Real Estate Flashcards - Quizlet

Real estate Flashcards | Quizlet 12/4/23, 8:04 AM
Real estate
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Terms in this set (594)
Which of the following is included in the To

bundle transfer
of rights inherent in ownership
What are three unique physical characteristics Immobile, indestructible, heterogeneous

of
land?
The concept that the state controls all The doctrine of prior
bodies of appropriation
water is called
Which government entity is the primary The

regulator state
of the real estate business?
The level of government that focuses on land- County and

use local
regulations and taxation is the
A property abutting a static body of water Littoral

has
____________ rights
Which may an item attached to a When the owner originally intended to remove it before conveying
structure be the
property Add to class or
considered personal property rather than folder
real property Print
Which is the "best" description of Everything above, on, and below the surface of the Combine
"land" Earth
Embed
What part of the non-navigable waterway To the middle of the
does waterway Report
the owner of an abutting property own
Surface rights include which of the Water

following rights
The concerns of the federal government Discrimination

in
regulating real property right's include
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What guarantees the right of private ownership The constitution

of
real estate in the United States
Which of these is the best definition for Any property that is not classified as real property
personal property
What do we call the conversion of real Affixing

property to personal property by detaching it
from the real estate
The primary distinction between the land does not include man-made structures
legal concepts of land and real estate
is that
Uncle Jake wrote his will out on a notepad. Holographic

This type of will is called
Of the principle forms of title of evidence in A title insurance policy

Illinois, the one that provides the best
evidence is
A deed is not valid unless it is Accompanied by a consideration
A hermit lives secretly in a cave on a large Declined because possession was secretive
property. After 20 years, the hermit makes a
claim of ownership. This claim will most likely
be
A lender forecloses on a property. The Sheriffs deed

type of deed that will convey ownership
after a public auction is reconfirmed by
the court is a
The only required clause in a deed of Names the parties, describes the property, and indicates a consideration
conveyance is one that
A person claims ownership of a parcel of real Actual notice

estate to a prospective buyer, stating that she
has lived on the property for five years and
nobody has ever bothered her. The claimant
also shows the buyer a copy of the deed.
The legal basis of this claim is referred to as
A break in the chain of title to a property A cloud on title

results in
For a deed to convey title, it is necessary for the accepted by the grantee
deed to be
The actual sales price of the property conveyed *note, in Illinois the tax
The amount of the transfer tax is based on
can be reduced if a buyer has assumed the sellers mortgage "subject
to"
The type of deed that gives the highest General warranty deed
assurance of good title is the
Which of the following best describes Ownership of the bundle of rights to real estate
the concept of "legal title" to real
estate
Which document contains a summary of the Title certificate

title search?
Constructive notice of ownership of a Title records

parcel of real estate is primarily
demonstrated through
An owner transfers title to a property to Voluntary alienation

buy an exchange for a consideration. This is
an example of.
Title records do all of the following Establish lien priority, reveal condition of title, give public notice of ownership
Aunt Molly, who had no legal heirs, died It will escheat to the state or county after all claims have been settled
without leaving a will. What will happen to
her estate
Which authority regulates involuntary title State law

transfers
regulated environmental conditions Electromagnetic fields, airport traffic noise, construction in earthquake zones
The Illinois residential real property disclosure Before the buyer signs an offer to purchase
act requires a seller to give a buyer written
property condition disclosure
Which of the following can terminate a A quietclaim deed

private deed restriction
Which of the following statements about They must be incorporated into local land use plans
federal and state environmental laws is true
Countries and municipalities have the legal Delegation of authority by state-level enabling acts
right to control land use due to
When was led first banned in the manufacture of 1978

paint used in residential properties
When a property is taken by eminent To receive "just compensation"

domain, what does the owner have?
If a property owner demonstrates a Variance

need, a zoning board may grant a
The Illinois residential disclosure act requires Asbestos, mold, methamphetamine production
that material defects related to which of the
following must be disclosed by the seller
Who is responsible for insuring that a Agents for buyers and sellers
buyer receives the protect your family
from lead pamphlet?
Which environmental legislation created the The national environmental policy act
requirement for environmental impact surveys on
large development projects?
A central goal of public land use planning is to Balance individual property rights with the community's welfare
The authority that allows the government Police power

to control land use is called
A buyer may terminate a purchase Three

contract without liability within business
days, if a
disclosure report indicating a material defect
is received after a binding real estate
contract has been entered into by all
parties
If a municipality exerts its power of The owner must sell the property or grant an easement to the
eminent domain against a certain property municipality for just compensation
owner, what happens
Dioxins, mercury, and methyl tertiary butyl Soil and water pollutants
ether (MTBE) are examples of
A property is exempt from lead It has no separate bedrooms

disclosure requirements if
With regard to environmental issues, which of Licensees must disclose potential hazards if known
the following is true
Unlike a deed restriction, a decoration Cannot be extinguished by a quitclaim deed

restriction
Licensees are required to disclose to a buyer The licensee knows of a latent structural defect
that
Referral fees and bonuses for licensees Compensation

are known as
Seller Joe has told his agent sam that if he The bonus is to be given to Sam's sponsoring broker and then passed on to
sells his house within three weeks, he will sam
give sam a
$500 bonus. What are the acceptable means
by which Sam can be paid the bonus
Which of the following statements is All of the above are true regarding compensation
true regarding compensation?
-The sponsoring broker is the only one
allowed to compensate his/her licensee
-Compensation must be disclosed to clients
-Compensation must always go from the seller
or the buyer through the sponsoring broker
to the licensee
-All of the above are true
regarding compensation
Which of the following describes a person Customer

who is not represented by a licensee but is
receiving clerical acts from the licensee
In which of the following cases might If required by the law

confidential information be disclosed
Which of the following forms of commission Commission is the excess of the sale price over an agreed-upon (net) price
agreements is not recommended due to
potential ethical issues
The name of a case wherein it was Chicago bar association vs quinlan & tyson, inc.
determined that a real estate licensee can
only fill in the blanks in a form provided
by legal counsel is
The person who is being represented Client

by a licensee is known as the
What is the result when a licensee The licensee's firm may be entitled to the commission
produces a ready willing and able buyer
but the seller refused to complete the
transaction
When is a licensee required to disclose third- As soon as non-third-party compensation must be disclosed
party sources of compensation to client
Seller Joe needy lists his home for $40,000 The broker violated the agency relationship
and the listing agent tells the prospective
buyer to submit a low offer because the seller
is desperate. The buyer offers $38,000 and the
seller excepts. In this situation:
What is commonly referred to as " the The real estate license act of 2000 as amended 12/31/2009
act" in Illinois real estate is actually:
What type of agency exists when the agent Universal agency

can perform any and all actions that may
be legally delegated to an agency
representative
The relationship between the licensee and a Agency

principal, during which the licensee is
authorized to represent the principle in certain
transactions is known as
What is the type of agency created Agency coupled with an interest

when a licensee holds a stake in the
transaction
True or false compensation does not True

create agency
A written or oral agreement between a Brokerage agreement

sponsoring broker and a consumer for
license activities to be provided to a
consumer in return for compensation or the
right to receive compensation from
another, is called
Agency is governed by ___________ law and Common and statutory

____________
law.
According to the act, legal proceedings, against 5

a license for a violation of the act, must
commence no later than years from
the occurrence
How long is an agency coupled with an Until the interest ends

interest enforced?
When a licensee leaves a brokerage, what It remains in force

becomes of the agency coupled with an
interest
agreement?
In Illinois, which statement is correct Agency coupled with an interest is allowed

regarding agency coupled with an
interest?
What actions can the principal take to abolish The principal cannot terminate the agency
the agency?
Which of the following actions terminate terms Expiration

of the agency?
Which of the following can a dual agent disclose Material or latent defects
Which laws holds harmless a licensee to Munjal v. Baird & Warner, inc. et al.
discover latent defects
Seller Jim provides a buyer with a forged Active fraud

home warranty. This is a form of
Who should receive an agency disclosure All clients and customers
What do we call an agent who represents Single agent

only one party in a real estate transaction
The situation that allows the broker to Designated agency

appoint more than one agent for the
client within the same firm, is called
Broker Dan is representing Mandy as a Dan needs to get the informed, written consent of both Mandy and the
buyer's agent. He wants to show Mandy one seller to act as a dual agent
of his listed properties. Which statement is
true
When should a seller agency disclosure At the time of the first substantive dialogue
take place
Licensee Paul is bound to inform his client of The owner of the property is HIV positive
all facts that might affect the clients
interest- both what call nose and what he"
should have known" which of these situations
would not be something, Paul " should know"
Colleen plans to be a dual agent and a real Colleen must disclose her intention to be a dual agent, and have
estate transaction. At what point, if any, written permission from both clients before acting as a dual
should she receive her clients permission to agent
act as a dual
agent
Which of the following statements would be The property has the best view in the subdivision
defined as "puffing?"
Which of the following types of agency is Undisclosed dual agency

not allowed in Illinois?
Yes. A buyer representative should advise the client on matters of which

Is it permissible, as a buyer representative,
he/she has knowledge. It is important to advise the client to obtain
to dispense advice to your purchaser
expert advice on areas in which the licensee is not an expert.
client?
When does the first substantive contact A potential buyer or seller begins to disclose his or her needs
take place?
What is the standard for agency Designated agency

representation in Illinois?
Broker Jim signs a listing agreement with Dual agency

seller, Grace, and a buyer agency agreement
with buyer, Pat. Broker Jim shows buyer Pat
the property owned by seller Grace. Both
Grace and Pat signed written disclosure
statements agreeing to this arrangement.
What is this relationship called?
A property seller signs, a listing agreement Express agency

with a licensee. What is this an example of
The sellers are selling because they are getting a

