Final Real Estate Final FINAL Exam

Interest rates charged by banks in the primary market are most likely a result of the actions of which agency?

A. Consumer Financial Protection Board

B. HUD (for FHA and VA loans)

C. Federal Reserve Board

D. Fannie Mae

C. Federal Reserve Board

A buyer wants to purchase a home for $260,000. The lender appraises the home for $225,000 and offers to finance it with an 80% loan-to-value loan, charging a loan origination fee of 1.5 points. How much will the buyer's loan origination fee be?

A.$2,700

B.$3.120

C.$3,375

D.$3,900

A.$2,700

The real estate licensee handling a transaction has the right to advise the parties, complete needed paperwork, verify all parties re in compliance with transaction requirements and receive confidential information about the parties. However, she may not negotiate or advocate for the parties and must disclose all known material defects about the property. In which capacity is this ensee acting?

A. As a non-agent

B. As a special agent

C. As a general agent

D. As a disclosed dual agent

B. As a special agent

When the seller lacks knowledge of an item on the property condition disclosure, the listing agent should

A. provide an implied warranty instead..

B.waive all inspections.

C.complete the form for the client.

D.notify the buyer's agent.

D.notify the buyer's agent.

Fred is the holder of a right of first refusal on a piece of property. The owner has decided not to sell. What action may Fred take?

A. As the owner is in breach of contract, Fred could petition the court for liquidated damages.

B. Fred has no recourse but to wait as the owner is under no obligation to sell the property.

C. The owner could sue Fred for breach of contract and force specific performance.

D.Fred could sue the owner for breach of contract and force specific performance.

B. Fred has no recourse but to wait as the owner is under no obligation to sell the property.

Which of the following situations automatically terminates an offer to purchase real estate?

A.the impending death of the offeror or offeree

B. acceptance of the offer by the offeree

C.revocation by the offeror after being notified of the offerrees acceptance

D.failure to accept the offer within the time stated therein by the offeree

A.the impending death of the offeror or offeree

Is the common expression used in purchase agreements that is meant to protect both the buyer and seller from delays ining but could also lead to one of the parties being in breach of contract?

A.novation

B.partial performance

C.statute of limitations

D.time is of the essence

D.time is of the essence

In this situation what is most important for the broker to explore before counseling the investor and putting his units on the market?

A. Be honest with the investor and tell him that he was foolish for spending so much money on rental properties and he should keep the property until he is able to depreciate all the improvements over the next 31 years.

B.Establish what the expenses, income, and vacancy rate of the investors building is, and then do an analysis using 4 or 5 comparable 8 unit buildings that have sold in the same area in the past 6-9 months to come up with the market value. Then the broker could estimate the investor's profit.

C. Explain that he will develop his opinion of value by using the income approach and that the investor may not be able to recover all the cost of his improvements.

D.Confirm the purchase price that was paid eight years ago so he will be able to accurately depreciate the property to come to his present market value.

E. Advise that he is not an appraiser, but would be happy to complete a sales comparison to develop an opinion of value and add the cost of his improvements to calculate the present market value of the property.

F.Explain that the property's market value will reflect comparable sales with lower quality improvement and that the investor will not get back all his expense of improvements. The broker will assign them some value and hope to recapture some of the investors costs.

E. Advise that he is not an appraiser, but would be happy to complete a sales comparison to develop an opinion of value and add the cost of his improvements to calculate the present market value of the property.

The purpose of the Indiana Real Estate Recovery Fund is to.

A. compensate those who suffer cash losses due to deceitful actions of licensees.

B.compensate the Indiana Real Estate B.Commissioners for their services to the state.

C.allow the state of Indiana to recover the costs involved in the investigation of real estate complaints,

D.allow managing brokers to recover any losses they incur as the result of the inappropriate actions of any of the agents.

A. compensate those who suffer cash losses due to deceitful actions of licensees.

A real estate licensee who is selling the licensee's own property must

A. List the property with the licensee's real estate company.

B. Disclose the licensee's ownership status to the licensee's Managing Broker.

C. Advertise the property in the name of the licensee's Managing Broker.

D. Disclose the interest in the property to potential buyers when showing the property.

D.disclose the interest in the property to potential buyers when showing the property.

Under which of the following circumstances is subagency allowed?

A. when the licensee has a pre-existing agency relationship with the seller

B.for commercial property only

C.when the buyer does not want an agency relationship

D.under no circumstances

D.under no circumstances

Sellers list their home with Broker X and give Broker X a survey of the property. Broker X leaves the real estate business and does not give the survey to the Managing Broker. In this case

A.the Managing Broker bears no responsibility for the survey.

B. Broker X bears no responsibility for the survey.

C.only Broker X is responsible for the survey.

