Tennessee Real Estate Practice Exam Flashcards

Tennessee Real Estate Practice Exam Flashcards A landlord may legally refuse to rent to a prospective tenant if the tenant1. is unable to live alone without assistance.2.has ever been convicted of using illegal drugs.3. has ever been convicted of selling illegal drugs.4. has a history of serious mental illness.

Answer:3. has ever been convicted of selling illegal drugs.

A competitive market analysis is MOST often used for:1.

property tax assessment.2. setting a listing price.3. estate tax purposes.4. divorce proceedings.

Answer:2. setting a listing price

A buyer was negotiating the purchase of a house for himself. During a conversation with the seller, the seller agreed to include all kitchen appliances in the sale, and this fact was included in the sales contract.In this situation, if the seller takes the appliances with him, what recourse does the buyer have?1. The buyer may declare the sales contract invalid.2. The buyer may sue the seller for partial performance.3. The buyer has no recourse because he negotiated the sale himself.4. The buyer may sue the seller for specific performance.

Answer:4. The buyer may sue the seller for specific

performance.AA salesperson qualified a minority couple with two children and defined their price range as between $110,000 and $120,000 for the three-bedroom house they wanted.They asked to look at two listings in a nonminority neighborhood. The salesperson did not show them the properties because they were priced under $90,000 and had only two small bedrooms. Did the salesperson act appropriately and why or why not?1. No, because the presence of children requires granting occupancy if they desire it.2. Yes, because they were overqualified for the homes they have requested to see.3. No, Because it is appropriate to show any property for which the buyer is qualified4. Yes, because it is the salesperson's job to tailor the properties shown to the need of the buyer.

Answer:No, Because it is appropriate to show any property

for which the buyer is qualified On February 1, a seller paid $1,140 in annual property tax for the current calendar year. He sold the house*with the closing set for April 1.What will be the seller's credit for the property taxes already paid if the buyer pays for the day of closing?Use a 360-day year and a 30-day month.1. 2852.

2883. 8524. 380

Answer:2. 288Since the total property taxes for the year

are $1,140, to find the property tax per month we have to divide by 12 $1,140 / 12 = $95 per monthThe seller is responsible for paying the property taxes during 3 months and 1 day, to find out the amount for that 1 day we divide the monthly tax by 30 = $3.17 per day.the total seller's credit = ($95 x 3) + $3 = $285 + $3 = $288*The seller's credit includes all the expenses that must be paid by the seller, while the seller's debit includes all the money that he

receives.A real estate salesperson is representing only the buyer in a transaction. Which of the following actions would be a violation of the salesperson's agency duties to the client?1.

identifying latent property defects2. disclosing the price the seller originally paid for the property3. preparing a competitive market analysis4. disclosing the highest price the buyer is willing to pay

Answer:4. disclosing the highest price the buyer is willing to

pay

The sellers want to accept a purchase offer, but only if the price is raised by $5,000. What should they give the prospective buyer?1. New listing contract.2. Novation.3.Contingency.4. Counteroffer.

Answer:4. Counteroffer.

Under the common law of agency, licensees owe the broker with whom they are associated all of the following

duties EXCEPT:1. competence.2. full disclosure.3.

loyalty.4. indemnification.

Answer:4. indemnification.

If all other factors are equal, in which location is a parking lot likely to bring the highest sales price?1. Business district zoned for a two-story commercial building.2. Business district zoned for a six-story office building.3. Residential district zoned for two-story apartments.4. The price for the parking lot will be the same regardless of area and zoning.

Answer:2. Business district zoned for a six-story office

building.

A deed restriction is applicable to the activities of:1.

mortgagors.2. all owners, present and future.3. the current owner only.4. tenants.

Answer:2. all owners, present and future.

An agency relationship between a property owner and a

property manager is usually created by:1. payment of a

management fee.2. a management agreement.3. an exclusive agency agreement.4. an independent contractor agreement.

Answer:2. a management agreement.

State laws differ on whether a buyer is entitled to know

about:1. possible lead paint in the property.2. a suicide that

occurred in the house last year.3. the flooding of the basement every spring.4. the fact that the sellers are getting a divorce.

Answer:2. a suicide that occurred in the house last year.

When a home is purchased using an ARM, the monthly

loan payment on the mortgage will:1. vary over the life of

the loan depending on fluctuations in the interest rate to which the loan is referenced.2. be based on a very low interest rate to begin with, but will rise to the market rate at the first adjustment.3. rise slightly in each adjustment period until the cap is reached.4. be adjusted automatically to ensure that negative amortization does not occur.

Answer:1. vary over the life of the loan depending on

fluctuations in the interest rate to which the loan is referenced.

The FHA functions MOST like:1. an insurance company.2.

a bank or savings and loan association.3. a mortgage company.4. an investment group.

Answer:1. an insurance company.

A competitive market analysis takes into consideration:1.

square footage of the subject property.2. neighborhood nuisances.3. age of the sellers.4. unemployment levels in the community.

Answer:1. square footage of the subject property.

Earnest money should be deposited into a trust account:1.

according to MLS rules.2. upon removal of all contingencies3. at the broker's discretion.4. in a timely