PROMULGATED CONTRACTS QUESTIONS
AND ANSWERS
What is TRUE about the Notice of Buyer's Termination of Contract? Correct Ans-this form
does not address the release of earnest money
House Flipping: Correct Ans-A type of real estate fraud in which someone purchases a
property and then quickly resells it at an artificially high value through the use of a false
appraisal
Predatory Lending: Correct Ans-Lending practices that take advantage of consumers by
charging unnecessary fees or unsubstantiated interest rates, making loans that are too big or
risky for the borrower, or pressuring buyers into loans
Buyer Rebate: Correct Ans-Illegal action during a transaction that causes money to go back
to the buyer, either at or after closing, without the knowledge of the lender
Who is usually the victim in a transaction that involves loan fraud? Correct Ans-lender
A buyer and seller made a plan where the buyer would get a loan and pay $60k more for the
property than it was worth. Their appraiser friend would help them. After closing, the buyer,
seller, and appraiser split the $60k. No payments were made, and the lender foreclosed. This is
an example of: Correct Ans-loan fraud
,Which of the following is NOT a red flag? Correct Ans-everything being disclosed to the
lender
Contractual agreements about commission are found in all of the following, EXCEPT: Correct
Ans-One to Four Family Residential Contract
The commission price on a listing is determined by an agreement between: Correct Ans-the
listing broker and the seller
A listing broker put in MLS that he would compensate a buyer's broker 2% if they sold his listing.
When the buyer's agent prepared the contract, he listed 3% as the agreement between brokers.
How much is the buyer's broker entitled to? Is the agent within his rights? Correct Ans-2%
and the agent is guilty of a violation of MLS rules
Fair Housing Act: Correct Ans-A federal law that prohibits discrimination in housing based on
race, color, religion, or national origin and was amended to include sex, disability, and familial
status
Fair Lending Laws: Correct Ans-Laws prohibiting lenders from discriminating against all of the
same protected classes as the Fair Housing Act, with the addition of age, marital status, and
receipt of public income
Disability: Correct Ans-A physical or mental impairment that limits one or more major life
activities
,Which one of the following is NOT a protected class? Correct Ans-current drug users
In addition to the protected classes defined by the Fair Housing Laws, which protected class has
the National Association of REALTORS® added for their members? Correct Ans-sexual
orientation
Which of the following would qualify as a disability under the Federal Fair Housing Act?
Correct Ans-ALL CHOICES ARE CORRECT (being blind, having a chronic mental disorder, being
deaf)
A prospective home renter asks the landlord if he would be able to build a wheelchair ramp to
the porch. Can the landlord agree to allow the ramp as long as the tenant removes it before
they vacate the home? Correct Ans-Yes, this can be part of the lease agreement
Sally is considering buying a lot close to the airport. Her agent learns that the airport and the
city are in discussion about widening the landing strip. If they do that, the property Sally is
looking at may be taken under eminent domain. Disclosure to Sally is: Correct Ans-required
A couple that is selling their home recently discovered they had termites. They had the termites
treated but are unsure if there is any damage that has not been corrected. When they complete
the Seller's Disclosure, what should they disclose? Correct Ans-They should say they had
termites treated but are unsure if there was any damage.
, Ms. Jones is listing her home for sale. Her husband had committed suicide in the home.
Disclosure of the suicide is ______. Correct Ans-permitted
An agent is showing property to a potential buyer when the buyer asks if there are many
Germans living in the neighborhood. This disclosure would be ______. Correct Ans-
prohibited
Denying housing based on any of the following is a violation of the Federal Fair Housing Act,
EXCEPT: Correct Ans-One of the people is a smoker.
Occupancy Standards: Correct Ans-Rules about the maximum number of people allowed to
live together in a single dwelling
Who creates occupancy standards? Correct Ans-Local laws and some housing providers
Which of the following is NOT considered when HUD reviews fair housing complaints?
