statute or contract element does this violate?
The statute of frauds
The education requirement for initial licensing as a trainee appraiser includes 15 hours of __.
Uniform Standards of Professional Appraisal Practice coursework. The 75 hours of pre-licensing education must include the 15-hour USPAP course.
Who does a finder represent?
Neither the buyer nor seller
What is a subdivision, according to Minnesota’s Subdivided Land Act?
Undeveloped land that is being divided into smaller lots
A home equity line of credit (HELOC) is based on the homeowner’s available __.
Equity, A HELOC is based on available equity, and is set up as a line of credit that homeowner’s can use as an open-end account.
Which type of ownership includes unity of time, title, interest, possession, and marriage?
Tenancy by the entirety, This is tenancy by the entirety. It’s similar to joint tenancy in that it has the right of survivorship and includes unity of time, title, interest, possession, but with marriage added.
With which type of government power is a property owner compensated when the government imposes an involuntary title conveyance for the public good?
Eminent domain, Eminent domain allows the government to convey title to a property involuntarily for the public good. In most cases, the property owner will be compensated.
Orla represents the seller, and Pardeep, an agent from a different firm, represents the buyer in the same transaction. What type of agency relationship does Orla have with her client?
Seller agency
The licensee owes the client the duty of __, even after agency is terminated.
Confidentiality, Even after the brokerage agreement is terminated, the duty of confidentiality remains.
Randall’s clients, Carma and Trent, are looking for a mountain cabin. They tell Randall they’ll pay him a $2,000 finder’s fee if he finds the cabin that checks all their boxes and they close on it. Randall finds a likely candidate as a FSBO, and negotiations begin. What circumstance is required for Randall to receive the finder’s fee?
Carma and Trent must pay the finder’s fee to Randall’s broker. Randall must disclose the finder’s fee and be paid through his broker.
Bobby is completing a residential loan application. On the application, he lists his liabilities. What are liabilities?
Obligations the borrower owes, Liabilities are obligations or debts owed by the borrower. This may include loans, credit card balances, and alimony.
Redmond owns a property in Minnesota that is the site of a petroleum release. The release took place before Redmond owned the property, but Redmond paid for the $200,000 clean-up, which took place last year. Can Redmond seek reimbursement for his costs?
Yes, since he’s the current owner who took and paid for corrective action, Redmond can seek reimbursement. Owners of property that was the site of a release can seek reimbursement from the Petrofund. The application must be submitted within seven years of the action, and approval or denial will occur within 60 to 120 days.
_ is the power of the government to take private land for public use.
Eminent domain, Eminent domain is the power of the government to take private land for public use, though the government is required to give the property owner just compensation. It is the ultimate police power.
A buyer with a 15-year, $250,000 loan at a 5.5% interest rate has a monthly principal and interest payment totaling $2,042.71. What is the total amount of interest the borrower will pay over the course of the loan?
$117,687.80, First, multiply the monthly payment ($2,042.71) by the total number of payments (180 = 12 payments/year for 15 years). The total paid back is $367,687.80. Then subtract the original loan value: $367,687.80 ‒ $250,000 = $117,687.80.
The client owes the agent the primary duties of __, information, indemnification, and availability.
Compensation
Which physical characteristic of land addresses the concept that land isn’t interchangeable and one piece of land isn’t exactly like another?
Uniqueness
In a contract, the element of consent is also called _.
Voluntary agreement
What is the key difference between assignment and novation of a contract?
Novation releases the original party from all obligations, while assignment does not. Both assignment and novation may replace one party to a contract with a new party (or parties). But with novation, a new contract is created, so the original party is fully released from any obligations.
Whitney and Justin are about to close on their refinance, and their loan amount is $362,000. They are paying a 1.5% origination fee. How much will their origination fee be?
$5,430, Whitney and Justin will pay $5,430 for their loan origination fee ($362,000 x 1.5% or .015).
When a licensee represents a seller, which one of the following statements is true about the licensee’s ability to list other properties that are for sale?
The licensee is permitted to list other properties for sale, even if they’re competing properties. When representing a seller, the licensee is permitted to list other properties for sale, even if they’re competing properties. Doing so doesn’t breach any fiduciary duties the licensee owes the seller.
Which fiduciary duty requires agents to follow all of their client’s lawful instructions?
Obedience
In what state agency or department is Minnesota’s Licensing Unit situated?
Department of Commerce
What must a licensee do when preparing a CMA (or opinion of price) for a consumer?
Make a statement that the opinion isn’t an appraisal.
The __ Coastal Program regulates coastal property development and use policies in Minnesota.
