Download Colorado psi real estate practice test (100 out of 100) Questions and Answers (GRADED A) and more Exams Real Estate Management in PDF only on Docsity!
Colorado psi real estate practice test (100 out of 100)
Questions and Answers (GRADED A)
Legal descriptions using the government survey system are NOT generally used in the original 13 states. Real property can be converted to personal property by severance A homeowner is willing to let his neighbor park an RV in his backyard. He does NOT want to make the permission permanent in case he dislikes others who might move next door in the future. What should he give his neighbor? A license. A broker hires a salesperson as an independent contractor. In order for the salesperson to be considered an independent contractor for federal income tax purposes, the broker's written contract with the salesperson MUST specify that the salesperson will not be treated as an employee for federal income tax purposes. The main difference between tenancy in common and joint tenancy is that with tenancy in common, when a co-owner dies, his undivided interest passes to his heirs. A property is encumbered by a first mortgage of $60,000 and a second mortgage of $23,500. The property has just been sold at a foreclosure auction to a speculating investor for $88,000. Assume that all costs of the foreclosure sale are included in these balances. Which of the following statements is FALSE regarding the distribution of funds? : The second mortgagee receives nothing unless he forced the foreclosure auction. A broker is showing a buyer one of his residential listings. The buyer says he wants to establish a day care center for seniors in the property. The property has been used as a day care center for no more than five children. How should the broker advise this buyer? Provide the buyer with contact information for the local planning and zoning office to confirm the zoning and determine whether it permits his use.
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? Conditional use permit or zoning variance If conditions for property use are included in a deed and these conditions are violated, what is the most severe potential penalty? A court may order the return of the property to the original owner. New sidewalks installed only on one particular street will probably be paid for by a special assessment. An appraiser MUST be licensed or certified to handle Federally related work on residential property valued at more than $250,000. According to the principle of progression, a three-bedroom, one-story home is MOST likely to bring the highest sales price if located in a neighborhood in which most homes are larger than the sale home. A formal appraisal will ALWAYS be REQUIRED when the lender wants to sell the mortgage to the secondary market. When compiling a competitive market analysis, a broker would look for comparable properties that were located near the property being listed. For a buyer, a DISADVANTAGE of a partially amortized or balloon payment loan is that at the end of the term, all remaining principal must be paid in a single large payment A broker and the buyers he represents are anxiously awaiting the closing on their new home. The closing is scheduled in 4 days. The buyers inform the broker that they just received revised Loan Estimate and Closing Disclosure forms from the lender, indicating the Annual Percentage Rate on their loan has increased by 0.3%. Based on the TILA-RESPA Integrated Disclosure rule, what action should the broker take in this situation? Confirm with the seller's broker, the lender and the closing entity that the closing must be delayed to allow for a new seven-day waiting period because of the interest rate revision.
disclosing the highest price the buyer is willing to pay 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? Agency coupled with an interest. The real estate agency relationship is best described as the broker's representing the principal. A licensee has an agency representation agreement with a buyer. When showing another company's listing, what obligation does the licensee have to the seller and the listing broker at the other company? Disclose the agency relationship when arranging the showing and disclose material information about the buyer if presenting an offer. 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 he is no longer the listing agent. Which of the following would generally be included in the Phase I assessment of a parcel where hazardous substances may have been disposed? an on-site visual inspection A manufacturer under contract with a broker is seeking a 30,000-square-foot building to house his factory. The broker is showing him one that has only been used as a junk warehouse for the past fifty years. As they look around, near the ceiling they see old brown metal drums seemingly wired into the electrical system. How should the broker proceed He should inform the client of the possibility that hazardous chemicals are present and recommend a baseline environmental assessment of the property as a contingency of the purchase. While touring a new listing a broker detects a very pronounced moldy odor. Upon inspection, the broker finds that all closets located on a particular wall in the vacant residence are extremely moldy. The mold growths are heavy, multi-colored and cover the lower back walls and part of the side walls and flooring of the closets, and the other associates on the tour are experiencing sneezing and watering eyes. The broker has already accepted the listing. What immediate action should the broker take regarding the listing status?
Inform the sellers in writing that there is a possible health hazard that should be inspected and, if necessary remediated, and the listing will be removed from the active list until such action is taken. A broker is developing a checklist to be used by licensees during the time period between writing a contract and closing. Which of the following items should be included in the "Property Inspections" section? A place to list repairs, who will pay, and when repairs are to be completed. A broker has brought a ready, willing, and able buyer to a seller. In MOST listing contracts, the broker has earned his commission when the seller accepts the offer. A buyer made an offer on an apartment building. The offer was not acceptable to the seller. When the buyer refused to accept the seller's counteroffer, the seller agreed to accept the original offer. What MUST happen now? Nothing; by making a counteroffer the seller released the buyer from the original offer. 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? The buyer finds a better property for better terms. If the terms of a contract indicate that Party A will be obliged to perform her part of the contract only if Party B chooses to take a certain action, then the contract is a unilateral contract in which only Party A has made a promise to perform. A mentally disabled person who has been declared incompetent by a judge wishes to enter into a contract. Under what conditions can such a person do so? The person appointed by the court to act for the disabled person must contract on his or her behalf. A buyer was negotiating the purchase of a house for himself. During a conversation with the seller, the seller agreed to include all kitchen appliances in the sale, and this fact was included in the sales contract. In this situation, if the seller takes the appliances with him, what recourse does the buyer have? The buyer may sue the seller for specific performance.
