MA Real Estate Exam

Which rule-of-thumb formula for estimating property value is being offered to an investor who is told that a house renting for $900 a month should sell for about $90,000?

a) CMA

b) IRV

c) NOI

d) GRM

d) GRM

State laws differ on whether a buyer is entitled to know about

a) a suicide that occurred in the house last year.

b) possible lead paint in the property.

c) the flooding of the basement every spring.

d) the fact that the sellers are getting a divorce.

a) a suicide that occurred in the house last year.

An owner lists his home and agrees to pay a 6% commission provided he nets $10,000 after paying the commission and the balance of his mortgage, which is $75,000. To the nearest dollar, what should the selling price be to net the owner his $10,000?

a) $79,787

b) $80,189

c) $90,100

d) $90,426

d) $90,426

Ps-0.06Ps = 75,000 + 10,000. 0.94

Ps = 85,000. Ps = $90,426 = Selling price.

A broker supplies the financing for a project to build condominiums with the stipulation that he has the exclusive right to sell the completed condos. Which of the following BEST describes this relationship?

a) Agency coupled with an interest.

b) Specific agency.

c) General agency.

d) Exclusive agency.

a) Agency coupled with an interest.

If a borrower can afford to make monthly principal and interest payments of $1,000 and the lender will make a 30-year loan at 5-1/2%, or a 20-year loan at 4-1/2%, what is the largest loan (rounded to the nearest $100) this buyer can afford? (BE SURE TO USE THE AMORTIZATION TABLE.)

a) $158,100

b) $158,300

c) $175,900

d) $176,100

d) $176,100

When a listing broker is preparing an Offer to Purchase for a buyer customer, contingencies involving inspections or approval by a third party should

a) have short deadlines.

b) be discouraged by the broker.

c) be stated as briefly as possible.

d) be limited to mortgage arrangements.

a) have short deadlines

A charge of violation of Federal Fair Housing laws can be heard by an administrative law judge within the Department of Housing and Urban Development (HUD) or by a Federal district court judge in Federal court. The advantage of a Federal court hearing to the complaining party is that

a) the case will be more thoroughly reviewed.

b) there is no dollar limit on damages paid.

c) only a district court judge can order that the property be sold to the complaining party.

d) only a district court judge can order jail time for the guilty party.

b) there is no dollar limit on damages paid.

A lender will make an 80% loan-to-value loan on a property that is appraised for $72,250 and sells for $73,500. If the buyer has saved $14,450 for a down payment, how much more (if any) will he need in order to make the down payment required under the terms of this loan?

a) He has $1,000 more than he needs for the down payment.

b) He has exactly the amount needed for the down payment.

c) He needs an additional $250 in order to make the down payment.

d) He needs an additional $1,250 in order to make the down payment.

d) He needs an additional $1,250 in order to make the down payment.

Which restrictive covenant would be considered illegal?

a) A covenant that is more restrictive than local zoning ordinances.

b) A restriction that is time-limited and expires after a stated period.

c) A covenant that restricts the type of building that may be constructed.

d) A covenant that restricts selected parcels within a defined subdivision.

d) A covenant that restricts selected parcels within a defined subdivision.

A prospective buyer made an offer to purchase a property. The owner responded with a counteroffer. While the buyer was reviewing the counteroffer, the owner received a better offer. The owner can accept the second offer if

a) it satisfies or exceeds all terms included in the counteroffer.

b) the owner withdraws the counteroffer before it is accepted.

c) the owner gives the first buyer notice that another offer was received and an opportunity to revise the bid.

d) the first buyer is informed, in writing, of the owner's intent to accept another offer.

b) the owner withdraws the counteroffer before it is accepted.

A formal appraisal will ALWAYS be REQUIRED when the

a) seller wants to be sure of the home's value.

b) buyer wants to obtain private mortgage insurance.

c) lender wants to sell the mortgage to the secondary market.

d) agent cannot locate enough comparables to complete a CMA.

c) lender wants to sell the mortgage to the secondary market.

