Real Estate Agency and Title Insurance: ANS Standard and Best Practices, Exams of Real Estate Management

Download Real Estate Agency and Title Insurance: ANS Standard and Best Practices and more Exams Real Estate Management in PDF only on Docsity! Real Estate Colibri Practice Exam Questions with Verified Solutions. 1. Which item below can help protect against a home with a listed incorrect street address or legal description in public records? - ANS Standard coverage title insurance policy and extended coverage title insurance policy 2. Robert owns his property and enjoys the full bundle of rights. Can he use his property as collateral for debt? - ANS Yes. Robert can encumber his property 3. Which location is an industrial coal plant least likely to be located? - ANS Adjacent to an elementary school 4. What is the least likely answer needed in a "legal consent" scenario? - ANS Contract 5. What is the name used to describe the fact that a client must have consent, free will, and act without duress when entering a contract or business relationship? - ANS Legal Consent 6. Mortgage lenders are required to disclose financing costs and annual percentage rate to the borrower under which law or regulation? - ANS Truth in Lending 7. Earl orally agreed to an 18-month lease with landlord Blake. Is this contract enforceable? - ANS No, all leases for longer than one year must be in writing to be enforceable 8. Jessica can only afford a 7% down payment on her new cottage. What will she be required to purchase at closing? - ANS Private Mortgage Insurance 9. What happens if the Grievance Committee finds that there is a potential ethics violation and that the complaint has been appropriately filed? - ANS The complaint is forwarded to a hearing panel of the Professional Standards Committee 10.Listing agents must present ________. - ANS All formal and informal offers 11.Which of the following principles are included in the Preamble to the Code of Ethics? - ANS Honesty and Integrity, Fairness, and Moral conduct in business relations P a g e 1 | 12 12.What type of agency cannot be revoked by the principal, nor is terminated if the principal dies? - ANS Agency coupled with an interest 13.Who can train office staff at a brokerage firm in weekly meetings? - ANS Principal Broker, associate brokers, and outside social media marketers 14.What is the minimum earnest money deposit that a Buyer can offer to purchase a listed home? - ANS Zero dollars 15.Which action does an escrow officer typically work on in a home sale transaction? - ANS Collects earnest money deposits, orders title insurance, and gathers third party inspection reports 16.What was the original name of the National Association of REALTORS® when it was first founded? - ANS The National Association of Real Estate Exchanges 17.What is "one click away" as it relates to the real estate profession? - ANS When a viewer online can find the agent's contact information with just one click of the mouse, smartphone, or keyboard 18.A broker who spends their client's $10,000 earnest money deposit on their office's monthly expenses such as rent, utilities, and has engaged in the act of what? - ANS Conversion and Criminal Fraud 19.Broker Joy just signed a listing agreement with a seller. When should Joy schedule an office tour? - ANS Within a week after the listing is taken 20.Under the Rectangular survey system, which direction do the principal meridian lines run on a map? - ANS North-South 21.According to Article 3, what does cooperating with other brokers involve? - ANS Sharing information about listings and making listings available for showing. 22.Which of the following would be a type of authorized discipline that may be issued by NAR in the case of an ethics violation? - ANS Letter of Warning or Letter of Reprimand 23.When an agent deposits their buyer's escrow funds into their personal account, then what is the action referred to under Agency Law? - ANS Commingling P a g e 2 | 12 49.According to Article 2, which of the following statements are TRUE? - ANS REALTORS® must disclose all known material facts but are not obligated to discover latent defects in the property. 50.How many square feet are there in ½ acre? - ANS 21,780 (one full acre = 43,560 sf) 51.Carla has been walking across a path on John's property for the past 22 years. John knows about this but has never given Carla permission. What might a court grant to Carla? - ANS An easement by prescription 52.Should a licensee who represents both the buyer and seller tell the buyer about material defects on the seller's property? - ANS Yes, any defects known to the broker should have been disclosed to the buyer. 