WRA EXAM QUESTIONS WITH CERTIFIED SOLUTIONS

WRA EXAM QUESTIONS WITH CERTIFIED SOLUTIONS "A buyer has an inspection contingency in the offer to purchase that does not give the seller the right to cure. The home inspector finds a defect during the inspection. The buyer would like the seller to repair the defect according to the buyer's specifications. If the seller does not want to repair the defect as specified by the buyer then the buyer is no longer interested in purchasing the property. How would you accomplish this for the buyer? - Correct Answer Deliver an amendment to the seller specifying the repairs that must be made and if the seller does not agree then deliver a notice of defects. ...Explanation: Because the seller does not have the right to cure, delivering a notice of defects will terminate the offer. The buyer should first try and negotiate the repairs by amending the offer. If the seller does not agree to the amendment, then issuing the notice will terminate the offer." “The WB-11 Residential Offer to Purchase describes which of the following as the way an earnest money payment should be handled as a result of a sale involving cooperating firms? - Correct Answer The selling licensee should have all earnest money checks paid directly to the listing firm... Explanation: The Earnest Money section of the offer states: "Unless otherwise agreed, earnest money shall be paid to and held in the trust account of the listing broker."" "An appraisal would most likely be used in all of the following transactions or situations EXCEPT: - Correct Answer subletting an apartment unit.... Value does not need to be established in order to sublet an apartment unit." "Which of the following is NOT a federally protected class? - Correct Answer Age...Explanation:The federally protected classes are race, color, religion, gender, national origin, disability, and familial status." "Which of the following would violate advertising rules for real estate licensees? - Correct Answer Advertising a property that has already been sold. ...Explanation: Wis. Admin. Code § REEB 24.04(1) states, "Licensees shall not advertise in a manner which is false, deceptive, or misleading."" "At closing, the seller needs to give a credit to the buyer for property taxes. Last year's taxes were $3,700 and there are 242 days from the first of the year through the day of closing. How much will the buyer's tax credit be? - Correct Answer $2,443.02... Explanation: $3,700 / 365 day year = $10.1370 daily proration. $10.1370 x 241 days between January 1 and the day prior to closing = $2,443.02." "The right of a governmental body to take ownership of real estate for public use is called: - Correct Answer eminent domain...Explanation: Eminent domain is one form of police power and is the power of a governmental body to take ownership of real estate for a public use." "Which of the following activities can an unlicensed personal assistant do? - Correct Answer Schedule appointments. Explanation: An unlicensed personal assistant cannot do any activities that would require a real estate license such as showings, open houses, or completing forms. An unlicensed assistant can complete activities that do not require a license such as scheduling appointments." "A city zoning board changes the zoning for a single parcel of property to meet a public need. This would be called: - Correct Answer spot zoning...Explanation:Spot zoning occurs when a single parcel of land rezoned. A variance allows a parcel to violate permanently a zoning law. Downzoning changes the use of all the properties within a zoning district." "A licensee is listing a 4-bedroom, two-story house. Which of the following would be the most suitable comparable property? - Correct Answer A 3-bedroom, two-story house that was recently sold in the same neighborhood as the listed property. Explanation: A comparable property is a similar property currently being sold. The maximum value of a property tends to be established by value of similar properties that have recently sold. A foreclosed property does not provide a good comparison because it is not an arm's length sale." "Evelyn and her boyfriend, Noah, are getting married, and are looking to purchase a new home. They have asked you as their real estate licensee for advice on how to take title. What advice can you give them regarding on how they should take title? - Correct Answer Suggest they speak to an attorney. Explanation: Real estate licensees cannot give legal advice such as how to take title." "Which of the following is the way that title appears on public records? - Correct Answer Record....Explanation: Record title is the way that the title appears on public records." "Omar lists his house with Brandon. Nancy goes to Brandon's open house and decides she wants to make an offer on the house. Nancy does not have an agency agreement with Brandon and she asks Brandon to write the offer. Which of the following CORRECTLY identifies the relationship between Brandon and Nancy? - Correct Answer Nancy is Brandon's customer...Explanation: Brandon has a listing contract with Omar. Nancy does not sign a buyer agency agreement with Brandon. Brandon provides brokerage services to Nancy as a customer." "Question 14 - Correct Answer " "A licensee is purchasing a home. When completing the offer to purchase how should they handle the agency information on line 1? - Correct Answer All of the agency information should be stricken because the licensee is acting as a principal not an agent. Explanation: A licensee cannot act as a principal and an agent at the same time. Therefore, the agency information found at line one of the Residential Offer to Purchase should be stricken completely." "A condominium owner has to pay a condominium fee each month. The condominium fee is calculated on an annual basis and then is paid monthly in equal installments. The fee paid is 1% of the assessed value of the unit, which is $240,000. The fee is due on the first of every month. How much would the owner of the condominium have paid in condominium fees as of June 1? - Correct Answer $1,200...Explanation: $240,000 assessed value x .01 = $2,400. $2,400 / 12 months = $200 monthly fee. $200 x 6 = $1,200 paid in condominium fees through June 1." "A listing contract must include all of the following EXCEPT: - Correct Answer the signature of the seller...Explanation: Wis. Stat. § 240.10(1): Every contract to pay a commission to a real estate agent or broker or to any other person for selling or buying real estate shall be void unless such contract or note or memorandum thereof describes that real estate; expresses the price for which the same may be sold or purchased, the commission to be paid and the periods during which the agent or broker shall procure a buyer or seller; is in writing; and is subscribed by the person agreeing to pay such commission, except that a contract to pay a commission to a person for locating a type of property need not describe the property." "A buyer hires a firm to locate a specific type of property for a buyer. The buyer's licensee, upon finding the property, does not make the buyer aware of it and purchases it for himself. What duty to the buyer did the licensee violate? - Correct Answer Loyalty...Explanation: The duty of loyalty requires an agent to put the interests of the client ahead of everyone else. Purchasing a property without telling a client about it first violates the duty of loyalty." "Rental property is sold to a new owner. Tenants remain under a written lease. The new owner wants to raise the rent. When can the new owner raise the rent? - Correct Answer When the lease with the current tenants expires Explanation: Unless the terms of the tenants' current lease permit an