Real Estate Exam Prep: Title Insurance, Land Ownership, and Legal Matters, Exams of Marketing Business-to-business (B2B)

Download Real Estate Exam Prep: Title Insurance, Land Ownership, and Legal Matters and more Exams Marketing Business-to-business (B2B) in PDF only on Docsity! What is a Preliminary Report? - Issued by title insurance companies - gives buyers an overview of title history and any liens/encumbrances - it outlines what insurance companies will/wont cover on its policy What is the Superfunds Amendments and Reauthorization Act (SARA)? - Amendment to CERCLA that says 'innocent landowners' arent responsible for clean up of hazardous contamination KY REAL ESTATE EXAM PREP ACTUAL SOLUTION Questions and Answers UPDATE 2024 What do Datums and Benchmarks measure? - Elevation Joint Tenancy - The joint ownership of property by two or more co-owners in which each co- owner owns an undivided portion of the property. On the death of one of the joint tenants, his or her interest automatically passes to the surviving joint tenants. Easement Appurtenant - Runs with the land - grants the right to use adjoining land Civil Rights Act of 1866 - Prohibits any exceptions for discrimination based on race/color What is the purpose of Building Code ? - It establishes workmanship standards when someone is building an addition to their property Developer that has a project planned that doesnt conform to the community zoning regulations and wants to make a change request would make a request to who? - the Zoning Board of Appeals for a variance What is a right to use timeshare? - It conveys the right of POSSESSION but not ownership (therefore cant be passed on or sold) What do lenders consider equally - Borrower and Property - the property's value (collateral) and the borrowers ability to repay the loan What is a Bridge Loan? - A temporary loan often used by buyers who have not yet closed on their prior property - short term -interest only What is a Land Contract? - Buyer will pay the seller. - Seller will hold legal title of the property during the term of the loan In KY when a tenant finds themselves in a DV situation and must get a protective order what can they do? - They may terminate the rental agreement early, giving 30 days' written notice In a PUD (planned unit development) who owns the common areas? - The common areas a jointly owned and maintained by the condo owners or HOA What is a Cash Flow Report? - Usually created monthly and shows the current financial status of the property - accounts for income received (rent) and expenses (utilities, personnel, repairs) What is an Attachment Lien? - When the courts place an encumbrance on the property of a defendant in a lawsuit for monetary damages - ex: damages related to a car accident When does Acceptance occur? - When all parties have signed a given contract When does Binding Acceptance occur? - When the accepted offer is delivered What is the highest fine that KREC can impose for a single charge of improper conduct? - $1,000 Which of the following compensations may a KY broker pay to a TN licensee? - A referral fee and/or commission How long must KY transaction records be retained for? - 5 years from the consummation date Who is responsible for completing the Condo Seller Certificate? - The Condo Association completes it upon the request of the seller -they have 10 days to complete When is a Lead Paint Disclosure required? - For any home built before 1978 What contract provision will buyers use to specify which items they would like included as part of the sale? - Inclusuions - appliances, washers, dryers, fridge All real estate contracts must be...? - In writing Who fills out the Agency Disclosure Statement? - The agent according to the type of agency provided Are brokers allowed to pay a fee to service providers for referrals? - No, RESPA and license laws prohibit it When a buyer is represented by a licensee, who is responsible for following up on issues identified in the inspection report to ensure that they were addressed? - The Buyers Agent What is a Freehold Estate? - estate (ownership interest)in land in which one has both possession and (indefinite) ownership rights in real property. What is the Truth in Lending Act and Regulation Z intended to do? - To do away with deceptive financing tactics What are the Bundle of Rights? - All the rights obtained with ownership of real property, the right to: -enter -use -lease -sell/give away real estate What is essentially the same as fraud? - Intentional Misrepresentation What is the Lot and Block System? - Mentions plat of property recorded in Map Book at county courthouse What is an Encroachment? - occurs when someone illegally places a structure or object on another person's property What does a title insurance policy list? - All recorded defects against the title. It just covers issues that have been recorded. Total Value - Assessed Value + Improvements What are improvements with regard to property? - Artificial attachments to land that include items such as fencing, buildings and walkways What is a Budget Comparison Statement? - Used for Property Management, it shows actual results from operating the property vs what had been projected What penalties may individuals face if they violate state antitrust laws? - May be liable for $100,000 and up to 10 years of imprisonment What physical characteristic of land states that while improvements may deteriorate, land cant be destroyed? - Indestructibility True or False: Federal law exempts properties under $400,000 from the certified appraisal requirement - True What is the purpose of the fixed/adjustable rate note? - Converts the interest rate from fixed to adjustable How many feet are in a mile? - 5,280 feet What is an accessory use? - A use incidental to the main purpose of a property. - ex: home business