Confidential information divorce. The buyer will pay more than what's being
offered.
The seller will take less than the current offer.
Agency most nearly means: One who represents and acts for another
What is the best course of action in dealing Refer your client to public records
with questions regarding the level of crime
in a neighborhood
When a licensee represents a seller, what type Client

of relationship is established?
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Al Dobbs, a licensee, has been hired by the The buyer is the customer and the seller is the client
seller who signed a listing agreement
without permission to act as a dual agent.
What is true regarding this situation when a
buyer is shown the
property by Al Dobbs as a clerical act?
When a licensee responds to an inquiry Consumer

from a person seeking general information,
what type of working relationship is
established?
Agency relationships impose fiduciary duties Client and licensee

on both
A licensee has lost a portion of the Accounting

earnest money. Which fiduciary duty has
the licensee violated?
Seller Jane is currently under contract with Fred can discuss the terms of a future agency representation with Jane
Broker Jill. Jane meets Broker Fred at a
baseball game and they discuss real estate
market trends. Jane calls Fred the following
week to seek new representation. What
action can Fred take?
With whom do licensees typically have a Client, customer, consumer

working relationship?
When a licensee works with an Customer

unrepresented seller by showing a buyer
client the seller's property, what type of
working relationship is established with the
seller, after proper written notice to the
seller?
Who may be liable when a buyer client's The buyer's agent

interests are not protected?
Fiduciary duty is primarily based on_______. Trust
Brokers should provide statutory services Only to clients
Agent Kim lost the keys to her Client's house Care

and always left the back door unlocked.
Agent Kim failed in her responsibility.
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Seller Jim has asked Agent Fred to hold an Obedience

open house. Agent Fred agreed to schedule
an open house but has not followed
through. This is a
failure of which fiduciary duty?
Which fiduciary duty requires the agent to Loyalty

collect information about the customer for
the client?
Which fiduciary duty requires the agent Accounting

to safeguard the earnest money
check?
Confidentiality ends______. With the written permission of the client
When does a dual agency arrangement When the licensee gets written confirmation from both the seller and the
become "official?" buyer in the transaction
Care, Obedience and Disclosure are Action

fiduciary duties of _.
When must the licensee give the seller an Before the seller shares confidential information or signs the listing
agency disclosure? agreement
In what situations can a Broker share When the client gives written permission
confidential information regarding a client,
after the client's listing expires.
What information was added to the report Meth production

in 2010?
Based on the Real Estate License Act of 2000 Actual knowledge

the licensee must disclose any material facts
about the physical condition of the property
OR the transaction about which the licensee
has
What happens if a seller lists a defect The buyer could take that information into account when structuring an offer
on the disclosure report?
Under the Illinois Property Disclosure Act, who Any person who has never occupied, nor managed, the property
is exempt from disclosure?
In Illinois, the Residential Real Property Licensee

Disclosure Act requires that when a
residential seller signs the listing agreement,
he or she must prepare a disclosure
document completed by any of the following

except the
How long does a person have to initiate an One year

action
for a violation of the Property Disclosure Act?
To which of these transfers of residential Transfer by sale, exchange, or assignment of beneficial interest
real property does the Property
Disclosure Act apply?
Which of these transfers of residential real Builder frank sold a newly-constructed home that never been occupied
property are exempt from the Illinois Property
Disclosure Act?
What MUST be printed on or included A copy of the actual disclosure act

with the Property Disclosure Report?
Negligent misrepresentation is practiced Accidentally
Broker Bob is showing a property that may Seek legal counsel regarding the disclosure of the stigmatized property
be considered a stigmatized property. If in
doubt Broker Bob should
The Deceptive Trade Practices Act (DPTA) an agent lies to get someone to put in a contract on a property.
can come to bear on a real estate
licensee when
Based on the Illinois Real Estate License Act Actual knowledge

the licensee must disclose any material facts
about the physical condition of the
property OR the transaction about which
the licensee has
Agents need to remember, "stigmatized" Are not required to be disclosed

conditions are not material and
According to various sections of the Is not required to disclose the act

Administrative Code, if Broker Bob is
showing property that was the site of an
act that had no effect on the physical
condition of the property or its
environment Broker Bob
Fraud is practiced______. Deliberately
The Deceptive Trade Practices Act (DPTA) The public

exists to protect whom?
A property may have hidden defects Latent defects

undiscoverable by ordinary inspection that
jeopardizes structural integrity or an
occupant's
safety, these items are defined as
Information about a property that has a Material fact

significant bearing on a buyers decision to
purchase that property is a
Which piece of information about a Company that writes the homeowner's policy
property would be the least helpful for a
licensee to collect?
Which of these environmental hazards Illegal methamphetamine manufacturing

is specifically addressed in the Residential
Real Property Disclosure Report?
In which of these places is asbestos not likely Drywall

to be found?
-roofing
-drywall
-textured paint
-vinyl floor tile
Broker Sandra accepted a listing for a Sandra should explain to the owner that the request is in violation of
home. A week later the owner told her Fair Housing law and she cannot abide by it.
that he was not willing to sell to an African-
American person or family. Which of the
following is true?
Which of these statements is FALSE Have an appraisal done of the property

regarding what a licensee should do to
prepare for a listing meeting?
-Drive through the neighborhood and check
out listed homes that are currently up for
sale.
-Check recent real estate activities by
accessing the local multiple listing service
database and public records.
-Have an appraisal done of the property.
-Become familiar with the neighborhood.
Which of the following would a potential The charitable organizations the firm supports
seller be least interested in knowing at the
time of the listing presentation?
-A licensee's qualifications
-How much profit the sellers could get from
the sale
-The services offered by the licensee's firm
-The charitable organizations the firm supports
When a licensee does a comparison of the Preparing a comparative market analysis (CMA).
prices of similar properties that have
recently sold, similar properties currently on
the market, and properties that have not
sold in anticipation of getting a listing she is
Which environmental hazard is Methamphetamine production

specifically mentioned on the Residential
Real Property Disclosure?
For which geological hazard would Earthquake

disclosure to a potential buyer be mostly
ineffective?
Which statement is FALSE? Underground storage tanks pose no hazard to residential areas.
-Mold often grows where it can't be seen.
-Radon is an odorless, colorless gas.
-Underground storage tanks pose no hazard
to residential areas.
-Urea formaldehyde foam insulation is no
longer used.
Oftentimes people confuse market value with Cost
What is the most common reason a property Overpricing

fails to sell?
-Overpricing
-Lack of advertising
-In need of repair
-Not enough prospective buyers
Technically a property can be listed at any "Buying" a listing

price, however deliberately misleading a client
as to the market value of the property to
guarantee a listing is an ethical violation.
This practice is commonly referred to as
-Blockbusting
-"Buying" a listing
-Over listing
-Price-fixing
Which of the following is a good example An option to buy

of a unilateral contract?
-A listing agreement
-A personal services agreement
-A sale contract
-An option to buy
Which of these would be a form an agent Estimate of seller proceeds

could use to show a seller what he or she
will net on the sale of the property?
-Statement of Closing Costs
-Comparative Market Analysis
-Sale Price Disclosure
-Estimate of Seller Proceeds
A comparative market analysis is an attempt to Establish a homes fair market value

-Find things in the home a seller needs to
repair.
-Establish a home's fair market value.
-Discover why some homes haven't sold.
-Convince a seller to list with you.
The best description for a CMA is____. And analysis of the sales prices of similar homes, so the seller can decide
-An appraisal how much to ask for the property
-A comparative mortgage analysis used
by lenders
-An analysis of the sales prices of similar
homes, so the seller can decide how much
to ask for the property
-A cooperative marketing approach used
by multiple listing services
The highest price a buyer is willing to pay Market value

and the lowest price the seller will accept for
a property is known as what?
What is an important legal characteristic of The seller must perform if the buyer exercises the option, but the buyer is
an option to buy agreement? under no obligation to do so
What type of financing exists when a seller Installment land contract

defers
receipt of some or all of the purchase price
of the property over a specified period of
time?
Short sales are not intended to allow A chronic history of seeking and exceeding higher credit limits
property owners to walk away from their
financial obligation based on arbitrary
reasons. Lenders require sellers to show
proof of hardship, which include all of the
following, except
-a chronic history of seeking and
exceeding higher credit limits.
-job loss / unexpected unemployment.
-loss of second income.
-divorce.
A licensee might suggest some optional Wraparound mortgage

strategies a seller might consider rather than
a short sale. These strategies would include
all of the following, except
-reinstatement of the mortgage.
-loan modification.
-wraparound mortgage.
-deed-in-lieu of foreclosure.
Before advertising a property as "distressed," Obtain the seller's permission

an agent should
The seller's main concern in arranging for the what the lender intends to do about the shortage.
sale of a distressed property is
The final step in the short sale transaction is___. the seller delivers the deed.
An important characteristic of a the seller generally has a limited time to sell.

distressed property, caused by a divorce,
compared to a 'conventional' property is
that
Which of the following is exempted from None of the foregoing are exempt
the lender's scrutiny in considering a
short sale?
-The seller's tax returns
-The seller's IRA account
-The sellers other real estate properties
-None of the foregoing are exempt
As part of the short sale consulting process, any portion of the loan that is "forgiven" may be considered income and
the licensee should discuss the following must be reported for tax purposes.
with the sellers
One characteristic of a short sale transaction is lenders may not allow a short sale if they discover other assets the seller
that____. concealed.
Property that is undergoing a reduction in Distressed property

market price due to the pressures of a
threatened foreclosure, divorce, estate
settlement, drastic economic changes, and/or
deteriorating physical condition is called
Which of the following would not appear Roof type

as an "interior feature" on the listing?
-Floor coverings
-Roof Type
-Number of Bathrooms
-Heating System
Commencement date can best be described as the date when the listing agreement was signed.
____.
Which of the following information would you Spouses maiden name

not collect for a listing?
-Listing Price
-Owner's Name
-Spouse's Maiden Name
-Street Number
In what section of the listing agreement does Seller obligations

the seller provide his responsibilities?
When starting a listing, what question is the "Are you currently listed with another brokerage?"
most important?
Which of the following statements Standard commission is 4.5%.

violates antitrust laws?
-Our agency charges a rate of 4.5%.
-Commission rate is not set.
-Each agency has its own commission rate.
-Standard commission is 4.5%.
Which of the following might be a "red flag" Damp basement

when taking a listing?
-Damp Basement
-New Roof
-Swimming Pool
-Security Cameras
In what section of the listing agreement would Additional terms and property information
you find property exemptions?
In what section of the listing agreement General provisions

would you find reference to fair housing?
Home warranties are: a good selling point.
What rights does a buyer have, if a seller Buyer has the right to terminate the contract
fails to provide a disclosure document prior
to the transfer of the property?
Licensee Mike knows that the property located None

at 15 S. Elm is stigmatized due a violent
death that occurred at the address five years
ago. Mike does not disclose this information
to out-of-town buyers. What act has Mike
violated?
-Residential Death Report Act
-None
-Illinois Disclosure Act
-Section 35 Act
Radon gas can be traced back to______. Uranium
Real estate agents who take listings of Built prior to 1978

homes must have their sellers fill out a
disclosure form about their knowledge or
lack of knowledge about the presence of
lead-based paint in the home if the home
was
In Illinois, the Residential Real Property Licensee