increase in rent, the new owner must wait until the lease expires and execute a new lease at the desired rent." "Betty and Sam were in negotiations regarding property 789 Pear Street. Betty made an offer to purchase including earnest money of $5,000. Sam rejected Betty's offer. Who receives the disbursement of the $5,000 earnest money? - Correct Answer Betty receives $5,000...Explanation: Lines 376-378 of the Offer to Purchase - Disbursement states, "If negotiations do not result in an accepted offer, the earnest money shall be promptly disbursed (after clearance from payer's depository institution if earnest money is paid by check) to the person(s) who paid the earnest money." "If a seller nets $140,000 on their home after paying the listing firm an 8% commission, what was the sales price of the home? - Correct Answer $152,173.91..Explanation: $140,000 / .92 = $152,173.91 sales price" "Zoning laws may NOT be used to regulate which of the following? - Correct Answer The placement of interior partitions...Explanation: The placement of interior partitions does not affect public safety. The purpose of zoning is to protect public safety and welfare." "According to the WB-1 Residential Listing Contract, which of the following parties is responsible to prepare the property to minimize the likelihood of injury? - Correct Answer The seller...Explanation: Lines 253-258 of the WB-1 Residential Listing Contract. Seller is aware that there is a potential risk of injury, damage and/or theft involving persons attending an "individual showing" or an "open house." Seller accepts responsibility for preparing the Property to minimize the likelihood of injury, damage and/or loss of personal property. Seller agrees to hold the Firm and its agents harmless for any losses or liability resulting from personal injury, property damage, or theft occurring during "individual showings" or "open houses" other than those caused by the negligence or intentional wrongdoing of the Firm or its agents." "What event would NOT terminate a listing contract? - Correct Answer A sales contract failed to close...Explanation: A listing contract can be terminated by: death or incapacity of the principals, destruction or condemnation of the property by eminent domain, expiration of the term, mutual agreement, breach, operation of law, or completion. Bankruptcy and foreclosure are examples of operation of law. The seller has the power to cancel the listing contract at any time. A sales contract that fails to close would not have any effect on the listing contract." "A borrower is obtaining an adjustable rate loan where the initial rate is fixed for three years. After the initial period, the loan will adjust every six months. What is the borrower's initial principal and interest payment is based upon? - Correct Answer The interest rate at which the ARM is originated...Explanation: When calculating a principal and interest payment for an adjustable rate loan, one would use the interest rate at which the loan is originated." "When trying to determine if an advertisement violates the Fair Housing Act, what test(s) is applied? - Correct Answer Ordinary Reader Test...Explanation: In determining if an advertisement violates fair housing, the ordinary reader test is applied. Essentially, if the add appears to prefer or "dis-prefer" individuals because of their membership in a protected class, it might be discriminatory." "What type of loan program requires the borrower to pay 20% of the purchase price or to obtain private mortgage insurance to cover the difference? - Correct Answer Conventional loan...Explanation: A conventional loan requires the borrower to invest 20% of the purchase price towards a down payment in order to receive financing. Lenders will originate loans to borrowers with a lower down payment if the borrower purchases PMI." "The Distribution of Information section of the WB-11 Residential Offer to Purchase states that: - Correct Answer the listing firm may deliver a copy of the offer to the title company...Explanation: Lines 272-277 state, "Buyer and Seller authorize the agents of Buyer and Seller to: (i) distribute copies of the Offer to Buyer's lender, appraisers, title insurance companies and any other settlement service providers for the transaction as defined by the Real Estate Settlement Procedures Act (RESPA); (ii) report sales and financing concession data to multiple listing service sold databases; and (iii) provide active listing, pending sales, closed sale and financing concession information and data and related information regarding seller contributions, incentives or assistance, and third party gifts, to appraisers researching comparable sales, market conditions and listings, upon inquiry." "The WB-11 Residential Offer to Purchase does NOT have any information at lines 38 and 39. This means that: - Correct Answer binding acceptance can only occur by delivery to the Party, not the agent...Explanation: The WB-11 states that delivery of documents and written notices to a Party shall be effective only when accomplished by one of the methods specified at lines 36-54. Even if the Parties select one or more methods of delivery, if a recipient is not name for delivery, then delivery can only occur to the Party." "Elements reserved for the exclusive use of one or more, but not all members of a condominium are called: - Correct Answer limited common elements...Explanation: Limited common elements are elements that are reserved for one or more unit owners and are not available for use by all the unit owners as are common elements." "All of the following may legally terminate a listing contract EXCEPT: - Correct Answer a rise in interest rates...Explanation: A rise in interest rates may make a property more difficult to market but it would not legally terminate the listing." "How can a seller terminate a listing contract? - Correct Answer In writing, delivered according to the terms of the listing contract...Explanation: Lines 263-271 of the WB-1 Residential Listing Contract." "What is the legal effect of a counter-offer? - Correct Answer Rejection of the offer and presentation of a new offer...Explanation:A counter-offer is a rejection of an offer and presentation of a new offer." "A seller accepts an offer for $175,000. Two weeks before closing a tornado causes $50,000 in damage to the property. What must the seller do? - Correct Answer Notify the buyer in writing wait for the buyer to decide what happens next...Explanation: If defects are discovered after an offer is accepted, the language in the offer specifies what will occur. Lines 206-215 of the WB-11 Residential Offer to Purchase state "If, prior to closing, the Property is damaged in an amount of not more than five percent (5%) of the selling price, Seller shall be obligated to repair the Property and restore it to the same condition that it was on the day of this Offer. If the damage shall exceed such sum, Seller shall promptly notify Buyer in writing of the damage and this Offer may be canceled at the option of Buyer."" "Housing that meets the Fair Housing Act's definition of "housing for older persons" may legally exclude: - Correct Answer families with children....Explanation: If housing meets the Fair Housing Act's definition of "housing for older persons," then it may legally exclude families with children." "Which of the following is NOT viewed as an encumbrance that must be disclosed to a buyer? - Correct Answer Back taxes that the seller will be paying off at closing...Explanation: Any encumbrances that are going to be removed at closing do not need to be disclosed. This would commonly include taxes, mortgage loans, and other liens that will be paid off at closing with the seller's proceeds." "A licensee is selling the licensee's own house. What must the licensee do? - Correct Answer Inform all prospective purchasers that the licensee is the owner and is a licensed real estate agent...Explanation: Wis. Admin. Code § REEB 24.05(5): A licensee acting as a principal in a real estate or business opportunity transaction shall disclose his, her, or its license status and intent to act in the transaction as a principal at the earliest of all of the following: 1. The first contact with the other party or an agent representing the other party where information regarding the other party or the transaction is being exchanged. 