A major difference between freehold and nonfreehold estates is that all freehold estates

a) are of indeterminable duration.

b) terminate upon the death of the person on whose life they are based.

c) are inheritable by the holder's heirs.

d) are estates for a fixed term.

a) are of indeterminable duration.

The owner of a large parcel of real estate legally divided it into two smaller parcels. Parcel North was directly to the north of Parcel South. The only road in the area bordered Parcel South. The owner intended to keep Parcel North, and wanted to prevent it from becoming landlocked. In the deed to the buyer of Parcel South, the owner reserved a non-exclusive easement for ingress and egress purposes over the westerly 8 feet of Parcel South. After both parcels were sold to two new owners, the new owner of Parcel South fenced in the entire parcel, making ingress and egress over the westerly 8 feet impossible for the new owner of Parcel North. In a lawsuit between the new owner of Parcel North and the new owner of Parcel South, who will most likely win?

a) The owner of Parcel North. An easement appurtenant cannot unilaterally be terminated by the servient tenement.

b) The owner of Parcel North. An easement in gross cannot unilaterally be terminated by the servient tenement.

c) The owner of Parcel North. Because there is no other access to a road, this is an easement by necessity.

d) The owner of Parcel South. The right to exclude non-owners is a fundamental right of property ownership.

a) The owner of Parcel North. An easement appurtenant cannot unilaterally be terminated by the servient tenement.

All of the following are agency relationships EXCEPT _____________.

a) the attorney-client relationship

b) the real estate salesperson-buyer relationship

c) the real estate broker-buyer relationship

d) the listing broker-seller relationship

e) None of the above - they all have agency relationships

b) the real estate salesperson-buyer relationship

As it pertains to a real estate brokerage firm, a "company dollar" is:

a) The income of the brokerage firm after paying licensee commissions.

b) The income of the brokerage firm before paying licensee commissions.

c) Office expenses divided by brokerage associates.

d) A Section 1031 tax-deferred exchange.

a) The income of the brokerage firm after paying licensee commissions.

A broker collects a non-refundable fee from the seller when the listing is signed to cover the advertising of the property for sale. Such a fee is called an "advance fee" and is considered trust funds.

True of False

True

The Loan-to-Value (LTV) ratio is the maximum amount a lender will lend to finance a loan collateralized by real estate. The loan is based on a percentage of either the purchase price or the appraisal, whichever is less. The 20% down payment lenders traditionally required with conventional financing put homeownership beyond the reach of many Americans. FHA fully-insured financing substantially lowers the down payment lenders require for the purchase of a home because FHA mortgage insurance minimizes lender risk in the event of borrower default. All of the following statements are incorrect, except:

a) FHA is a direct lender.

b) FHA is a joint lender with HUD-approved institutional lenders.

c) FHA insured loans have a lower LTV ratio than conventional loans.

d) FHA insurance premiums may be paid at the close of escrow or financed into the loan.

d) FHA insurance premiums may be paid at the close of escrow or financed into the loan.

You can only legally receive a commission from your employer.

True or False

True

How much time must the parties to a real estate closing be given to review the HUD statement?

a. One hour before closing

b. One day before closing

c. Three days before closing

d. One week before closing

b. One day before closing

You can only appraise a listing if you are a certified appraiser, unless it is a residential property and you are appraising it for listing purposes only.

True or False

True

Ionization Smoke Detectors

Uses radiation to detect smoke

More effective in detecting flames

False alarms by steam from shower or smoke from cooking

3 Characteristics of Land

Immobility, Indestructibility, Uniqueness

Covenant of Quiet Enjoyment

ensures that the title will be good against the title claims of third parties.

Lis Pendens

A recorded legal document giving constructive notice that an action affecting a particular property has been filed in either a state or a federal court.

In helping a buyer to select a lender, if the buyer believes he has good credit and his income is documentable as a salary and by tax returns, the licensee might recommend a mortgage banker, instead of a mortgage broker, for all of the following reasons EXCEPT

a) closing costs may be lower.

b) loan originator has knowledge of the underwriter's policies.

c) more variety of loan programs available.

d) originator and lender are part of same company.

c) more variety of loan programs available.

