Real Estate Basics Flashcards

Real Estate Basics Flashcards NARthe National Association of Realtors Deedthe official document transferring ownership from seller to buyer Broker Helen allows her dentist to use her vacation condominium for a week for free to thank him for sending her a person who listed a house with her. Helen..(A) did nothing wrong.(B) violated license law.(C) violated the antitrust prohibition about tie-in arrangements.(D) should have checked with the state real estate commission first.

Correct answer: (B). State license laws generally prohibit

the payment of fees or gifts to non-licensed individuals as part of a real estate transaction. So Helen did something wrong, it's not an antitrust violation, and there's nothing to check because it is a license law violation.Closinga meeting of the seller, the buyer, and the lender of funds, or representatives of each party, to complete the transaction Buildersomeone who makes or repairs buildings as a job Associate BrokerThis person has a broker's license but chooses to work under another broker rather than opening their own business Employment AgreementAn employment agreement between the broker and the salesperson has become virtually mandatory to prove and maintain the IC relationship Commissiongenerally is a percentage of the final sale price of the property that usually is paid upon completion of the sale Because of the independent contractor status of most real

estate salespeople, a broker:A. Should not bother with a

policies and procedures manualB. Is not responsible for his salesperson's actionsC. Is responsible for actions only with respect to fair housing lawD. Need not withhold Social Security taxes unless they are employees

• Need not withhold Social Security taxes unless they are

employees.One of the distinguishing features of independent contractor status is that the broker doesn't have to withhold payroll taxes or Social Security payments.That doesn't relieve the broker of their responsibility for their salespersons actions. All of the other answers are therefore wrong.A salesperson paid an hourly wage and expected to be in the office from 8 a.m. until 2 p.m. to answer phones is probably a(n)(A) independent contractor.(B) employee.(C) contract agent.(D) associate broker.(B) employee.A person required to work certain hours and paid an hourly wage is usually considered an employee.Anindependent contractor is allowed to work her own hours and is usually paid for her productivity by commission. An associate broker is not a status of employment but rather a licensing level. I made up the term "contract agent." Lendersan organization or person that lends money.LandLand is legally considered to include the surface of the earth, which includes any naturally attached components, the subsurface to the center of the earth, and the air above the land to infinity.REITA real estate investment trust (REIT) is a company that owns, operates, or finances income-generating real estate

capital budgeta budget that highlights a firm's spending plans for major asset purchases that often require large sums of money The Building Owners and Managers Association International Certification demonstrates the abilities of highly skilled Stationary Engineers and Building Operators. To become a Certified Engineer, you must pass this 5 part exam.Real EstateReal estate is defined as the actual physical land (also known as unimproved land or raw land) and everything, both natural and man-made, that is permanently attached or appurtenant to it (referred to as improvements).Property manager financial responsibilities Creating an annual operating budget, collecting rents, setting rents, paying bills and preparing periodic financial reports Broker Bob will not give any referrals to Broker Jane because he believes she acts unethically. He tells no one about this. He..(A) is violating the antitrust law regarding group boycotting.(B) is entitled to his opinion but needs to have checked with his local Board of Realtors first.(C) is violating no antitrust law.(D) needs to refer business to her because he has no proof of her behavior.

Correct answer: (C). No group is involved here. As long as

no fair housing or civil rights laws are being violated, an individual generally is permitted to do business with whomever he or she wants.the Real Estate Settlement and Procedures Act RESPA prohibits loan servicers from demanding excessively large escrow accounts and restricts sellers from mandating title insurance companies.Retaining riskaccepting the liability (self insurance) usually taken if risk is small Listing AgreementA contract between an owner (as Principal) and a real estate broker (as agent) by which the broker is employed as agent to find a buyer for the owner's real estate on the owner's terms, for which service the owner agrees to pay a commission The amount of compensation received by a property manager is...(A) set by the local real estate board.(B) set by the local property owner's association.(C) a matter of individual negotiation.(D) always based on a percentage of gross rents.

Correct answer: (C). This is the same as setting

commission rates. It's all negotiable.RealtorSpecifically refers to someone who is a member of the National Association of Realtors (NAR) Title Insurancea type of insurance that protects the buyer if problems with the title are found later, may be purchased (or even required) as part of the contract process to ensure that the title is legal.Annual Operating Budgeta statement of expected revenues and expenses over twelve months.Property managers are usually considered..(A) special agents.(B) general agents.(C) universal agents.(D) contractual agents.

Correct answer: (B). A general agent handles a range of

activities on behalf of a client. Special agents handle only one activity like selling a piece of property, and universal

agents act on behalf of a client in all real estate matters

Real Estate AgentThis generic term pretty much refers to anyone who has a real estate license Errors and omissions insuranceThis type of insurance can cover property managers against any errors they make in the performance of their duties. The insurance doesn't cover losses caused by fraud or other dishonest or malfeasant activities home inspector or engineerhome inspector who has the training and certifications to perform such inspections.administrative duties and responsibilities of running a real estate brokerage supervising people who work for you, training those people, and setting office policies. This responsibility extends to violations of the state licensing laws, fair housing laws, and illegal or fraudulent activities. The extent of liability and punishment is, of course, determined by state licensing officials, and in the case of criminal or civil actions, by the courts.Fire and hazard insuranceDepending on what it covers, this type of policy sometimes is called an all-risk, all-peril policy. It basically covers loss of the property caused by fire, storms, and other types of damaging conditions.Certified Property Manager (CPM)A professional designation for one who has met all the education and experience requirements of the Institute of Real Estate Management .Federal Antirust Lawsproscribe unlawful mergers and business practices in general terms, leaving courts to decide which ones are illegal based on the facts of each case Duties of Property ManagerMaximizing income and maintaining or increasing the overall value of the property being managed Controlling risksanticipating it and preparing for it. Emergency lighting systems are an example of controlling risks.Home InspectionA thorough inspection by a professional that evaluates the structural and mechanical condition of a property. A satisfactory home inspection is often included as a contingency by the purchaser.Questions on the exam regarding broker responsibilitiesWhat your state law has to say about brokers' responsibilities with respect to supervising their salespeople.The expectation that you'll know most of the important points of the state licensing law with which you and your salespeople are expected to comply.Casualty insuranceThis type of insurance covers losses by theft, vandalism and burglary Proceedsmoney derived from some activity; price or profit Surplus propertyIf a federal agency no longer has a need for personal property, it declares the property excess property, and the property is then made available to all other federal agencies. If no federal agency claims the excess property