2. A showing of the property. 3. Any other negotiation with the seller or the listing firm." "A licensee is required to do all of the following EXCEPT: - Correct Answer have the technical knowledge, skills, or training possessed by competent third-party inspectors and investigators of real estate and related areas...Explanation: Licensees are not required to have the technical knowledge, skills, or training possessed by competent third-party inspectors and investigators of real estate and related areas." "All of the following would be examples of public land use restrictions EXCEPT: - Correct Answer deed conditions...Explanation: Deed conditions are land use controls used between private citizens." "The buyer, in an effort to meet the terms of the Financing Contingency found in the WB-11 Residential Offer to Purchase, delivers a notice to the seller indicating that the buyer is ready to proceed to closing. Has the buyer waived the Financing Contingency? - Correct Answer No, because the buyer did not deliver a loan commitment....Explanation: The offer to purchase states at line 219 that the financing contingency is removed when the buyer delivers a loan commitment to the seller within the specified number of days from acceptance. The delivery of the loan commitment removes the financing contingency." "If property is held in joint tenancy, the heirs of a deceased joint tenant have: - Correct Answer no interest...Explanation: When property is held in joint tenancy and a joint tenant dies, the surviving joint tenant or tenants become owners of the deceased joint tenant's interest." "A builder completed a new home and is going to live in it for 3 weeks prior to closing of the sale to a buyer. Must the builder complete a real estate condition report? - Correct Answer Yes, because the property meets the definition of one-to-four dwelling units....Explanation: Sellers of vacant land or real estate containing one-to-four dwelling units, whether listed with a firm or for sale by owner, are required to complete a real estate condition report. There is an exemption for a property that has never been lived in but if the builder is living in the home prior to closing, the builder is not exempt and must complete a real estate condition report." "A listing agent has an accepted offer to purchase on a listing. Another offer is being written and the buyer wants information about the existing offer. What information can the listing agent share with the second buyer? - Correct Answer The existing offer has a continued marketing (bump) clause...Explanation: Wis. Admin. Code § REEB 24.12 A licensee cannot share the terms of one buyer's offer to purchase with any other buyer. A licensee can say another offer exists, that it has contingencies, or a continued marketing clause but nothing more specific than that." "Binding acceptance occurs: - Correct Answer when all parties have signed an identical copy of the offer to purchase and it is delivered to the party who made the offer...Explanation: Lines 27-28 of the WB-11 Residential Offer to Purchase, "The Offer is binding upon both Parties only if a copy of the accepted Offer is delivered to Buyer on or before (stated date/time)."" "In the WB-1 Residential Listing Contract, a seller does NOT agree to: - Correct Answer reimburse the listing firm for all advertising if the property does not sell...Explanation: The listing contract does not require the seller to compensate the listing firm for any advertising." "A salesperson may practice real estate for: - Correct Answer the firm with which the licensee is associated...Explanation: Wis. Stat. § 452.30(7) A salesperson may be associated with only one firm at a given time. (b) A salesperson may not engage in independent real estate practice and may engage in real estate practice only when associated with a firm." "A borrower is obtaining a loan for $130,000. The loan is 95% of the property's value. The interest rate on the loan is 5% after the borrower pays two points. How much do the two points cost the borrower? - Correct Answer $2,600...Explanation: $130,000 principal loan amount x .02 = $2,600 cost of points." "Four condominium units are valued at $200,000; $215,000; $220,000; and $225,000; a total value of $860,000. The four condominiums have an annual property maintenance fee $8,500. If the amount of the property maintenance fee owed by each unit is based upon the unit's value, what percentage of the total fee does the most expensive unit owe? - Correct Answer 26%...Explanation: The most expensive unit is $225,000. The total value of all the units is $860,000. $225,000 / $860,000 = .2616 or 26%." "The financing contingency would be removed if which of the following were to occur? - Correct Answer The seller receives a loan commitment subject to conditions...Explanation: Lines 235-246 of the WB-11 Residential Offer to Purchase discuss the loan commitment. The loan commitment may be subject to conditions as stated on lines 243-246." "According to the terms of the Extension of Listing section of the WB-1 Residential Listing Contract, how long is the listing contract extended for protected buyers? - Correct Answer One year...Explanation: Line 220 states, "The Listing term is extended for a period of one year as to any Protected Buyer."" "A licensee is required to disclose: - Correct Answer material inconsistent with or materially contradictory to the seller's statements or the inspection report of a third party....Explanation: Wis. Admin. Code § REEB 24.07(6): If a licensee's reasonably and diligent inspection reveals facts materially inconsistent with or materially contradictory to the seller's statements or the inspection or investigation report of a third party, the inconsistency shall be disclosed in writing and in a timely manner to the parties." "What type of mortgage law is recognized in Wisconsin? - Correct Answer Lien theory...Explanation: Under lien theory, the buyer has legal title and the lender has the right to place a lien on the buyer's property given as collateral for the loan." "The Real Estate Settlement Procedures Act (RESPA) regulates: - Correct Answer new first mortgages on residential 1-4 family transactions...Explanation: The purpose of RESPA is to ensure that borrowers in mortgage loan transactions have knowledge of all settlement costs. It applies to all federally related new first mortgages on residential 1-4 family transactions." "Which of the following creates a multiple representation relationship? - Correct Answer A buyer's licensee writes an offer for a buyer on a property listed by the buyer's licensee's firm...Explanation: Multiple representation occurs when a firm has an agency contract with both the buyer and the seller in the real estate transaction. The phrase "a buyer's licensee" tells us that the buyer has an agency agreement with the firm. "A property listed with the buyer's licensee's firm" tells us that the seller also has a listing contract with that firm. The buyer's licensee's firm has an agreement with both the buyer and the seller." "A property protected under the WB-36 Buyer Agency Agreement