Which of the following real estate contracts is a service contract?

a) a purchase agreement

b) a listing agreement

c) an option contract

d) a mortgage

b) a listing agreement

A salesperson lists a property with a contract that allows for subagency and dual agency. The salesperson is

a) an independent contractor to the broker and an agent to the principal.

b) an agent to the broker and a subagent to the principal.

c) a subagent to the broker and an agent to the principal.

d) an agent to the broker and an agent to the principal.

b) an agent to the broker and a subagent to the principal.

Salesperson Susan was at the local coffee shop with some agents from other offices. The subject of commissions came up, and agents began to compare their commission rates. Susan should

a) excuse herself from the discussion as this could constitute illegal blockbusting.

b) advise her friends this could constitute a violation of Sherman Antitrust Act.

c) listen carefully so she can be more competitive in the market.

d) be certain her company is charging as much as the others.

b) advise her friends this could constitute a violation of Sherman Antitrust Act.

Earnest money should be deposited into a trust account

a) in a timely manner, according to state laws.

b) upon removal of all contingencies.

c) at the broker's discretion.

d) according to MLS rules.

a) in a timely manner, according to state laws.

Even after an offer has been accepted and is binding, the buyer and seller may still choose to sign mutual release papers rather than proceed to closing. Which of the following circumstances would NOT give either party a justifiable reason to insist on a mutual release?

a) The buyer finds a better property for better terms.

b) A title defect that will take months to clear is discovered.

c) A basement fire causes damage that requires extensive repairs.

d) The buyer is unable to obtain financing that meets the terms of the contract's financing contingency.

a) The buyer finds a better property for better terms

For Federal income tax purposes, which of the following are costs of homeownership that may be deducted from gross income?

a) Mortgage loan interest, local property taxes, mortgage loan origination fees.

b) Mortgage loan interest, homeowner's insurance premium, local property taxes.

c) Cost of essential repairs, mortgage loan origination fees, local property taxes.

d) Homeowner's insurance premium, mortgage loan origination fees, mortgage loan interest.

a) Mortgage loan interest, local property taxes, mortgage loan origination fees.

A seller tells the listing agent that her home was treated for termites 10 years ago, so there are no termites now. Before listing the property, the agent should

a) tell the seller not to disclose, because the statute of limitations has run out.

b) tell the seller to disclose the termite treatment on the property disclosure.

c) talk to neighbors to see if there are termites in the neighborhood.

d) talk to the planning and zoning department for local termite eradication ordinance.

b) tell the seller to disclose the termite treatment on the property disclosure.

Building codes are

a) created to establish zoning in a neighborhood.

b) ordinances that specify construction standards.

c) established in each neighborhood or development.

d) set up to hear complaints about effects of zoning ordinances.

b) ordinances that specify construction standards.

Ulyanna and Daniel own two contiguous properties situated on the shores of a fast-moving river. Ulyanna's parcel is situated upstream from Daniel's parcel. Over time, the action of the river's water has moved some silt and dirt from the shores of Ursula's property and deposited it downstream on the shores of Daniel's property. Based upon this fact pattern, which of the following lists best describes what has occurred on Daniel's property?

a) Alienation, attachment, alluvium

b) Accession, littoral, standing water

c) Assemblage, plottage, increased value

d) Accession, accretion, alluvium

d) Accession, accretion, alluvium

A county government was widening a highway. Prior to construction, the county had to demolish certain dwelling houses and commercial retail properties bordering the old highway. After the legal proceedings were complete, several residential property owners refused to leave their former homes. The sheriff removed several individuals forcibly. In one case, the sheriff was forced to drag an elderly, protesting woman out of a house she had owned for decades. What is the name of the governmental power?

a) Condemnation

b) Police Power

c) Eminent Domain

d) Escheat

c) Eminent Domain

What is the difference between a specific lien and a general lien?

a) A specific lien is secured by a specific piece of property, and a general lien is secured by the collective assets of the person against whom the lien is held.

b) A general lien is secured by a specific piece of property, and a specific lien is secured by the collective assets of the person against whom the lien is held.

c) Specific liens require collateral, and general liens do not.

d) General liens require collateral, and specific liens do not.

a) A specific lien is secured by a specific piece of property, and a general lien is secured by the collective assets of the person against whom the lien is held.

