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Final Exam TN Real Estate Course Exam
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A Tennessee licensee must use the "Exclusive Right to Sell" form ✔✔required by the licensee's broker. According to the level of authority delegated to the agent, the usual real estate agency is a ✔✔limited agency. When must the contract be in writing? ✔✔John is agreeing to sell his shed to Shawn for $1,000. One disadvantage in using active listings for comparables is ✔✔they provide somewhat dubious comparisons because listing prices are not selling prices. Why is it sometimes necessary to include a bill of sale with a purchase contract? ✔✔A bill of sale confirms that all promised inclusions are in fact part of the conveyance. Prior to the acceptance of a purchase contract, the seller must provide the buyer with a written property condition disclosure if ✔✔the property is a residential property of less than 5 units. Which HUD document provides information to builders regarding fair housing compliance? ✔✔Fair Housing Act Accessibility Guidelines
The two restraints of trade of most concern to real estate brokers are conspiracies to fix prices and ✔✔group boycotts. The payment amount a borrower makes periodically to a lender consists of ✔✔a portion of principal and a portion of interest. If a loan is subject to RESPA, the lender must give the borrower an estimate of closing costs ✔✔within three days of receiving the loan application. "Farming" is the practice of ✔✔prospecting for business in a selected area. ___________ is normally the single most important element in a home's value. ✔✔Location ______________ property is land or improved property with buildings designed for humans to live in, such as single-family homes, apartments, or condominiums. ✔✔Residential When does a purchase and sale agreement become enforceable? ✔✔At time of offer delivery and acceptance by seller Which of the following is subject to the requirements of RESPA? ✔✔A single-family home purchase financed by a federally-insured loan A licensee found guilty of engaging in the unauthorized practice of law could face ✔✔suspension of license.
Which of the following is not an area of risk in terms of unintentional misrepresentation? ✔✔Stating that a client should seek legal counsel. Cancellation and discharge of a contract includes all of the following EXCEPT ✔✔Revocation without repercussions FHA guidelines require the income ratio on a mortgage loan to be ✔✔no more than 29% What is a property manager's most important duty? ✔✔To maximize ROI for the property owner What are the two ways escrow funds are most often misused? ✔✔Commingling and conversion The Tennessee Landlord and Tenant Act allows the landlord to enter the premises in any of the following situations EXCEPT ✔✔to quiet down noisy tenants. What is the primary method for transferring risk in real estate transactions? ✔✔Carrying an Errors & Omissions policy What is the amount a lender normally requires to be included for taxes and insurance in a borrower's monthly mortgage payment? ✔✔1/12th of the annual real estate taxes and hazard insurance payment Upon execution of the contract, a licensee should provide all signatories with ✔✔copies of any listing or contract relevant to the real estate transaction.
A broker has an agency relationship with a client. An affiliate broker is working as that broker's agent. This kind of agency is called ✔✔subagency. Strategies for managing risk fall into all except which of the following categories? ✔✔Protection An owner is not liable for errors and omissions in the condition disclosure provided ✔✔the error was based on information provided by a professional engineer or inspector. The rules for internet advertising in Tennessee are ✔✔the same as those that apply to all advertising, regardless of medium. What is the difference in the principal broker's supervisory responsibilities to an employee affiliate broker and an independent contractor affiliate broker? ✔✔There is no difference in the supervisory responsibilities of the broker to any affiliate. How is etiquette distinguished from ethics and laws? ✔✔Ethics and laws must be obeyed; etiquette is voluntary. When a code of ethics violation complaint goes to a Grievance Committee, the Committee has the authority to ✔✔dismiss the complaint. Under which type of listing agreement is the listing broker entitled to a commission regardless of who is the procuring cause of the sale? ✔✔Exclusive right-to-sell
Who is liable for errors or inaccuracies on the property condition disclosure if the condition change occurred after the disclosure was delivered to the buyer? ✔✔No one It is_____________for a real estate licensee to pay a commission to an unlicensed individual or company. ✔✔unlawful In Tennessee a property manager who performs duties that include negotiating security deposits, rents, and lease terms must ✔✔be licensed. Where does someone go to file a complaint that a licensee-member has violated the Code of Ethics? ✔✔The local REALTOR® board or association When showing a home, it is good etiquette to always ✔✔turn off any lights that were turned on during the showing. How would a neighborhood transitioning from residential to some other use affect a home's estimated selling price? ✔✔It could increase or decrease the likely price, depending on what kind of use the area is moving to. "Risk" in the practice of real estate means ✔✔the chance of experiencing a loss. Which type of listing agreement is illegal in Tennessee? ✔✔Net In a transaction using a contract for deed, what does the buyer initially receive? ✔✔Equitable title
To help avoid practicing law without a license, licensees should ✔✔only use standardized forms. Within _______ from the date a broker's original license was issued, the broker must complete 120 classroom hours of real estate education to renew the license. ✔✔3 years A licensee who represents a buyer in the purchase of a property must ✔✔disclose known adverse facts about the property to the buyer. Before an appointment to list a property, the agent should ✔✔check out the property's neighborhood. The legal remedy for a contract default that terminates the contract and returns the valuable consideration to its original owner is called ✔✔rescission. When using forms with clients, the agent should never ✔✔charge a fee for helping with a form. Which of the following statements is true? ✔✔Failure to correctly complete forms is a violation by the licensee, not the sponsoring broker. When working as a seller's agent, a licensee must never disclose ✔✔anything harmful to the client's interests. When is the latest an agent may obtain written confirmation of his or her agency disclosure from a seller who has no agent? ✔✔Before executing a listing agreement or presenting an offer