D.both the Managing Broker and Broker X are responsible for the survey.

D.both the Managing Broker and Broker X are responsible for the survey.

Lack of cooperation with an investigation of a broker by the office of the Attorney General would include

A.failure to respond to a subpoena.

B.not submitting to a polygraph test.

C.failure to respond to voicemails left by an investigator.

D.submitting a response in writing to a pending investigation.

C.failure to respond to voicemails left by an investigator.

Buyers hired a broker for a fee to represent them in the purchase of a property. The buyers decide to purchase a property that the broker has listed. Under these circumstances, which of the following statements is CORRECT about the broker receiving a fee from both the buyers and the seller?

A. It is illegal to receive compensation from more than one party in a transaction.

B. By making a written disclosure to each party and receiving their permission, the broker may receive both fees.

C.Under Indiana Real Estate License Law, commissions are paid by the seller.

D.Since the entire transaction was conducted within one firm, if oral notice was given to the parties, the broker may collect both fees.

B. By making a written disclosure to each party and receiving their permission, the broker may receive both fees.

When the Indiana Real Estate Commission decides to examine the records of a broker, how much advance notice of the examination MUST be given to the broker?

A. 120 days

B. 30 days 

C.24 hours 

D. none

D. none

Licensees in "unassigned" status

A. have the same CE requirements as active status licensees.

B. have no CE requirements until the time of license renewal.

C.may make referrals to and receive fees only from their managing broker.

D.must notify their managing broker of any intent to activate their license.

A. have the same CE requirements as active status licensees.

If the Indiana Real Estate Commission denies a person's license application, the person may appeal the denial by

A.filing a formal appeal with the Indiana Attorney General's office.

B. petitioning the Commission for review.

C.filing for review by the Indiana Association of REALTORS®.

D. completing six hours of continuing education.

B. petitioning the Commission for review.

A developer's ban on the use of a chain link fence in a residential development is an example of

A. An encroachment.

B. a covenant.

C. a zoning ordinance.

D. eminent domain.

B. a covenant.

The buyer is interested in opening a day care center in the city. A large vacant lot near the manufacturing district is available. The city is encouraging more day care and has stated they will happily grant a variance. The buyer's agent should advise buyer

A. of the possibility of contamination and suggest the offer be written only subject to a satisfactory environmental rel

B. against such a venture as getting all of the approvals in place will be difficult.

C. to seek a location elsewhere that is already suitably zoned.

D. to write the offer contingent upon a satisfactory environmental report and zoning and planning commission approval

D. to write the offer contingent upon a satisfactory environmental report and zoning and planning commission approval

A purchase contract required that the property be free of tenants when the property conveyance occurred. On the day of closing the tenants were still living in the property. Who is responsible for ensuring that the tenants vacated the property prior to closing?

A. the buyer

B. the seller

C. the listing broker

D. the selling broker

B. the seller

A tenant executes a 1-year lease on a residential property. Four months later, the landlord sells the property to a third party, who wants to take immediate possession. If the lease is silent regarding this situation, which of the following best describes the status of the lease?

A. The lease is not terminated, and the buyer does not take possession until expiration of the lease.

B. The landlord, as the seller, has the right to terminate the lease by operation of law.

C. The landlord cannot sell the property to the buyer, as all tenants must be given first right of refusal.

D. The buyer, as the new titleholder, can terminate the lease.

A. The lease is not terminated, and the buyer does not take possession until expiration of the lease.

A developer has a 100-acre tract to develop. Two percent of the land will be used for recreational areas and 10% will be used for roads and utilities. Acre lots are selling for $32,000. What is the potential gross income from sale of this development?

A. $2,816,000

B. $2,944,000

C. $3.200.000

D. $5,632.000

A. $2,816,000

A listing broker presents an offer from a customer that meets every term asked for in the listing agreement. The seller decides not to sell. Which of the following statements is most likely true?

A. The broker could collect a commission.

B. The broker could sue for specific performance.

C. The buyer could sue for specific performance

D. The seller will not have to pay a commission.

D. The seller will not have to pay a commission.

When using the cost approach to develop an estimate of property value, which step would NOT be part of the process?

A. estimating the value of the land as though it were vacant and available to be put to its highest and best use

B. capitalizing the net operating income utilizing the current LIBOR rates

C. deducting the estimated amount of the property's accrued depreciation

D. deducting the accrued depreciation from the construction cost

B. capitalizing the net operating income utilizing the current LIBOR rates

A buyer wants to purchase a home for $160,000 with a 15% down payment. The lender charges 2 points. How much money does the buyer need up front to make the purchase?