Lake Superior, The Lake Superior Coastal Program provides federal funding and annual grants to communities to strike a balance between conservation and responsible development of the Lake Superior North Shore area.
Which of these statements about title insurance is true?
Title insurance coverage includes the service of a “title search” prior to the close of the sale. Title insurance helps the buyer (and lender, if applicable) confirm that the title is clear and marketable.
What’s the longest sentence someone can serve in prison for an antitrust violation?
10 years
What’s the title insurance representative’s responsibility at a closing?
Ensures the title is marketable by performing a title search and provides the buyer with an abstract of title and title protection. The title insurance representative is responsible for the title search and for providing the buyer with proof of title. Most title representatives will also help prepare the parties, but that responsibility rests with the agents representing them.
The education requirement for initial licensing as a trainee appraiser includes six hours of __.
Supervisor/trainee education
Jeung gave her agent an earnest money check, and the seller accepted Jeung’s offer. What will happen to the check now?
An escrow agent will hold the funds in a trust account until the agreement’s terms are satisfied. The earnest money will be delivered to the escrow officer, who will hold it in a trust account until all agreement terms have been met. If there’s a dispute, the money will be held until the dispute is settled.
Robert is the general contractor for a home being constructed in a new development. The foundation has been poured, and he’s working with the homeowners to make some decisions that weren’t identified in the blueprints he’s working from. Which of the following details will be guided by local building codes?
Number and type of electrical breakers. Electrical safety standards are typically a component of building codes in almost any location.
A home inspector provides a report on a property’s structure, systems, and site conditions. To whom is the report provided?
Buyer, Typically, buyers pay to have home inspections done when they purchase property.
Jane found a house she loved that was listed at $345,000. Her offer of $330,000 was accepted, but the appraisal came in at $300,000. Jane plans to finance $275,000. What’s the loan-to-value ratio?
92%. lenders use the lower of the sales price or appraised value. This results in an LTVR of 92% = (275,000 ÷ 300,000) x 100.
Which of these is an encroachment?
Jeff installed a sidewalk next to his driveway, six inches outside his property. An encroachment occurs when someone illegally places a structure or object on another person’s property. Jeff’s installation of a sidewalk off of his property is an example.
You’re selling a property located in a subdivision. Which form of legal description will you likely see for this property?
Lot and block. Subdivisions frequently use a lot and block form of legal description, which references the more technical description that is recorded in a plat map.
When homebuyers agree to open an escrow account for their mortgage, the mortgage lender uses that money to pay __.
Taxes and insurance. Escrow accounts that go along with mortgages are used to guarantee that the property taxes and insurance are paid.
Which of the following duties are still owed after a listing agreement expires?
Confidentiality
When must a Minnesota licensee disclose the licensed name of the brokerage under whom the licensee is authorized to conduct business?
Before the negotiation or consummation of any transaction. All licensees must disclose and practice under the name of the brokerage under which they operate. Salespersons can only conduct business on behalf of their registered brokerage
What’s another name for the Homeowners Protection Act?
The PMI Act of 1998
Kendrick bought into a cooperative housing project. When Kendrick purchased his unit, he received a proprietary lease. What else did he receive?
Shares in the cooperative corporation, Purchase of a co-op unit isn’t a purchase of real property, so no deed will be issued. Co-op owners hold shares in the cooperative corporation. These shares are considered personal property.
A homeowner has $80,000 of principal left to pay on her mortgage. Her home was recently appraised at $156,000, which is $13,000 more than what she purchased it for. How much equity does she have in her home?
$76,000. o find how much equity she has, subtract the amount she still owes on her mortgage from the appraised value.
Marjory is making a subdivided land offer to Samuel. Which of the following can we reasonably assume to be true?
The land has been registered or is exempt from registration with the Minnesota Department of Commerce.
Which of the following is a characteristic of predatory lending?
Making loans the consumer can’t afford. Predatory lenders use toxic loan features and prey on consumers by providing loans the consumer can’t really afford.
What is a code of ethics?
Guidelines for conduct
A new real estate professional is getting to know licensees at his new firm, Tremont Homes. One licensee tells him there’s an unwritten agreement with a neighboring firm that Tremont serves the mid-town area, and everyone who has prospective clients in that area refer their leads to Tremont. What’s this an example of?
Market allocation
Siblings Julia and Gene are co-owners of a small retail building in which a tanning salon is currently operating. Gene really wants to leave his ownership interest to his son when he dies, but the way in which they own the property doesn’t allow him to do so. What type of ownership do they have?
