Minnesota State Real Estate Test Review

46. What is the maximum amount that may be paid from the Education, Research and Recovery Fund for each violation? - answer-The Recovery Fund will issue $150,000 per claimant, per transaction violation. The Fund is not obligated to pay more than $250,000 per licensee in total, regardless of the number of claimants. A broker has brought a ready, willing, and able buyer to a seller. In MOST listing contracts, the broker has earned his commission when - answer-the seller accepts the offer A broker, acting as agent for the seller, presents an offer to buy from the broker's former college roommate. The broker knows that the buyer will increase the amount of the offer if the seller turns down the offer. When presenting the offer, the broker should - answer-tell the seller that the buyer will pay more. A company agrees to lease a property to be used as a gambling casino. State laws prohibit gambling. This particular contract would be legally defined as - answer-Void A couple owns an older home in a neighborhood that is becoming a commercial area. Because of the change in the use of the land, the couple can expect the value of their parcel to increase at some future time. This is an example of the principle of - answer-anticipation A homeowner is willing to let his neighbor park an RV in his backyard. He does NOT want to make the permission permanent in case he dislikes others who might move next door in the future. What should he give his neighbor? - answer-A license. A landowner wishes to build a neighborhood grocery store on a busy street in an area zoned for residential use. Which of the following would MOST likely be used to obtain permission for this store? - answer-Conditional use permit or zoning variance. A property management plan may serve different purposes for different owners, and generally has to strike a balance between preservation of the property's value and generation of income. Which of the following owners would MOST likely prefer a property manager who emphasizes maintenance of value over profitability? - answer-Department of Housing and Urban Development A prospective buyer made an offer to purchase a property. The owner responded with a counteroffer. While the buyer was reviewing the counteroffer, the owner received a better offer. The owner can accept the second offer if - answer-the owner withdraws the counteroffer before it is accepted. A salesperson lists a property with a contract that allows for subagency and dual agency. The salesperson is - answer-an agent to the broker and a subagent to the principal. According to the principle of progression, a three-bedroom, one-story home is MOST likely to bring the highest sales price if located in a neighborhood in which - answer-most homes are larger than the sale home According to the Truth-in-Lending Act, if any "trigger terms" are used in an ad, all of the following disclosures MUST appear in the ad EXCEPT the - answer-prepayment penalties and rebates. Additional clauses to property sales. - answer-Only a licensed attorney may prepare a clause for inclusion in a real estate sales contract. Adverse possession of Torrens property - answer-Even though a person can claim adverse possession after 15 years in Minnesota, after a property is registered as Torrens title no one can gain adverse possession rights against the title of that property. Affirmative action plan - answer-A firm or business certified to be in compliance with affirmative action requirements of a local human rights agency or the federal government, shall be deemed to be in compliance upon receipt by the Commissioner of an affirmative action plan approved by a local human rights agency or the federal government. Affirmative Marketing Regulations - answer-Affirmative Marketing Regulations require housing developers receiving over $50,000 in state funding to adopt marketing policies that inform minorities and protected groups of available housing. Agency disclosure contains - answer-A disclosure must make known the licensee's brokerage relationship, the source or sources of compensation, be signed and dated by the seller/landlord and buyer/tenant, and be signed and dated by the disclosing licensee on or before the contract date. Agency disclosure forms - answer-The salesperson must provide the consumer with an agency disclosure form at the FIRST substantive (person-to-person) meeting. An equal housing opportunity notice MUST be - answer-displayed in the brokerage office. An exclusive right to sell listing obtained by a broker associate belongs to - answer-the employing broker only Are net listings legal in MN? - answer-Yes. At the closing on June 15, the buyer is assuming a mortgage presently on the property, on which the monthly interest charge is currently $600. The seller has made the payment due on June 1. Assuming a VA mortgage, what is the adjustment made at closing? - answer-Debit seller $300; credit buyer $300 Broker money in trust fund - answer-A broker may maintain the his own funds in a trust account only if the financial institution requires a minimum balance be maintained to keep the account open or a service to avoid a service charge for the account. Broker