A. $3.200

B. $23.520

C. $24,400

D. $26.720

D. $26.720

A seller's broker is negotiating to convince a lender to accept less than the balance due as complete satisfaction of the selle debt. If the lender agrees the transaction would be considered

A. a negotiated balance reduction

B. an equitable redemption.

C. debt forgiveness.

D. a short sale.

D. a short sale.

An example of modular construction is

A. prefabricated housing.

B. an apartment building.

C. a home used as a model.

D. a mobile home.

A. prefabricated housing.

Agent receives a $3,000 cash deposit from a buyer for a condominium. The agent gives it to the broker late on Friday afternoon. The broker has a party that evening. He deposits the money in his business account, planning to move it on Monday. This is

A. legal because the deposit is cash.

B. illegal because it is commingling.

C. legal because he will move it on Monday.

D. illegal because it is a form of conversion.

B. illegal because it is commingling.

A licensee representing a seller has the duty to present all written offers to purchase from cooperating brokers

A. within 24 hours of receiving the offer.

B. immediately upon receipt of the offer.

C. when the buyer's broker is unavailable for the presentation.

D. until an offer is accepted.

B. immediately upon receipt of the offer.

A broker has been hired to appraise a property being offered for sale. The broker must

A. arrive at the same estimated market value as the certified real estate appraiser.

B. adhere to the Uniform Standards of Professional Appraisal Practice (USPAP).

C. accept a fee only if the estimated value is the same or higher as the purchase agreement price.

D. notify the lender immediately if the value reached is lower than the purchase price

B. adhere to the Uniform Standards of Professional Appraisal Practice (USPAP).

The Indiana Real Estate Commission's general powers under Indiana law include

A. delegating rulemaking authority to the Indiana Association of REALTORS®,

B. directing the Office of the Attorney General to file specific charges against a broker.

C. adopting rules defining incompetent practice of real estate.

D. revoking a license and prohibiting the person from ever applying for a new license.

C. adopting rules defining incompetent practice of real estate.

A limited agent may disclose which of the following facts?

A. The septic system is inadequate to service the property.

B. The sellers of the property are filing for divorce.

C. The buyer will pay list price for the property.

D. The seller has rejected higher offers.

A. The septic system is inadequate to service the property.

A broker is affiliated with Broker Company XYZ. The broker opens a limited liability company (LLC) on the side to practice property management for third parties for consideration. This is an example of

A. lawful practice.

B. a fraudulent act.

C. an ethical violation.

D. incompetent practice.

D. incompetent practice.

A real estate licensee accepting employment on the basis that the licensee receives only half of the appraisal fee in estimated value does not equal the subject's sale price is an example of

A. incompetent real estate practice.

B. a violation of the Statute of Frauds.

C. a valid compensation policy.

D.compliance with Uniform Standards of Professional Appraisal Practice (USPAP).

A. incompetent real estate practice.

A licensed broker, acting as a real estate appraiser, accepts an appraisal assignment based on a predetermined value. The broker may

A. be subject to license revocation or suspension.

B. receive a fee depending upon the amount of predetermined value.

C. be required to disclose this fact to the listing broker.

D. advertise for future assignments based on this practice.

A. be subject to license revocation or suspension.

A broker who is assigned to a managing broker may

A. list real property in the name of the managing broker company.

B. accept an undisclosed commission if the managing broker approves.

C. represent another managing broker with whom the broker is not associated.

D. not be required to follow Uniform Standards of Professional Appraisal Practice (USPAP) guidelines when preparing an appraisal

A. list real property in the name of the managing broker company.

The Indiana Real Estate Commission may delay the renewal of a broker's license if the

A. broker owes past Multiple Listing Service (MLS) fees.

B. Commission is completing an investigation that will verify whether the licensee has committed an act that require discipline.

C. Managing Broker has failed to provide the Commission with copies of the broker's continuing education certificate 

D. licensee has not successfully completed the latest Uniform Standards of Professional Appraisal Practice (USPAP) update.

A. broker owes past Multiple Listing Service (MLS) fees.

How many continuing education hours are required for each CE year?

A. 36

B. 24

C. 16

D. 12

D. 12

A property that is under contract is damaged by a storm before title is transferred. What action should the listing broker take with respect to the damage caused by the storm?

A. Estimate the damages and guarantee that the damage will be repaired before closing.

B. Advise the seller that the contract is invalidated by the changed conditions.

C. Keep the information confidential since the broker represents the seller.

D. Disclose to buyer that a storm damaged the property.

A. Estimate the damages and guarantee that the damage will be repaired before closing.

Interest rates charged by banks in the primary market are most likely a result of the actions of which agency?