How much is the typical loan origination fee? ✔✔1% of the loan amount Which of the following would be an appropriate risk management response if a seller asks about the religion of a potential buyer? ✔✔Remember when we signed the listing agreement that we discussed that basing a decision on someone's religion is against anti-discrimination laws? With that in mind, if the buyer's religion is really important to you, I can refer you to an expert who can help you with that question. In Tennessee, a rental is considered abandoned ✔✔30 days of absence plus failure to be up to date on rent. Which state agency would oversee complaints regarding substandard living conditions in rental housing? ✔✔Tennessee Department of Commerce & Insurance When is a real estate license required for property managers in Tennessee? ✔✔when negotiating security deposits, rents, and lease terms. When calculating a borrower's debt ratio, all of the following will be included in calculating a borrower's debt load except ✔✔estimated tax payments. How should the names of the buyers appear on a purchase and sale contract? ✔✔The same as they will appear on the title
Which of the following items is a requirement for license renewal? ✔✔Proof of Errors and Omissions insurance An example of an appurtenance would be ✔✔a condominium parking stall. What is the maximum amount the FHA will loan to a qualified buyer? ✔✔$ Federal fair housing law is administered by ✔✔the Office of Fair Housing and Equal Opportunity. What is the best explanation for why ethical decisions are difficult to make? ✔✔Ethical dilemmas are often more a matter of degree than of right vs. wrong. The party who receives a counteroffer in the form of the standard "Form 8 Counter Offer" ✔✔may accept, reject, or counter the counteroffer. Which of the following statements is false? ✔✔Etiquette often reflects laws. If a seller wants to help a buyer with financing, the agent's best risk reduction move is to ✔✔make sure all agreements between the parties are in writing. Which form is used for an Open Listing Agreement? ✔✔TAR Form F Which of the following is not required to be in writing? ✔✔A month-to-month lease
Most real estate licensees specialize in ✔✔none of the above. When several houses that are equal in size, quality and appeal are for sale , the valuation principle that says a buyer will not pay more for one than for another is ✔✔substitution. Which neighborhood factor must be considered when using a CMA? ✔✔Land contour Which of the following is a reason for a low appraisal? ✔✔An artificially inflated price due to multiple offers When looking at managing office properties, which class of office building is older and located outside of prime areas? ✔✔Class C If the buyer is unable to obtain financing to purchase the property and financing is a contingency of the contract, what will happen? ✔✔The contract will terminate. Offers and counteroffers become binding contracts when ✔✔all parties have indicated acceptance. Licensee Lou has found a property he would like to purchase as an investment. What must he do? ✔✔Make a written disclosure of personal interest to the seller If a party fails to perform or meet a condition by a specified date, ✔✔the failing party is in default of the time is of the essence clause.
The process of securing a loan by pledging a property without giving up ownership of the property is called ✔✔hypothecation. To aid in risk reduction programs, Tennessee firms are required to keep written records of all real estate transactions for at least ______ after closing or termination. ✔✔3 years As of 2008, which of the following rules was NOT added: ✔✔A licensee preparing an offer to buy must inform the buyer that a lead-based paint inspection letter is available for a fee through the Tennessee Department of Environment and Conservation. When entering into an Exclusive Buyer Representation Agreement, the licensee must advise the buyer in writing that ✔✔the buyer should contact only the licensee to arrange property viewings. Which of the following statements is false? ✔✔An agent may enter into a legally binding oral agency relationship with a client. Which of the following conditions is necessary to show reasonable cause for soliciting a referral fee from another licensee? ✔✔There must be a subagency, referral, or cooperative relationship between the licensees. In order to have a buyer agency relationship with a buyer, a licensee must ✔✔obtain a written agency agreement from the buyer. In practice, if a licensee is a facilitator, which of the following is true? ✔✔There is not a signed agency agreement with the seller or buyer.
Broker Harding requires all of his buyers to sign offers with the stipulation that they will use Acme Home Inspection Services. This practice is called a ✔✔tying arrangement. An agreement between a seller and buyer for the purchase of a property where payment of the sale price is deferred is called a(n) ✔✔contract for deed. What is the primary relationship between a broker and client? ✔✔The agency relationship A multiple listing is ✔✔a listing shared with members of an organization who agree to cooperate in return for a commission share. What method does the government use to prove fair housing violations? ✔✔case testers. A seller's agent must disclose ✔✔to the seller - the buyer's intended use of the property. Which type of document may a real estate licensee prepare without being guilty of unauthorized practice of law? ✔✔Sales agreements If a licensee signs a listing contract with a home seller and then has a disabling car accident, the contract ✔✔may terminate for infeasibility. Which segment of the real estate industry might be subject to the practice of redlining? ✔✔Lenders To practice ethically, real estate professionals should ✔✔exclude disparagement of competitors.
Typical disclaimers by the real estate firms and licensees who are party to the purchase transaction would include ✔✔not responsible for the performance of buyer or seller. An affiliate broker ✔✔may not be paid by parties other than the broker. When observing etiquette with the public, a broker should not ✔✔answer questions for clients of other brokers. What kind of lease is most common for residential properties? ✔✔Gross lease When a licensee has an agreement to provide services as an agent to more than one party in the same transaction when the interests of the party are adverse, this is called ✔✔a dual agency. A loan's "term" refers to ✔✔the length of time a borrower has to repay a loan. A Kentucky real estate firm has a web site on a server in Tennessee. The web site states that the firm is a Tennessee real estate firm. Is this allowed under Tennessee law? ✔✔No, it is a violation of the License Act and Commission rules. When a contract is unenforceable ✔✔a court will not compel a party to perform his end of the contract. A counteroffer is ✔✔the rejection of an offer and a simultaneous new offer.
What is "secondary financing?" ✔✔A loan to cover purchase costs that are not covered by the primary loan How does a personal interest disclosure manage risk? ✔✔It reduces the chance of being accused of a conflict of interest.
