Q&A Hero

Q: A tenant seeking both flexibility for himself and commitment from the landlord would request a a. participation clause. b. month-to-month lease. c. long-term lease. d. lease with options to renew.

Q: The tenant has signed a percentage lease. The terms of the lease are $500 per month plus an annual payment equal to 9% of gross sales over $250,000. If, at the end of the year, the tenant is celebrating a million dollars in gross sales, how much additional rent does he still owe?a. $6,000b. $61,500c. $67,500d. $73,500

Q: A lease under which the amount of rent is based upon the tenant's sales volume is known as a. a percentage lease. b. a gratuity lease. c. an escalation lease. d. usury.

Q: If a lease on a commercial building contains an escalation clause, the a. tenant must maintain the elevators. b. rent could change. c. rent must go up and down regularly. d. rent stays the same but the term may change.

Q: A contract that contains predetermined rent increases to take effect during the life of the lease is a. a step-up lease. b. one with a participation clause. c. a percentage lease. d. a net lease.

Q: Under the terms of a normal net lease, the lessee is responsible for all of the following EXCEPT a. mortgage payments. b. repairs. c. water bills. d. taxes.

Q: A tenant will know in advance how much his rent will be at any time during the lease under a a. gross lease. b. percentage lease. c. pass through lease. d. participation.

Q: A lease which requires a fixed constant amount of rent for each payment period of the term is called a a. gross lease. b. net lease. c. percentage lease. d. raw lease.

Q: Residential landlord tenant laws recently enacted in many states have modified the reliance on common law and contract tenancy right. These changes include all of the following EXCEPT a. the landlord must supply a fit and habitable premise. b. limits on the amount of security deposit that can be required. c. statutory procedures required for collecting back rent and evicting a tenant. d. defining a leasehold as a recordable real property belonging to the tenant.

Q: In any valid lease, the lessor by law gives an implied covenant ofa. quiet enjoyment.b. satisfaction.c. reconveyance.d. undue duress.

Q: Current legal thinking with regard to owner's obligations under a residential rental contract is that a. if a service is not promised in writing, it will not be forthcoming. b. the owner is obligated to keep the premises repaired. c. the owner has an obligation only to collect the rent and pay the utilities. d. only expressed agreements may be pursued in court.

Q: A rental contract gives the tenant a. the right of possession. b. temporary ownership. c. a freehold estate. d. the right to encumber.

Q: A valid lease must contain a. an option. b. the signatures of at least three parties. c. a clean-up deposit. d. a property description.

Q: Lonnie and Connie had a one-year lease that ended November 30. They were still living in the apartment as of December 12 without a new lease and without the landlord's permission. They have become a. tenants at sufferance. b. tenants in common. c. tenants at will. d. tenants for years.

Q: A lease for six months is classified as a. a periodic estate. b. an estate at sufferance. c. an estate at will. d. an estate for years.

Q: A couple's one year lease has expired, but they continued living on the premises. If they now pay rent on a monthly basis, this type of tenancy is a. by the entireties. b. at will. c. periodic. d. at sufferance.

Q: Who holds a less than freehold estate under a valid lease? a. Lessor b. Lessee c. Landlord d. Owner

Q: If a lease were signed by a lessee who is a minor, the lease is a. void. b. voidable by the landlord. c. voidable by the tenant. d. unenforceable.

Q: If a lease must be acknowledged for recording, whose signature should be acknowledged? a. Property manager b. Lessor c. Lessee d. Notary public

Q: Upon termination of a rental contract, a. ownership reverts to the lessor. b. possession is returned to the lessor. c. possession is returned to the lessee. d. ownership reverts to the lessee.

Q: According to the Real Estate Settlement and Procedures Act, which of the following is illegal? a. Examination of the HUD settlement statement the day before closing b. Payment of kickbacks c. Delivery of the closing statement on the day of closing d. Disbursement of commission fees

Q: A local federal savings and loan makes a home loan. RESPA requires that a. a good faith estimate of closing costs be given to the borrower. b. an HEW closing statement be used for the closing. c. a credit application be filed with escrow. d. a credit statement be given the borrower.