Extension of Agreement Term is protected for how long after the expiration of the contract? - Correct Answer One year...Explanation: Lines 252-257 Extension of the Agreement Term of the WB-36 Buyer Agency Agreement provides, "The Agreement term is extended for a period of one year as to any property The Agreement term is extended for a period of one year as to any Protected Property under this Agreement. Upon receipt of written request from Client or a firm that has a new buyer agency or tenant representation agreement with Client, the Firm agrees to promptly deliver to Client a written list of those Protected Properties known by the Firm and its agents to which the extension period applies. Should this Agreement be terminated by Client prior to the expiration of the term stated in this Agreement, this Agreement shall be extended for Protected Properties, on the same terms, for one year after the Agreement is terminated (lines 243-251)."" "A buyer's licensee is representing two separate buyers. Each buyer is interested in the same property. How should the buyer's licensee proceed? - Correct Answer The licensee should draft competing offers on behalf of each buyer...Explanation: The WB-36 Buyer Agency/Tenant Representation Agreement at lines 159-163 provides, "Client acknowledges and agrees that the Firm and its agents may act for other buyers or tenants in connection with the location of properties and may negotiate on behalf of such buyers or tenants with the owner or owner's agent. In In the event that the Firm or its agents undertake to represent and act for other buyers or tenants, the Firm its agents shall not disclose to Client, or any other buyer or tenant, any confidential information of any buyer or tenant, unless required by law."" "Licensees must always avoid communications with licensees from other firms relating to: - Correct Answer commission rates charged to clients...Explanation: Licensees must always avoid communications with licensees from other firms relating to the commission rates charged to sellers and buyers, the rates paid to other firms for cooperative commission, and the compensation paid to licensees." "A rural property is currently being used as cropland. However, the assessed value reflects the property's worth as if it was being used for residential housing. The principle of value being applied is: - Correct Answer highest and best use...Explanation: The principle of value being used is highest and best use, which is the most profitable use to which a property is adapted. The use must be legally permitted, financially feasible, physically possible, and maximally productive." "When a listing firm lists a property, the seller is: - Correct Answer a client...Explanation: In a listing contract, the seller is the one who has hired the firm. Thus, the seller would be the principal/client in a listing contract." "Which of the following sales would need to include a lead-based paint addendum to the Offer to Purchase? - Correct Answer A duplex built prior to 1978...Explanation: The LBP disclosure addendum is required on all transactions involving target housing. Target housing includes any housing built prior to 1978 except for housing for the elderly or persons with disabilities and 0-bedroom dwellings." "If property is valued at $65,000 and assessed for 60 percent of its value, what is the tax if the rate is $5.30 per hundred? - Correct Answer $2,067...Explanation: $65,000 x .60 = $39,000 assessed value. $39,000 x .053 = $2,067 tax bill." "Which of the following does NOT constitute accurate market conditions that would be disclosed by a licensee to all parties in a transaction upon request? - Correct Answer The racial makeup of the neighborhood...Explanation: Licensees are not allowed to discriminate and providing information about people groups would be a violation of the fair housing laws." "Which of the following statements is INCORRECT regarding a licensee's duty to inspect real estate? - Correct Answer A licensee does not need to view a home if the buyer wants to write an offer sight unseen...Explanation: A licensee, when engaging in real estate practice that involves real estate improved with a structure, shall conduct a reasonably competent and diligent inspection of accessible areas of the structure and immediately surrounding areas of the property to detect observable, material adverse facts." "How long does a licensee have to notify the DSPS of a misdemeanor conviction? - Correct Answer 48 hours...Explanation: A license who is convicted of a misdemeanor or a felony must notify the DSPS of the conviction within 48 hours of the conviction." "Which of the following are NOT considered client funds? - Correct Answer Promissory notes...Explanation: Wis. Stat. § 452.13(a) "Client funds" means all downpayments, earnest money deposits, or other money related to a conveyance of real estate that is received by a licensee on behalf of a firm or any other person. "Client funds" does not include promissory notes." ""Use a form" means to: - Correct Answer complete a form by filling in the blanks to accomplish the intent of a party...Explanation: Wis. Admin. Code § REEB 16.02(5): Use a form means to complete a contractual or conveyance form by filling in the blanks or modifying printed provisions on a form for the purpose of accomplishing the instruction of a party in a specific real estate transaction." "Wisconsin fair housing laws prohibit discrimination in housing based on all of the following EXCEPT: - Correct Answer conviction record...Explanation: Conviction record is not a protected class under Wisconsin fair housing laws." "A buyer orders a title insurance policy. The title insurance provider searches the public records for the title examination. The title company notifies the buyer in writing of the condition of the title with the: - Correct Answer title insurance commitment...Explanation: The title company notifies the buyer of the condition of title in writing with the title insurance commitment. This document is also sometimes call a preliminary report or the title insurance binder but in Wisconsin it is most commonly referred to as the title insurance commitment." "Licensees are required to disclose to all parties: - Correct Answer possible material adverse facts...Explanation: Licensees are required to disclose to all parties known material adverse facts and possible material adverse facts in writing and in a timely fashion. A licensee only needs to disclose material facts to a client." "Which of the following would be a fair housing violation in Wisconsin? - Correct Answer A property owner charging more money to a tenant with children than to a tenant without children...Explanation: Wis. Stat. § 106.50(1): It is the declared policy of this state that all persons shall have an equal opportunity for housing regardless of sex, race, color, sexual orientation, disability, religion, national origin, marital status, family status, lawful source of income, age or ancestry. Wis. Stat. § 106.50(2)(5m): Nothing in this section prohibits discrimination based on age or family status with respect to housing for older persons. Wis. Stat. § 106.50(2)(5m)(b): Nothing in this section shall prohibit a person from exacting different or more stringent terms or condition for financing housing based on the age of the individual applicant for financing if the terms or conditions are reasonably related to the individual applicant." "An offer is written and subsequently rejected. The buyer gave earnest money with the offer. What would be the proper procedure to return the earnest money? - Correct Answer The earnest money can be returned to the buyer....Explanation: Generally, the firm must deposit earnest money in a real estate