53.What year was the Code of Ethics adopted? - ANS 1913 54.Which party or parties below generally has not management of authority of others in the office? - ANS Associate broker and salespeople 55.Before ordering disciplinary action against a licensee, the Commission must _____. - ANS order a hearing. 56.The fee for renewing a real estate license should: - ANS not exceed $60. 57.The Law of Agency is a specific type of _________. - ANS Commercial law 58.A seller decided to back out of a sales contract for no good reason. What recourse does the buyer have? - ANS To sue for specific performance 59.What is another name for a "meeting of the minds" in a contract situation? - ANS Mutual Assent 60.What tool would be both helpful and visual when conducting a listing presentation? - ANS PowerPoint 61.Which of the following is true regarding a financed investment property? - ANS After-tax cash flows identify what the investor actually yields from the investment. 62.What is the presumed time frame for a Broker when receiving a written offer from a client that is forwarded to another party? - ANS Time is of the essence P a g e 5 | 12 63.The risk of committing an unauthorized practice of law can be practically reduced by _______. - ANS using standard forms and contracts prepared by attorneys. 64.Why would a property with a rectangular system description also have a metes and bounds legal description? - ANS Because the property is irregular in shape 65. In order for a dispute to qualify for arbitration what type of dispute must it be? - ANS A contractual dispute or a non-contractual dispute as specified in Standard of Practice 17-4. 66.What is established upon the signing of a contract or by the actions or spoken words between an Agent and Principal? - ANS Fiduciary relationship 67.When was the Statute of Frauds first enacted? - ANS England in 1677 68.What is the name of a standard elevation reference point in a land survey? - ANS Datums 69.A "house location survey" is also called a ________. - ANS Drive-by survey 70.Why is the condition of bearing walls more important than non-bearing walls? - ANS Bearing walls support the ceiling and the roof. 71.Broker Willy has a buyer who has seen a property three times and seems ready to make an offer. However, the buyer is objecting because the air conditioning system is 9 years old. What should Willy do? - ANS Ask the buyer if the buyer would like to make an offer taking the age of the a/c unit into account. 72.What is another common name for the lot and block system of legal descriptions? - ANS The recorded plat method 73.How does Planned Unit Development zoning differ from ordinary zoning? - ANS It requires that multiple tracts of land be developed according to a single design for efficient use of space. 74.Who has the most liability in a fiduciary relationship dispute over a real estate transaction? - ANS Principal Broker 75.A developer wants to develop an 18-acre subdivision. He figures that the streets and common area will take up about 20% of this overall area. If the P a g e 6 | 12 minimum lot size is to be 10,000 SF, how many lots can the developer have on this property? - ANS 62 lots 76.REALTORS® intending to share or sell consumer information gathered on the Internet must - ANS disclose that possibility in a readily apparent manner on the site. 77.Why would municipal governments be concerned if property values are falling? - ANS Because the majority of their revenue comes from real estate taxes. When property values fall, revenue for municipal governments also falls. 78.Which of the following actions is legal in Kentucky? - ANS Acting for more than 1 party in a transaction with the knowledge of all parties for whom the licensee acts. 79.Justin defaulted on his home mortgage payments. The lender obtained a court order to foreclose on the property. At the foreclosure sale, Justin's house sold for $339,000 and the unpaid balance of his loan is $400,000. What must the lender do to recover the $61,000 Justin still owes? - ANS Seek a deficiency judgment 80.Dan is buying Jessica's house. The closing date (day belongs to seller) of the sale transaction is March 9th. Current year real estate taxes are $1,900 (will be billed to Dan next year). Use the 365-day method for prorating. What is the Jessica's share of the real estate taxes for the current year? - ANS $354 81.What type of bank accounts are trust funds placed into once received from clients? - ANS Non-interest bearing accounts 82.What is another description for a "restrictive covenant"? - ANS Deed restrictions 83. If a prospective buyer calls about a $1,000,000 listing, what is the most important thing a broker should do? - ANS Set an appointment to show the property the buyer asked about 84.Which measurement option is used to survey land with latitude