Q&A Hero

Q: When a party in a contract fails to perform (e.g. breach of contract, nonperformance, or default) the other party has a variety of remedies. All of the following are remedies that an aggrieved seller may pursue EXCEPT: A. Sue for damages. B. Retain the earnest money deposit as liquidated damages. C. Agree to rescission of the contract. D. Sue for specific performance.

Q: In Adarand Constructors, Inc. v. Pena, Adarand challenged a federal law that requires a subcontracting clause in federal contracts giving preferences to socially and economically disadvantaged individuals based on race. The court upheld the general appropriateness of the law and determined that its application must be examined using:A.Minimal scrutiny.B.Intermediate scrutiny.C.Quasi-strict scrutiny.D.Strict scrutiny.

Q: In general, most contracts " including a real estate contract " can be assigned. All of the following statements regarding assignment are true EXCEPT: A. Any type of personal performance contracted by one party cannot be assigned without that party's permission. B. Land contracts are not assignable without the owner's permission C. If buyers of real estate assign the contract, the new buyers may pay the agreed upon price and obtain title to the property. D. When buyers assign their rights to someone else, they escape liability under the original contract.

Q: Contracts for sale may contain sections that cause implementation of the contract to depend on the successful completion of some prior action such as the buyer's ability to obtain financing on specified terms. This type of contract is commonly referred to as a(n): A. contract assignment B. equitable title C. contract with contingencies D. uniform settlement statement

Q: In Granholm v. Heald, New York and Michigan (states) enacted laws which allowed in-state wineries to ship their product directly to their residents but required out-of-state wineries to deal through instate wholesalers thereby adding additional layers to the transaction. Various out-of-state wineries sued: A.The wineries were successful because the Commerce Clause prohibits states from enacting laws that mandate different treatment of in-state and out-of-state economic interests that benefit the former and burden the latter without proving a legitimate and legal state interest in the discrimination B.The wineries were successful because the states could not prove that their in-state wine industry would be harmed. C.The states were successful because the Twenty First Amendment provided an effective and uniform system for controlling liquor by regulating its transport, importation and use. D.The states were successful because they were able to show that without the legislation, they could not control tax evasion from out-of- state breweries and their economies would be irrevocably harmed and their citizens would bear an unfair tax burden.

Q: Historically, ________ speech was not protected by the First Amendment. A.Verbal. B.Symbolic. C.Commercial. D.Written.

Q: Since the issues in many transactions are similar, brokers often use standard preprinted contract forms. Generally, the best standard form contracts are those prepared and approved by which of the following parties? A. Office supply firm B. Seller C. Local Board of Realtors D. Web source of generic legal forms

Q: Which clause in which Amendment has probably caused the most litigation compared to other constitutional phrases? A.Due process in the 14th Amendment. B.Due process in the 5th Amendment. C.Equal protection in the 14th Amendment. D.Cruel and unusual punishment in the 8th Amendment.

Q: The distinction between legal title and equitable title is an important concept in the contract for sale of real estate. When the buyer obtains equitable title, the seller can no longer sell the property to someone else, even though the legal title has not officially passed on. In the contract for sale process, the creation of equitable title occurs when: A. The contract for sale is written. B. The contract for sale is signed. C. The contract terms are orally agreed upon. D. Each party is deemed legally competent.

Q: Which Amendment includes both the due process clause and the equal protection clause? A.5th B.1st. C.14th. D.4th.

Q: In certain circumstances, mutual assent between the contracting parties may be broken, thus invalidating the contract. Which of the following defects to mutual assent involves compelling a person to act by the use of force? A. One of the parties is under duress. B. One of the parties is under undue influence. C. One of the parties is under menace. D. One of the parties is committing fraud.

Q: Judicial review by a court is limited to: A.Reweighing the evidence. B.Making independent determinations of fact. C.Determining if there was substantial evidence to support the decision. D.Substituting their view of the evidence for that of the agency.

Q: Both parties to a valid and enforceable contract must provide consideration. In a contract for the sale and purchase of real estate, which of the following depicts the seller's consideration? A. A meeting of the minds with the buyer. B. The option to present a counteroffer. C. The property to be given up. D. The money or goods that constitute the purchase price.

Q: Any party seeking judicial review of an agency decision must prove: A.A constitutional violation. B.A compelling interest. C.Standing to sue. D.Standards of conduct were violated.