When can Escheat be used? - When a individual dies with no heirs and no debt What is Bulk Zoning? - Decreases density -an area of town has max building height requirements Who must approve of a short sale? - The seller and the sellers lender How long does a borrower have to pay PMI? - Until the borrower reaches a 22% equity position A is a method of conveying real property from one party to another - Deed What must occur for a transfer of title? - The seller must deliver the deed -must deliver marketable title What is an Estate at Sufferance? - Landlord is "suffering" because tenant stays after the right to possess has terminated -Holdover Tenant What is an Estate for Years? - An estate for a specified time: (e.g., days, months, years) What physical characteristic of land addresses the concept that the geographic location of a piece of land is fixed and can never be changed? - Immobility What are Trust Funds? - Money belonging to others held for a specific purpose in the course of real estate transaction What is accretion? - The coming together of smaller pieces of matter to form larger ones In KY, when someone pays commission to an unlicensed individual who is not exempt from licensing law, this is known as...? - A kickback (illegal) A person who acts as an Mortgage Loan Originator (MLO) must obtain the endorsement and register with who? - The Nationwide Mortgage Licensing System and Registry What is Blockbusting - An illegal practice in which licensees or others encourage homeowners to sell because of an influx or expected influx of minorities into the area What penalties may an unlicensed individual face when the received compensation from the sale of RE? - Class A misdemeanor A fine ranging from $100-$1,000 And an additional fine equal to the amount of commission By what date do licensees need to complete their biennial CE requirement in KY? - Dec 31 True of False: Individuals whose sole business activity is to compile and categorize lists of real property available for rental and lease and providing the info to prospective tenants for a fee arent subject to KRS Ch 324 - True After a KY seller client has completed and signed the Sellers Disclosure of Property and Conditions form, who keeps the original? - Listing Agent's Broker What is a situation in which 2 licensees from the same KY brokerage represent opposite sides of the same transaction, and the principal broker and all the broker's affiliated licensees also represent both the seller's and the buyer's interests in the transaction? - Dual Licensed Dual Agency What is the maximum recovery fund compensation that may be granted to an aggrieved party? - $20,000 per claimant, limited to $50,000 against a licensee What is a Hold Harmless Clause? - It protects property managers from lawsuits due to damage/liability for employees' or others' personal injury Real Property vs. Personal Property - Real = Immovable Personal = Movable Freehold vs. Less-than-freehold - Types for Less than Freehold Estates - Estate for Years Periodic Tenancy Estate at Will Estate at Sufferance Estate for Years - Defined period of time -ex: may 1st - aug 8th -ex: summer rental Periodic Tenancy - any lease agreement that automatically renews each period until either party gives notice of termination -grantees will choose this because it gives them the most protection as possible Special Warranty Deed (Limited Warranty Deed) - Only covers claims that happened while grantor held title to the property - only used when general warranty deed isnt an option Quitclaim Deed - No warranties, just conveys deed -usually used for quick transfers -family members Bargain and Sale Deed - includes warranty that grantor has title to the property but does not guarantee that the property is free of claims -better than quitclaim deed -When it states the guarantees it is a bargain and sale deed with covenants -used after foreclosures -grantors will choose this because it limits their liability What is a sub-agent? - A licensee from another firm who brings in the buyer but represents the seller What does a municipality do to verify that new construction meets building codes? - Issue Building Permits Fair Housing Amendments Act of 1988 - Added Disability and familial status to protected classes. The Sherman Antitrust Act of 1890 - prohibits monopolies and the restraint of free trade The Clayton Act - A federal regulation intended to prevent specific business actions that might prohibit competition, e.g., tying agreements and exclusive agreements What is a Tax Abatement - an incentive. applies to new buildings/ renovated buildings - usually will rise when period ends What must the seller provide prospective buyers of homes built prior to 1978, in addition to the federally required disclosure form? - EPA lead safety pamphlet What are the stages of homeownership? - Acquisition Ownership Reversion What stages of ownership can be affected by income taxes? - All 3 stages Metes and Bounds - A method of land description which involves identifying distances and directions and makes use of both the physical boundaries and measurements of the land. True or False: Closing Disclosure and Loan Estimates arent required in a seller-financed transaction? - True Lot and Block System - Subdivision system; method of legal description of land using parcel maps identified by tract, block, and lot numbers Rectangular Government Survey - takes into consideration base lines, meridians, townships and sections. Townships and Sections are located in Ranges. Example S7T3R2 means Section 7 Townships 3 Range 2 Housing and Community Development Act of 1974 - added gender (sex) to the protected classes What is a Percentage Lease - tenant pays rent and percentage of profit to landlord of business. What is a Gross Lease - tenant pays a fixed base rent and landlord pays all expenses