Disclosure Act requires that when a seller
signs the listing agreement, he or she must
also prepare a property condition disclosure
document completed by any of the following
except the
Based on the Illinois License Act, the Actual knowledge

licensee must disclose any material facts
about the physical condition of the
property OR the transaction about which
the licensee has
Which of the following is FALSE regarding Can be absorbed through the skin
the toxic effects of lead-based paint?
-Can be absorbed through the skin
-Can be ingested
-Can be inhaled
-Can alter brain growth
To comply with the Illinois Radon Awareness The plan for the seller to conduct radon testing and mitigation activities
Act the seller is required to fill out the prior to the entering into a contract with purchasers
Illinois Disclosure of Information on Radon
Hazards form by initialing, explaining, and
providing all of the following items, except
-all available records and reports pertaining
to elevated radon concentrations within
the dwelling.
-documentation that all prior elevated
radon concentrations have been
mitigated or remediated.
-the plan for the seller to conduct radon
testing and mitigation activities prior to
entering into a contract with purchasers.
-acknowledgement that elevated radon
concentrations are known to be present
within the dwelling.
Buyer Jake took possession of a house on On or before March 12, 2011

March 12, 2010. Buyer Jake needs to file a
case based on a disclosure violation. When
must he file?
Under law, when the seller has knowledge of The Illinois disclosure of information on radon hazards form
high radon gas levels, what must the seller
provide to the buyer?
Which of these is not a helpful homeowner tip? Display lots of family photos to impress potential buyers
-Display lots of family photos to impress
potential buyers.
-Declutter the garage and basement.
-Bake muffins or cinnamon rolls to
create a "homey" feel.
-Make sure all light bulbs and lamps are
working and are bright.
No-shows for a scheduled appointment can The agent should prepare her client during the listing presentation for
happen. How should an agent handle no- no- shows.
shows?
-The agent should make note of the no-show
in the weekly activity report.
-The agent should prepare her client during
the listing presentation for no-shows.
-The agent should have a no-show
agent reschedule.
-The agent should report no shows to the MLS
board.
Which of the following is a good Remove clutter

property showing tip?
-Remove all area rugs
-Allow pets to interact with the clients
-Lock-off storage areas
-Remove clutter
All of these activities are appropriate to do Discuss modifying the listing price.
within the first few days of obtaining a listing
except which?
-Give the sellers a copy of some homeowner
tips.
-Discuss modifying the listing price.
-Explain your marketing plan to the sellers.
-Have the broker send a "thank you for
listing" letter to the sellers.
If someone shows up at the sellers' door Take their names and call your office.
unexpectedly to see the home, the sellers
should
_________.
-Tell them to call your office.
-Invite them in and show them around.
-Take their names and call your office.
-Show them the outside of the property.
When should a licensee schedule an office tour? Soon after the listing is taken.
-If the listing does not sell within 30 days.
-Prior to taking a listing.
-Soon after the listing is taken.
-During a public open house
Which of these items is not important to Number of hits on the company website
include on your weekly activity report?
-Buyer's comments about the property.
-Agent comments about the property
-Number of phone calls requesting
property information.
-Number of hits on the company website
What is a good technique to make a Bake some brownies just before the showing.
home appear homey?
-Bake some brownies just before the showing.
-Close all blinds and curtains.
-Organize storage spaces.
-Place more furniture in the space.
Which of the following actions by an agent Sharing all visitor comments two weeks before the listing ends
would most probably upset the sellers?
-Conducting an agent open house
-Sending a weekly activity report
-Sharing all visitor comments two weeks
before the listing ends
-Placing a classified ad in the weekend paper
What is the best strategy to take when a Schedule a meeting with the seller a few weeks before the listing expires
listing is about to expire? and review options.
-Let the listing expire.
-Have your managing broker call the seller
to discuss an extension.
-Schedule a meeting with the seller a few
weeks before the listing expires and review
options.
-Relist the property with MLS for two
additional weeks
What are the two categories of duties? Action and Protection
Which of the following is a good suggestion Maintain a file on each client and record all properties shown.
for keeping track of listings that have been
shown to a client?
-Print off an MLS listing.
-Ask the client to keep a binder of all listings.
-Maintain a file on each client and
record all properties shown.
-Leave a business card at each property shown.
Which skill must the licensee use the Listening

most to ensure that his or her client
receives the best care?
The acronym COD stands Care, Obedience, Disclosure

for:
Which of the following best defines dual agency? Representing both the buyer and seller in a transaction.
When does a seller first become aware of At the time that the listing agreement is signed
the possibility of a dual agency?
How might a licensee hide the true identity of Insert "and/or assigns" in the buyer's line.
his or her client on a sales offer?
Who must approve a dual All parties to the transaction

agency representation?
What type of agency is standard in Illinois? designated
Which is the only duty that continues beyond Confidentiality

the agency relationship, unless a client
gives a licensee permission to share the
information with others?
The best reason for the buyer to The buyer's agent can provide a strong negotiating position.
have representation is:
-The seller has representation.
-The listing agent is on the seller's side.
-The licensee offered it.
-The buyer's agent can provide a
strong negotiating position.
When the buyer checks "yes" to dual agency By checking "yes" to this paragraph, the buyer is only acknowledging
on a Buyer Representation agreement, what that the possibility of dual agency exists.
does the buyer actually agree to?
The reason licensees like buyer agency so The buyer will be loyal to the buyer's agent
much is:
It is important that you take the time to go compensation provision

over each of the provisions of the buyer
representation agreement especially the
___.
Getting paid by the buyer before showing A retainer fee

him homes is an example of
What are the three types of Buyer's Exclusive buyer, Exclusive agency buyer, Open buyer agency.
Agreements?
Under an exclusive buyer brokerage When the seller and listing broker will not
agreement, the buyer may have to pay the
buyer agent's
commission
After the termination of a Buyer's If the buyer purchases a property that was shown by the licensee
Agreement, when might a licensee's firm during the term of the agreement.
still earn a commission?
Which provision in the buyer's agreement Disclaimer

deals with the limits to the professional
duties and abilities of the licensee?
What type of contract is a Buyer's Agreement? employment
What is the key to working with Minimize disruption

relocation buyers?
When meeting a buyer, what should you deal Their emotional needs
with first?
When selecting a property, what is the Meeting wants and needs

most desirable outcome?
You should change the buyers wants and Buyer feedback

needs based on what?
What drives downsizers? convenience
What two pieces of information are most Motivation and urgency

helpful to know when working with buyers?
Which type of fire will most likely have the First-time buyers
highest fear factor?
To be successful with investor buyers, what Determine exactly what the buyer wants
must a licensee do?
What is the reaction when a buyer is faced They become paralyzed

with too many options?
What is fortunate about working with upsizers? they know what they want
Which type of status is viewed as a A buyer who holds a pre-approval letter.

stronger buying position?
Buyers can find out how much of a loan they can Pre-approval, a formal process that only a lender can perform.
qualify for by:
What term is used to denote everything Liabilities

that a person owes?
Which type of loan requires that debt- FHA loans

ratio guidelines must not exceed 41
percent?
What is the single most important document Credit history

used to determine loan worthiness?
How will you know if the letter regarding a If the letter states that the loan approval is subject to "verification of the
buyer's loan capacity is a prequalification letter buyers' income and credit information" it is a prequalification letter.
or a preapproval letter?
How do lenders determine the value Lenders rely on appraisal reports.

of a property?
Which two tools are used to determine a Income ratio and debt ratio
buyer's ability to pay the loan?
The evaluation process used to determine Underwriting

the borrower's ability to repay a loan and
estimating the value of the property being
used as collateral is called _.
Bob and Linda Todd are buyers with $60,000 $1,120.00

of stable income and unknown credit scores.
Using a 28% front end loan qualifying ratio and
assuming about 20% of that amount would
be for taxes and insurance, how much of a
monthly payment (principal and interest)
could the Todd's qualify for?
Which of the following is not necessary Home warranty application

for a presentation package?
-Property information sheet
-Photos
-Home Warranty Application
-Map
All of these questions could help you How much do you have in your savings account?
determine a prospect's capacity to make a
purchase except which one?
-How much do you have in your savings
account?
-How soon are you planning to buy?
-Where do you and your spouse work?
-Do you need the equity from your current
home for the new home purchase?
What technique is used to elicit "yes" Tie-down

responses from a client?
Joe Broker takes a prospective buyer into a Forgot to knock upon entering and turn off the lights
home. Joe turns on the lights to add
warmth, walks the buyer through the house,
leaves a business card, then locks up and
leaves the premises. What steps did Joe
miss?
What is the primary purpose of the first To pre-qualify them

meeting with prospective buyers?
What technique helps you uncover what Invite comparisons

property features are most important to
clients?.
A buyer calls your office to inquire about a On the Internet

property he saw advertised. He sounds
knowledgeable about this listing. Where is it
that he likely found out the property
information?
What is the key to a successful showing? organization
How do you stay in control of a call? By asking questions
If a prospective buyer calls about a listing, Set an appointment to show it

what is the most important thing a broker
should do?
A buyer wants to take the offer to an Encourage the buyer to get the attorney to review it quickly.
attorney to review it. Broker Tim knows that
another offer will be coming in at about the
same time. What should Tim do?
In which of the following instances If the buyers are requesting unusual provisions not covered by the
should a broker suggest that a buyer standard contract
should consult an attorney?
Broker Bob has a buyer who has seen a Ask the buyer if the buyer would like to make an offer taking the roof
property twice and seems ready to make an age into account.
offer.
However, he is objecting because the roof is 12
years old. What should Bob do?
Broker Sally has a buyer who seems to like Suggest that the buyer include an allowance for updating in the offer.
a property but is concerned because the
kitchen is out of date. What should Sally do?
Broker Dave represents Buyer Mary. Mary No, Dave should have submitted the offer.
wants to make an offer on a house that is
25% lower than the asking price. Dave writes
the offer but is too embarrassed to submit
it. Instead, Dave terminates the relationship
with Mary. Has Dave acted properly?
Broker Carol's buyer wants to submit an offer Show the buyer comparables and indicate that the seller's price is in line
that Carol believes is too low. What should with similar properties.
Carol say to the buyer?
If a buyer has given the broker a signal Proceed as if the buyer has decided to make an offer.
that the buyer is ready to make an offer,
what should the broker do to get the buyer
to make the offer?
Broker Will represents a young couple who Encourage the couple to offer only what they can afford.
is preparing an offer on a home. Through
preapproval, Will knows the couple can
only afford to pay $100,000. The couple
insists on offering
$120,000. What should Will do?
Mary makes an offer to purchase a duplex The contract is voidable due to mutual mistake.
from Sam. They agree on a price and both
parties execute the contract. Mary learns that
Sam is only selling half of the duplex. Mary
wants to terminate the contract. What is the
result?
What can Broker Kevin do to create urgency Point out how long houses in the area stay on the market and discuss how
in a buyer? many showings there have been.
When does an Assumption Fee apply? When the buyer assumes the seller's existing loan.
What document is a detailed accounting of Settlement Statement

the transaction that is prepared before
closing?
Which of the following charges does the Lender fees

buyer usually pay?
What tax is imposed on any deed or instrument Real estate transfer tax
which conveys interest in real property?
What is a fee charged to secure a specific Loan Lock Fee

interest rate?
A falsified Real Estate Transfer Declaration is a Class B misdemeanor