Q: While the principal parties to a transaction must be legally competent for a contract to be valid, it is possible for a party acting on behalf of a principal to obtain this legal right. In order for personal representatives and trustees to be authorized to act on behalf of a principal, a legal instrument commonly referred to as ____________ must be in place. A. assignment B. power of attorney C. mutual assent D. consideration

Q: The equal protection clause does not apply to: A.The makeup of juries. B.The size of juries. C.The rights of aliens. D.Apportionment of legislative bodies.

Q: Any contract, whether it is for the sale of real estate or some other entity, must contain five basic elements. However, any contract for the sale of real estate must adhere to two additional requirements. Which of the following contract elements is an additional requirement that must be satisfied in a contract for sale of real estate that isn"t necessarily a part of other contracts? A. No defects to mutual assent B. Consideration C. Offer and acceptance D. Written form

Q: Courts have used the ________ clause to require integration of public schools. A.Equal protection B.Due process C.Commerce D.Contracts

Q: The successful conveyance of real estate depends on a well-formed contract for sale since the contract dictates the rights and type of deed involved, as well as choreographs the entire transaction. Which of the following features of the contract for sale refers to the arrangements agreed to by the parties, such as price and date of closing? A. Contract terms B. Contract conditions C. Equitable title D. Contingency clause

Q: Courts have used the equal protection clause for all of the following types of cases except: A.Racial segregation. B.Rights of aliens. C.Makeup of juries. D.The right to bear arms.

Q: Chapter 13 " Contracts for Sale and Closing

Q: Suspending the judicial process pending a referral of a matter to an administrative body for its views refers to:A.Exhaustion of remedies.B.Exhaustion of jurisdiction.C.Primary remedies.D.Primary jurisdiction.

Q: Amy is trying to decide whether or not it would be beneficial to employ the services of a real estate broker in order to facilitate the sale of her home. She has estimated that the marketing costs and opportunity cost associated with time spent dealing with prospective buyers amounts to $5,000. If Amy were to sell the house on her own for $200,000, but a broker would have been able to negotiate a higher price of $206,350, what commission rate should Amy have been willing to accept from a real estate broker to make her indifferent between selling the house on her own and hiring a real estate broker?A. 2.4%B. 3.1%C. 5.0%D. 5.5%

Q: Which of the following is not a suspect class mandating strict scrutiny by the courts? A.Race. B.National origin. C.Legitimacy of birth. D.Gender.

Q: Jim has hired a real estate broker to help facilitate the sale of his home. If the broker requires a commission of 6%, how much will Jim clear from the sale (after the commission has been paid) if he is able to sell his house for $478,723 (Assume that Jim has already paid off his mortgage)? A. $424,528 B. $450,000 C. $478,723 D. $507,446

Q: Jonathan recently sold his home and was able to take home $423,000 after paying the real estate broker's commission of 6%. If the buyer was ultimately found through a buyer broker, the dollar commission will need to be split between the listing broker and buyer broker. If the buyer broker is entitled to 40% of the commission, what is her share of the commission rounded to the nearest dollar? A. $10,800 B. $13,500 C. $16,200 D. $27,000

Q: Judicial review of agency actions is available: A.As soon as an agency issues a decision to file a complaint. B.At any point in the process of investigation. C.Only for final actions by an agency. D.Only if the investigation results in a substantial monetary fine.

Q: The 1st amendment establishment clause pertains to: A.Freedom of speech. B.Freedom of association. C.Freedom of religion. D.Freedom of the press.

Q: Christopher has hired a real estate broker to help facilitate the sale of his home. Realizing that Christopher is most likely going to realize a loss on his investment due to the recent decline in housing values in his neighborhood, the broker has agreed to charge Christopher a lower commission rate as long as Christopher enters into an exclusive right of sale listing contract. If Christopher ends up selling his house for $364,583 and takes home $350,000 after paying the real estate broker's commission, what was the commission rate that the broker ended up charging? A. 4.0% B. 4.2% C. 8.0% D. 14.6%

Q: What function of an agency involves both fact finding and applying the law to the facts: A.Quasi-judicial. B.Quasi-executive. C.Quasi-legislative. D.Quasi-investigative.

Q: Suppose you are interested in selling your home and would like to clear a net value of $300,000. If you have agreed to pay your broker a commission of 5.5% (no matter who ultimately is responsible for finding the buyer), what price must you sell the home for in order to meet your net profit (rounded to the nearest dollar)? A. $282,540 B. $300,000 C. $316,500 D. $317,460

Q: There are a number of different types of listing contracts that can be used when marketing a property. Which of the following types of listings requires the broker to be paid a commission if anyone, other than the owner, sells the property during the contract period? A. Open listing B. FSBO listing C. Exclusive agency listing D. Exclusive right of sale listing

Q: "No state shall make or enforce any laws which shall abridge the privileges or immunities of citizens if the United States"; this is from the ______ Amendment. A.5th. B.4th. C.14th. D.24th.