At the closing on June 15, the buyer is assuming a mortgage presently on the property, on which the monthly interest charge is currently $600. The seller has made the payment due on June 1. Assuming a VA mortgage, what is the adjustment made at closing? Debit seller $300; credit buyer $300. What is the duration of a home warranty's coverage? as disclosed in the contract that offers the warranty Which of the following statements best describes the risk taken by NOT recording a deed? A subsequent purchaser's recorded deed could take precedence over any unrecorded instrument. Why was the Jones vs. Mayer decision of 1968 important? By upholding the Civil Rights Act of 1866, the Supreme Court removed all exceptions to racial discrimination in housing. A broker did NOT have a written independent contractor agreement with his salesperson. While showing homes to a family, the salesperson was involved in a car accident in which a child in her car was injured. Could the broker be held liable in this situation, and why? Yes; the lack of an independent contractor agreement may classify the salesperson an employee and an employer may be held liable for the torts of an employee. Several salespersons have asked a broker for his permission to use a personal web site for real estate advertising of specific properties for sale. Before giving permission the broker should first review the sites and all proposed advertising for compliance with state laws. In an effort to improve his brokerage a broker decides to streamline his handling of escrow/deposit funds. This streamlining can BEST be achieved by following state law but having as few individuals as possible handle the funds before they are deposited. A broker represents a group of investors who purchase single family residences when they can be found at very low prices. Their offers are typically made with $500 deposits and cash closings within 7 days of acceptance of the offers. When the last property closed, the investors suggested the broker keep the deposit money to be used for their next purchase, as yet not identified. What must the broker do with these deposit funds? : Return them to the purchasers.
A salesperson qualified a minority couple with two children and defined their price range as between $110,000 and $120,000 for the three-bedroom house they wanted. They asked to look at two listings in a nonminority neighborhood. The salesperson did not show them the properties because they were priced under $90,000 and had only two small bedrooms. Did the salesperson act appropriately and why or why not? No, because it is appropriate to show any property for which the buyer is qualified. Antitrust laws prohibit competing brokers from all of the following EXCEPT receiving compensation from both the buyer and the seller. A salesperson in a branch office is sued for damages by a buyer after the salesperson misrepresents a property. Who has the ultimate responsibility for the salesperson's actions? the supervising broker Under the Federal Fair Housing Law, which of the following is considered discriminatory advertising? "Catholics preferred." Jake is preparing a Comparative Market Analysis on a 5-year-old vacant two-story, 10,000- square foot office building on a one-acre property. Jake knows that a vacant lot next door of about the same size just sold for $100,000. He also knows that market value for comparable office space today would be $100 per square foot. The owner agrees with Jake that his building has experienced a yearly 3% depreciation of its value. What should Jake recommend as a selling price? $850,00 0 A tenant with a triple net lease rents a building that has the following yearly operating expenses: Property taxes $ 5,000 Utilities $ 7,000 Repairs & Maintenance $ 1,500 The tenant would be responsible for how much of these expenses? $13,50 0 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? He needs an additional $1,250 in order to make the down payment. A buyer is getting a fully amortized loan for $220,000. The bank will give the buyer the loan for 15 years at 5 1/2% or for 30 years at 6 1/2%. To the nearest dollar, what is the difference
In the property condition disclosure form under "Asbestos", a broker reviewing an associated licensee's listing sees that the property owner reported that the asbestos siding on his building was not removed but was professionally encapsulated ten years ago. Documentation of this professionally applied process is attached. The broker should have the listing agent verify the license of the firm that performed the encapsulation process. Refer to the scenario below.You are hosting an open house. Mr. and Mrs. Charles Martin come into the house. You greet them and show them the house. The Martins tell you the house is exactly what they are looking for and they are very interested in purchasing it. You then give them information showing the various types of financing available with down payment options and projected payments. Mr. Martin tells you they have been working with Mary Hempstead of XX Realty, a competing real estate company. Before leaving, you thank them for coming and give them your business card.The first thing on Monday morning, Mrs. Martin calls and indicates they have tried to reach Mary and cannot. They indicate they have a written buyer's agent agreement with Mary's broker. They are afraid someone else is going to buy the house. Which of the following should you do? Tell them to call Mary's supervising broker or branch manager. If leased premises become unusable for the purpose state in the lease, the tenant may have the right to abandon the premises. This action is called constructive eviction. A gross lease can be best defined as one where the tenant pays, as a part of the rent, no operating expenses of the leased space. 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 maintenance of value over profitability? The Department of Housing and Urban Development. Tenants are still in their rental property even though their lease has expired. The landlord has given them written notice to quit and refused to accept rent. They are tenants at sufferance.
