Minnesota Salesperson Course 1

What industry is considered to be the largest in the US?

The Real Estate Industry

Which category of real estate related tasks do real estate salespersons spend the bulk of their time and effort in?

Sale or transfer

What are property sales at the mercy of?

The local economy

An overabundance of lower-priced homes with many more buyers than homes available is called?

A seller's market

A number of higher-priced homes for sale with only a few buyers in that price range would make?

A buyer's market

What is an organization of member brokers who share listing information with one another called?

An MLS

What business do most real estate salespersons engage in?

The business of listing or selling residential property

What land is used for industrial purposes, such as warehouses, factories and power plants?

Industrial property

This type of property refers to income-producing property, such as office buildings, restaurants, shopping centers, hotels and motels, parking lots and stores.

Commercial Property

This is a type of property that is defined as land used primarily for growing crops or raising livestock, such as farms, pastureland, orchards and timberland.

Agricultural property

This type of property has a unique use to the persons who own and use it, such as churches, hospitals, schools and government buildings.

Special-purpose property

This land is used for leisure activities, such as parks, forests, time-shares and campgrounds.

Recreational property

This is defined as any property that is being held as an investment to generate income or profit.

Investment property

A licensed individual employed on a fee or commission basis as an agent to bring buyers and sellers together and assist in negotiating real estate contracts between them.

Real Estate Broker

A person licensed to perform any of the acts of a real estate broker but while associated with and supervised by a broker.

Real Estate Salesperson

The process whereby rights in a unit of property are transferred between two or more parties, one party being the seller and the other being the buyer.

Real Estate Transaction

The term used by brokers to market a property for sale or rent.

Listing

An indication of the desire to purchase a property at a specific price.

Offer

A sum of borrowed money that is generally repaid with interest.

Loan

A term which can refer to the institution making the loan or to the individual representing the firm.

Lenders

A legal document that pledges a property to the lender as security for payment of a debt.

Mortgage

The largest and most prestigious real estate organization in the world.

National Association of Realtors (NAR)

What type of course does NAR require its members to take every four years?

Ethics Course

What is the oldest and largest minority trade association in the US?

NAREB

Good ethical practices have to do with what three qualities?

Trustworthiness, honesty , and competence

Anyone a state has licensed to practice real estate.

A licensee

What is the goal of the Code of Ethics?

To encourage the highest standard of ethical business practice by all of the members of the association.

What does the formal Code of Ethics and Standards of Practice set forth by NAR call for professionals to observe?

The Golden Rule

The beginning statements of the Code contain principles that we consider only to be.

Aspirational in other words, they may not be enforced

How often is the Code reviewed?

Annually

How many articles are there in the Code?

17

What is the purpose of the Standard of Practice?

To clarify, interpret, or give examples of the intent of the article itself.

What type of payment plan has a licensee start out at a lower percentage payment but then graduate to a higher percentage rate as his or her production increases?

Graduated Payment Plan

Who is a salesperson licensed to perform transactions on behalf of?

His or her licensed broker

Who is ultimately responsible for the actions of his or her affiliated licensees?

The broker

What type of activities can a salesperson engage in?

Only those activities assigned by the broker

Who may the salesperson receive compensation from?

Only the employing broker

Who is hired to perform certain acts, but without the control how the salesperson does the acts?

An independent contractor

Many brokers require licensees carry what two types of insurance?

Automobile liability insurance and errors and omissions insurance

Property held by only one owner?

In Severalty

Property held by two or more people?

In Co-Ownership

Property held by a third party for the benefit of someone else?

In trust

What are synonyms for severalty?

Sole ownership and tenancy in severalty

Co-owners are called?

Co-tenants

Which two types of co-ownership does Minnesota recognize?

Tenancy in common and joint tenancy

What allows a trustor, during his or her lifetime, to convey title to a trustee for the benefit of a third party?

A living trust

What allows the trustor to convey the fee estaete to the trustee and to name himself or herself the beneficiary?

A land trust aka Deed in trust

What is the most common form of co-ownership when the owners are not married?

Tenancy in common

Two or more persons collectively own a property as if they were a single person?

Joint tenancy

Joint tenants together hold a single title to the property called?

Unity of ownership

Joint tenants own equal shares in the property, without exception?