Q: As an agent for the buyer or seller, a broker has 6 basic fiduciary responsibilities. Which of the following definitions best describes the responsibility of "Obedience"? A. Broker must follow the instructions of the principal to the limits of what is legal and ethical B. Broker must keep principal informed of all changes in the financials of the negotiation C. Broker must not convey information about principal's financial status or motivations D. Broker must never subordinate the best interest of the principal to the interests of others, including himself/herself

Q: Your professor has just unilaterally changed the course syllabus to the class's detriment. The professor has violated: A.14th amendment procedural due process. B.14th amendment substantive due process. C.Both A and B. D.None of the above.

Q: When a state law limits picketing, it may be constitutional if all of the following except which one is true: A.The regulation is a constitutional power of government. B.It furthers a substantial government interest. C.It is related to suppression of free expression. D.The incidental restriction is no greater than is needed to further the government's interest.

Q: In determining the appropriate listing contract to be used, it is important to know whether a multiple listing service (MLS) will be employed. The MLS only accepts which of the following types of listing contracts? A. Open listing B. FSBO listing C. Exclusive agency listing D. Exclusive right of sale listing

Q: 14th amendment due process applies to: I. Federal government bodies. II. State government bodies. III. Individuals. A.I only B.I and II. C.I and III. D.III only.

Q: According to the law of agency, real estate brokers are required to observe several duties as they act as an agent for an individual trying to buy or sell a property. Which of the following duties refers to a broker's obligation to be completely open and honest with the principal? A. Disclosure B. Confidentiality C. Loyalty D. Obedience

Q: In Meadwestvaco Corporation v. Illinois Department of Revenue, the court examined whether Mead's Ohio sale of Lexus-Nexis Illinois resulted in a nonbusiness event or whether the sale was subject to taxation in Illinois. The court determined that: A.The Due Process clause applies to individuals but not corporations so Illinois has no claim. B.Business integration evidenced by functional integration, centralized management and economics of scale must be evidenced for the sale to be business income and subject in part to Illinois taxation. C.Illinois is not entitled to tax a portion of the income realized from the sale because such a taxation would violate the Commerce Clause by instituting an unreasonable burden on interstate commerce. D.The unitary business principle should be abandoned due to new methods of finance and focus on new forms of business that make it obsolete.

Q: Federal and state laws prohibit discrimination in housing. However, exemptions do exist depending on the particular type of property that is being considered. All of the following activities could be considered exempt in specific scenarios EXCEPT:A. Refusing to sell or rent to a person because of race.B. Refusing to sell or rent based on familial status (i.e. having children).C. Refusing to sell or rent to persons based on age.D. Refusing to sell or rent a single-family home based on religion provided the owners do not employ the services of a broker or agent.

Q: In District of Columbia v. Heller, the court examined the 2nd Amendment right to bear arms and said: A.The right to bear arms applies to a well regulated militia so DC could ban handguns but not rifles. B.DC could not ban handguns but could require rife owners to keep rifles unloaded or disassembled or subject to a trigger lock mechanism. C.DC could ban handguns but could require rife owners to keep rifles unloaded or disassembled or subject to a trigger lock mechanism. D.DC could not ban handguns in homes and could not ban loaded and ready to use rifles.

Q: The recent emergence of discount brokerage services has had a modest effect on the price of brokerage services. The average commission that a broker could expect to receive today would most likely range between: A. 1-2% B. 3-4% C. 5-6% D. 7-10%

Q: In Food and Drug Administration v. Brown & Williamson Tobacco Corporation, the court examined whether the Food and Drug Administration had the authority to regulate the tobacco industry. They determined that: A.If the FDA had the right to regulate cigarettes as a device, the FDA would be required to ban tobacco entirely. B.Because Congress has directly addressed the problem of tobacco and health on six occasions, there is no ambiguity necessitating the agency filling a gap with its judgment. C.The marketing of tobacco is mentioned in the United States Code as one of the greatest basic industries of the United States, directly affecting interstate and foreign commerce and that stable conditions in the industry are necessary to the general welfare. D.All of the above.

Q: What is the only organized private business given explicit constitutional protection? A.Child care. B.Gun manufacturing. C.Bail bonding agencies. D.Publishing.

Q: Which Amendment establishes the separation of church and state? A.5th. B.1st. C.4th. D.8th.

