Washington Real Estate Practice Questions and Answers

Washington Real Estate Practice Questions and Answers At what point in a transaction must you disclose your agency status in writing? Before a party signs an offer A counteroffer: Acts as a rejection of the current offer Which of the following practices would not be an illegal discriminatory action? Referring a buyer to a Spanish speaking colleague after the buyer expressed a preference to work with a Spanish speaking agent If a contingency is not fulfilled despite a good faith effort to fulfill it, what may the person who benefits from the contingency do? Either A or B -Terminate the agreement and have the earnest money deposit returned -Waive the contingency and continue with the agreement Under which type of listing will the seller owe a commission to the listing agent regardless of who is the procuring cause of the sale? Exclusive right to sell Under which type of listing will an agent receive a commission only if he is the procuring cause of the sale? Open listing All of the following should be taken into account in choosing a closing date, except: The due date of the next installment of property taxes Excise tax is usually paid by the: Seller Which document should be prepared if the buyer plans to take possession before the closing date? Rental agreement A conventional loan can be: All of the above -An ARM -A 15 year loan -A 30 year loan Which party to a purchase and sale agreement usually benefits from a contingency? Buyer All trust fund deposits of $10,000 or less that will be placed in a brokerage's account must be put in the: Pooled trust account Which party is usually responsible for the costs of modifications or repairs made as a result of unsatisfactory inspection results? Seller Disclosure of and consent to a dual agency: Must be in writing In a VA transaction, who pays the points? As negotiated between the buyer and seller Which of the following is a material fact that an agent would be required to disclose? The roof leaks during rainy weather Which of the following statements in an advertisement is most clearly discriminatory? "Close knit Asian neighborhood" All of the following should be included in every purchase and sale agreement, except: Agent's commission To determine an appropriate listing price for a property, an agent will perform a/an ____, which is related to but less rigorous than a/an _____. CMA/ appraisal A large earnest money deposit: Indicates the buyer's good faith in making an offer For a property to be useful as a comparable, it should: All of the above -Be in the same neighborhood as the subject property -Be of a similar age and quality as the subject property -Have sold within the last 6 months Which of the following is not usually a cost to the buyer? Excise tax The federal Fair Housing Act prohibits discrimination on the basis of: All of the above -Race, religion, color, national origin -Mental/physical disability -Familial status The Hutchinson's own a house that is currently appraised at $545,000. They owe $397,000 on the deed of trust and would have $65,000 in selling expenses. What is their net equity in the property? $83,000 To calculate net equity, subtract outstanding liens and estimated selling costs from the appraised value of the home ($545,000 - $397,000- $65,000 = $83,000) Which of these loans would present the greatest level of risk to a lender? 97% LTV A dual agent must: Keep each party's negotiating position confidential Fee packing, equity stripping, and balloon payment abuses are all examples of: Predatory lending practices In a request for reconsideration of value, you should use: Comparable sales that are at least as similar to the subject property as the appraiser's comparables The legal description in a purchase and sale agreement: May be attached as an addendum when lengthy, rather than appearing on the first page of the agreement form A seller offers to pay six discount points on behalf of the buyers. This will reduce the buyers interest rate from 9% to 8%. This is known as a: Buydown Which of the following is not an important component of an inspection report? Providing an estimated valuation for the property The seller disclosure statement should be filled out by the: Seller The cash price for a property and APR may be advertised. However, if other terms such as the downpayment or interest rate are stated in the ad, then: All the important terms of the loan must be included in the ad Which of the following would not be an adequate property description in a purchase and sale agreement? Street address Which of the following is not a duty owed to every party in a transaction? Confidentiality Once the buyer receives the seller disclosure statement, she may rescind the purchase and sale agreement within: 3 days Unless otherwise agreed, a licensee owes no duty to: All of the above -Conduct an independent investigation of the property -Conduct an independent investigation of either party's financial condition -Independently verify the accuracy or completeness of any statement made by either party Advertisements for residential property should always include: The Equal Housing Opportunity logo or slogan All written offers must be: Presented to the seller The licensee owes to all parties to whom the licensee renders real estate brokerage services the following duties: All of the above -To exercise reasonable care and skill -To deal in honesty and good faith -To present all written offers PMI is private mortgage insurance that protects the lender against financial loss in case of: Default by the borrower When a listing agent transfers his affiliation to another brokerage: The agent's listings remain with the brokerage, since the listing agreement is a contract between the seller and the firm It's a good idea to include calculation of the seller's estimated net proceeds in your completive market analysis: Both A and B -To show the seller what the bottom line will be as a result of the sale -To educate the seller that there are costs involved with the sale of a home On a settlement statement, the debits represent: Costs that the party must pay at closing A bathroom contains a toilet, a sink, and a stand up shower. This would be considered a: Three quarter bath Before looking for a house, a potential buyer approaches a lender in order to obtain a promise of a loan up to a certain amount. This is known as: Preapproval Which of the following items is not a part of the escrow process? Making a counteroffer Which document does the escrow agent rely on in deciding how to disburse funds? Escrow instructions The "included items" paragraph is used to: Specify which fixtures and/or personal property items will be part of the sale If a seller wants to help a prospective buyer qualify for an institutional loan, which of the following options will reduce the buyers interest rate? Buydown If a prospective buyer is adamantly opposed to an adjustable rate or graduated payment mortgage, the agent should: Condition the agreement upon the buyer's ability to obtain a fixed rate loan Pest inspections are most clearly indicated when: There is sawdust like material below parts of the foundations wooden structure Which of the following will not be covered by a standard homeowner's hazard insurance policy? Earthquake An agency relationship may be terminated by: Any of the above -Notice from the agent -Notice from the principal -Mutual agreement A listing agreement is a contract between the seller and: The firm the licensee taking the listing works for Any changes to a purchase and sale agreement must be approved and signed by the: Seller and buyer A principal is not liable for the act of an agent or subagent unless: The principal participated in or authorized the act Prior to acceptance, an offer may legally be terminated by: The offeror All of the following are characteristics of FHA insured loans, except: No downpayment If a seller does not want to sell to a member of a protected class, the agent should: Explain the fair housing laws to the seller An agent representing the seller cannot disclose any confidential information from or about the seller: Even after the representation ends When taking a listing, the agent should: All of the above -Let the seller know what to expect regarding open houses, signs, and the escrow process -Give instructions on preparing the house for sale -Explain how the key box works "APR" refers to: Annual percentage rate Potential environmental hazards to be concerned with include: All of the above -Empty oil tank on property -urea formaldehyde -Asbestos Which of the following is a method commonly used by agents to generate listings? All of the above -Cold calling -Referrals -Farming TILA requires the lender to provide the buyer with an estimate of loan costs within: 3 days after the loan application is submitted Servicing the listing involves: All of the above -Obtaining keys and installing a lockbox -Advertising the property -Giving the seller weekly activity reports Which of the statements about an offer to purchase real estate is true? Both the offer and acceptance must be in writing Which of the following items is most likely to cause title to be unmarketable? Adverse possession