trust account within 48 hours of receipt. Wis. Admin. Code Chapter REEB 18 allows for the disbursement of trust funds upon rejection, expiration or withdrawal, prior to binding acceptance, of an offer to purchase, Therefore, if the offer is rejected, withdrawn or expires prior to the 48 hours, the firm may return earnest money to the buyer. It would be prudent practice to make a photocopy of the earnest money check and document the return." "The duties to all parties include all of the following EXCEPT: - Correct Answer negotiation...Explanation:Duties to all parties: Safeguard trust funds, provide brokerage services honestly and fairly, present contract proposals in an objective and unbiased manner, confidentiality, provide accurate information about market conditions within a reasonable time after the person's request, provide brokerage services with reasonable skill and care, disclosure of material adverse facts. The duty of negotiation is just for clients." "If, after receiving an offer from a prospective buyer, the seller makes a counter-offer, the prospective buyer is: - Correct Answer relieved of further liability...Explanation: A counter-offer is a rejection of a previous offer. The parties of a rejected offer are no longer bound by the original offer." "How must a supervising broker delegate supervision to another broker? - Correct Answer In a written statement signed by both brokers...Explanation: A firm can delegate supervision responsibility in writing as long as the delegation is signed by both the broker/firm delegating and the recipient of the delegated authority." "A firm has a contract with a person to pay a finder's fee if the person finds a buyer for the firm's listing. This is permissible if the: - Correct Answer person has a salesperson's license...Explanation: Wis. Stat. § 452.19 No licensee may pay a fee or a commission or any part thereof for performing any act specified in this chapter or as compensation for a referral or as a finder's fee to any person who is not licensed under this chapter or who is not regularly and lawfully engaged in the real estate brokerage business in another state, a territory or possession of the United States, or a foreign country." "Which type of loan does the federal government guarantee? - Correct Answer Department of Veterans Affairs (VA) loan...Explanation: The guarantee feature on a VA loan promises lenders that in the event of deficiency in a foreclosure the lender will be compensated by the VA for any losses incurred in the foreclosure and subsequent sale of the property up to the limit of the guarantee." "A tenant has vacated a property at the end of the tenant's lease term. What is the landlord's deadline for returning a security deposit less any amounts properly withheld? - Correct Answer 21 days after the tenant vacates the unit...Explanation: A landlord must return the security deposit within 21 days of the tenant vacating the unit if the tenant vacates at the end of the tenant's lease term." "A property is listed for $225,000 and is selling for $219,000. The seller is paying a 5% commission and $500 in points for the buyer. After paying these costs, what will the seller net? - Correct Answer $207,550...Explanation: $219,000 selling price x .05 commission rate = $10,950. $219,000 - $10,950 = $208,050. $208,050 - $500 points = $207,550 net." "A borrower is obtaining a loan for $130,150. The loan is 95% of the property's value. The interest rate on the loan is 5% after the borrower pays two points. How much did the borrower pay for the property? - Correct Answer $137,000...Explanation: $130,150 / .95 = $137,000." "Bob changed his mind about purchasing 456 Right Here Avenue. The seller has accepted the offer. The offer has not been delivered to Bob. What is the effect on the transaction if Bob's license calls the seller and says the deal is off? - Correct Answer Withdrawal of the offer...Explanation: A buyer may withdraw an offer any time prior to binding acceptance." "Which of the following is NOT typically considered client funds? - Correct Answer Security deposits collected by a property owner...Explanation: Wis. Stat. § 452.13(1)(a): "client funds" means all down payments, earnest money deposits or other money related to a conveyance of real estate that is received by a licensee on behalf of a firm or any other person. "Client funds" does not include promissory notes." "At what point in the real estate transaction does a buyer receive equitable title? - Correct Answer When all contingencies have been removed...Explanation:Equitable title is the right to obtain absolute ownership to property when legal title is held in another's name. A buyer obtains equitable title after all contingencies have been removed and they are ready to consummate the transaction." "Which of the following situations requires a written earnest money disbursement agreement prior to disbursement of funds? - Correct Answer A buyer is not able to obtain financing...Explanation: The listing firm cannot do anything with the earnest money for 60 days after the scheduled closing date unless the parties reach a written agreement for the disbursement of the earnest money. The listing firm may wish to write a memorandum or letter to the buyer and seller and their respective attorneys, if any, pointing out lines 376-385 of the WB-11 Residential Offer to Purchase and explaining that this is how the earnest money disbursement must be handled. It is then up to the parties to work out their differences by negotiation or by going to small claims court." "Who of the following should NOT sign a seller's real estate condition report? - Correct Answer A listing licensee...Explanation: Wis. Stat. § 709.02 Disclosures by Owners of Real Estate..."except that the owner may substitute for any entry information supplied by a licensed engineer, land surveyor or structural pest control operator or by an individual who is a qualified 3rd party or by a contractor about matters within the scope of the contractor's occupation if the information is in writing and is furnished on time and if the entry to which it relates is identified." A listing licensee should NEVER complete or sign a seller's real estate condition report." "What kind of agency relationship is created when a seller signs a listing contract and prohibits the firm from representing the buyer too? - Correct Answer Express agency...Explanation: A listing contract creates an express, special agency relationship because it is in writing and it allows the listing agent to represent the seller in one specific transaction." "Where must a firm deposit client funds? - Correct Answer Mandatory interest-bearing real estate common trust account (IBRETA)...Explanation: Wis. Stat. § 452.13(2)(c) A firm shall deposit all client funds in the interest-bearing common trust account." "Who must receive a copy of the signed offer to purchase? - Correct Answer The seller and the buyer...Explanation: Wis. Admin. Code § REEB 15.02(1) A licensee shall promptly provide an exact and complete copy of any document utilized, prepared, or received by the licensee in real estate practice to any person who has signed the document." "According to the WB-36 Buyer Agency/Tenant Representation Agreement, a commission is earned by the buyer firm only if the: - Correct Answer buyer acquires an interest in property or enters into an enforceable contract that is acceptable to buyer...Explanation: See lines 37-40 of the WB-36 Buyer Agency/Tenant Representation Agreement. The Firm has earned the Firm's commission if during the term of this Agreement (or any extension of it), Buyer or any Person Acting on Behalf of Buyer acquires an Interest in Property or enters into an enforceable written contract to