Q: Critical to any listing contract is the question of when the broker becomes entitled to a commission. Traditionally, the broker is still entitled to a commission in all of the following scenarios EXCEPT: A. If the seller refuses to sell upon being presented with an offer meeting the original terms and conditions B. If the seller cannot deliver the property for any reason due to his or her fault. C. If both the buyer and seller sign a contract but then agree to cancel it. D. If a contract is contingent upon the buyer obtaining financing and the buyer is unable to do so.

Q: Which statement is true? A.Basic constitutional rights are absolutes. B.Constitutional guarantees exist to insure certain issues will be part of the political process C.Constitutional rights vary from time to time. D.Public policy concerns are ignored in constitutional cases.

Q: In recent years, many U.S. investors have expanded their purchases of real estate into foreign countries, and many foreign investors have held interests in U.S. real estate. This is an example of what is commonly referred to as ________________ of real estate markets. A. deregulation B. globalization C. disintermediation D. industrialization

Q: The federal government can: A.Prohibit foreign commerce entirely. B.Allow foreign commerce with restrictions. C.Prohibit state regulation of foreign commerce. D.All of the above.

Q: Blockbusting, which involves persuading an individual to sell her home by telling her that minority groups are moving into the neighborhood, is one form of discrimination in housing that is prohibited by which of the following acts of Congress? A. Riegle Community Development and Regulatory Improvement Act B. Secure and Fair Enforcement for Mortgage Licensing Act C. Fair Housing Act (Title VIII of the Civil Rights Act) D. Equal Credit Opportunity Act

Q: The link between a state's activities and interstate commerce for taxing purposes is called a: A.Nexus. B.Lexus. C.Major linkage. D.Mandatory linkage.

Q: Although the function of commercial brokerage is the same as that of residential brokerage, the activities of commercial brokers usually differ considerably from those of residential brokers due to fundamental differences in these two markets. All of the following statements regarding commercial brokerage are true EXCEPT: A. Relative to residential transactions, commercial transactions tend to be larger B. The parties in commercial mortgage transactions are typically less knowledgeable than those in residential transactions. C. An important part of the commercial broker's service is to provide the prospective buyer with reports that enable him to complete due diligence for the property D. Commercial brokers are often required to lower their commission in order to negotiate compromises between buyers and sellers when they reach an impasse over price.

Q: To justify a tax on interstate commerce, a state must prove: A.A sufficient connection between the taxing state and the business. B.A sufficient level of income. C.Sufficient revenue. D.Global implications.

Q: It is common for real estate firms to identify submarkets, such as property types or particular sections of a city, in which they can specialize and concentrate their transaction activity. This practice is referred to as: A. internet marketing B. open listing C. discount brokerage D. market segmentation

Q: ___________ are used to allocate the tax burden of an interstate business among states entitled to tax it. A.Tax codes. B.Apportionment formulas. C.State formulas. D.Commercial codes.

Q: State licensing laws prescribe behavioral requirements with which licensees must comply to keep their licenses. Licensing laws generally seek to prevent brokers from partaking in all of the following activities EXCEPT: A. Handling money in trust for clients B. Taking kickbacks without the employer's knowledge C. Offering the property at terms other than those specified by clients D. Failure to submit all offers to the client

Q: One of the traditional requirements for individuals who wish to obtain a brokerage license has been to demonstrate financial capacity to cover damage judgments brought against them by clients. In order to address this concern, some states have required licensees to first obtain: A. Private mortgage insurance (PMI) B. Errors and omission insurance C. Deposit insurance D. Hazard insurance

Q: The purpose of the commerce clause is: A.To insure no inter-state conflicts. B.To insure that a taxpayer engaged in interstate commerce only pays his or her fair share of state taxes. C.To regulate commerce among foreign nations that could affect U.S. commerce. D.To limit unfair property taxes.

Q: All 50 states have licensing laws that regulate persons and companies that engage in the brokerage business. Interpreting and enforcing state licensing laws falls under the responsibilities of which of the following parties? A. Broker B. Real estate commission C. National Association of Realtors D. Salesperson

Q: Irreconcilable conflicts exist when: A.It is not possible for a business to comply with both federal and local statutes. B.No local statutes exist regarding the issue. C.No federal statutes exist regarding the issue. D.The conflict is a result of interstate commerce.

Q: In theory, states have exclusive authority over activities that: A.Affect interstate commerce. B.Are of significant economic benefit to the state. C.Do not have a substantial effect on interstate commerce. D.All of the above.