___________.
Which of the following charges does the Commission Fees

seller usually pay?
Which of the following deeds are exempt Partitions

from transfer tax?
Which document is used to show the Real estate transfer declaration

amount of taxable consideration that was
used to determine the transfer taxes?
Bob Broker is representing a buyer and is No, because he recommended a specific company
assisting with the closing. He tells the buyer
that Eagle Inspections will get the inspection
done quickly and thoroughly. Has Bob acted
properly?
After the contract has been executed, the Have the buyer ask his attorney to prepare an amendment requesting
buyer needs to change the closing date. the change.
What should the broker do?
If a property is located in a flood zone and A lender would not make a loan on the property.
the property owner does not obtain flood
insurance, what are the consequences?
Who is responsible for keeping track of The broker

all the dates listed in the contract?
During the walk-through, the buyer sees that The buyer and his attorney should confer on how to handle the
the seller did not do a proper cleaning of problem cleaning without delaying the closing.
the house. What is the best way of
handling this?
If a general home inspection showed a Ask a structural engineer to inspect and give an opinion.
possible crack in a foundation, what should
the buyer do?
Since each home has an "insurance record" of Make their offer subject to receiving and approving a copy of the
its own, licensees should advise buyers to seller's CLUE report
obtain a CLUE Report and:
Buyer Jim's loan is turned down the week before The buyer could ask for an extension to allow Jim to find another lender.
closing. What happens now?
During the inspection period under a Amend the contract to extend the time to a time certain to correct the
contract, the buyer discovered that there was problem.
a title defect that needed to be rectified. The

parties are uncertain about the amount of
time it will take to correct the problem. What
should they do?
Requires the homeowner to have property insurance equal to 80% of

What does the coinsurance clause do?
the home's replacement value
Broker licensees are exempt from continuing serve as a full-time employee of the Department.
education requirements if they serve in the
United States armed forces, serve as an
elected state or federal official, or _.
When does a real estate advertising If and when the business engages in the practice of real estate brokerage.
business need to hold a real estate
license?
What are the three licensee designations Broker, Managing Broker, Residential Leasing Agent
in Illinois?
Individuals renewing or obtaining a 12

managing broker's license must complete
a broker- management course of how
many CE credit hours?
A credit hour must include classroom 50 minutes

instruction in coursework of a minimum of:
Who is responsible to demonstrate evidence Each renewal applicant

of CE compliance?
Within how many days does a change in 15

managing brokers need to be reported to
the IDFPR?
Managing Broker Jane owns a recreational The RV is not considered an office under Illinois Law.
vehicle that contains real estate records.
She'd like to have her RV licensed as her
principal place of business. What does the
law say about this type of action?
What action can a licensee take if a client A licensee may without liability withdraw from representing a client who has
refuses not
to approve a dual agency relationship? consented to a disclosed dual agency.
Which of the following statements best Two or more offers being written at the same time on the same property
describes a contemporaneous offer? from the same designated agent.
Licensee Jim has a deal with home inspector When Jim fails to inform all parties in writing.
Jake. For every client referral, Jim earns
$25. When does Jim's action become
unlawful?
When is a licensee banned from acting as a A licensee is prohibited from serving as a dual agent if he or
dual agent in a transaction? she has an ownership interest in the property.
In what situation is undisclosed dual Never

agency acceptable?
-When the seller client agrees
-When two or more contemporaneous offers
are made
-When the broker approves
-Never
When is a licensee required to disclose interest? When the licensee holds more than 1% owner interest.
Which of the following entities are exempt General circulation newspapers

from holding a license?
-General circulation newspapers
-Rental Finding Service
-Real estate firm
-Companies offering properties for exchange.
Janice performs only activities related to the Residential Leasing Agent

leasing of residential property, and she
requires a license. Which of the following
titles applies to Janice?
Which of the following is a true statement? State and federal employees performing official duties do not need
-Agents selling real estate less than 10 to be licensed.
hours a week do not need to be licensed.
-Agents selling real estate less than 45
hours a month do not need to be
licensed.
-State and federal employees performing
official duties do not need to be licensed.
-Auctioneers selling property do not need
to be licensed.
Who does NOT need a real estate license An attorney acting under a power-of-attorney to deal with property from
under Illinois law? the owner.
-Someone supervising the collection of rent
(or offering to do so) for the use of real
estate.
-Someone advertising or representing herself
as working to buy, sell, exchange, rent or
lease real estate.
-Someone who negotiates or agrees to
negotiate the sale, exchange, purchase,
rental or lease of real estate.
-An attorney acting under a power-of-attorney to
deal with property from the owner.
Which of the following would NOT require a An attorney representing a client

real estate license?
-A person who deals in options
-An attorney representing a client
-One who sells or leases at an auction
-A person who negotiates to help someone
else buy or sell real estate
Any business which finds, attempts to A rental finding service

find, or offers to find, for any person who
pays or is obligated to pay a fee or other
valuable consideration, a unit of rental
real estate or a lessee to occupy a unit of
rental real estate, not owned or leased by
the business is known as:
Which of the following is true All of the above are true.

regarding licensure?
-Part-time Realtors must be licensed.
-Full-time Realtors must be licensed.
-Anyone offering to negotiate the sale of
real estate must be licensed.
-All of the above are true.
In which of the following situations, when All of the above situations require a person or corporation to have a
performing duties for compensation, must a real estate license.
person or corporation have a real estate
license?
-Only when the person or corporation
advertises or represents herself as working to
buy, sell, rent, exchange or lease real
estate.
-Only when the person or corporation opens
real estate to the public, for the purpose of
marketing.
-Only when selling or leasing, or offering

to sell or lease real estate at an auction.
-All of the above situations require a person or
corporation to have a real estate license.
Carol's legal action must start within how many Carol's legal action must begin within 2 years.
years after she became aware of the acts that

led to legal action to obtain recovery from
the fund?
How many days from receipt of a peer 30 days

review does the Department have to
respond?
Lawrence practiced real estate without a Class 4 felony

license and was caught for the second time
. For his offense, Lawrence can be charged
with a
_________________________.
Which of the following organizations would Real Estate Administration and Disciplinary Board of IDFPR
initiate the investigation of anyone regulated
by Illinois' license act?
-Real Estate Administration and Disciplinary
Board of IDFPR
-Council of the IDFPR
-Illinois Environmental Protection Agency
-Illinois Human Rights Act Committee
Who can file a complaint with the IDFPR? anyone
A licensee who violates license law the first A first-time offender is guilty of a Class A Misdemeanor.
time is guilty of which of the following?
Which of the following is a fund established Real Estate Recovery Fund

from real estate license revenues to cover
claims of "wronged" parties who have
suffered monetary damages due to a real
estate licensee?
-Real Estate Administration Fund
-Real Estate Revenue Fund
-Real Estate Support Fund
-Real Estate Recovery Fund
Ads not stating the broker's name, not stating Blind ads
that the advertiser is licensed, or those with
only a phone number, P.O. box, or street
address are known as:
Which governmental agency files suits in Dept. of justice

ADA cases?
Which of these classes are protected by the Military status

Fair Housing Laws of Illinois?
-Middle Income Renters
-Criminal Record Holders
-Military Status
-Employment Status
The following is evidence of guilt of a Failure to display the Fair Housing poster as required by law
Fair Housing Violation
-Having violated the act previously
-Failure to display the Fair Housing poster
as required by law
-A charge that you advertised a property
with location of schools nearby
-Asking a buyer to prove they are over a
certain age
Which Fair Housing Law added Fair Housing Amendments Act of 1988
handicap individuals to the list of
protected classes?
Which is a TRUE statement about the The act applies to AIDS victims.
Americans with Disabilities Act?
-The act applies to AIDS victims.
-The act applies to all structures built in the
last 50 years.
-Shopping centers are exempt if built after
March 13, 1991.
-An apartment manager might be required
to widen all doorways to 60 inches.
What is the limit for HUD to start a 30 days

discrimination investigation?
A person filing the complaint may be entitled to Actual damages

__________.
Which Fair Housing Law added sex to the Housing and Community Development Act
list of protected classes?
-Jones v. Mayer
-Title VIII of the Civil Rights Act of 1968
-Housing and Community Development Act
-Fair Housing Amendments Act
Which of these phrases would not be Wheelchair ramps

considered discriminatory if used in
advertising?
-White family home
-Christian home
-Couples only
-Wheelchair ramps
What is a good policy regarding a seller Terminate the listing

who refuses to accept an offer from a
potential buyer that is in a specific protected
class?
A broker induces an owner to sell by telling Blockbusting

him that Hispanics are moving into the
neighborhood. This broker is guilty of what
prohibited activity?
Mortgage providers and Federal Loan programs Housing affordability ratios

base their loans on Debt to income ratios as
determined by their own
Is any city in Illinois allowed to pass an Yes, if the requirement is judged as reasonable.
occupancy law regarding number of tenants
per apartment?
A broker only shows homes in certain Steering

neighborhoods based on matching existing
residents with similar potential buyers. This
broker is guilty of what prohibited activity?
Seller Jim tells his listing licensee that The licensee could be held liable if he or she knowing goes along
regardless of the offer, he will not sell to with the request.
any Asian families. How does this impact
the listing agent?
If a person believes he or she has been 1 year

discriminated against, how long does he or
she have to file a HUD complaint?
What practice helps move low-income Filtering Down

persons into previously-owned higher
income owner properties?
Records show that Banker Fred has increased Yes, this would be viewed as discriminatory.
the interest rate on all loans to Native
Americans by an additional 3%. Has Banker
Fred violated any laws?
Which of the following classes are not Military status

protected by federal law?
-Military status
-Sex
-Color
-Handicap
When must a model home comply with If the home also has a sales office area.
ADA guidelines?
To which of the following transactions Seller-financed loans

does RESPA NOT apply?
-Seller-financed loans
-Residential property
-First or second mortgage loans
-A loan that is insured by a federal agency
What is the purpose of RESPA? That home buyers receive the correct figures pertaining to their closing costs.
Which of the following is exempt from RESPA? All cash sale