A. Consumer Financial Protection Board

B. HUD (for FHA and VA loans)

C. Federal Reserve Board

D. Fannie Mae

C. Federal Reserve Board

A subordination agreement is used to

A. change the priority of mortgages.

B. Initiate foreclosure proceedings.

C. pledge property for a loan without giving up possession.

D. assign rents to the lender in case of borrower default.

A. change the priority of mortgages.

A property owner cannot build a home on his lot and still meet setback requirements because of a steep upgrade at the back of the lot. In order to build, the owner will most likely apply for

A. an amendment to zoning.

B. A variance.

C. a conditional use permit.

D. spot zoning.

B. A variance.

When is it appropriate to use the tax assessor's parcel number as a legal property description?

A. It is appropriate only in a quitclaim deed.

B. It is appropriate as long as it is assigned a unique parcel number.

C. It is appropriate only if doing so has been approved by the county clerk.

D. Never, it is only useful as a general means of identifying a particular parcel.

D. Never, it is only useful as a general means of identifying a particular parcel.

A loan is offered and later there is a change in APR of 0.125%. What will be required to close?

A. an expedited closing

B. a shortened loan term

C. a revised closing disclosure

D. a notification from the Consumer Financial Protection Bureau

C. a revised closing disclosure

May a licensee who is NOT the listing agent hold an open house for the listing broker within the same company?

A. Yes, but the licensee would have to disclose to visitors that only the listing broker could write up an offer.

B. No, because the licensee does not represent the seller and it would be a conflict of interest.

C. No, the licensee would need to sign another listing with the seller to hold the open house.

D. Yes, this would be allowed with appropriate disclosure and permission from the seller.

D. Yes, this would be allowed with appropriate disclosure and permission from the seller.

A sole proprietor broker wants to keep her office procedures as simple and streamlined as possible. She instructs her accountant to set up a single bank account with sub-accounts in the books to keep track of business operations in one area and trust account requirements in a different sub-account. She writes a special instruction for anyone depositing funds Including herself or her assistant to be absolutely certain to keep all trust funds and closing proceeds separate from operating funds. She even has a separate checkbook on this account for each function. Would this structure provide sufficient protection for funds held in trust for others and why or why not?

A. Yes, because the bookkeeping would separate the functions and the two checkbooks would show what was used for which function, this procedure would provide the protection needed.

B. Yes, because when state regulations require separate accounts, it is generally possible to keep separate sub-accounts as long as the bookkeeping allows the broker to identify exactly how much of the money is held in trust at any specific time.

C. No, because this single account would now have multiple owners including many for whom the money is held in trust, the FDIC insurance would not protect the owners from fraud or commingling.

D. No, because funds belonging to others must not be commingled with funds belonging to the broker or brokerage, andin the procedure outlined, all of the funds would be in a single bank account, so they would be commingled no matter how careful the bookkeeping was.

D. No, because funds belonging to others must not be commingled with funds belonging to the broker or brokerage, andin the procedure outlined, all of the funds would be in a single bank account, so they would be commingled no matter how careful the bookkeeping was.

A buyer's broker is aware that a lot adjacent to the home the buyer is considering was occupied by a dry cleaning company for 15 years. What is the broker's responsibility regarding this knowledge?

A. The buyer's broker has no responsibility unless environmental contamination has actually been identified.

B. The buyer's broker must disclose to the buyer but may not inform the listing broker.

C. The buyer's broker must disclose to the buyer and should inform the seller's broker.

D. The buyer's broker should disclose this information directly to the seller.

C. The buyer's broker must disclose to the buyer and should inform the seller's broker.

In conducting a real estate appraisal, a reconciliation process will be necessary because

A. different approaches to value will yield different estimated values for the same property.

B. it is the only means of reaching a reasonable estimate of market value.

C. the appraiser's estimate of market value needs to be reconciled with the assessed value listed on the tax roll:

D. the appraisal cannot be considered reliable without it.

A. different approaches to value will yield different estimated values for the same property.

An exclusive right-to-sell listing obtained by a salesperson belongs to

A. the seller only.

B. the broker only.

C. the salesperson only.

D. both the salesperson and broker.

B. the broker only.

To be a proper legal description, a recorded plat must be filed with

A. the Secretary of State in the state where the land is located.

B. the city office that approves the plat.

C. the county recorder's map records.

D. the state recorder's office.

C. the county recorder's map records.

A licensee just attended a class on using social media to further her real estate sales career. She was so excited about the class that she Immediately came home and signed up for Facebook, Twitter and Linkedin. She has chosen a listing to market via social networking, a residence recently built to resemble an antebellum mansion. Which of the following words or phrases may she lawfully include in her advertising?

