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Mock Exam 2
| Question | Answer |
|---|---|
| Which is true regarding a standard 203(b) FHA loan? a) An FHA appraisal is required. b) No downpayment is required. c) Secondary financing from an institutional loan may be used for the downpayment. d) The max loan term is 20 years. | A -- FHA loans require an appraisal by an appraiser who has met the ed and cert requirements for inclusion on the FHA's roster of approved appraisers. Secondary financing provided by a close family member is allowed, but not from an institution. |
| An apartment building is right where a new city park is going to be built. The city condemn it. Can the city terminate the leases of the buildings tenants? Explain. | Yes, if the tenants receive just compensation by the city. |
| Acres in a section | 640 (1 square mile) |
| A 17-year-old purchased a house. He moved in, lived in it for several months, and then decided he didn't want the responsibility of owning a home. He refused to honor the contract. In this case: | ...the contract was voidable when signed; however, the buyer probably ratified it by living in the house. A contract entered into by a minor is voidable, and can be rescinded by the minor if done promptly. |
| Generally, providing any brokerage services creates an agency. What is the important exception? | If the agent is already representing another party under a written agreement (usually a listing agreement), then providing minimal services does not create an agency. |
| A homeless shelter is owned by a religious group and restricts occupancy only to individuals who are of their faith. This would be permissible as long as...? | Membership in the religious organization is not restricted on the basis of race, color, or national origin. In dealing with its own property in noncommercial transactions, a religious organization may limit occupancy to its owns members. |
| Sarita bought a home. She had poor credit so the owner agreed to finance the purchase. The parties agreed to a 20-year loan term. Sarita took title, and the seller held a lien against the property. What type of financing instrument was used? | A purchase money mortgage. A purchase money mortgage is one given by the buyer to the seller to secure credit extendedly the seller. |
| What can Investment property owner deduct the full cost of for income tax purposes? | Repairs to keep an investment property in ordinary operating condition are deductible in the year they are performed. This would include repainting. |
| If an agent fails to renew a license within one year after expiration the license is considered: A - inactive B – suspended C – revoked D – canceled | D -- if the license is not renewed within one year after it expires, the license is canceled. The canceled license may still be reinstated within two years of cancellation, if certain conditions are met. |
| An unlicensed real estate assistant may do which of the following without a license? A- receive referral fees in some cases B- discuss financing options with the client C- hold open houses and discuss property D- provide full-service property mgmt | A -- A license isn't required to receive referral fees, provided the fee isn't continent on a licensee's compensation. |
| A property manager needs a license to engage in which of the following activities: A) Managing property owned by the company he works for. B) Managing self-owned property C) Managing a self-storage facility D) Third-party property management. | D -- A property manager who manages property for third-parties must be licensed. Licensing exemptions exist for person to manage property they own or on behalf of the group they belong to, and for managers of self storage facilities. |
| A company that is organized as an LLC wants to engage in real estate transactions. Who must be licensed. | The company itself must obtain a resale estate license, and the company's designated broker must hold a managing broker's license. The designated broker must have the ability to control the company's operational and financial decisions. |
| According to WA license law, a licensee who is acting as a property manager must give the owner a summer statement for all of the following, except: a) rent receipts b) property condition c) outstanding balances d) owner's contributions | B -- A summer statement is a brief report showing the property's financial status over a certain period of time, such as one month or one quarter. It would not include a report on the managed property's physical condition. |
| An out-of-state licensee (who is licensed in another state) may enter WA to engage in which real estate activity? a) residential property management b) residential sales c) commercial sales or leasing d) contract collection | C -- WA law allows out-of-state licensees to perform duties that would require a license when engaged in commercial real estate transactions. The out-of-state licensee must have a written agreement to work in cooperation with a brokerage licensed in WA. |
| If an agent fails to renew his license by the expiration date what happens? | A licensee can renew the license within a year by paying the renewal fee and a late fee. |
| How long should real estate transaction records be kept for? | A minimum of 3 years after the transaction closes. |
| Who needs to submit continuing education credits with each license renewal? | All active licensees. Inactive licensees do not need to comply with continuing education requirement, Although one 30 hour class is required in order to reactivate a license that has been inactive for more than three years. |
| Who is ultimately responsible for the delivery of the earnest money? | The licensee who receives the funds is the one responsible for handling the money in compliance with the license law. |
| A licensee is criminally charged for stealing prescription drugs on July 2. He tells his designated broker about the charges on July 5. Who must notify the Real Estate Program Manager and by when? | The licensee must provide notice within 20 days of learning of any criminal complaint or incitement in which the licensee is named as a defendant. If a conviction occurs, the licensee will also have to notify the DOL within 20 days of the conviction. |
| What is the primary purpose of the Real Estate Procedures Act? | To provide borrowers with information about their closing costs and to eliminate kickbacks and referral fees. |
| If a licensee's license is inactive, what does this mean? | Her license has been delivered to the Director of the Department of Licensing. |
Created by:
fwlenard