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Parol Evidence Rule
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RE Exam
| Question | Answer |
|---|---|
| Conversion | - The misappropriation of other's property - Penalties include civil damages and possibly jail time |
| Parol Evidence Rule | - Cannot use extrinsic evidence to create an ambiguity in contract - "Four corners doctrine" |
| Proration | Done by dividing the bill by the number of days in the month or year, depending on how often the bill is paid, and counting the days before the closing as the seller's responsibility, and the days after the closing as the buyer's responsibility |
| Liquidated damages | - A sum agreed upon by the parties to be full damages if certain event occurs - When compensatory damages cannot be calculated, a court can award liquidated damages |
| Contingency clause | States a requirement for the closing to happen, or an event that could cancel the closing |
| The most common contingency clause | Mortgage contingency - If the buyer, after diligent effort, is unable to obtain a loan that falls within the contingency, the contract can be canceled without penalty |
| Home sale contingency | - Allows the buyer time to sell old home first to afford to buy the new home - If the buyer is unable to sell old home within a given time, this contingency clause allows the buyer to cancel the contract |
| Insurance contingency | - If for some reason the buyer is unable to obtain insurance, the contract can be canceled - Extend to title insurance |
| Addendum | Additional material that are added to and become part of a contract |
| The most common addendum | Legal description of the subject real estate |
| FHA Loan Contingency Exhibit (F407) | Most home mortgage loans are insured by the FHA, the Federal Housing Administration |
| Lead-based Paint Exhibit (F316) | If the home or any structure on the property being sold was constructed prior to 1978, the seller must complete and attach this lead-based paint disclosure form |
| Seller’s Property Disclosure Statement (F301, F304, F307, or F310) | This disclosure statement gives the seller an opportunity to identify any and all material defects in the property |
| Closing Attorney Acting as Holder of Earnest Money Exhibit (F510) | - In Georgia, only attorneys can act as closing agents for real estate transactions - It is a common practice for the closing agent to also hold the earnest money. When they do so, this exhibit must be completed and attached to the agreement |
| The Georgia Lease for Lease exhibit | Designed as an exhibit to be used in conjunction with the purchase agreement for a real estate transaction |
| Option to Purchase Leased Property Exhibit | Sellers and potential buyers can document this in an exhibit to the purchase agreement |
| Brian and Sam write a real estate contract and include every term of the agreement, except for the purchase price, which they agree to orally. Is this a valid real estate contract? | No, there must be a price. |
| Can a buyer and a seller prepare their own real estate contract? | Yes, but it is not advisable. |
| What are the public policy grounds for making specific performance a rare remedy? | Courts do not want to force people into transactions that they do not want to join in, if there is a monetary remedy available. |
| How would a corporation sign a real estate contract? | Through an agent appointed by the corporation, usually a corporate officer. |
| Eddie did an inspection of the property and Gil provided a list of disclosures. But a week after closing when Eddie moved into the property, he found that under a carpet was a huge crack in the floor. What type of damages can Eddie claim? | Compensatory damages. |
| What is the most common reason a property owner might enter into a "Lease for Lease" agreement with a prospective buyer? | The buyer is unable to secure financing but believes he or she will be able to get a mortgage at a later date. |
| What are warranties in a real estate contract? | Promises made by the seller about the condition of the property and its title. |
| 2 main types of damages recoverable in a contract case | - Compensatory damages - Liquidated damages |
| The seller's outstanding mortgage interest payment will be marked as a .........on the settlement statement. | Debit |
| Hector is buying a house from Rita with a closing in May. The settlement agent learns that city taxes have been paid in full through the date of closing. How should Samantha treat the city taxes on the Closing Disclosure? | Ignore them. No action is required. |
| By which category are land records least likely to be indexed? | By sales price |
| The outstanding loan balance multiplied by the interest rate equals...? | The annual interest paid |
| What is the primary purpose of RESPA? | To help buyers with closing details and to understand and compare loans |
| Common provisions in a promissory note include all of the following: | - Acceleration clause - Prepayment penalty - Late penalty |
| When the parties have accepted and signed an offer to purchase, the licensee's first obligation is to? | Deliver a complete signed copy of the purchase agreement to the buyer, the seller, and the broker(s) |
| Which item will the settlement agent most likely adjust to ensure the buyer’s side of the Closing Disclosure balances properly? | Cash from Buyer |