acquire an Interest in Property, at any terms and price acceptable to owner and Buyer, regardless of the purchase price range." "A licensee drafts an offer on behalf of some buyers. The husband is not available to sign the offer so tells his wife to sign his name. The offer was delivered back to the buyer. What is the status of the offer? - Correct Answer Void...Explanation: The offer is void. There was never a contract because the essential elements of the contract were never met. Wis. Stat. § 706.02 states that a contract to convey must be signed by or on behalf of all parties and 706.03(1m) states that a conveyance signed by one purporting to act as agent for another shall be ineffective as against the purported principal unless such agent was expressly authorized, and unless the authorizing principal is identified as such in the conveyance or in the form of signature. If the wife had written permission to act as the husband's principal and indicated such on the offer then there would be a binding contract." "An offer to purchase for the sale of a home meets all of the requirements established in the listing agreement. Which of the following statements is true? - Correct Answer The owner may reject the offer...Explanation: The listing contract is an employment agreement. The seller does not promise in the listing contract to consider or accept an offer, only to pay the firm a commission if the firm procures a buyer." "If a licensee is asked about the existence of any known sex offenders in the area, to achieve immunity from having to disclose this information, the licensee may: - Correct Answer provide the Department of Corrections' contact information in writing...Explanation:Wis. Stat. § 452.24 Disclosure duty; immunity for providing notice about the sex offender registry. (1) If, in connection with the sale, exchange, purchase or rental of real property, a licensee receives a request from a person to whom the licensee is providing brokerage services in connection with the sale, exchange, purchase or rental for information related to whether a particular person is required to register as a sex offender under s. 301.45 or any other information about the sex offender registry under s. 301.45, the licensee has a duty to disclose such information, if the licensee has actual knowledge of the information. Notwithstanding sub. (1), the licensee is immune from liability for any act or omission related to the disclosure of information under sub. (1) if the licensee in a timely manner provides to the person requesting the information written notice that the person may obtain information about the sex offender registry and persons registered with the registry by contacting the department of corrections. The notice shall include the appropriate telephone number and Internet site of the department of corrections." "What must firms provide to their licensees? - Correct Answer A written statement of procedures under which the firm and licensees associated with the firm shall operate with respect to transaction documents...Explanation:A firm must provide licensees associated with the firm with a written statement of procedures under which the firm and licensees associated with the firm shall operate with respect to handling documents relating to a real estate transaction." "A licensee associated with a firm wants to place an advertisement in the local newspaper. A licensee must use the firm's name in all advertising UNLESS: - Correct Answer the licensee is advertising for tenants for personally owned rental property...Explanation:Wis. Admin. Code § REEB 24.04: Except for advertisements for the rental of real estate owned by the licensee, a licensee firm shall disclose the firm's name as it appears on the firm's license or disclose a trade name previously filed by the department." "Representing both parties in a transaction is: - Correct Answer multiple representation...Explanation:Both the buyer and the seller are being represented by the same firm in the same transaction. Multiple representation is legal only where written disclosure and consent have occurred." "The WB-11 Residential Offer to Purchase indicates the seller shall provide title evidence in the form of: - Correct Answer title insurance...Explanation:Seller shall give evidence of title in the form of an owner's policy of title insurance in the amount of the purchase price." "Which of the following documents does NOT have to be delivered promptly to the parties after it is signed? - Correct Answer Lease agreement...Explanation:Wis. Admin. Code § REEB 15.02 Copies of documents - A licensee shall promptly provide an exact and complete copy of any document utilized, prepared, or received by the licensee in real estate practice to any person who has signed the document. A broker or salesperson shall promptly distribute an exact and complete copy of a lease or rental agreement which has been accepted and signed by all parties to the tenant upon execution of the lease or rental agreement when the tenant leases the property and to the landlord upon the landlord's request." "Four condominium units are valued at $200,000; $215,000, $220,000; and $225,000. Together the annual property maintenance fees for the condominiums are $8,500. What is the total value of the units? - Correct Answer $860,000...Explanation: The total value of the four condominiums is $860,000." "The WB-11 Residential Offer to Purchase states that title evidence shall be given by the seller in the form of a/an: - Correct Answer owner's policy of title insurance...Explanation:Lines 340-342 of the WB-11 Residential Offer to Purchase state, "Seller shall give evidence of title in the form of an owner's policy of title insurance in the amount of the purchase price on a current ALTA form issued by an insurer licensed to write title insurance in Wisconsin."" "A purchaser drafts their WB-14 Residential Condominium Offer to Purchase with an inspection contingency. According to the WB-14 the home inspector will be inspecting the? - Correct Answer Unit and limited common elements...Explanation: Lines 490-492 of the WB-14 Residential Condominium Offer to Purchase states: This Offer is contingent upon a Wisconsin registered home inspector performing a home inspection of the Unit and the Limited Common Elements which discloses no defects." "Which of the following bundle of rights are NOT included in a leasehold estate? - Correct Answer Disposition...Explanation:The tenant does not hold title. Therefore, they do not have the ability to transfer title." "Which of the following advertisements does NOT violate fair housing laws? - Correct Answer "Room available, shared bathroom, female only."