-Condominium purchase
-Federally-insured loan
-Loan involving a second mortgage
-All cash sale
Which statement is true about accepting It could be a law violation

referral fees?
-It is common business practice.
-It could be a law violation.
-It is forbidden under all circumstances.
-It is permissible in amounts under $50.
What is the title of the booklet that lenders "Your home loan toolkit"
must give to every person at the time of
application for a loan?
Regulation Z applies to which of these $75,000 condominium loan

situations?
During a loan interview, a lender always ECOA

asks borrowers what church they attend.
What law, if any, does this action violate?
Which document is required by RESPA to Closing Disclosure

detail the costs that the buyer and seller
will pay at closing?
If a group of area brokers have a meeting to set Sherman Antitrust Act

commission rates, what does this violate?
Which of these is not a violation of antitrust Redlining

laws?
-Boycott
-Price fixing
-Redlining
-Market allocation
One broker says to another "I'll take the east Market allocation
side of town and your company can take
the west side." What is this an example of?
Two brokers working for the same firm meet No. The brokers do not represent competing firms.
over coffee and decide to charge the same
set commission rate to all of their sellers. Is
this an illegal action?
All of the members of one board of Group boycott

REALTORS agree that they will not show
the properties of the members of another
board of REALTORS. What is this an
example of?
Matt Bower is a developer. Will Jones is a Tie-in arrangement

builder. Matt agrees to sell Will a lot, but he
conditions the sale by insisting that Will
agree to list the property with him after the
home is built. What is this called?
Section 1450.145 defines a "Page" as what? Each html document
Which of the following is true regarding Licensees may not use blind ads regardless of who owns the property.
blind ads?
-Licensees may not utilize blind ads unless
they own the advertised property.
-Licensees may not use blind ads regardless
of who owns the property.
-A blind ad is an ad that excludes the
licensees name.
-Blind ads placed by licensees are permitted
if they do not discriminate.
Licensee Judy takes a weekly ad out in the Ads in only one local paper may appear to be discriminatory.
South Side Journal. Judy does not place ads
in any of the other neighborhood newspapers.
What might be said about Judy's
advertisement practices?
Ads should be written____. from the perspective of all the protected classes
What is defined as the copying or Scraping

extracting of existing listing information or
keywords from a website, digital platform,
or any form of social media of another
licensee and using or altering that material
and posting or displaying it for the benefit of
the general public on another digital
platform, form of social media, or in front
of firewall on another website, without
written or electronic permission and
disclosure from the original listing licensee?
Which of the following statements are illegal Those of the Catholic faith only accepted.
in real estate ads?
-Property has a mother-in-law annex.
-Apartment is a four-story walk-up.
-No smokers and No pets.
-Those of the Catholic faith only accepted.
At times, the women's shelter at St. Mary's Yes, gender based ads for shared living housing is acceptable.
Catholic Church has rental units open to
the public. Are they allowed to advertise for
female renters only?
Advertising a property that is subject to an Deceptive and misleading advertising

exclusive listing agreement with a
sponsoring broker other than the licensee's
own without the permission of and identifying
that listing broker is an example of:
Which of the following real estate ads would Great location for empty nesters, close to park and hospitals.
not be acceptable?
-Property sits on a corner lot with 3
bedrooms, new master bath and large
family room.
-Great location for empty nesters, close to
park and hospitals.
-Cozy 2 bedroom cottage in quiet neighborhood.
-Home is located in gated community
with security entrance.
Internet ads, on a licensee's home page, licensee's name, sponsoring broker's name, company
must contain name/address, geographic location.
Which statement about the Junk Fax Licensees can only send faxes to existing clients.
Prevention Act is TRUE?
-Licensees must check the national
registry before sending a fax.
-Licensees can only send faxes to existing
clients.
-This act applies only to managing brokers,
not their employees.
-Licensees are exempt from this act when
sending
open house notices.
Which of the following is a rule of the federal The law prohibits unsolicited phone calls to any consumer telephone
Do- Not-Call List? number listed on the registry.
-Every state must have its own list.
-Only telemarketers are bound by this law.
-Consumers must update their information on
the registry at least every two years.
-The law prohibits unsolicited phone calls to
any consumer telephone number listed on
the registry.
Agent Jim wants to send out an email to all Jim must give the agents a way to opt out of any future email messages.
the local real estate agents to inform them
about an open house he is holding. What
must he do to be in compliance with the
CAN-SPAM Act?
Which agency handles junk fax complaints? FCC
A managing broker may be protected from Both a and b

their broker's violation of the Do Not Call
Act if he or she has implemented
-Training on Do not Call procedures
-A written policy on Do not call procedures
-Provided a policy manual for the office
-Both a and b
the price that a willing, informed, and unpressured seller and buyer agree
The concept of market value is best described as upon for a property, assuming a cash price and the property's reasonable
exposure to the market.
Which of the following situations illustrates A homeowner adds a third bathroom to a house and thereby increases
the principle of contribution? the appraised value by $10,000.
-A homebuyer makes a down payment of
20% instead of the 10% the lender
requires.
-A homeowner adds a third bathroom to a
house and thereby increases the appraised
value by
$10,000.
-The appraised value of a house goes up by
$20,000 over a two-year period because of
the prices recently paid for other houses in
the neighborhood.
-Because of a decline in mortgage interest
rates, a homeowner in a certain market is able
to list her
house at a higher price.
The present monetary worth of benefits arising from the ownership of

Real estate value in general is:
real estate.
Which of the following is a local market Municipal infrastructure.

influence on market value?
-Inflation.
-Municipal infrastructure.
-Money supply.
-Federal tax laws.
A person paid $150,000 for a house with Anticipation

the intention of renting it out for $1,000 per
month. The economic principle that led
the person to pay this price based on the
property's ability to generate this future
income is known as:
A property owner buys an adjacent parcel Assemblage

and combines it with the original parcel to
create a property with a higher value than
the total of the two separate property
values. The operative principle of value in
this situation is called:
A phase that is NOT part of the usual real Price-demand independence

estate market cycle is
-oversupply.
-undersupply.
-supply-demand equilibrium.
-price-demand independence.
One reason real estate agents need to Foresee how current conditions may affect their transactions
understand influences on market value is so
they can
Highest and best use of a property is that use is physically and financially feasible, legal, and the most productive.
which_______.
Of the following market conditions or trends, Number of competing agents in the market area.
which is NOT important as an influence on
market value?
-Number of properties on the market.
-Trends in average time on the market.
-Number of competing agents in the market
area.
-Trends in sale prices in different price ranges.
What a property actually sells for is its: market price
How readily or easily title or rights to real Transferability value

estate can be transferred affects the
property's:
All the following qualities are required in a locational identity to the subject.
good comparable for an appraisal EXCEPT
-resemblance to the subject in utility and design.
-locational identity to the subject.
-sale in an arm's-length transaction.
-recent sale.
The main limitation of using a pending sale the final sales price is not known.
for a comparable is that
As a comparable, an expired listing can a listing price that was too high for the market.
be a useful indicator of
If a comparable sold for $200,000 but $210,000.00

lacks a garage valued at $10,000, while the
subject has one, the adjusted value of the
comparable is
Because the sale prices of the comparables can be made only to the comparables' prices, not to the subject's.
are known, while the value and price of the
subject are not, adjustments:
As a rule, the fewer the total number of The more reliable the comparable
adjustments, the smaller the adjustment
amounts, and the less the total adjustment
amount:
One of the principal factors for adjustment Time of sale

in a CMA or sales comparison appraisal is
If a comparable is better than the subject in an amount is deducted from the sale price of the comparable.
some
characteristic,
A lender who charges a rate of interest in Usury

excess of legal limits is guilty of
The document that commits a mortgage Promissory note

loan borrower to repay the loan is the
If the loan term, loan amount, and interest Periodic payment

rate of a loan are known, it is possible to
calculate the
A homeowner borrows money from a lender Hypothecation

and gives the lender a mortgage on the
property as collateral for the loan. The
homeowner retains title to the property.
This is an example of
Which of the following best expresses The borrower gives the lender a note and a mortgage in exchange
the mechanics of a mortgage loan for loan funds
transaction?
-The borrower gives the lender a note
and a mortgage in exchange for loan
funds.
-The lender gives the borrower a mortgage
and receives a note in exchange for loan
funds.
-The borrower receives a note in exchange
for a mortgage from the lender.
-The lender gives the borrower a note, loan
funds and a mortgage.
A document executed by a lender as evidence that a loan has been

What is a "satisfaction piece?"
repaid in full.
Wesley wants to sell his house to Maria. due-on-sale clause.

Maria would like to assume Wesley's
mortgage loan. Wesley's lender demands
full and immediate repayment of the loan if
Wesley completes the sale. The lender can
make this demand if the mortgage
contains a
Because of a borrower's default on Acceleration clause

payments, a mortgage lender calls the entire
balance due and payable immediately. The
clause in the mortgage document that allows
the lender to do this is the
Freddie Mac issues securities known as Guaranteed Mortgage Certificates.
A lender lends money to a homeowner and takes Title-theory state

legal title to the property as collateral during
the payoff period. They are in a
guaranteeing to lenders that monthly payments on mortgage loans

Ginnie Mae operates by
will be made.
A lender is charging three points on a $3,000

$100,000 loan. How much does this
amount to for the borrower?
When financial institutions use funds from Intermediation

depositors to make mortgage loans, the
process is called
The primary mortgage market includes all of Fannie Mae

the following EXCEPT
-commercial banks.
-insurance companies.
-Fannie Mae.
-credit unions.
In a deed of trust transaction, which of The trustor conveys title to a trustee in exchange for loan funds from
the following occurs? the beneficiary.
-The beneficiary conveys title to a trustee
in exchange for loan funds.
-The trustee conveys title to a beneficiary
in exchange for loan funds.
-The trustor conveys title to a trustee in
exchange for loan funds from the
beneficiary.
-The trustee conveys title to a trustor in
exchange for loan funds from the
beneficiary.
Which of the following best describes a A homeowner's equity is pledged as collateral for a loan paid out over
reverse annuity mortgage? time. The loan is repaid when the house is sold.
-The monthly payments on a loan decrease
over the loan term, leaving a balance to be
paid off at the end of the term.
-A homeowner borrows an amount equal to
the equity in her home, invests it, and pays
part of the interest earned each month to
the lender.
-A homeowner's equity is pledged as
collateral for a loan paid out over time. The
loan is repaid when the house is sold.
-A homeowner buys an annuity and uses
the interest from the annuity to pay off a
mortgage loan.
Norm is buying a furnished condo in Chicago. Package mortgage