Equal ownership

A joint tenant may transfer his or her interest in the property to an outside party but only as what type of interest?

Tenancy in common interest

How do you create a joint tenancy?

All owners must acquire the property at the same time, use the same deed, acquire equal interests, and share in equal rights of possession

What are the four unities of a joint tenancy?

Time, Title, Interest, Possession

What is a term that refers to the legal ownership of property, both real and personal, along with their tangible and intangible interests?

A title

What is an abstract of title?

Briefly summarizes the various activities affecting ownership of a parcel of land.

What is an examination of the history of the property's title?

Title search

Why is a title search conducted?

To determine that the seller of the property in fact owns the property and has a free and clear title.

What is a free and clear title?

A title with no clouds on it.

What does no clouds on a title mean?

It means that no person or business other than the seller has an interest in, or claim to the property

What is the seller required to deliver at closing?

A marketable title

What is a marketable title?

A title so free of defects that the buyer is certain he or she will not have to defend it.

What must the seller have proof of to delver a marketable title?

Ownership of the property aka evidence of title

What is commonly accepted as the best evidence of marketable title?

A title insurance policy

What does title insurance guarantee?

The validity and accuracy of the title search.

What happens if the title search fails to discover any uninsurable defects?

The company issues a binder or commitment to insure

How many times is title insurance paid for?

One time, when the property passes from one owner to another.

How long does title insurance stay in effect?

Until the property sells again

Who should have title insurance?

Both the buyer and the lender

What are the two most common types of title policies?

Loan policies that protect lenders and owner policies that protect property buyers

How much does a loan policy cover?

Up to the amount of the principle on the loan.

How long do loan policies remain in effect?

Until the loan is repaid

When will lenders typically require owners to buy a new loan title policy?

When they refinance

What will a title policy typically not cover?

Problems that occur after the date the owner purchased the policy

This coverage insures against many of the items excluded in the standard policy.

Extended coverage policy

In this system of recording the title passes only when the conveyance has been duly registered on the title certificate itself.

Torrens system of recording

In effect, the Torrens title record is?

The title itself

MN is one of 10 states that have adopted this system of title recording?

Torrens System

This refers to the succession of property owners of record dating back to the original grant of title from the state to a private party.

Chain of title

If there is a missing link in the chronology of owners, or if there was a defective conveyance, the chain is said to be broken, resulting in a?

Clouded title

To remove a cloud, an owner may need to initiate a?

Suit to quiet title, which clears the title record of any unrecorded claims.

What are the two forms of evidence most used to clear a title?

The abstract of title with attorney's opinion and the title insurance policy.

This document briefly summarizes the various activities that affect the ownership of a parcel of land?

Abstract of title

Who conducts the search for an abstract of title?

An abstractor

What does the Statute of Frauds require in order for certain documents to be enforceable?

That they be in writing

This provides legal, public, and constructive knowledge to everyone about the ownership of a property?

The act of recording

This gives protection to an owner from any other titles to the property that are not recorded in the public record?

Recording the deed

AKA legal notice, is the knowledge of a fact that a person could have or should have obtained?

Constructive notice

What is the foremost method of imparting constructive notice?

Recordation of ownership documents in public records, specifically, title records.

A person receiving this type of notice has actual knowledge of something?

Actual notice

This means learning of something through direct experience or communication?

Actual notice

This is identifying the list of owners from the present/current owner back to the original owner?

Running the chain of title

The person who conveys whatever title he or she has to a property.

Grantor

A debt instrument, secured by the collateral of specified real estate property, that the borrower is obliged to pay back with a predetermined set of payments.

Mortgage

Latin for "a suit pending" a written notice that a lawsuit has been filed which concerns the title to real property or some interest in that real property.

Lis pendens

A decision handed down by the court that resolves a controversy between the parties involved in the lawsuit.

Judgment

Taxes that are imposed on homeowners and landowners to cover the cost of improvements that will benefit all those upon whom the tax was imposed.

Special assessments

A legal claim that someone or something has on the property of another person until a debt has been paid back.

Lien

A court ruling that gives a creditor the right to take possession of a debtor's real property if the debtor fails to fulfill his or her contractual obligations.

Judgment lien

A lien placed on a property by the lender when granting a mortgage for a property.

Property lien