| The loan from Honest Bank’s has an APR of 4.0% and a TIP of 71.87%. The loan from Fair Bank has an APR of 3.75% and a TIP of 83%. If Omar wants to pay as little as possible over the life of the loan, which loan should Omar choose? | Honest Bank’s loan because its TIP is the lowest |
| Liza and Trevor meet for the closing. No one else is present. Liza gives a personal check for $200,000, and Trevor gives Liza a signed deed. They did not use a Closing Disclosure at any time. They shake hands and leave. Which of the following is true? | They did not need a Closing Disclosure because RESPA does not apply to this transaction. |
| Which of the following pays the seller a credit at closing for the remaining days left on their insurance policy? | The seller's insurance company |
| What does the title system help potential buyers, potential lenders, and the public find out? | Who has interests in a particular property |
| Which of the following must come first at closing? | Signing the loan documents |
| Rent from an income producing property is typically collected...? | in advance for the upcoming month |
| The Closing Disclosure contains similarities to what other document? | The Loan Estimate |
| Theoboldt is a title searcher, wants to create a working relationship with Bank. He proposes that if Bank refers borrowers to him for title searches, he will agree to charge a premium , without disclosing to the buyer. What is this deal under RESPA? | A prohibited kickback scheme |
| What are the closings costs on the Loan Estimate? | The lender’s best estimate of the costs at the time of application |
| What items will the seller’s column in the Loan Costs section of the Closing Disclosure usually contain? | None, usually |
| Jilian is buying a house. By the day before closing, she has received a title opinion, an informational pamphlet, a loan estimate, and a closing disclosure. Which of these items does RESPA not require? | The title opinion |
| RESPA requires lenders to provide what disclosure within three days of receiving a loan application? | A loan estimate |
| The amount of interest paid per year is equal to which of the following? | The loan amount multiplied by the interest rate |
| Georgia law requires a closing to be handled by...? | An attorney |
| If the buyer takes out a new loan, the lender will require execution of a...? | Security deed |
| The Area Of Squares And Rectangles | Area = Width x Depth |
| The Area Of A Triangle | Area = (Height x Base) / 2 |
| Convert Square Footage Into Acres | Acres = Area / 43,560 S.F. |
| Calculate Volume | Volume = Width x Height x Depth |
| If an agent is hurt at a client's home, the client's .............insurance may cover the damages | Homeowners |
| Which of the following carries liability insurance...? | Real estate agents |
| Which of the following should work with a prospective buyer who has been the victim of identity theft...? | A lender |
| For real estate agents, liability insurance is written on a .......basis? | By-claim |
| The most common way children are exposed to lead poisoning is...? | By eating or inhaling lead-based paint. |
| Asbestos was used ...? | Asbestos was primarily used in insulation, but was also found in floor tiles, among other materials. |
| What determines a brownfield site? | A brownfield site is an area that is, or could be, contaminated and has the potential to be reclaimed and developed to achieve its highest and best use. |
| ............. fields can be blocked or hampered by buildings and other obstructions, but ............ fields penetrate people, animals, buildings, and other materials. | Electric, magnetic |
| Asbestos is dangerous because ...? | It has microscopic particles that infiltrate the lungs |
| The difference between high-frequency EMFs and low-to mid-frequency EMFs is...? | High-frequency EMFs can damage DNA or cells, while low-to mid-frequency EMFs have not been proven to cause direct damage. |
| Asbestos can cause ...? | Cancer |
| Radon is ............. than air. | Heavier |
| The buyers have decided to get the property they are purchasing inspected for EMFs. They ask their real estate agent who they should get to do the inspection, and she tells them...? | To get an expert who is trained in the detection of EMF and radio frequency (RF) to do the inspection. |
| Because of the potential dangers of UFFI, the government...? | Banned the sale of it, but that law was revoked soon after due to lack of evidence documenting proof of the dangers, however, it’s not used much in the United States anymore. |
| Lead is hazardous to one's health, and it’s found...? | In pipes and the paint used in many older homes. |
| Some differences between electric fields and magnetic fields are...? | Electric fields are produced by devices, whether they are on or off, while magnetic fields are active only when on. |
| Sam is buying a house that has been remodeled, and he’s concerned about possible formaldehyde presence. His real estate agent told him...? | Formaldehyde is still used today in carpets and pressed-wood products, so get it tested. |
| People who are exposed to radon...? | Often show no symptoms, but might have respiratory issues. |
| Radon is...? | A colorless, odorless gas that comes from dirt, rocks, and water as a result of radioactive decay. |