Which type of mortgage is specifically designed
for property and contents?
The feature of an adjustable rate loan that Payment cap

prevents the monthly payment during an
adjustment period from varying up or down
by more than a set amount is the
What is the function of the index in an It is the starting point for calculating the interest rate for the loan.
adjustable rate mortgage loan?
Owner Sam has a $75,000 mortgage on his Wraparound

home. Sam sells his home to Bill for $100,000.
Bill pays
$7,000 down and borrows $93,000 on a
new mortgage. This mortgage includes the
existing
$75,000 mortgage because the new lender
will make the payments on the old mortgage.
This is an example of a what kind of loan?
The basic FHA-insured loan program is 1-4 family residential properties

provided for loans on
Which of the following is a feature of a It has the same payment amount every month.
fully- amortized loan?
-It has the same payment amount every month.
-It has a different payment amount every
month.
-At the end of the loan term, there is a
remaining balance to be paid off.
-A fixed amount of each monthly payment
goes to the principal.
The VA reimburses the lender, up to the guaranteed amount, for losses

If a borrower in a VA-guaranteed loan defaults,
not covered by foreclosure proceeds.
To be eligible for an FHA-insured loan, a Appraised by an FHA-approved appraiser

property must be
Interest rates on FHA loans are negotiated by lender and borrower.
Which of the following statements The seller cannot repossess the property without a judicial foreclosure if
about contracts for deed in Illinois is a defaulting buyer has 20 percent equity and the contract term is longer
TRUE? than five years.
-They cannot have a term longer than 5 years.
-If the buyer defaults at any point, the seller
can cancel the contract, evict the tenant, and
retain the property plus all payments.
-If the buyer has a 20 percent equity in
the property, the seller must convey
title.
-The seller cannot repossess the property
without a judicial foreclosure if a defaulting
buyer has 20 percent equity and the contract
term is longer
than five years.
Buyer Jane has a loan which requires her to pay Balloon mortgage
$588.00 per month for 20 years. At the end of
the loan period, Jane has to make a final
payment of
$27, 580. What type of mortgage does Jane
hold?
Why are interest rates generally higher on Second loans are riskier because they are not paid off until first loans are
second loans than on first loans? paid in case of default.
A permanent long-term mortgage loan that is Conventional loan

not government-backed is a
Lenders use private mortgage insurance to minimize their risk when accepting a loan with a low downpayment
Which of the following best expresses the Monthly housing expenses divided by monthly gross income.
income ratio used by lenders to assess a loan
applicant's borrowing capacity?
-Monthly gross income divided by
monthly housing expenses.
-Monthly housing expenses divided by
monthly gross income.
-Monthly housing expenses divided by
monthly debt obligations.
-Monthly debt obligations divided by monthly
net income.
RESPA requires that a lender, within three A loam estimate form

days of receiving the loan application, must
give a borrower
A lender may deny a loan application and The application form contains fraudulent information
retain the application fee if
When does the initiation of a loan application When a lender receives a completed loan application package from an
process occur? applicant.
If a lender's loan-to-value ratio is 90%, how $180,000

much will the lender lend on a house valued
at
$200,000?
If an individual is seeking a federally-related the borrower to purchase flood hazard insurance.

loan to finance a residential property
located in a designated flood-hazard zone,
federal law requires
Larry and Sandy have a combined monthly $2,050

income of $5,000. Using the FHA and VA
debt ratio of 41%, how much monthly housing
and debt obligation can they qualify for?
The Equal Credit Opportunity Act protects Physical handicap

against discrimination in all of the following
areas EXCEPT
-physical handicap.
-religion.
-age.
-color.
The lender's process of determining a Underwriting

borrower's ability to repay a loan and
evaluating a property is known as
A lender's time-sensitive agreement to lend a specific amount at a

What is a "lock-in" loan commitment?
specific interest rate for a specific term.
ECOA prohibits all of the following underwriting asking applicants how long they have worked at their present job.
practices EXCEPT
-disregarding income from part-time work.
-refusing a loan because of the location
of the collateral property.
-asking applicants how long they have worked
at their present job.
-asking whether an applicant plans to
have children.
Regulation Z disclosure requirements apply All loans secured by a residence.

to which of the following loans?
-All loans, secured and unsecured
-Agricultural and commercial loans over $25,000.
-All loans secured by real property.
-All loans secured by a residence.
Mortgage loan applicants must meet Net worth

underwriting standards for income, debt,
cash, and
day on which the creditor's offices are open to the public for
According to RESPA, a business day is a
carrying out substantially all of its business functions.
What does a demand feature mean in a A demand feature would allow the lender to require early repayment.
mortgage loan?
A mortgage Loan Estimate must be three business days of loan application.

delivered within
What is typically deposited into a mortgage Money held for certain future payments, such as insurance and taxes
loan escrow account?
What does it mean when a loan applicant It means that the borrower has received a copy of the form.
signs the Confirm Receipt section on page
3 of the Loan Estimate?
On what document would a consumer find Loan estimate

information regarding a good-faith estimate
of credit costs and transaction terms for a
property loan mortgage?
The administration aspect of a loan from the Loan servicing

time the proceeds are dispersed until the
loan is paid off is called
Which of the following statements best The time that a consumer becomes contractually obligated on a
describes the term "consummation" as credit transaction
defined under Regulation Z?
Which of the following mortgage loan Title insurance

items would NOT typically fall under
origination charges?
-Title Insurance
-Underwriting Fee
-Application Fee
-Points
On a mortgage Loan Estimate, how are loan Yes or no statements

amounts and interest rates that might be
changed after the closing indicated?
What type of information is found in the The total amount of all payments on the loan, the dollar amount of the
Loan Calculations section on page 5 of finance charges over the life of the loan, the amount financed, the annual
the Closing Disclosure? percentage rate (APR), and the total interest percentage (TIP)
Which of the following statements best The legal right of a borrower to redeem property between the time of
defines Equitable Right of Redemption? default and the foreclosure sale.
One way that a Chapter 13 bankruptcy includes a plan for repayment.

differs from a Chapter 7 bankruptcy is
that it
If a bankruptcy proceeding begins before the foreclosure proceeding is stayed until completion of the
a foreclosure proceeding,____. bankruptcy process.
Which of the following statements Mortgage foreclosures require a court proceeding.

about foreclosure in Illinois is TRUE?
-All types of foreclosure are allowed.
-Foreclosure is not allowed if there is a
deed of trust.
-Mortgage foreclosures require a
court proceeding.
-Illinois is a non-judicial foreclosure state.
In what type of foreclosure is the lender Strict

required to file suit asking a court to order
the borrower to pay the mortgage debt by a
certain date or the lender will automatically
gain full title to the property?
Which of the following statements best The right of a defaulted property owner to recover the property after the sale.
defines Statutory Right of Redemption?
-The right of a defaulted property
owner to recover damages after the
sale.
-The right of a lender to recover expenses
after the sale from the defaulted property
owner.
-The right of a defaulted property
owner to recover the property after the
sale.
-The right of a defaulted property owner to
recover and remove personal property after
the
sale.
Which statement about a deed in It avoids public notice of the foreclosure.

lieu of foreclosure is TRUE?
-It gives the borrower an opportunity to
change the loan terms.
-It is a deed to the lender in exchange
for a reduction in the loan payoff.
-It avoids public notice of the foreclosure.
-It is always accepted by the lender
since it reduces the costs of
foreclosure.
In what type of foreclosure does a lender Non-judicial foreclosure

give a borrower a notice of default in a form
prescribed by the state?
Ronald defaulted on his home mortgage Seek a deficiency judgment.

payments. The lender obtained a court order
to foreclose on the property. At the
foreclosure sale, Ronald's house sold for
$29,000 and the unpaid balance of his loan
is $40,000. What must the lender do to
recover the $11,000 Ronald still owes?
The first step in a judicial foreclosure is: acceleration of the loan.
What action must the lender take when a The lender must dismiss the suit and continue the mortgage.
notice of reinstatement occurs?
Illinois has enacted legislation "opting out" of Illinois bankruptcy filers are only permitted to exempt property using state
any federal bankruptcy exemptions. As a laws
result,
Inducing a borrower to refinance a mortgage loan repeatedly with no

What is the practice of "loan flipping?"
benefit to the borrower.
Which of the following is NOT Charging low origination fees to encourage loan applications.
considered a predatory lending
practice?
-Charging low origination fees to encourage
loan applications.
-Adding unnecessary charges and products
to the loan amount.
-Issuing an unaffordable loan based solely on
the applicant's assets.
-Failing to provide RESPA documents.
Loans designed for persons with blemished Subprime loans

credit histories and that carry a higher rate
of interest than prime loans to compensate
for increased credit risk are called
misstating, misrepresenting, or omitting information that is relied on in

The essence of mortgage fraud is____.
an mortgage loan underwriting decision.
A buyer borrows $20,000 from his mother to Yes, it is loan fraud

make a down payment. This loan must be
repaid within five years, but the buyer tells the
mortgage lender it is a gift. Has any fraud
been committed?
Under the Fair and Accurate Credit investigate, correct, and notify the other bureaus of any error within thirty
Transactions Act, if a consumer asks one of days
the national credit bureaus to investigate an

alleged error in her credit report, the
bureau must:
Which of the following would NOT be found Annual income

in a consumer's credit report?
-Information about bankruptcies
and foreclosures.
-Social Security Number.
-Mortgage payment history.
-Annual income.
The median FICO score in the United 723

States is reportedly
Which of the following best describes the A statistical prediction of the likelihood that a borrower will default on a loan.
credit score?
-A numerical ranking of the amount of
credit a borrower can qualify for.
-A statistical prediction of the likelihood
that a borrower will default on a loan.
-The percentage of previously borrowed funds
that an applicant has repaid.
-The total amount of debt a borrower is
carrying divided by the borrower's annual
salary times the number of effective working
years left to the
borrower.
The factors on which credit scores are Number of family members who have credit cards
based include all of the following EXCEPT
_______________________________.
-number of family members who have
credit cards.
-length of credit history.
-number of recent inquiries.
-unused available credit.
What type of listing allows the distribution of Multiple listing

the listings to all other brokers?
Which of these listing agreements is Open

considered a unilateral contract?
-Open
-Exclusive Agency
-Net
-Exclusive Sale and Listing
When must a seller receive a copy of the At the time of signing

listing agreement?
Net listings are Viewed as unprofessional
Which type of listing provides the most Exclusive right to sell

incentive for a broker to market a property?
Which of these sources would not be a MLS Data Bank

way to determine who holds title to a
property?
-Seller's Deed
-Title Company
-County Tax Office
-MLS Data Bank
Which type of listing is least attractive to a Open

broker?
Seller Jim wants to walk away with $175,000 in $175,000

his pocket after the sale. Jim agrees to a net
listing. The property sells for $212,000. How
much money is Jim entitled to?
Which of these statements is true? A listing agreement can be modified, but only if all parties agree in writing.
-Once a listing agreement is signed by all
parties it cannot be changed.
-The seller can change the listing
agreement whenever he or she wants.
-A listing agreement can be modified, but
only if all parties agree in writing.
-A listing agreement can change by the
mutual verbal agreement of all parties.
When a seller signs a listing agreement, who Seller and managing broker
are the actual contract parties?
Which of these functions is not performed Preparing the property deed

by a property manager?
-Renting property
-Leasing property
-Keeping costs within budget
-Preparing the property deed
Which of these usually contributes to Percentage of rental income

the property manager's fee?
-Rebates from suppliers
-Percentage of rental income
-A percentage of fees paid to outside workers
-Capital improvement fund
What task takes up the majority of a Physically managing the property

property manager's time?
-Evaluating tax incentives
-Physically managing the property
-Evaluating utility services
-Allocating shares of stock for the units
What is a budget that includes income Operating

and expenses for ongoing operations?
-Capital reserve
-Operating
-Fixed
-Stabilized
What is a property manager's first Realize maximum profit.