Requirements - answer-The requirements for licensure as a broker include at least 3 years of licensure as a real estate salesperson within the previous 5 years. All applicants for a broker license must successfully complete the 30-hour broker course and pass the exam. Can a condo be a homestead? - answer-Each apartment owner shall be entitled to the exclusive ownership and possession of the apartment, and for the purposes of the constitution and laws of Minnesota, such parcel of real property is the homestead of the owner. Collecting commission when accepted offer is canceled. - answer-Since Rose accepted the offer in writing, the broker is entitled to receive compensation in the form of his commission. A change of heart simply does not cancel the transaction, because Rose accepted the offer in writing. The broker may sue Rose to collect that commission. Commerce Fraud Bureau - answer-The commissioner may appoint peace officers and establish a law enforcement agency known as the Commerce Fraud Bureau, to conduct investigations and make arrests for insurance fraud offenses. The Commerce Fraud Bureau shall: review reports of insurance fraud; conduct investigations into insurance fraud; and report its investigations to law enforcement agencies and assist those law enforcement authorities. Condo insurance - answer-The manager or the board of directors has the authority to obtain insurance for the property against loss or damage by fire and other hazards for the full insurable replacement costs of the common areas and facilities and the apartments. This insurance coverage is written on the property in the name of the manager or the board of directors of the apartment owners' association. Premiums shall be common expenses. Consequences of an undisclosed well. - answer-A seller who fails to disclose the existence or known status of a well at the time of sale is liable to the buyer for costs relating to sealing of the well and attorney fees for collection of costs from the seller. This action must be taken within 6 years after the date the buyer closed the purchase of the property. Continuing Education Requirement - answer-All salesperson licensees must complete 30 hours of continuing education before their license renewal. The education includes an annual 'general' module and a minimum of 1 hour of fair housing law and 1 hour of agency law. Conveyance of homestead - answer-If the owner is married, no conveyance of the homestead shall be valid without the signatures of both spouses. Delinquent Tax date - answer-On or before February 15th, each year, the County Auditor shall file with the Court Administrator of the District Court of the County a list of the delinquent taxes upon real estate within the county. Disclosure of realtor status? - answer-No disclosure is necessary if the property is listed with a separate real estate company. Discriminatory acts are.. - answer-Every person who commits an unfair discriminatory act or aids, abets, incites, compels, or coerces another to do so, is guilty of a misdemeanor. Even with title insurance, the policyholder may still suffer losses arising from - answer-land use change due to zoning ordinances. Expired Broker License - answer-If a broker license has expired for over 2 years the broker may apply for waiver of salesperson's experience if they can prove 3 years of licensed MN real estate salesperson experience in the last 5 years. If not a broker would need to start over as new salesperson. Fees to education recovery fund - answer-Each real estate broker, real estate salesperson, and real estate closing agent renewing a license shall pay a fee of $20 per licensing period which shall be credited to the Recovery Fund. Persons receiving an initial license shall pay a fee of $30. Fines for real estate offenses - answer-The Commissioner may impose a civil penalty not to exceed $10,000 per violation upon a person who violates any law, rule, or order related to the duties and responsibilities entrusted to the Commissioner. For Federal income tax purposes, which of the following are costs of homeownership that may be deducted from gross income? - answer-Mortgage loan interest, local property taxes, mortgage loan origination fees. Foreclosure Advice Notice - answer-The Foreclosure Advice Notice to Tenants must be in 14-point boldface type and the title must be in 20-point boldface type. It must also be printed on colored paper different to the color of the actual foreclosure notice and must be on its own page. Foreclosure notice period - answer-6 weeks' published notice shall be given that a mortgage will be foreclosed by sale of the mortgaged premises, and at least 4 weeks before the appointed time of sale a copy of the notice shall be served as a summons upon the person in possession of the mortgaged premises. Foreclosure sale - answer-The foreclosure sale is made by the sheriff or the sheriff's deputy at public venue to the highest bidder, in the county in which the premises to be sold are situated, between 9:00am and 4:00pm. formeldehyde - answer-Minnesota's product standards are intended to provide indoor air levels of formaldehyde that do not exceed 0.4 parts per million. If the Commissioner of Health determines