Rockwell Cram Exam #3 Quiz Questions with Correct Solutions Graded A+| Already Passed

When homes in a new development are sold, a $2,000 fee is charged to the buyers. This fee covers the homeowners association dues for the first year. HOA dues for each subsequent year are $1,000. In the development's first year, ten homes are sold. Ten more are sold the second year. Assuming that the HOA's account had no disbursements or expenses (and ignoring any possible contributions from the developer), what is the balance of the account after two years? - $50,000 Teresa gives her little brother, Mark, a life estate pur autre vie. Which of the following is true? - Mark is the life tenant, but the measuring life is someone else (Our Autre Vie= "for another life" the measuring life is someone other than the life tenant. Jack receives a life estate in a property, for the life of Larry. When Larry dies, the property passes to Mary, rather than to the grantor or the grantor's heirs. This is a: - life estate pur autre vie, in remainder Reversion= Reverting to the grantor (original owner) A 17-year-old purchased a house. He moved in, lived in it for a year, and then decided he didn't want the responsibility of owning a home. He refused to honor the contract. In this case the contract: - was voidable when signed; however, the buyer probably ratified it by living in the house A store owner would like to sell common stock in her business (a chain of stores) to investors. She asks an inexperienced licensee for help. The licensee should: - refer the client to a securities dealer A seller has entered into a listing agreement with an expiration date of April 30. Under which of these circumstances would the listing NOT terminate on the date mentioned in the answer option? - The licensee who took the listing is legally declared incompetent on April 26 XYZ Realty has the exclusive right to represent a new subdivision. An agent working for the subdivision office, and named on the listing agreement, shows a property to the Meyers, who are not working with their own agent. When the Meyers decide to buy, they have XYZ's agent provide basic help in filling out an offer form. Which of the following is true? - The buyers are not represented by an agent. (if the agent is already representing another party under a written agreement (usually, a listing agreement), then providing minimal services does not create an agency.) Maria offered to purchase Alexander's house for $135,000. After talking it over with his agent, Alexander signed the offer and returned it to Maria. At this point, what type of title does Maria have to the house? - Equitable A builder plans to construct a single-family home on spec, which he will then sell himself. He needs to borrow $60,000 to do so, and he approaches the local bank for a construction loan. Is this loan subject to Truth in Lending Act disclosure laws? - No, because no disclosure is required for business loans A property owner would like to use a tax-deferred exchange. The owner's property would qualify if it was: - used in a business or trade A homeless shelter, which contains a number of units for different families, is owned by a religious group. The religious group's leaders instruct the shelter's manager to limit occupancy only to individuals who are of their faith. This would be permissible under which of the following circumstances? - Membership in the religious organization is not restricted on the basis of race, color, or national origin With the closing date fast approaching, the buyer's real estate agent learns that the seller's sister may have an ownership interest in the property. The parties have already signed the purchase and sale agreement. The buyer's agent should: - ask the listing agent to suggest that the seller see a lawyer about obtaining a quitclaim deed from the sister A woman owns a large house in a subdivision that is zoned strictly residential. She would like to operate a preschool out of her house. She should seek to obtain a/an: - conditional use permit Chris, a real estate agent, met with Zach, a property owner, to discuss listing the property. Zach told Chris that he was illiterate and that he needed Chris to read the listing agreement to him. Chris did so, plus he spent a long time explaining the various terms and answering Zach's questions. Zach agreed to everything, and signed the agreement with an "X." The listing agreement is: - valid, because Zach was illiterate, not mentally incompetent ABC Realty signed a property management agreement to manage property for XYZ Apartment Rentals. Do they have an agency agreement and, if so, what kind of agency authority has been created? - Yes; ABC has been hired by XYZ to be a general agent A buyer's earnest money deposit can be kept by a seller in the event of a buyer's default only if the: - purchase and sale agreement includes a forfeiture clause for liquidated damages