Robin rents a unit from owner Joaquin. Therefore _____________.

a) Joaquin is the lessee and Robin is the lessor

b) Joaquin is the lessor and Robin is the lessee

c) Robin is a lessor and Joaquin is a landlord

d) Joaquin is a lessee and Robin is a tenant

b) Joaquin is the lessor and Robin is the lessee

An appraiser is hired to appraise a single-family residence as part of a purchase transaction. The subject property has 4 bedrooms and 4 bathrooms. The appraiser needs comparables to complete the appraisal, and finds 3 recently-sold properties in the same subdivision. The first comparable has 4 bedrooms and 4 bathrooms. The second comparable has 4 bedrooms and 3 bathrooms. The third comparable has 3 bedrooms and 4 bathrooms. What is a correct statement regarding the market data approach?

a) The market data approach requires that the comparables have the same number of bedrooms and bathrooms as the subject property.

b) Adjustments must be made to the subject property to make it match the comparables.

c) The value of a bathroom must be added to the sales price of the second comparable.

d) The value of a bedroom must be subtracted from the sales price of the third comparable.

c) The value of a bathroom must be added to the sales price of the second comparable.

Construction on a single-family residence in a new subdivision started on June 1, 1977. Construction was completed on January 1, 1978. The current owner, John Ying, acquired the property via first deed out from the developer. The property has not been remodeled or rebuilt since it was originally constructed. Ying is now selling the property, and is represented by a licensee. All of the following choices related to compliance with federal lead-based paint disclosure rules are incorrect, except:

a. Because construction was completed on January 1, 1978, there are no federal disclosure requirements related to lead-based paint.

b. The licensee is responsible for compliance with federal lead-based paint disclosures.

c. The seller must inform prospective buyers of any lead-based paint he knows is on the property.

d. The seller is responsible for having the property professionally inspected for lead-based paint.

c. The seller must inform prospective buyers of any lead-based paint he knows is on the property.

The presence of lead paint in a home must only be disclosed if the home is being purchased using an FHA loan.

True or False

FALSE

The monthly net income on an investment of $115,000 if the rate of return is 12 ½ percent is _____________.

a) $1,150.00

b) $7,666.67

c) $1,197.92

d) $14,375.00

c) $1,197.92

$115,000 x .125 = $14,375

$14,375 ÷ 12 = $1,197.92

If a deed is valid it must be:

a. Signed

b. Recorded

c. Witnessed

d. All of the above.

e. Both a and c

e. Both a and c

A buyer is applying for an ARM loan. How do the payments on such a loan change?

a. They stay the same over the course of the loan.

b. The interest rate changes every year, which can raise or lower the total payment.

c. The interest rate goes up every year.

d. The interest rate goes down every year.

b. The interest rate changes every year, which can raise or lower the total payment.

You are trying to price a property. Five years ago it was sold for $125,000, but property values in this particular neighborhood have decreased by an average of 5 percent since then. What is the rough value of this property?

a. $117,500

b. $118,750

c. $118,000

d. $119,000

b. $118,750

$125,000 x .05 = $6,250

$125,000 - $6,250 = $118,750

You receive an offer on a listing and an escrow check. Your client accepts the offer. What should you do with the escrow check?

a. Turn it over to your broker as soon as possible.

b. Deposit it into the broker's account.

c. Keep it and write a check to your broker.

d. Put it in the file and hold it until the closing.

a. Turn it over to your broker as soon as possible.