that indoor air levels of formaldehyde exceed 0.4 parts per million, the Commissioner may adopt different building materials product standards to ensure that the 0.4 parts per million level is not exceeded. Handicap accessible units. - answer-Minnesota's Human Rights law's Priority Requirement states a landlord of rental housing that contains accessible units must give priority for the rental of an accessible unit to a disabled person or a family with a disabled family member who will reside in the unit. How to become Torrens property - answer-An application for registration shall be addressed to the District Court in and for the county wherein the land being registered is situated. How to terminate a tenancy at will? - answer-A tenancy at will may be terminated by either party by giving notice in writing. The time of the notice must be at least as long as the interval between the time rent is due or 3 months, whichever is less. If an older building cannot be air-conditioned, it is an example of - answer-functional obsolesence In helping a buyer to select a lender, if the buyer believes he has good credit and his income is documentable as a salary and by tax returns, the licensee might recommend a mortgage banker, instead of a mortgage broker, for all of the following reasons EXCEPT - answer-more variety of loan programs available. Joint registration under Torrens system - answer-Owners of separate tracts of land may join in a single application to register the title to their individual tracts. The application must list separately each individual owner's information. The process is known as "Adjacent land; common title defect." Known wells - answer-Before signing an agreement to sell or transfer real property, the seller MUST disclose to the buyer information about the status and location of all known wells on the property, Land to 2 people. - answer-All grants and devises of lands made to 2 or more persons, shall be construed to create estates in common, and not in joint tenancy, unless expressly declared to be in joint tenancy. This subdivision does not apply to mortgages or devises or grants made in trust, or to executors. Lead disclosures - answer-The disclosure of known information on lead-based paint and lead-based paint hazards before the sale or lease of most housing built before 1978. Lease for more than 1 year. - answer-Every contract for the leasing for a longer period than 1 year shall be void unless the contract is in writing and subscribed by the party by whom the lease is to be made, or by the party's agent. Legal descriptions using the government survey system are NOT generally used in - answer-: the original 13 states. License Fees - answer-The fee's for an initials salesperson's and broker's license are $130 and $210 respective Licensee listing own property - answer-Licensee must disclose their status as a licensee when advertising their own property. Ads for unlisted property cannot include a brokerage name or phone number. List of delinquent taxes contains - answer-The list of delinquent real estate taxes shall contain the following information: legal description of the land and tax parcel or identification number of each parcel of land; names of the taxpayers and fee owners and the current filed addresses; and the total amount of taxes and penalties, with the years for which the same are delinquent. LTV Rates - answer-The LTV ratio is calculated as the amount of the mortgage lien divided by the appraised value of the property, expressed as a percentage. For example, a borrower taking on a $92,500 mortgage to purchase a home appraised at $100,000 would have an LTV ratio of 92.50% (92,500/100,000) Material Defects - answer-Both the seller and the broker have a legal obligation to disclose known material defects to a buyer prospect, and the buyer can sue both for failure to fulfill that obligation. Nonmoney escrow payments - answer-In the event earnest money is received in the form of a nondepositable item such as a bond, stock certificate, or any other instrument or equity or value, in lieu of cash, it shall be deposited immediately with an authorized escrow agent, whose authority is evidenced by a written agreement executed by the offeror and the escrow agent. A receipt shall be issued to the buyer for the value of the nondepositable item. Ordinances that specify construction standards are - answer-Building Codes Own Brokerage - answer-A broker must first apply for a business entity license, unless he or she is going to be affiliated with an active Minnesota licensed real estate company. Ownership of common space - answer-The percentage of the undivided interest in the common areas and facilities is computed by taking the value of the apartment in relation to the value of the property. Payment of delinquent taxes - answer-Payment of delinquent property tax and any interest, penalties, or special assessments shall be paid with US currency or by check, money order, or electronic means, including, but not limited to, automated clearinghouse transactions and federal wires drawn on a bank or other financial institution in the United States. PRofits and expenses of condos - answer-The common profits of the property shall be d