Joint tenancy. Joint tenancy does not include the right of inheritance; ownership interest passes to the remaining tenants once a tenant dies.
Andrew Michaels has died and left a will. Before his heirs can inherit Andrew’s vast estate, a legal process ensues to determine the will’s validity and to ensure that it accurately reflects the deceased person’s wishes. This is known as __.
Probate. Probate is the legal process to determine a will’s validity and to ensure the will accurately reflects the deceased person’s wishes
Select the statement that accurately depicts property ownership income tax implications.
During the ownership stage, both investors and homeowners may be able to deduct mortgage interest paid. Eligibility for deductions related to property ownership depend on circumstances, and tax questions should always be directed to a qualified expert. In general, homeowners and investors may be eligible to deduct mortgage interest.
Property with ownership by more than one person is known as __.
Co-ownership
In the eyes of the law, why do people under age 18 lack contractual ability?
Because they’re minors.
The right to access ponds, lakes, and other stationary bodies of water is __.
Littoral
What is the difference between ethics and the law?
Laws are legally enforceable. Ethics aren’t legally enforceable until they become law.
Where permitted, married couples usually hold property as __.
Tenancy by the entirety, where each has an undivided interest in the entire property. If one dies, the other owns the entire property. If the couple divorces, their ownership automatically becomes a tenancy in common.
Xavier deposited a $3,000 earnest money check into his personal account for safekeeping while he was on vacation. The balance in his account when he left on vacation was $4,200, and when he returned, it was $2,800. He withdrew enough funds from his savings account to cover the earnest money check and delivered the funds to the escrow agent. Which statement best represents Xavier’s issue?
Xavier is guilty of commingling and conversion. Because Xavier’s balance fell below the amount required to cover the earnest money check, he’s guilty of both commingling and conversion, even though he replaced the funds.
What are the main ways that license laws ensure consumer protection?
They establish requirements, define activities, and set standards. License laws ensure consumer protection by establishing basic requirements for entry to the profession, defining activities that require a license, and setting conduct standards.
Stacey, a buyer, is working with Rebecca, a licensee, in a state that doesn’t recognize or permit implied agency. Rebecca doesn’t represent Stacey, however, and is performing only ministerial tasks for her. Which of these statements about this situation is correct?
Stacey is Rebecca’s customer. Without an agency agreement in place, Stacey is Rebecca’s customer. With an agency agreement in place, Stacey would be Rebecca’s client.
Caitlin purchased a Minnesota property for $350,000. She put down $70,000 and financed the remaining $280,000. How much deed tax did she owe for the purchase?
$1,155. Deed tax is the value of the property multiplied by .0033. So, $350,000 x .0033.
Leigh Ann’s cousin, Carly, is interested in buying a house. Leigh Ann shows Carly how to look for properties online and runs some CMAs for her. When Carly finds a property she likes and asks Leigh Ann to help her make the offer, Leigh Ann decides she should ratify the implied agreement with Carly. What are Leigh Ann’s options for accepting an agency relationship after the fact?
Prepare an agency agreement or continue to assist Carly with the purchase. Leigh Ann can achieve ratification either by getting a signed agency agreement or by continuing to act as Carly’s agent.
Several brokerages in a certain area agree to stop running advertisements in a local publication. What type of antitrust violation is this?
Group boycotting
Mika has borrowed $5,000 from her cousin Jun and not repaid it. Now, Mika is selling her house to Jun’s nephew, Cheong. As Mika writes up the contract, Jun tells her that if she doesn’t sell the house at a steeply discounted price, Jun will take the matter of the $5,000 to court. What is true about this situation
Jun’s influence is invalidating Mika’s consent. Jun’s threat of prosecution is enough to invalidate Mika’s consent.
Todd and Susan are a married couple living in Minnesota. Susan purchased their homestead shortly before they married and only her name appears on the property’s title. They are planning to sell this property and purchase a condo. Whose signatures are required to sell their current property?
Because this is a homestead property and Susan is married to Todd, both Susan and Todd’s signatures are required. A couple key facts for this question are that the property being sold is a homestead and Susan and Todd are married. Because of both these facts, signatures from both spouses are required.
Which of the following describes a subdivision plat?
A record in the county clerk’s office that can serve as the legal description on a deed. A subdivision plat is recorded in a plat book at the county clerk’s office and is the legal description used on the deed.
Paul owns a property in eastern Minnesota. The underground storage tank he uses to store hazardous materials on that property has leaked 10 gallons into the surrounding ground. What action should Paul take?
Paul should immediately notify the Minnesota Pollution Control Agency.