Which of the following types of mortgages will probably have the lowest initial interest rate?

a. Conventional 30-year fixed rate

b. 30-year fixed rate FHA loan

c. Conventional 15-year fixed rate

d. Conventional 30-year ARM

d. Conventional 30-year ARM

Carbon Monoxide in home built AFTER 2011

- On every habitable level and Basement/Attic

-10 ft of every bedroom

-must be hardwired

Photoelectric Smoke Detector

A type of smoke detector that uses a light source to detect smoke

More effective for smoldering fires

Low voltage or wireless

Smoke Detector Requirement

April 2010

Within 20ft of kitchen and bathrooms (Photoelectric Detectors)

Outside of 20ft of kitchen and bathrooms (Either Dual Detectors or Ionization Detectors)

Types of Life Estates

-Life Estate in Reversion

-Life Estate in Remainder

-Pur Autre Vie

Erosion

Subtraction of lan because of wind or water

Addendum

(n.) a thing that is added; an appendix or addition to a book or written document

Remember ADD

Bilateral Contract

A type of contract that arises when a promise is given in exchange for a return promise.

Blanket Mortgage

A mortgage which covers more than one piece of real estate. Often used by a developer in the financing of undeveloped lots. Contains a partial release clause.

Exclusive Right to Sell

a listing that gives the broker the right to collect a commission no matter who sells the property during the listing period.

Seller waves their right to sell in exchange for your marketing efforts

Civil Rights Act of 1866

Federal government CANNOT discriminate against RACE

1 square mile = _____ acres

640 acres

Encumbrances

Anything that burdens or limits the fee title to property

Ex. Lien, easement, any restriction

Contingency

A possible future event that must be prepared for or guarded against; possibility

Ex. Yes I will buy this property CONTINGENT that there will be a lead inspection

Tenancy by Entirety

-Married People

-Interest cannot be divided during marriage

-Divorce turns into tenancy in common

-Death of a Spouse -survivor takes title as a fee simple estate aka survivorship

Conventional Mortgage

Refers to home loans other than government loans (VA and FHA).

Basically common mortgage

Federal Fair Housing Act of 1968

An act prohibiting discrimination in the sale or rental of housing on the basis of race, color, religion or national origin sex, handicap and familial status.

Examples of Fair Housing Violations

Blockbusting

Redlining

Steering

Escrow

the depositing of money, legal documents, and instructions with a third party to be held until the conditions of a contract are fulfilled

Fair Market Value

the price a willing buyer would pay a willing seller in a free market

Habendum Clause

That part of a deed beginning with the words "to have and to hold," following the granting clause and defining the extent of ownership the grantor is conveying.

Purchase and Sale Agreement

A contract in which a seller promises to convey title to real property to a buyer in exchange for the purchase price.

Closing Disclosure (HUD)

A final closing disclosure to the consumer that must be received by the consumer 3 days before closing

Capitalization Rate

The rate of return a property will produce on the owner's investment.

Income = Rate x Value

Remember IRV

What is the capitalization rate?

Income = Rate x Value

GRM (Gross Rent Multiplier)

A factor based on location and rent - a price per monthly rent used to give an initial estimate of value for a residential rental property

A tenant rented an apartment, signing a 15-month lease. After the lease expired, the tenant paid 1 month's rent and got a receipt. What kind of leasehold does the tenant have?

a) Gross lease

b) Proprietary lease.

c) Tenancy at sufferance

d) Tenancy at Will

d) Tenancy at Will

Unrepresented buyers ask the licensee who listed the home whether they should order a property inspection as a part of their due diligence for the purchase of the home. Which of the following would be the most appropriate way for the listing agent to respond?

a) If you feel it is in your best interest, please do so.

b) Since I represent the seller I am not able to answer your question.

c) I am not aware of any issues that such an inspection would identify.

d) Since the seller has provided a property disclosure, there should be no need for any further inspection.

a) If you feel it is in your best interest, please do so.

A prospective seller asks a salesperson to recommend a listing price for a property. The salesperson should suggest

a) listing the property at the price the owner believes it is worth.

b) listing the property at least 30% above the current mortgage.

c) a competitive market analysis to determine the property's value.

d) setting the price at the value of the most recent sale in the neighborhood.

c) a competitive market analysis to determine the property's value.