responsibility to the owner?
-Get liability insurance.
-Prosecute delinquent tenants.
-Realize maximum profit.
-Cure functional obsolescence.
Which of the following would not be found Tenant credit histories

in a management agreement?
-Tenant credit histories
-Property description
-Extent of authority
-Management fee information
Which of the following groups is not Commercial Land Council

a professional property management
trade organization?
-National Property Management Association
-Commercial Land Council
-Urban Land Institute
-International Council of Shopping Centers
What does the management agreement create? general agency
Which IREM designation is reserved for CPM

individuals who meet a certain level of
education and experience?
Which of the following would be considered replace a defective water heater

as corrective maintenance?
-Replace a defective water heater
-Painting wood trim
-Adding additional parking spaces.
-Replacing furnace filters
An implied contract may be deemed to exist if: The parties act as if there is a contract
A contract to commit an illegal act is: void
Those people who are of legal age and sound Legally competent parties
mind are considered:
A letter of intent is basically___________. An agreement to agree
A contract in which the party or parties Executory

have not completed all acts under the
contract is known as:
An oral or written contract in which the An express contract

parties state the contract's terms and
communicate their intentions in words is
known as:
What is an important legal feature of a contract? it represents a "meeting of the minds."
Which of the following factors must be Mutual agreement

present for a contract to be valid?
-Recorded
-Involuntary
-Placed in the public record
-Mutual agreement
A promise by one party to act or perform in An offer

a specified manner provided the other party
acts or performs in the manner requested is
known as:
According to contract law, every valid contract Enforceable or unenforceable

is also:
What is a breach of contract? The failure of a party to perform according to the terms of the contract
The necessary condition of mutual consent The offer which was accepted is vague
may be found lacking in a contract if:
Bob the sponsoring broker who accepts Ten days after he receives the monthly bank statement.
earnest money and maintains the
bookkeeping system must reconcile each
escrow account that he maintains within:
Broker John received three earnest money Tuesday

checks on Friday. The upcoming Monday is a
holiday.
When is Broker John required to make an
escrow deposit?
When a broker makes a change to an escrow Broker must submit the change to the Real Estate Division of IDFPR.
account, what action must be taken?
How much time is allowed to produce 24 hours

escrow records when a request is made by
the Illinois Division of Professional
Regulations?
If any dispute between the parties Not release the money without a written release from both parties or
arises regarding the deposited escrow both parties' duly authorized agents (power of attorney or attorney
money, the sponsoring broker should at law).
________________________.
Buyer Jim put down a deposit in the form of Jim

a boat title worth $5,000. The boat is
owned by Jim's parents. The transaction was
not completed, who should the boat title be
returned to?
John a sponsoring broker may transfer Two (2) business days prior to the scheduled closing date.
escrow monies needed for a particular
closing to that transaction's closing agent
up to:
James a property manager must maintain Tenant waives this requirement in writing. If such a waiver is included
all security deposits in an escrow account in the lease, it must be in bold print.
for the duration of the lease, unless the
_____________________________.
According to the Illinois Real Estate License Must open special trust (or escrow) accounts in which to deposit the funds
Act of 2000, sponsoring brokers who are they have been given.
responsible for earnest money deposits for
property sales (and security deposits for
leases)
What is the legal requirement regarding the There is no legal limit

number of escrow accounts that can be
opened?
Which of the following statements are Personal property can be offered as an earnest deposit.
TRUE regarding earnest money?
-Must be in the form of cash or a check.
-Earnest money is required with all contract
offers
-Personal property can be offered as an
earnest deposit.
-Earnest money is also known as evidence
trust account money.
A sponsoring broker must keep all 5 years

escrow records for _.
All licensees should IMMEDIATELY give The next business day after contract acceptance.
earnest money checks to their sponsoring
broker who
MUST deposit said earnest money by
Agent Tom works at the Cliffside an office of Not allowed, no sponsored licensee may maintain his or her own
ABC Realty. The sponsoring broker at the escrow accounts.
main office for ABC Realty maintains an
escrow account for all offices of ABC Realty.
Tom has been very busy writing offers and
has little time to drive to the main office so
he has decided to open an escrow account at
the office. Tom's action is___________.
When must an escrow account be When all parties make the request
interest bearing?
When reviewing an offer, what is the purpose To raise the seller's comfort level.
of providing buyer information?
Most sellers object to offers based on offering price
What is the value in doing another CMA A new CMA can provide a realistic interpretation of the offer.
when an offer is presented?
Which of these statements about purchase -Both the offer and the acceptance must be in writing to be binding
offers is true?
-The offer must be in writing, but the
acceptance can be oral.
-The offer can be oral, but the acceptance
must include all of the terms in writing.
-Both the offer and the acceptance must be
in writing to be binding
-Neither offer nor acceptance must be in
writing, but the deed for title transfer must be
in writing.
What is the impact of making a counteroffer? A counteroffer represents a rejection of an offer.
When you receive an offer on a listing for Give the sellers the price over the phone so they can think about it
less than asking price, which of these would before you meet with them.
be the least effective course of action to
take?
Which of these is not a good thing to do Exert pressure on the sellers for changes you think are important.
when writing a counteroffer?
-Fill out a separate, numbered counteroffer
form.
-Promptly provide counter offer to the
other party.
-Date and attach supporting documents.
-Exert pressure on the sellers for changes
you think are important.
When you believe an offer is both fair Work toward acceptance

and reasonable but it does not meet the
sellers' asking price, you should _.
Which of the following is not an option a Rewrite the offer.

seller might take once an offer has been
presented?
-Accept the offer exactly as it is written
-Reject the offer totally
-Reject the offer and submit a counteroffer
-Rewrite the offer.
When preparing for a presentation, how Make a copy for each seller.
many copies of the offer should you
make?
RESPA rules do not apply to: Seller-financed loans

-VA loans
-Seller-financed loans.
-HUD administered loans
-Equable assumption loans
-null
Which document itemizes the estimated Initial Escrow Statement

taxes, insurance premiums, and other
charges anticipated to be paid from the
Escrow Account during the first twelve
months of the loan?
What document must be completed by a Servicing Transfer Statement

creditor if a mortgage loan is assigned to
another loan service?
This occurs when the buyer takes a second Silent mortgage

mortgage out with the seller and the
transaction is not reported.
What document is required when a An Affiliated Business Arrangement (AfBA) Disclosure

settlement service provider involved in a
RESPA-covered transaction refers the
consumer to a provider with whom the
referring party has an ownership or
other beneficial interest?
Jim's brother Al, gives Jim $5,000 as a This is a case of mortgage fraud.
down payment on a property. Jim tells the
lender that the down payment was a gift. We
latter find that the $ 5,000 was a loan.
What legal violations might be pending?
Which of the following statements best define A document detailing fees, commissions, insurance, and prorated
a closing statement? charges necessary for the transfer of ownership to take place.
-A document that describes the ownership
and sales activity of the transferred
property.
-A document that details the title search results.
-A document detailing fees, commissions,
insurance, and prorated charges necessary
for the transfer of ownership to take
place.
-A document detailing federal transfer fees
and expenses.
Equal item amounts on the closing statement Prorated Item

that appear as a credit to one party and a
debit to the other party is most likely a _.
Which party is responsible for expenses that The seller

will be paid in arrears?
What type of closing consists of all parties Face-to-face

in the transaction meeting at one time?
Who may file for a constructive eviction? tenant
Which of the following summarizes the The tenant leases the ground from the landlord.
general terms of a ground lease?
-The landlord sells the ground to another,
then leases it back.
-A tenant buys the landlord's ground, then
leases the improvements.
-The landlord leases the ground floor of
the building to a commercial tenant.
-The tenant leases the ground from the landlord.
A tenant living in cooperative owned housing, Proprietary lease

would hold what type of lease?
Grant moves into his new office space Estate from period to period
while he awaits the completion of the
negotiations of the lease terms. During this
interim period, Grant makes monthly rent
payments and the owner accepts them. How
would Grant's lease at this time be
classified?
When a tenant agrees to pay taxes and Net

maintenance, the tenant has what kind of
lease?
What is one important difference between In a sublease, the original tenant retains primary responsibility for
a sublease and a lease assignment? performance of the original lease contract.
A type of lease when the tenant pays Triple net lease

for the taxes, insurance, maintenance and
repairs is called what?
What kind of lease contains a recapture clause? percentage
Which kind of lease increases at Graduated

specified intervals?
Which kind of lease has no time limit? Estate at will
This occurs when a tenant remains on the Estate at sufferance

property without the owner's consent after
lease termination.
What method is used to remove a tenant who Suit for eviction

is in default in paying rent?
Which of these items is not included in a Alienation clause

lease agreement?
-Terms
-Demising clause
-Description of premises
-Alienation clause
Jill pays $2,450 per month on an apartment. Gross lease

No other expenses are paid by Jill. What
type of lease does Jill hold?
Business owner Jill, leases a store front. Her Index lease

lease amount is based on the wholesale
price index.
What type of lease does Jill have?
For an independent contractor, how is the Managing Broker does not withhold tax monies
issue of withholding tax dealt with by the
managing broker?
In this type of program, an agent may start Graduated payment plan

out at a lower percentage rate and then
graduate to higher rate as his or her
production increases.
Which of these guidelines is not part of the Contractors must have access to workers compensation benefits.
IRS safe harbor test?
-Income must be based on sales input.
-There must be a written contract in place.
-The contractor must be licensed as a real
estate salesperson or broker.
-Contractors must have access to
workers compensation benefits.
What can a broker require of his They must sign a written agreement.
independent contractors?
Which of the following must a broker Unemployment insurance

legally provide to an employee?
-Pension plan
-Unemployment insurance
-Health insurance
-Sales commission
Who established "safe harbor rules?" IRS
If a licensee joins a company as an Health Insurance

independent contractor, which of these will
he probably have to pay for on his own?
Which of the following must be included Duty Assignment and Compensation

in an employment or independent
contractor agreement?
-Duty Assignment and Compensation
-Management Structure and Benefits
-Health Insurance and Expense Reporting
-Travel Expenses and Sick Leave Policy
In an IRS audit, which of the following The licensee receives an hourly wage.
situations would cause the IRS to think that
a contractor
might really be an employee?
Which of these statements about an He or she is paid commission on all sales.