Q: State licensing laws generally prescribe two levels of real estate brokerage licensing: the broker license and the salesperson license. Which of the following responsibilities is an individual with a salesperson license permitted to do? A. Own and operate a real estate brokerage business B. Handle money in trust for clients C. Negotiate listing contracts or contracts for sale D. Complete legal documents used in sales and leases in their own name

Q: In dual agency, conflicts of interest may arise since a single broker has both the listing contract with the seller and a buyer agency agreement with the purchaser. One way that states have attempted to deal with this issue is to develop a new type of brokerage relationship in which the broker assists the buyer and seller, but does not represent either party. This type of brokerage relationship is commonly referred to as: A. unintended dual agency B. universal agency C. transaction brokerage D. multiple listing

Q: The power of Congress over commerce is: A.Non-existent. B.Very limited. C.Very broad. D.Inferior to state power.

Q: The commerce clause is viewed as: A.A positive grant of power to the federal government to regulate interstate commerce. B.A positive grant of power to the federal government to regulate foreign commerce. C.A restriction on state and local government's authority to regulate business. D.All of the above.

Q: Modern real estate brokerage normally relies on a multiple listing service (MLS) through which brokers have access to each other's listings. Which of the following types of agency agreements is established with the use of a MLS? A. Single agency agreement B. Subagency agreement C. Dual agency agreement D. Designated agent agreement

Q: The power of the federal government to regulate business activity is found in the: A.Contract clause. B.Commerce clause. C.Declaration of Independence. D.1st Amendment

Q: In acting as an agent for another person, the broker carries several special responsibilities, which by law must be adhered here to throughout the transaction process. These responsibilities constitute what is commonly referred to as a: A. Subagency relationship B. Dual agency relationship C. Fiduciary relationship D. Open listing relationship

Q: The contract clause: A.Prohibits the federal government's interference in contracts. B.Limits a state's ability to impair the obligation of a contract. C.Prohibits the federal government from contracting with a state government. D.Is found in the Bill of Rights.

Q: Real estate brokers operate under the law of agency, which gives a broker the right to act for a principal in trying to buy or sell a property. In the basic principal-agent relationship of real estate brokerage, real estate brokers act in the capacity of a: A. Universal agent B. General agent C. Special agent D. Undercover agent

Q: The supremacy clause says that: A.State law preempts federal law. B.Federal law preempts state law. C.U.S. law preempts foreign law in foreign countries. D.Local laws preempt state laws.

Q: The importance of brokers in the real estate market is often overlooked. In the absence of a real estate broker, one would expect all of the following to be true EXCEPT: A. The asking price would most likely be higher, on average, than in the case where a broker was involved because the seller is in total control of the sale B. A seller would most likely rely on a "thinner" market (i.e. the seller has access to fewer prospective buyers) C. It would be more difficult for an individual to buy a property D. Buyers would be more inclined to negotiate prices downward by at least the value of a typical commission.

Q: When a legislature passes a law that unnecessarily or too generally restricts freedom of speech, the court may declare the law unconstitutional based on the: A.Overreaching Doctrine. B.Overstretching Doctrine. C.Overextension Doctrine. D.Overbreadth Doctrine.

Q: Real estate brokers serve as intermediaries by bringing buyers and sellers together in the real estate market. For this service, brokers are paid what is commonly referred to as a: A. commission B. licensing fee C. recovery fee D. listing fee

Q: Which of the following is not a First Amendment right? A.Freedom of the press. B.Freedom of assembly. C.The right to petition the government for a redress of grievances. D.Freedom to bear arms.

Q: Utilizing the following information, calculate the housing expense ratio. Monthly Principal and interest on mortgage loan: $635; Monthly Tax and insurance payments into escrow: $125; Gross monthly income: $2,500A. 25.4%B. 30.4%C. 44.4%D. 53.2%

Q: What kind of power are agencies exercising when they issue rules and regulations that have the force and effect of law? A.Quasi-judicial. B.Quasi-investigative. C.Quasi-legislative. D.Quasi-administrative.

Q: Suppose an institution has purchased a $250,000 mortgage loan from the loan originator and wishes to create a mortgage pass-through security. In doing so, this institution will generate revenue by charging a servicing fee of 35 basis points. If the monthly mortgage payment on the loan is $1,250, how much income is passed through to the investor in the mortgage pass through each month (rounded to the nearest dollar)? A. $73 B. $375 C. $875 D. $1177

Q: Any proven state interest is sufficient to deny equal protection to a suspect class and satisfies the strict scrutiny test.