and longitude lines? - ANS Rectangular Survey System (the lines of latitude and longitude intersect and create uniform grids of squares called townships 85.As it pertains to Article 13 of the NAR's Code of Ethics, what must agents not do in contractual situations? - ANS Engage in the unauthorized practice of law P a g e 7 | 12 113. Which land measurement system was the oldest one used in the original 13 states? - ANS Metes and bounds 114. What formula or calculation is used to determine if it is worthwhile for a builder to buy a piece of raw land? - ANS Cost Approach 115. The system of land ownership in the United States is known as what? - ANS The allodial system 116. What is the main purpose of the Kentucky Real Estate Commission? - ANS To put into effect and make known the administrative regulations to effectively carry out and enforce the provisions of the Kentucky statutes governing real estate. 117. The very fine line between acting as a licensed real estate agent and as an unlicensed attorney is described as _______. - ANS The upper limits of a licensed agent's limited authority 118. What does "caveat emptor" translate to in English? - ANS Let the buyer beware 119. What is another name for a recorded plat method? - ANS Lot and block method 120. Who holds the actual hearings on the cases that are reviewed by and forwarded on from the Grievance Committee? - ANS The Professional Standards Committee 121. What is the best example when a real estate agreement be verbal and not in a formal contract between a principal and agent? - ANS Open listing and a non-exclusive buyer agency 122. Mary abandoned her property by failing to pay its property taxes and the property reverted to the state. This is an example of ________. - ANS escheat 123. Broker Dean realizes he has relocation buyers. What is something he should focus on with these buyers? - ANS On finding a property with good resale value 124. What is the basic core origin of U.S. zoning policies? - ANS Euclidean Zoning P a g e 10 | 12 125. During the final walk-through, the buyer sees that the seller did not remove a downed tree. What is the best way of handling this? - ANS At the closing, the buyer could ask for a credit from the seller to remove the downed tree. 126. Sales associate Nika is showing a property with an electronic lockbox. How should she access the property? - ANS By using the E-key smartphone application 127. What is the most common agency form code for an Agent who solely represents the Buyer in a residential transaction? - ANS EBAA (Exclusive Buyer Agency Agreement) 128. What are some of the benefits to professions like real estate having an internally enforced code of ethics that members of the profession must follow? - ANS It prevents exploitation of the client. 129. Euclidean II is most probable for what type of properties? - ANS Planned Urban Developments 130. What is typically used to find boundaries for properties? - ANS Land surveys 131. Agency that is based upon Old English Common Law is also known as ________. - ANS Common Law Agency 132. The Quarry Mountain Subdivision requires all properties to have fences that are at least 8 feet tall surrounding each property. This is an example of ______. - ANS a deed restriction. 133. Which advertising guidelines do most agents need to follow the most closely? - ANS The Broker's Office Policy Manual 134. The Broker of record can be responsible for the real estate transactions worked on by _______. - ANS Salespersons on site, partnerships with real estate licenses, and corporations with real estate licenses 135. Which national group has tried to stop real estate licensees from handling any contracts? - ANS American Bar Association 136. What was the maximum FDIC bank account insurance protection limit in early 2008? - ANS $100,000 P a g e 11 | 12 137. Which of the following is an agency disclosure statement that a licensee does NOT have to include? - ANS The number of years the licensee has held a real estate license. 138. The 'damage and destruction' clause in a lease generally establishes which of the following? - ANS That the tenant is responsible for restoration of the tenant's alterations 139. Real estate laws that are passed by government bodies in Arkansas are called _____. - ANS Statutory laws 140. Where can Kentucky Brokers purchase the latest updated real estate forms? - ANS MLS and KREC 141. What is the name of the national survey system that was first established many years ago to classify giant land parcels before naming an independent owner? - ANS Public Land Survey System 142. Which survey system is the likeliest to be used to define specific boundaries between two adjacent large land parcels? - ANS Metes and bounds P a g e 12 | 12