The Department of Housing and Urban Development estimates that most private homes built before 1978 contain potentially dangerous levels of lead. Because of this, some Federal agencies, such as FHA

a) will no longer lend or guarantee loans on these older properties.

b) require evidence of testing for and disclosure of any type of lead contamination before they will lend or guarantee loans on such properties.

c) require funds to be escrowed for lead abatement as a condition of lending or guaranteeing loans on such properties.

d) require the buyer to acknowledge disclosure of the presence of any known lead paint.

d) require the buyer to acknowledge disclosure of the presence of any known lead paint.

If all other factors are equal, in which location is a parking lot likely to bring the highest sales price?

a) Residential district zoned for two-story apartments

b) Business district zoned for a two-story commercial building.

c) Business district zoned for a six-story office building.

d) The price for the parking lot will be the same regardless of area and zoning.

c) Business district zoned for a six-story office building.

An example of a contract terminated due to inability to perform would be one in which the

a) purchaser had suffered financial reverses so that she could not make payment as required by the contract.

b) seller had died after the contract became binding but before the closing.

c) seller had contracted for sale of the entire property without the knowledge or consent of the other joint tenant.

d) property had been severely damaged by fire after the contract became binding but before the closing.

c) seller had contracted for sale of the entire property without the knowledge or consent of the other joint tenant.

A property management plan may serve different purposes for different owners, and generally has to strike a balance between preservation of the property's value and generation of income. Which of the following owners would MOST likely prefer a property manager who emphasizes cash flow or income over the maintenance of value?

a) An individual entrepreneur who owns several apartment buildings.

b) The Department of Housing and Urban Development.

c) A bank acting as a trustee.

d) A cooperative corporation.

a) An individual entrepreneur who owns several apartment buildings.

A minority couple come to a salesperson looking for a house. The salesperson has some properties for which the couple qualify but avoids showing or mentioning these listings. Instead, the salesperson shows only properties in low-priced and integrated neighborhoods. This practice is known as

a) steering.

b) blockbusting.

c) redlining.

d) conciliation.

a) steering

A written agreement in which a purchaser agrees to buy and a seller agrees to sell is called

a) an agency.

b) an assessment.

c) a contract.

d) a fiduciary obligation.

c) a contract

A borrower has defaulted on the mortgage. The mortgage contains an acceleration clause. This permits the lender to

a) confiscate the borrower's personal assets.

b) demand immediate payment of the entire note.

c) report the borrower to the Federal Housing Administration.

d) force the borrower to vacate the premises.

b) demand immediate payment of the entire note.

An agency relationship between a property owner and a property manager is usually created by

a) a management agreement.

b) payment of a management fee.

c) an exclusive agency agreement.

d) an independent contractor agreement.

a) a management agreement.

Even with title insurance, the policyholder may still suffer losses arising from

a) forged documents.

b) incompetent grantors.

c) defects found in recorded public records.

d) land use change due to zoning ordinances.

d) land use change due to zoning ordinances.

An escheat occurs when

a) property is seized to satisfy a tax lien.

b) property is condemned for a necessary public use.

c) a property owner dies without heirs or a valid will.

d) a property owner fails to perform legally required cleanup of toxic waste.

c) a property owner dies without heirs or a valid will.

Antitrust laws prohibit competing brokers from all of the following EXCEPT

a) boycotting other brokers in the marketplace.

b) dividing the market to restrict competition.

c) agreeing to set sales commissions and management rates.

d) receiving compensation from both the buyer and the seller.

d) receiving compensation from both the buyer and the seller.

A managing broker can be held responsible for

a) all actions of associated salespersons.

b) all real estate activities of salespersons.

c) only those real estate activities the broker is aware of.

d) no activities of independent contractors.

b) all real estate activities of salespersons.