A. updated antebellum

B. antebellum mansion

C. antebellum style mansion

D. beautiful "antebellum" estate

C. antebellum style mansion

A broker is assisting a trainee in listing an older home in a very stable part of the city. The sellers have owned the home for 45 years, and they mention that when the property next door was enlarged and modernized years ago, the added second floor overhang adjacent to the sellers' property may actually come across the property line above their property. Since their home is set back 20 feet from that side, they did not impact their value. How should the broker advise the trainee to handle this situation with the sellers?

A. Ignore the sellers' concern and proceed with the listing.

B. Advise the sellers to get a property survey to determine if there is an encroachment.

C. Take a measuring tape and, after locating the property line, measure the length of the overhang compared to the setback of the ground floor of the neighbor's house.

D. Send the trainee to the city zoning office to view the plans for the addition to the neighbor's house and the plot plan that goes with it, to check for any possible setback violation or encroachment.

D. Send the trainee to the city zoning office to view the plans for the addition to the neighbor's house and the plot plan that goes with it, to check for any possible setback violation or encroachment.

Which of the following is most correct regarding a seller's rights when she has countered an offer to purchase and another offer is presented?

A. The seller must wait for either an acceptance or rejection of her counteroffer before accepting the new offer.

B. The seller may accept another offer if she first cancels the counteroffer before it is accepted.

C. The seller must give the same counteroffer to all offerors.

D. The seller may accept the second offer, even if she has received notification that her first counteroffer is accepted.

B. The seller may accept another offer if she first cancels the counteroffer before it is accepted.

A conditional-use permit allows an individual landowner to deviate from

A. deed restrictions.

B. zoning requirements.

C. environmental requirements.

D. building codes.

B. zoning requirements.

An adjustable rate mortgage may NOT be good for a buyer

A. who only intends to own the property for a short time.

B. whose income is likely to increase.

C. who is about to retire.

D. who is receiving his down payment as a gift from parents.

C. who is about to retire.

An agreement between brokers to charge a specific commission rate

A. violates fair housing laws.

B. is unethical, though technically legal.

C. violates RESPA.

D. illegally inhibits competition.

D. illegally inhibits competition.

Which of the following best completes the following metes and bounds description? Beginning at the intersection of Bun Hill Road and Munson Avenue, thence 150 feet south; thence 85 feet west; thence 150 feet north; thence

A. 150 feet south to the Point of Beginning.

B. 150 feet west to the Point of Beginning.

C. 85 feet west to the Point of Beginning.

D. 85 feet east to the Point of Beginning.

C. 85 feet west to the Point of Beginning.

A property is listed at $450,000, and the prequalified buyer believes no additional financing will be needed. The buyer is then notified the property is encumbered with a $30,000 mortgage. The buyer's agent advises his buyer to assume equity by paying the $30,000 mortgage. The sales contract is accepted with no mention of existing mortgage terms. The closing statement reflects the price of the property at $450,000 with a credit for $30,000 mortgage. The deed to the buyer was exempt and the loan did not fund. When the mortgage debt was not paid, the mortgagee foreclosed. Who is liable for the foreclosure?

A. buyer

B. mortgagee

C. buyer's agent

D. seller's agent

B. mortgagee

Fred is a licensee at ABC Realty and he has a listing to sell 123 Main Street. The listing will not expire for 70 more days, If Fred decides to move his license to QRS Realty, what is the status of the listing?

A. Fred cannot qualify for any part of the commission even if Fred finds a buyer who purchases 123 Main Street during

the listing period.

B. It is Fred's listing so he will automatically get the listing commission when the property sells regardless of the change of brokerage companies.

C. Fred can inform both the seller and the principal broker of ABC Realty that he is moving the listing to QRS Realty and continue to market the property.

D. The listing belongs to the firm, ABC Realty, and the rights to a commission if the property sells during the listing will be determined by the policies of ABC Realty.

D. The listing belongs to the firm, ABC Realty, and the rights to a commission if the property sells during the listing will be determined by the policies of ABC Realty.

The purchase and sales agreement provides for release of earnest money to the seller after the buyer's property inspection. The seller requests the earnest money prior to the property inspection. The broker should

A. release the earnest money to the seller immediately.

B. notify the buyer of the broker's intention to release the earnest money to the seller.

C. release the earnest money on the buyer's verbal approval.

D. refuse to release the earnest money.

D. refuse to release the earnest money.

The real estate licensee handling a transaction has the right to advise the parties, complete needed paperwork, verify all parties are in compliance with transaction requirements and receive confidential information about the parties. However, she may not negotiate or advocate for the parties and must disclose all known material defects about the property. In which capacity is this licensee acting?

A. as a non-agent

B. as a special agent

C. as a general agent

D. as a disclosed dual agent

C. as a general agent

An exclusive buyer agent is meeting with her buyers to complete an offer to purchase a property. The buyers mention that they noticed indications that the roof leaks. The property condition disclosure form completed by the sellers has no mention of any roof problems. What obligation does the buyers' agent have to the buyers beyond showing them the property condition disclosure form? The buyers' agent should

A have the roof inspected before writing an offer on the property.