...Explanation:The Fair Housing Act and Wisconsin law make it unlawful to print or publish any statement, notice, or advertisement with respect to the sale or rental of a dwelling that indicates a preference of a federally protected class. An advertisement can mention gender if there will be shared living space such as someone renting out a room in a person's home." "A licensee is going to list a property improved with a structure. Which of the following statements best describes a licensee's inspection duties? - Correct Answer A licensee needs to complete a reasonably competent and diligent inspection to detect observable, material adverse facts...Explanation:Wis. Admin. Code § REEB 24.07(1) A licensee, when engaging in real estate practice involves real estate improved with a structure shall conduct a reasonably competent and diligent inspection of accessible areas of the structure and immediately surrounding areas of the property to detect observable, material adverse facts." "The commission on the sale of 123 Anywhere Drive was $18,500, based on a 6.5 percent commission rate. What was the final selling price of the property? Use whole numbers. - Correct Answer $284,615...Explanation:$18,500/ .065 = $284,615." "Which of the following transactions must include a real estate condition report? - Correct Answer A seller selling a duplex that the seller has never lived in...Explanation:According to Wis. Stat. Chapter § 709 transactions involving the following properties are exempt from the real estate condition report requirements: property that has not been inhabited; transfers exempt from the Wisconsin transfer fee; transfers by personal representative, trustees, conservators, fiduciaries who are appointed by, or subject to the supervision by the court as long as the person has never occupied the property. There is NOT an exemption for a seller that does not live on the property or is not familiar with the condition of the property." "A seller accepts an offer for $91,575 with a $10,000 mortgage carried by the seller for the buyer. After adjustments between the parties were made on the closing statement, the buyer ended up owing the seller $78,500 in cash on closing day. What was the amount of transfer tax paid by the seller? - Correct Answer $274.80...Explanation:$91,600 x .003 = $274.80." "A buyer purchases a property for $129,550. How much is the transfer fee for this transaction? - Correct Answer $388.80...Explanation:The transfer fee on a $129,550 purchase is $388.80. To calculate the transfer fee, round the purchase price up to the nearest $100 and multiply times .003. Round $129,550 up to $129,600 and multiply by .003 = $388.80." "Lester lists his house with Orlando. Jimmy goes to Orlando's open house and decides he wants to make an offer on the house. Jimmy signs a buyer agency agreement with Orlando. Orlando then writes the offer to purchase. Which of the following correctly identifies the relationship of Orlando to Lester and Jimmy? - Correct Answer Orlando has a multiple representation relationship...Explanation:Lester and Jimmy each have a signed agency agreement with Orlando, thus creating a multiple representation relationship." "A purchaser of real estate is entering into a land contract with the seller. The purchaser should expect legal title when: - Correct Answer the seller has been paid in full...Explanation:A land contract is different from other types of financing in that legal title does not pass to the buyer during the term of the land contract. Legal title passes only when the seller is paid in full." "Which of the following is specific to the WB-4 Condominium Listing Contract? - Correct Answer The seller needs to indicate whether the sale is subject to a right of first refusal...Explanation:The WB-4 provides an area for the seller to indicate whether the condominium association has a right of first refusal on the unit." "Which of the following is the type of agency model where the firm represents just the seller in the transaction according to the terms of the listing contract? - Correct Answer Single agency...Explanation:Single agency is the agency model where the firm only has one client in the transaction. A Multiple Representation relationship exists when the same firm has both the buyer and seller as clients in the same transaction. Multiple Representation without Designated Agency means that both seller and buyer are clients of the firm in the same transaction and the firm must remain neutral. Multiple Representation with Designated Agency is when both the seller and buyer are clients of the same firm in the same transaction but each agent is permitted to provide information and advice to their respective client. There must be two agents involved to practice designated agency." "Which of the following are used to allow for special exceptions in land use regulations? - Correct Answer Conditional use...Explanation:The purpose of conditional use permits are to allow a use if the property owner meets other conditions." "What term describes a debt secured by an item of personal property? - Correct Answer A security interest...Explanation:A security interest is an interest a creditor holds in an item of personal property when the debt is secured by that item of personal property. A lender may have a security interest in a car, a tractor, machinery, or restaurant equipment for example. A security interest is also know as a chattel mortgage though security interest is the more common term." "A real estate agent signs a contract with a non-licensed individual. In that contract, the real estate licensee agrees to pay the non-licensed individual $50 for every referred person that signs a listing contract. What type of contract is this? - Correct Answer Void...Explanation:A contract as described in this question is a contract to pay referral fees to a non-licensed individual. Payment of real estate related fees including commissions, finders fees, and referral fees is illegal fee-splitting in Wisconsin. Therefore this contact is for an illegal purpose and is void." "A listing firm and a seller can modify an Exclusive Right to Sell Listing Contract to create any of the following EXCEPT: - Correct Answer net listing...Explanation:Wis. Admin. Code § REEB 24.10: Licensees shall not obtain, negotiate or attempt to obtain or negotiate any listing contract providing for a stipulated net price to the owner with the excess over the stipulated net price to be received by the firm as commission. Wis. Admin. Code § REEB 16.06(6): A licensee may alter an approved exclusive right to sell listing contract to create an exclusive agency listing or an open listing." "Wallace lists his house with Kima. Preston goes to Kima's open house and decides he wants to make an offer on the house. Preston signs a buyer agency agreement with Kima. Kima drafts the offer to purchase for Preston. Which of the following CORRECTLY identifies the relationship of Kima to Preston and Wallace? - Correct Answer Wallace is Kima's client, Preston is Kima's client...Explanation:Kima has a listing contract with Wallace. Kima has a buyer agency agreement with Preston. Kima has a multiple representation relationship with both Wallace and Preston and both are clients." "A firm is allowed to act in a multiple representation relationship when: - Correct Answer both clients in the transaction consent in writing to the multiple representation...Explanation:Wis. Stat. § 452.135(1) No firm may provide brokerage services to more than one client in a transaction without an agency agreement with each client and a written consent to multiple representation." "A licensee who is writing an offer for a buyer-customer on another firm's listing is a: - Correct Answer selling licensee...Explanation:A licensee writing an offer for a buyer-customer on another firm's listing is a selling licensee. A licensee who is writing an offer for a buyer-client is a buyer's licensee." "Changing the zoning from residential to scenic reserve would be an example of: - Correct Answer downzoning...Explanation:Changing zoning from residential to scenic reserve is a change in zoning from a more active to a less active classification." "A selling licensee can receive a commission from the: - Correct Answer selling firm...Explanation:Wis. Stat. § 452.14(3)(f) Disciplinary proceedings shall be conducted by the board if it finds that a licensee accepted from any person except the firm with which the licensee is associated, if the licensee is associated with a firm, a commission or valuable consideration for the performance of any act specified in this chapter or as compensation for referring a person to another licensee or to any other person in connection with a transaction." "In the WB-1 Residential Listing Contract, who has the authority to