Q: The seller has just sold her home and received a closing statement and the balance due to her. Presuming no agreement to the contrary, which of the following should have been charged to the buyer? a. Proration of taxes with a debit to the seller for the tax year up to closing b. Recording fee for the deed prepared by the sellers' attorney c. Sales commission d. Amount required to pay off the seller's loan

Q: In a closing statement, the amount of interest on an assumed loan is a a. charge to the seller only. b. charge to the buyer only. c. charge to the seller and credit to the buyer. d. charge to the buyer and credit to the seller.

Q: The property tax year runs from January 1 to December 31. The taxes on a certain house are $1,440 this year, none of which has been paid. If the house sells, not in a leap year, and the closing date is June 12, thea. buyer owes the seller $796.93.b. buyer owes the seller $643.07.c. seller owes the buyer $796.93.d. seller owes the buyer $643.07.

Q: The proration of prepaid condominium association dues will result in a a. charge to the seller and credit to the buyer. b. charge to the buyer and credit to the seller. c. charge to the seller and credit to the association. d. charge to the association and credit to the buyer.

Q: The home was sold on July 18. The next payment date is August 1. The buyer agreed to assume the seller's 6% loan which has a balance of $36,800 as of July 1. Interest on this loan would be prorated as a. debit buyer $77.16 and credit seller $106.84. b. debit seller $77.16 and credit buyer $106.84. c. credit seller $106.84 and charge buyer $106.84. d. credit buyer $106.84 and charge seller $106.84.

Q: The property tax year runs from January 1 through December 31. The taxes on a certain house are $1,440 this year and have not yet been paid. If the house sells and the closing date is December 10th, the a. buyer owes the seller $82.85. b. buyer owes the seller $1,357.15. c. seller owes the buyer $82.85. d. seller owes the buyer $1,357.15.

Q: On the day of closing a real estate sale, existing property taxes and insurance are a. left as is. b. paid by the bank out of the reserves. c. prorated. d. paid in full by the seller.

Q: A 9% amortized loan with a November 1 balance of $40,000 requires the payment of principal and interest at the first of each month. If prorating is done as of the 20thof November, thea. buyer owes the seller $100.b. buyer owes the seller $200.c. seller owes the buyer $100.d. seller owes the buyer $200.

Q: A disinterested party representing both buyer and seller in a real estate sale is the a. broker. b. salesperson. c. escrow agent. d. attorney-in-fact.

Q: Deed delivery in an escrow is accomplished by a. the escrow holder accepting the deed on behalf of the grantee. b. delivery of the deed by the escrow holder to the grantor. c. a courier service. d. the title company.

Q: Escrow accounts are opened for the protection of the interests of the a. general public. b. seller. c. buyer and seller. d. buyer.

Q: If an existing escrow is to be canceled, it must be done a. only by the buyer. b. by mutual rescission. c. by either party. d. only by the seller.

Q: All of the following items are usually paid by the seller at the close of a residential sale escrow EXCEPT a. title search. b. appraisal fee. c. commission. d. title insurance.

Q: Of the following, the final action to be taken to complete a closing is a. acknowledgement of all instruments. b. recordation of appropriate instruments. c. signing of the deed. d. title search.

Q: A couple buys a house complete with furnishings. They assume and agree to pay the existing mortgage. All of the following documents should be used in closing EXCEPT a. note and mortgage. b. assumption papers. c. bill of sale. d. closing instructions.

Q: How many days are normally needed to close a residential sale that requires no financing? a. 1 to 29 b. 30 to 60 c. 61 to 90 d. over 90

Q: Pat bought a home for $75,000. He put up $5,000 earnest money and secured an 80% loan. The bank charged four points and a 2.5% loan fee. Pat received a $900 credit from the proration of taxes. How much cash will he need to bring to close this transaction?a. $13,000b. $13,900c. $13,975d. $18,000

Q: A buyer agreed to put down $5,000 as earnest money toward a house he was buying for $97,000. The offer was based upon receipt of an 80% loan from a bank. The attorney's fees were $2,000 and all other buyer costs amounted to $1,500. How much money will the buyer need to pay at settlement? a. $14,400 b. $17,900 c. $17,700 d. $22,900

Q: A seller received a net amount of $29,817 after paying off a $53,000 loan balance, $1,213 in miscellaneous costs, and a 7% brokerage fee. What was the sale price of the house? (round to nearest dollar) a. $77,020 b. $84,030 c. $90,355 d. $90,360