B. recommend that the buyers have an inspection made.

C. insist that the buyers not make an offer until the roof issue is settled.

D. encourage the buyers to wait until there is a rain before deciding the roof leaks.

B. recommend that the buyers have an inspection made.

You are the supervising broker of a real estate company. On August 1, one of your licensees listed a house owned by an investor client. On August 10, a full-price offer was received from the buyer's agent, a licensee with a cooperating real estate company, and accepted by the seller. The buyer's agent indicated that the buyer is a transferee. The sale is to close on September 10, but on September 5, the buyer's agent informs the seller's agent that his client is not going to close and wants the earnest money refunded. Your firm is holding the earnest money. Which information is the most critical to be obtained?

A. The amount of transactions the buyer's agent has completed.

B. The number of times the buyer's agent met with the buyer before making the offer.

C. The reason why the buyer is not closing.

D. Verifying if there is a clause in the purchase agreement regarding the disbursement of earnest default.

E. What the source of the earnest money is.

F. If the buyer's agent tried to sell the buyer something else.

D. Verifying if there is a clause in the purchase agreement regarding the disbursement of earnest default.

Which of the following statements is true concerning an unrecorded deed?

A. It is not valid between the grantor and the grantee.

B. It need not name the grantee.

C. It need not contain a legal description.

D. It does not give constructive notice of ownership.

D. It does not give constructive notice of ownership.

Which of the following is NOT a good reason to recommend the seller provide a home warranty?

A. The National Association of Realtors statistics show homes with a warranty sell 15% faster.

B. Purchasing a home warranty is a good method of risk reduction for a seller to consider.

C. The fee the home warranty company pays will increase the cash flow for the brokerage.

D. Sixty-eight percent of used homes will have a major system failure the very first year purchased.

C. The fee the home warranty company pays will increase the cash flow for the brokerage.

When can a non-licensed individual acting as an independent contractor for a broker represent a property owner?

A. when the independent contractor acts according to requirements of real estate law

B. when representing the property owner, the independent contractor must be licensed

C. when the individual does not represent renters while handling rental properties

D. when the individual represents themselves as a real estate professional

B. when representing the property owner, the independent contractor must be licensed

A real estate brokerage firm provides property management services to the owner of an apartment complex. During their business relationship, the apartment building catches fire and three tenants die. The surviving family members sue the owner of

the apartment complex as well as the property management company for wrongful death, alleging negligence in the maintenance and control of the apartment building, as well as failure to keep the property safe. Who would be liable in this scenario?

A. The owner of the property is solely liable.

B. The inspection and engineering service vendors are liable.

C. The owner and the brokerage firm are liable for professional negligence.

D. The errors and omissions insurance would cover this incidental occurrence.

C. The owner and the brokerage firm are liable for professional negligence.

The TILA-RESPA Integrated Disclosure (TRID) Rule requires a loan estimate document provided by the lender. Approximately when should the broker advise the borrower to expect the loan estimate?

A. immediately upon loan application

B. at least 24 hours prior to the closing

C. exactly 10 days before the loan consummation

D. not more than 3 days after the lender receives the loan application

D. not more than 3 days after the lender receives the loan application

In order to collect a commission, which of the following is a requirement for a broker with an open listing?

A. The broker must put the listing in the MLS.

B. The listing must have a protection clause.

C.The broker or one of his licensees must be the procuring cause for the sale.

D. The broker must notify any other broker with an open listing on the property of the sale within 2 days after

C.The broker or one of his licensees must be the procuring cause for the sale.

A complainant in a discrimination case under the Federal Fair Housing Act MUST prove

A. only that discrimination occurred.

B. that discrimination occurred and was not provoked.

C. that the accused party intended to discriminate.

D. that damages occurred.

B. that discrimination occurred and was not provoked.

A buyer contracts without contingency to purchase a home for $800,000 and the seller accepts. The house is appraised at $700,000 and the lender agrees to make an 80% loan-to-value loan. The earnest money deposit of $16,000 is in an escrow account. Which outcome is correct if the buyer cannot provide the additional $224,000 needed to close?

A. The contract is voidable because the property is not worth the sales price.

B. The seller can cancel the contract and keep the earnest money deposit.

C. The seller will adjust the sales price.

D. The lender will cover the difference

B. The seller can cancel the contract and keep the earnest money deposit.

One of the major DISADVANTAGES of real estate as an investment is that

A. managing it requires expertise.

B. it is highly speculative.

C. its liquidity is limited.

D. the tax advantages are minimal.

C. its liquidity is limited.

The statement "A contract for the transfer of an interest in land must be in writing," best defines which of the following real estate concept? 