accompany a home inspector during a home inspection? - Correct Answer The buyer...Explanation:The WB-1 Residential Listing Contract authorizes the buyer to accompany a home inspector during the inspection." "A buyer wants to have the interest earned on their earnest money deposit. Which of the following statements is most correct? - Correct Answer The firm cannot draft an escrow agreement for the buyer and seller...Explanation:Wis. Admin. Code § REEB 18.06 If the parties to a transaction do not desire that the firm hold the earnest money in the firm's real estate trust account, and wish to designate an escrow agent other than the firm, the firm may not draft the escrow agreement. The escrow agreement shall be drafted by the parties or an attorney. The firm may not hold the funds in the firm's real estate trust account, nor may the firm act in any way as custodian of the funds for the parties. The funds, pursuant to the escrow agreement, shall be held by some other party, such as a bank, a savings and loan association, a credit union, or an attorney." "Which of the following is CORRECT regarding a property owner who holds a real estate license? - Correct Answer The property owner may place security deposits into a real estate trust account....Explanation:Wis. Admin. Code § REEB 18.031 A licensee having an ownership interest in a rental property shall either place security deposits related to that property in a real estate trust account or shall provide in a lease for security deposits to be held in an account maintained in the name of the owner or owners." "Jane is showing a home to prospective buyer Lester. Jane shows Lester the warped steps of the back porch stairs, describing it as "country charm." She then shows him the "beautifully landscaped herb garden," while pointing to patch of overgrown weeds. Which term below describes Jane's actions in describing the property to Lester? - Correct Answer Puffing...Explanation:Any prudent buyer can see that the warped back porch stairs and overgrown weeds are what they are, rather than how Jane described them. Thus, Jane's statements are considered to be "puffing." Agents must be careful that they do not make any statements in a way to harm the buyer, or to take advantage of the buyer's lack of knowledge. Statements that harm the buyer or take advantage of their lack of knowledge constitute fraud." "A seller counters a buyer's offer. The buyer rejects the seller's counter and the original period for binding acceptance has not expired. The seller accepts and delivers the original offer to the buyer. At this point: - Correct Answer a sales contract does not exist...Explanation:A counter-offer is a rejection of the original offer. A party that makes an offer is relieved of any liability once the offer has been countered. A seller does not have the ability to accept an offer to purchase once it has been countered or rejected." "A firm is responsible for: - Correct Answer any brokerage service provided on behalf of the firm by its licensee...Explanation:Firms are responsible only for the brokerage services provided on behalf of the firm by any licensee who is associated with the firm." "The listing contract states that the washer and dryer are included in the sale. The offer to purchase does not mention the washer and dryer anywhere. At the time of closing the washer and dryer: - Correct Answer must be removed...Explanation:Lines 58-60 of the WB-11 Residential Offer to Purchase state "At time of Buyer's occupancy, Property shall be in broom swept condition and free of all debris and personal property belonging to current tenants, or that sold to Buyer or left with Buyer's consent." The offer to purchase determines what property is included or excluded in the transaction. Since the washer are dryer are personal property if they are not addressed in the offer to purchase they must be removed at closing." "A firm may charge for services in all of the following ways EXCEPT: - Correct Answer agreement with other firms in the area to charge a certain rate...Explanation:A firm may charge a single flat fee, a commission based upon a percentage of the selling price, or an hourly rate. The practice of getting together with other firms in an area and agreeing upon a certain rate to charge for services rendered is a violation of antitrust laws." "A licensee offers payment for a buyer's home inspection. What is this offer from the licensee to the buyer called? - Correct Answer An incentive...Explanation:Wisconsin allows incentives to be offered to buyers and sellers directly provided they are documented properly prior to closing. Such incentives may be offered in any amount in order to induce the buyers and sellers to purchase or sell." "Which of the following form of asbestos is likely to be considered the largest health risk? - Correct Answer Deteriorating asbestos insulation wrapped around water pipes...Explanation:The deteriorating asbestos is most likely going to be friable and would be the largest health risk. Asbestos, which has been covered or encapsulated so that the fibers cannot become airborne, would be considered the safest." "Chain of title refers to: - Correct Answer the succession of conveyances from some starting point whereby the current owner derives title to the real estate...Explanation:The chain of title for a property is the succession of conveyances from some starting point whereby the current owner derives title to the real estate. A chain of title may start with the original grant of ownership from the United States to the first private owner and all subsequent conveyances up to the current owner." "A radioactive gas in the air that comes from the natural breakdown of uranium in soil, rock and water is: - Correct Answer radon...Explanation:Radon is a gas that comes from the natural (radioactive) breakdown of uranium in soil, rock, and water and gets into the air." "From the grantee's point of view, the best deed to receive is a: - Correct Answer warranty deed...Explanation:The general warranty deed offers the most comprehensive guarantee of title. The grantor makes five promises to the grantee. They are the covenants of seisin, against encumbrances, further assurance, quiet enjoyment, and warranty forever." "Four condominium units are valued at $200,000; $215,000; $220,000; and $225,000; a total value of $860,000. The four condominiums have an annual property maintenance fee $8,500. The amount of the property maintenance fee owed by each unit is based upon the unit's value; what is the monthly maintenance fee of the most expensive unit? - Correct Answer $184.17...Explanation:The most expensive unit is $225,000. The total value of all the units is $860,000. $225,000 / $860,000 = .2616 or 26%. The annual maintenance fee for all the units is $8,500. $8,500 x .26 = $2,210 per year for the most expensive unit. $2,210/12 months determines the monthly maintenance fee of the most expensive unit is $184.17." "A listing contract is best described as a: - Correct Answer personal service contract...Explanation:A listing contract is a personal service contract based upon a special fiduciary relationship of trust and confidence in the firm. Specific performance is not an available remedy for breach of a listing contract. However, damages are an available remedy for breach of a listing contract." "Question 136 - Correct Answer " "A buyer uses a buyer's licensee to draft an offer. The WB-11 Residential Offer to Purchase directs the buyer's licensee to make the earnest money check payable to the: - Correct Answer listing firm's trust account...Explanation:The WB-11 Residential Offer to Purchase states: "Unless otherwise agreed, earnest money shall be paid to and held in the trust account of the listing