Correct Ans-number of pets
If a listing agent is presented with an offer for a property that is $20,000 over list price and a
request for the $20,000 to go to a vendor for some renovations to be done in the future, this is
considered: Correct Ans-a red flag that loan fraud may be involved
AND ANSWERS
What is TRUE about the Notice of Buyer's Termination of Contract? Correct Ans-this form
does not address the release of earnest money
House Flipping: Correct Ans-A type of real estate fraud in which someone purchases a
property and then quickly resells it at an artificially high value through the use of a false
appraisal
Predatory Lending: Correct Ans-Lending practices that take advantage of consumers by
charging unnecessary fees or unsubstantiated interest rates, making loans that are too big or
risky for the borrower, or pressuring buyers into loans
Buyer Rebate: Correct Ans-Illegal action during a transaction that causes money to go back
to the buyer, either at or after closing, without the knowledge of the lender
Who is usually the victim in a transaction that involves loan fraud? Correct Ans-lender
A buyer and seller made a plan where the buyer would get a loan and pay $60k more for the
property than it was worth. Their appraiser friend would help them. After closing, the buyer,
seller, and appraiser split the $60k. No payments were made, and the lender foreclosed. This is
an example of: Correct Ans-loan fraud
,Which of the following is NOT a red flag? Correct Ans-everything being disclosed to the
lender
Contractual agreements about commission are found in all of the following, EXCEPT: Correct
Ans-One to Four Family Residential Contract
The commission price on a listing is determined by an agreement between: Correct Ans-the
listing broker and the seller
A listing broker put in MLS that he would compensate a buyer's broker 2% if they sold his listing.
When the buyer's agent prepared the contract, he listed 3% as the agreement between brokers.
How much is the buyer's broker entitled to? Is the agent within his rights? Correct Ans-2%
and the agent is guilty of a violation of MLS rules
Fair Housing Act: Correct Ans-A federal law that prohibits discrimination in housing based on
race, color, religion, or national origin and was amended to include sex, disability, and familial
status
Fair Lending Laws: Correct Ans-Laws prohibiting lenders from discriminating against all of the
same protected classes as the Fair Housing Act, with the addition of age, marital status, and
receipt of public income
Disability: Correct Ans-A physical or mental impairment that limits one or more major life
activities
,Which one of the following is NOT a protected class? Correct Ans-current drug users
In addition to the protected classes defined by the Fair Housing Laws, which protected class has
the National Association of REALTORS® added for their members? Correct Ans-sexual
orientation
Which of the following would qualify as a disability under the Federal Fair Housing Act?
Correct Ans-ALL CHOICES ARE CORRECT (being blind, having a chronic mental disorder, being
deaf)
A prospective home renter asks the landlord if he would be able to build a wheelchair ramp to
the porch. Can the landlord agree to allow the ramp as long as the tenant removes it before
they vacate the home? Correct Ans-Yes, this can be part of the lease agreement
Sally is considering buying a lot close to the airport. Her agent learns that the airport and the
city are in discussion about widening the landing strip. If they do that, the property Sally is
looking at may be taken under eminent domain. Disclosure to Sally is: Correct Ans-required
A couple that is selling their home recently discovered they had termites. They had the termites
treated but are unsure if there is any damage that has not been corrected. When they complete
the Seller's Disclosure, what should they disclose? Correct Ans-They should say they had
termites treated but are unsure if there was any damage.
, Ms. Jones is listing her home for sale. Her husband had committed suicide in the home.
Disclosure of the suicide is ______. Correct Ans-permitted
An agent is showing property to a potential buyer when the buyer asks if there are many
Germans living in the neighborhood. This disclosure would be ______. Correct Ans-
prohibited
Denying housing based on any of the following is a violation of the Federal Fair Housing Act,
EXCEPT: Correct Ans-One of the people is a smoker.
Occupancy Standards: Correct Ans-Rules about the maximum number of people allowed to
live together in a single dwelling
Who creates occupancy standards? Correct Ans-Local laws and some housing providers
Which of the following is NOT considered when HUD reviews fair housing complaints?
Correct Ans-number of pets
If a listing agent is presented with an offer for a property that is $20,000 over list price and a
request for the $20,000 to go to a vendor for some renovations to be done in the future, this is
considered: Correct Ans-a red flag that loan fraud may be involved