A. acknowledgement

B. Mutual consent

C. statute of frauds

C. statute of limitations

C. statute of frauds

In the rectangular survey system of land description, Range 3 West would be best described as a

A. line 12 miles west of the principal meridian.

B. strip of land 12 miles east of the principal meridian.

C. strip of land between 12 and 18 miles west of the principal meridian.

D. Point 12 miles west of the principal meridian on the principal base line.

C. strip of land between 12 and 18 miles west of the principal meridian.

Happy Trail Community was just informed by the city that the entire subdivision will be assessed to pay for a sewer line on one street in the community. Each lot will be assessed based on  front footage. Sally Seller, a resident of Happy Trail, is about to list her home. If she does so, she will need to include in the property disclosures the fact that the property is subject to a

A. Special assessment 

B. Utility assessment 

C. sewer ad valorem tax 

D. special community assessment

A. Special assessment 

Under Indiana Real Estate License Law, the definition of a psychologically affected home includes a home

A.where a person died.

B. that is publicized in the community as being haunted.

C. that was previously sold at foreclosure.

D. that is on the historic register.

A.where a person died.

A broker who is assigned to a managing broker may

A. list real property in the name of the managing broker company.

B. accept an undisclosed commission if the managing broker approves.

C. represents another managing broker with whom the broker is not associated.

D. not be required to follow Uniform Standards of Professional Appraisal Practice (USPAP) guird appraisal.

A. list real property in the name of the managing broker company.

Broker Z is a member of a limited liability company (LLC) that buys and sells investment properties. The LLC lists the properties with Broker Q at a different brokerage firm. Broker Z

A.does not need to disclose an ownership interest in the LLC of less than 5 percent.

B.must disclose, in writing, Broker Z's interest to all parties in real estate transactions.

C. must disclose, in writing, only when selling properties listed with her Managing Broker.

D.does not need to disclose her interest, as the LLC is a separate legal entity.

C. must disclose, in writing, only when selling properties listed with her Managing Broker.

Which of the following would most likely cause housing prices to fall?

A. the opening of a new business hiring 250 engineers

B. the sale of three luxury homes in the neighborhood

C. a shortage of properties on the market

D. a sharp increase in interest rates

D. a sharp increase in interest rates

Sarah has passed her broker exam and has applied for licensure with IPLA. What activities may she NOT undertake?

A. make copies of open house flyers

B. provide directions to local open houses

C. reconcile the broker company's escrow account

D. explain amortization tables and mortgage products

D. explain amortization tables and mortgage products

Prior to placing a "For Sale" sign on a property, a licensee must have

A. oral consent of the seller.

B. an open listing contract.

C.written consent of the seller.

D.any form of a listing contract.

D.any form of a listing contract.

In order for a broker to transfer from one broker company to another, the broker must

A. notify the Indiana Real Estate Commission of the name and address of the new broker company within the transfer.

B. notify the Indiana Real Estate Commission within five days of the transfer.

C. have the former broker company send the broker's pocket card and transfer request to the new broker 

D. become a managing broker until a new pocket card is issued.

C. have the former broker company send the broker's pocket card and transfer request to the new broker 

A person without a valid real estate license cannot list or sell real estate for consideration unless that person

A. is over 18 years of age.

B. has received a license from the attorney general.

C. has held a license in another state for at least 10 years.

D. falls under an exemption from licensing in the Indiana Real Estate License Law.

D. falls under an exemption from licensing in the Indiana Real Estate License Law.

Broker X is meeting with Seller Y to list her family home of 60 years. Seller Y's sight is failing and she does not want to fill out the Seller's Residential Real Estate Sales Disclosure form. Broker X is obligated to

A. inform Seller Y that the form can be waived.

B. complete the form to the best of Broker X's knowledge.

C. inform Seller Y that it is her responsibility to complete the form.

D. complete the form and have Seller Y sign.

C. inform Seller Y that it is her responsibility to complete the form.

To participate in a referral service, a Broker Company must

A. Be a member of a franchise.

B. be licensed in the state to which they are sending the referral.

C. have a written agreement with the cooperating broker.

D, place their license in referral status with the Indiana Real Estate Commission.