Q: A seller has agreed to pay 80% of the title insurance company's fee on a sale. The company charges $550 for the title policy, plus $95.50 for the title search and $50 for processing the papers. What is the difference between what the seller has to pay and what the buyer has to pay?a. 20%b. $139.10c. $417.30d. $556.40

Q: For what price must a house sell if the seller is to net $30,000 after paying $1,500 in settlement and the broker's commission of 6% (rounded to the nearest dollar)? a. $30,000 b. $32,011 c. $32,300 d. $33,511

Q: A seller received $81,000 at the close of escrow after paying $1,750 in closing costs and a 6% brokerage fee. What was the sales price of the house? a. $82,750 b. $87,480 c. $89,230 d. $88,032

Q: A(n) ____________________ statement is a statement by an owner or lienholder as to the balance due on an existing lien against the property.

Q: The deposit of documents and funds with a ____________________ third party plus instructions as to how to conduct the closing is called an escrow closing.

Q: The HUD Settlement Statement required of all federally related real estate lenders is known as the ____________________.

Q: RESPA prohibits ____________________ and fees for services not performed during the closing process.

Q: In some states, the use of a ____________________ month may be used instead of the actual days of the month.

Q: In a situation where all the documents are not yet available but it would be difficult to reschedule the closing meeting, the parties may agree to a ____________________ closing.

Q: A settlement statement, also called a ____________________ statement, is given to the buyer and seller to summarize the financial aspects of their transaction.

Q: A ____________________ statement is a statement of the unpaid balance on a note secured by a trust deed.

Q: The final inspection of the property just prior to the settlement date is called a _________________________.

Q: The person placed in charge of an escrow is called an escrow ____________________.

Q: Outside of the closing means a party to the closing has paid someone directly and not through the closing.

Q: In prorating rents, the dollar amount is a credit to the seller and a debit to the buyer.

Q: An accounting of funds to the buyer and the seller at the completion of a real estate transaction is called a settlement statement.

Q: The division of ongoing expenses and income items between the buyer and seller is called prorating.

Q: Under the provisions of RESPA payments outside closing are prohibited.

Q: In a typical closing, insurance prorations will usually be a credit to the seller and an expense to the buyer.

Q: Prorations of items in a real estate closing are made usually as of the date of the signing of the contract.

Q: Among the items to be prorated at a settlement or escrow closing taxes and rents.

Q: When a home is sold and a new loan by an institutional lender is required, the typical time between purchase contract signing and settlement will most likely be from 1 to 29 days.

Q: RESPA prohibits the seller from requiring that the buyer purchase title insurance from a particular title company.

Q: Escrow closings cannot be used when refinancing a property.

Q: One advantage of the escrow closing method is that it can eliminate personal confrontation between buyer and seller.

Q: In an escrow closing, the escrow agent serves as agent for the buyer.

Q: In an escrow closing, funds are disbursed when all escrow papers have been signed and the buyer brings in the money.

Q: In most states in which title transfers are handled in escrow, the agents must be bonded.

Q: The escrow agent is always selected by the real estate broker.

Q: During a "dry closing" the money is disbursed to the seller.

Q: During a "dry closing" the deed is disbursed to the buyer.

Q: The purpose of a settlement statement is to provide an accounting of all funds involved in a transaction.

Q: A buyer and a seller are likely to shake hands upon completion of a real estate transaction involving an escrow closing.

Q: Which of the following may serve as an escrow agent? a. A bank b. An independent escrow company c. A lender d. Any of the above

Q: When a real estate settlement is held in escrow a. there is no closing meeting. b. the closing process may be conducted by mail. c. both a and b. d. neither a nor b.

Q: A settlement meeting may take place in the offices of a. the real estate agent. b. an attorney. c. a title company. d. any of the above.

Q: A buyer's walk-through is conducted for the purpose of a. appraising the property in order to get a loan on it. b. inspecting the property for major structural defects. c. meeting the seller and obtaining the keys to the property. d. making a final inspection just prior to closing.

Q: Details that must be handled between the time a purchase contract is signed and the closing typically include a. title search. b. deed preparation. c. loan arrangements. d. all of the above.

Q: Under the Real Estate Settlement and Procedures Act, all of the following are required of the lender EXCEPT a. submission to the borrower of the booklet "Settlement Costs and You". b. submission of a "good faith estimate" of loan closing costs. c. disclosure of the "Annual Percentage Rate". d. use of the Uniform Settlement Statement for closing.