independent contractor is true?
-He or she gets a regular salary with bonuses.
-He or she is reimbursed for all
business expenses.
-He or she is paid commission on all sales.
-He or she will get three weeks of paid
vacation every year.
When doing a comparative market analysis, Recently renovated properties.

an agent looks at all but which of the
following factors?
-Prices of properties currently on the market.
-Prices of sold properties.
-Properties that were listed but did not sell.
-Recently renovated properties.
The cost at today's prices of producing a Replacement cost

similar or equivalent structure is known as
what?
The sales comparison approach is based on Substitution

what principle of value?
The cost approach would be most reliable New shopping mall

for which of these properties?
-Renovated historic home
-Apartment building
-County court house
-New shopping mall
Which of the following problems would be Non-air conditioned office complex

an example of incurable depreciation?
-Outmoded bathroom
-Termite damage
-Non-air conditioned office complex
-Outdated boiler
Which data should have the most impact on Recently-sold properties.

what a subject property is realistically worth
in the current market?
A comparative market analysis is an attempt to Identify an estimate of a property's value based on comparables.
do
what?
Which of the following would not be found Recently remodeled homes

in a comparative market analysis?
-Currently listed homes
-Recently sold homes
-Recently remodeled homes
-Similar expired listings that didn't sell
Tim and Sue have the smallest home in a Progression

sought- after neighborhood. The value of
their home is increased because of the
higher value of the other homes in the
neighborhood. This is an example of what
principle?
Which of these statements is not true? Asking price is a good indicator of selling price.
-Asking price is a good indicator of selling price.
-Data on homes that have sold is more
reliable if it is recent.
-Most often a property fails to sell
because of overpricing.
-Actual sale price of similar homes has an
impact on what a home is worth in the
current market.
Which of the following is not a condition Minimally productive

for highest and best use?
-Minimally productive
-Financially feasible
-Physically possible
-Legally permissible
The highest amount a buyer is willing to pay Market value

and the lowest amount a seller will accept
for a property is known as what?
Eric and Sarah had a new home built for Regression

$275,000. Most of the homes in their
neighborhood do not have the amenities and
upgrades Eric and Sarah chose to put in their
home. Eric and Sarah's home will probably be
affected by which principle?
When analyzing the data collected for Asking price is a good indicator of selling price.
a comparative market analysis, which of
the following statements is most likely
false?
-Data on homes that sold more than six
months ago is less reliable.
-Homes with listing prices that are too high
take longer to sell.
-Asking price is a good indicator of selling price.
-Research properties should match the
subject property's characteristics as closely
as possible.
What the market recognizes as "the Contribution

change in value an improvement makes to
a property" is called what?
When doing research to recommend a Selling prices of recently sold homes.

reasonable listing price for a home, the
most critical part of the research deals with
analyzing which of these figures?
The actual price of a property is known as market price

what?
A property sold for $185,000 and is producing 9%

an annual net operating income of $16,650.
What is the capitalization rate?
If a prospective tenant is rejected due to the landlord notify the prospective tenant of the bad report and the
a bad credit report, the Fair Credit name of the reporting service.
Reporting Act requires that _.
What is the best way to obtain information Check with the human resources department of a previous employer
about a prospective tenant's employment
history?
The property management agreement The property owner and the broker
creates a contractual agreement between:
Randy Renter is earning $2000 per month. No, unless there are mitigating factors
The apartment he wants to rent costs $800 per
month. Should you rent it to him?
To whom should a property manager not rent? All of the above

-friends
-family
-romantic interests
-all of the above
In an Illinois property management relationship, The property owner and the broker
there must be a written property
management
agreement between:
What information should you obtain from Tax returns for the last two years
people who are self-employed?
The number one responsibility of the Strive for the highest return on the property consistent with the
property manager is to: owners' instructions.
Peter Property Manager has screened an No, if the applicant has explained the moves to Peter's satisfaction and
applicant, who is clearly Middle Eastern. there is no other basis to reject him
Peter decides to reject the applicant when he
sees the applicant has moved three times in
three years. Has Peter acted properly?
A credit score is also called a___score. FICO
The Federal Fair Housing Act prohibits Sexual orientation

discrimination for all of the following
reasons except:
-Race or color
-Sexual orientation
-Familial status
-Handicap
Which of the following is permissible as part "Large master bedroom with bath"
of a property advertisement under HUD's Fair
Housing guidelines?
-"No children or pets"
-"Large master bedroom with bath"
-"Wonderful ethnic neighborhood"
-"Great family home"
All security deposits held by a broker Unless the owners have agreed otherwise in writing.
must be maintained, intact, in an escrow
account other than the property
management accounts:
Rental properties may allow discrimination Roommates who share a common bathroom or bedroom.
based on sex in the event of:
A broker must establish and maintain a Property management escrow account

separate account for the deposit of current
rents and money received from the owner
or on the owner's behalf for payment of
expenses related to property management.
This account is called
the:
All of the following are ways in which Personal service on someone at the tenant's home, who is more than 10
written eviction notices can be served to the years old.
tenant, but one. Which of the following is
NOT one of these ways?
-Personal service on the tenant.
-Personal service on someone at the
tenant's home, who is more than 10
years old.
-Personal service on someone at the
tenant's home, who is more than 13
years old.
-Mailing to the tenant by certified or
registered mail, with a return receipt from
the tenant.
Which of the following parties is NOT A 43-year-old man who has been convicted of dealing illegal drugs.
covered under the Illinois Human Rights
Act?
-A 38-year-old woman who uses a seeing
eye dog.
-A 43-year-old man who has been convicted
of dealing illegal drugs.
-A 27-year-old homosexual man who is
an alcoholic.
-A 43-year-old unmarried woman who is an
Army reservist.
The escrow account maintained by the the property is residential with 25 or more units or local ordinance
property manager must be in a non- requires payment of interest.
interest-bearing account unless
Which of the following would NOT be Religious organizations

considered a "place of public
accommodation?"
-Restaurants
-Hotels
-Religious organizations
-Doctors' offices
Illinois law generally requires what prior to Written notice

an eviction?
Which of the following is NOT permissible as "Maximum two children"

part of an advertisement about an apartment
for rent?
-"Great apartment complex with on-site chapel"
-"Kosher meals available"
-"Non-smoking building"
-"Maximum two children"
Security deposits must be deposited in By the next business day after a lease is signed
the escrow account:
According to the Illinois Human Rights 40 years old

Act, "elderly" is defined as anyone over:
In a situation in which a property owner That clause of the lease would be void.
inserts a condition in the lease that ends the
lease if a child under 18 is ever in the family
living in the property, which of the following
statements is most accurate?
-The lease would be valid as is.
-The lease would be invalid.
-That clause of the lease would be void.
-That clause of the lease would be enforceable.
Sam paid $500,000 for a five-unit 9%

apartment building. The gross income is
$1,000 per month per unit, with annual
expenses of $15,000 annually. What was the
capitalization rate for this investment?
The percentage 10.0% converted to a decimal is: 0.1
All of the following are prorated, EXCEPT: interest on a new loan.

-interest on a new loan.
-property taxes.
-interest on assumed loans.
-rents.
How many linear feet are in 1 mile? 5,280 feet
What is the charge for the use of money? Interest
Sandra, a real estate sales associate, found $3,000

a buyer for a $200,000 house. The seller
agreed to pay a 6% commission to the listing
broker, half of which will be paid to Sandra's
broker. Sandra is on a 50-50 split with her
broker. What is the amount
of her commission?
How are numbers with decimals subtracted? By lining up the decimals vertically
Of the following numbers, which is the 1/8

smallest?
-0.1667
-0.667
-1/8
-16 2/3%
Sales agent Sally needs to convert square feet Divide the number of square feet by 9.
to square yards. How should she make the
calculation?
Betty made a 20% profit on a residential lot $25,000

she sold for $30,000. What did she pay
for the property?

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Real estate Flashcards | Quizlet 12/4/23, 8:04 AM

Terms in this set (594)

Which of the following is included in the To

What are three unique physical characteristics Immobile, indestructible, heterogeneous

Which government entity is the primary The

The level of government that focuses on land- County and

A property abutting a static body of water Littoral

Surface rights include which of the Water

The concerns of the federal government Discrimination

What guarantees the right of private ownership The constitution

What do we call the conversion of real Affixing

Uncle Jake wrote his will out on a notepad. Holographic

Of the principle forms of title of evidence in A title insurance policy

A deed is not valid unless it is Accompanied by a consideration

A lender forecloses on a property. The Sheriffs deed

A person claims ownership of a parcel of real Actual notice

A break in the chain of title to a property A cloud on title

Which document contains a summary of the Title certificate

Constructive notice of ownership of a Title records

An owner transfers title to a property to Voluntary alienation

Which authority regulates involuntary title State law

Which of the following can terminate a A quietclaim deed

When was led first banned in the manufacture of 1978

When a property is taken by eminent To receive "just compensation"

If a property owner demonstrates a Variance

The authority that allows the government Police power

A buyer may terminate a purchase Three

A property is exempt from lead It has no separate bedrooms

Unlike a deed restriction, a decoration Cannot be extinguished by a quitclaim deed

Referral fees and bonuses for licensees Compensation

Which of the following describes a person Customer

In which of the following cases might If required by the law

The person who is being represented Client

What type of agency exists when the agent Universal agency

The relationship between the licensee and a Agency

What is the type of agency created Agency coupled with an interest

True or false compensation does not True

A written or oral agreement between a Brokerage agreement

Agency is governed by ___________ law and Common and statutory

According to the act, legal proceedings, against 5

How long is an agency coupled with an Until the interest ends

When a licensee leaves a brokerage, what It remains in force

In Illinois, which statement is correct Agency coupled with an interest is allowed

Which of the following actions terminate terms Expiration

Seller Jim provides a buyer with a forged Active fraud

Who should receive an agency disclosure All clients and customers

What do we call an agent who represents Single agent

The situation that allows the broker to Designated agency

Which of the following types of agency is Undisclosed dual agency

Yes. A buyer representative should advise the client on matters of which

What is the standard for agency Designated agency

Broker Jim signs a listing agreement with Dual agency

A property seller signs, a listing agreement Express agency

The sellers are selling because they are getting a

When a licensee represents a seller, what type Client

When a licensee responds to an inquiry Consumer

Agency relationships impose fiduciary duties Client and licensee

A licensee has lost a portion of the Accounting