C. have a written agreement with the cooperating broker.

Every Broker Company shall be directed, supervised, and managed by an individual broker. The individual broker

A. may not act as a branch manager.

B. must maintain an Errors and Omissions (E&O) insurance policy.

C. shall be primarily responsible for the Broker Company's actions.

D. must have been a Managing Broker for a minimum of three years

C. shall be primarily responsible for the Broker Company's actions.

A newly licensed broker must take and pass 30 hours of post-licensing education

A. within 3 years after the license was issued.

B. before applying as a Managing Broker.

C. before the broker applies for renewal.

D. within 2 years after the license was issued.

D. within 2 years after the license was issued.

Any display, classified advertising, sign, Internet advertising, or business card carrying a licensee's name

A. must contain the Broker Company name and the name must be in a larger font than the licensee's name.

B. must contain the Broker Company name and the name must be clearly visible.

C. does not have to contain the Broker Company name.

D. must contain the licensee's corporate name.

B. must contain the Broker Company name and the name must be clearly visible.

A seller of real estate, who does not have a real estate license, swindles a buyer out of $60,000. How much, at a maximum, the buyer recovers from the Indiana Real Estate Recovery Fund?

A. $0

B. $20,000

C.$50,000

D.$60.000

A. $0

At the consummation of a transaction, the listing broker is required to deliver a complete detailed closing statement to the

A. buyer.

B. seller.

C. seller's broker.

D. buyer's broker.

C. seller's broker.

A broker discovers that a former buyer client has listed their home with another broker. The broker calls the former client and suggests that they try to get out of the contract and list with them. This call is

A.deemed a breach of contract.

B. deemed incompetent practice.

C. allowable because of the former agency relationship.

D. allowable because the seller should have the choice as to who will represent them.

B. deemed incompetent practice.

A broker tells a friend, who does not have a real estate license, that if the friend will help the broker obtain listings, the broker will pay the friend a portion of the commission. This practice is:

A. legal if the broker provides full written disclosure to all parties

B. illegal if there is no written consent from the client

C. legal as long as it is considered a finder's fee and not a commission

D. illegal because no commission may be paid to an unlicensed person

D. illegal because no commission may be paid to an unlicensed person

Which of the following is a CORRECT statement about a Broker Company's office agency policy?

A.The policy must permit or reject disclosed limited agency.

B.The policy must be furnished to seller clients only.

C. The policy must be furnished to buyer clients only.

D.The policy must state that compensation creates an agency relationship.

D.The policy must state that compensation creates an agency relationship.

A licensee acting on behalf of an out-of-town seller receives an offer from a buyer. The licensee may accept the offer

A. as an agent of the principal.

B. if the licensee has the managing broker's authority.

C. with verbal approval from the seller via a phone conversation.

D. only if the licensee has written authority as power of attorney from the seller.

D. only if the licensee has written authority as power of attorney from the seller.

An executory contract is one that

A. is made by the executor of an estate for the sale of probate property.

B. has yet to be performed.

C. has been completely performed.

D. has been proposed but not yet signed by either party.

B. has yet to be performed.

Price fixing occurs when

A. the broker lists a property at the price set by the seller.

B. an employing broker and her employed broker make a side agreement relative to commission.

C. two employing brokers agree to charge identical fees for services.

D.an associate broker takes a listing at less than the company's scheduled fee.

C. two employing brokers agree to charge identical fees for services.

Buyer and seller enter into a clear contract. The buyer refuses to purchase for a reason not excused by a contingency. Which statement is correct?

A. The seller is entitled to damages the buyer caused, which are taken from either the earnest money deposit or the 20% down payment.

B. The original buyer gets the earnest money deposit back as soon as there is a new offer.

C. The seller has the right to terminate the contract and keep the earnest money deposit.

D. The seller has the right to keep 20% of the down payment on property.

C. The seller has the right to terminate the contract and keep the earnest money deposit.

The buyer gave the broker an earnest money deposit of $5,000. As closing was approaching the buyer discovered he needed $2,000 back in order to pay off a charge card and get his debt-to-income ratio where it needed to be to obtain the loan. The broker wrote him a check for $2,000 from the trust account. Is this acceptable, and why or why NOT?

A. Yes, because the transaction has not yet closed and therefore the buyer may request his money.

B. Yes, because this practice would be permissible with the seller and buyer's written permission.

C. No, because under no circumstance may money be taken from the broker's trust account; it belongs to the transaction

D. No, because the withdrawal of the $2,000 would have reduced the amount of deposit to less than the minimum required.

C. No, because under no circumstance may money be taken from the broker's trust account; it belongs to the transaction

A recently widowed farm owner has called the agent to list a one-acre building site in order to raise the money to pay the property taxes. How should the agent proceed?

A. pace off the land, put markers on the corners, and advertise the building site for sale

B. draw up the legal description of the property, list it, and begin the marketing campaign

C. refuse the assignment, as one cannot divide and sell a portion of their land without selling all of it

D. Contact the municipality to determine if this is possible, and then have a surveyor prepare the description

D. Contact the municipality to determine if this is possible, and then have a surveyor prepare the description