| The Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), or Superfund, was a federal program established in 1980 to...? | Clean up locations where pollutants were, or could be, hazardous. |
| What is a landfill? | A landfill is where trash and waste are buried, and it is usually designed to have a liner and procedures in place to prevent contamination to the surrounding environment. |
| Tom has popcorn ceilings in his home, which could contain asbestos. He spends the weekend scraping the ceilings and repainting. When buyer, asks about it, Tom say no further need for testing. As the real estate agent for the buyer, Sam suggests ...? | Jeff should have a professional test the rooms since fibers could now be loose and create issues |
| The EPA believes radon tests should be done...? | On every home, even if they are built to be radon-resistant. |
| UFFI is not usually visible because... | It was mainly put in locations that were hard to reach |
| Formaldehyde is associated with... | Sick building syndrome |
| Asbestosis | A serious, chronic, non-cancer lung disease caused by inhaling asbestos fibers |
| Mesothelioma | An aggressive rare form of cancer that affects the lining of the lungs (pleural mesothelioma) or the stomach (peritoneal mesothelioma) |
| Carol is a property manager who works closely with investors who have residential portfolios in a college town. When establishing the length of service terms, she understands that...? | Length of service terms are flexible, and she must consider both her income and the owners' financial goals. |
| Property management positions with large firms often require a ............ degree because it have thorough knowledge of general accounting principles (GAO), financial reporting, and basic knowledge about day to day duties of operating a business. | Business Administration |
| A document that sets forth the duties of the manager when employed by the owner is known as the...? | Management proposal |
| An amount of money set aside by the owner for a specific period for the property manager to manage the property effectively is known as...? | Operating budget |
| The face of the eave is known as the...? | Fascia |
| A type of roof covering that consists of individual overlapping elements is known as...? | Shingled roofing |
| Roof drains are located at the ......... point of a roof. | Low |
| The rafters of a sloped roof are fastened to a ........... at the top of the roof. | Ridge beam |
| What horizontal structural member supports a floor? | Joist |
| One of an array of small, closely spaced, parallel wall framing members is known as a...? | Stud |
| Which of the following is a drawback to using concrete masonry units...? | Labor intensive |
| In a bearing wall, what should align with the studs of the wall...? | Floor joists |
| The horizontal step of a stair is known as the...? | Tread |
| Temporary loads imposed by people, furniture, or the weather are known as what type of loads...? | Live loads |
| Foundation walls are typically constructed of...? | Cast-in-place concrete |
| What determines the depth of a floor joist...? | Spacing Floor load Span |
| Roof rafters are covered by what, which enhances the stiffness of the roofing system...? | Sheathing |
| A broker should keep copies of documents and record for... | 3 years |
| Coercion | Include over-stating property value, making promises on potential future value, or convincing a seller to change broker |
| FHA Loan | Require mortgage insurance premium (Covered the entire life of the loan) |
| All tax assessment are based on ... | Market value |
| Tax-deffered Exchange | Without the need to pay income tax |
| The most common homeowner insurance plan | HO3 - Minimum plan required by many mortgage lender |
| ........ is not covered in most homeowner insurance plans | Water damage |
| Chattel | Personal property |
| MARIA | - Method of attachment - Adaptability - Relationship of the parties - Intent of the seller - Agreement |
| Economic characteristics of real estate | - Scarcity - Location - Improvements - Not liquid |
| Physical characteristics of real estate | - Indestructible - Immobile - Unique - Structures - Association with luxury |
| Government power "PETE" | - Police power - Eminent domain - Taxation - Escheat |
| Floor Area Ratio (FAR) | Rate of the total building floor area to the area of the zoning lot |
| Condemnation | Taking private property for public use by a political subdivision upon payment to the owner of just compensation |
| Freehold estate | The right to own land, or an interest derived from land, with no fixed time period associated with the ownership |
| Fee simple estate | - The greatest interest that one can have in real property. - An estate that is unqualified, of indefinite duration, freely transferable and inheritable. |
| Fee simple absolute | An inheritable estate in land providing the greatest interest of any form of title |
| Fee simple determinable | An estate that will end automatically when the stated event or condition occurs |
| Life Estate | - An estate or interest in real property, which is helf for the duration of the life of certain person. - Another form of freehold estate - Typically created by a deed |
| Encumbrance | - Anything which affects or limits the fee simple title or value of property - i.e. Mortgages / Easements |
Created by:
tzkiri6