A landowner wishes to build a neighborhood grocery store on a busy street in an area zoned for residential use. Which of the following would MOST likely be used to obtain permission for this store?

a) Deed amendment.

b) Approval of surrounding property owners.

c) Inclusionary zoning.

d) Conditional use permit or zoning variance.

d) Conditional use permit or zoning variance.

A licensee is listing a property in a known flood plain. The seller flatly denies that the structure and the property have ever been flooded. What is the licensee required to do in this situation?

a) Rely on the face value of seller's statement.

b) Inform the seller of potential legal consequences if this claim is untrue.

c) Inform the seller of the legal obligation to disclose facts regarding flood plains.

d) Refuse to list the property and explain to the seller that all properties in this area flood.

c) Inform the seller of the legal obligation to disclose facts regarding flood plains.

During the listing presentation, the seller questions the amount of commission to be paid and is told

a) the amount is set by law.

b) everyone charges the same amount.

c) the amount of commission is negotiable.

d) the agent that charges a lower commission will not do as good a job selling the property.

c) the amount of commission is negotiable.

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?

a) disclosing the price the seller originally paid for the property

b) disclosing the highest price the buyer is willing to pay

c) preparing a competitive market analysis

d) identifying latent property defects

b) disclosing the highest price the buyer is willing to pay

Legal descriptions using the government survey system are NOT generally used in

a) the original 13 states.

b) subdivisions.

c) quitclaim deeds.

d) mortgages or deeds of trust.

a) the original 13 states.

To be valid, every deed must

a) contain a warranty.

b) include granting language.

c) be executed by the grantor.

d) be signed by the grantee if there are covenants.

c) be executed by the grantor.

A legal easement can be created by any of the following EXCEPT

a) definition within a deed.

b) merger of the titles.

c) a written agreement between the parties.

d) the parties' behaving as though there was an agreement.

b) merger of the titles

A broker has signed a listing contract for the sale of a home. Which of the following could make this contract voidable?

a) The seller cannot write and sign with an "X".

b) The listing contract specifies that no other broker may show the house.

c) The seller is heavily under the influence of alcohol at the time of signing.

d) The listing contract specifies that a commission will be paid only if the house is sold within 3 weeks.

c) The seller is heavily under the influence of alcohol at the time of signing.

Prospective buyers made an offer on a property. The seller did NOT accept, but made a counteroffer. The prospective buyers signed the counteroffer and the real estate agent delivered their acceptance to the seller. In the interim, the same buyers had found another house that they liked better and made an offer on it, which was accepted. Which of the following is TRUE?

a) The contract on the first house is not enforceable.

b) Neither contract is enforceable.

c) Only the first contract is valid.

d) Both contracts are valid.

d) Both contracts are valid.

What is the duration of a home warranty's coverage?

a) the expected life of the purchaser

b) the expected life of the product or system covered

c) as disclosed in the contract that offers the warranty

d) a minimum of 5 years or the duration of the purchaser's ownership, whichever is shorter

c) as disclosed in the contract that offers the warranty

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

a) loyalty.

b) competence.

c) indemnification.

d) full disclosure.

c) indemnification.

The day after a broker's listing on a house expired, it was listed with another broker and offered in the MLS. Several days later, a third licensee called the first broker and asked for the key to show the home. The broker should inform the caller that

a) he is no longer the listing agent.

b) he will set up an appointment for showing the home.

c) he will leave the key under the door mat.

d) the house is currently off the market.

a) he is no longer the listing agent.

According to the Truth-in-Lending Act, if any "trigger terms" are used in an ad, all of the following disclosures MUST appear in the ad EXCEPT the

a) cash price or amount of the loan.

b) amount of down payment required.

c) number, amount, and frequency of payments.

d) prepayment penalties and rebates.

d) prepayment penalties and rebates.

A couple bought a rental house for $195,000. Its assessed value was $180,000. If the tax rate is $1.50 per $100 of assessed value, what is the monthly contribution the lender will REQUIRE for taxes? Round to the nearest cent.

a) $225.00

b) $162.50

c) $150.00

d) $112.50

a) $225.00