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The CE Shop MLO Final Exam 1 Questions and Answers
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The CE Shop MLO Final Exam 1
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The CE Shop MLO Final Exam 1Severance - Answer -Which term describes the process of real property becoming
personal property by detaching it from the land?
FNMA, GNMA, FHLMC, and lending institutions that buy loans from other lenders -
Answer -The secondary mortgage market is comprised of
_________________________.
Discrimination through blockbusting, steering, and redlining
The Fair Housing Act in 1968 was the first step in reversing the process of blockbusting,
steering and redlining—all of which are banned as part of the act. - Answer -What
practice did the Fair Housing Act of 1968 attempt to eliminate?
Option agreements usually don't include a termination date.
Because option agreements leave a seller hanging without the opportunity to sell the
property to anyone else, they usually have a defined ending date. - Answer -A lease
with option to buy is a good home buying solution for some buyers. Which of these
statements about a lease with option to buy is FALSE?
2,000 - Answer -A contract shows that a fee is "$200" in one location and "two
thousand" in another. What should one presume the correct fee to be?
Suing for specific performance - Answer -Archie signed a contract to buy Pam's home.
The deal eventually closed, but Pam failed to hand over the home's keys to Archie. A
week passed, and Archie filed a lawsuit in an attempt to force Pam to give him the keys.
This is an example of ______.
Independent contractor - Answer -Pam is a new real estate licensee who must receive a
high level of supervision. Even with the supervisory requirement, the Internal Revenue
Service allows Pam to be classified as an ______.
The formula to calculate the annual gross income is as follows: AGI = Property Value ×
Annual Cap Rate = $400,000 × 8% = $32,000 net operating income - Answer -You have
a client who has an investment property valued at $400,000. Annual cap rates are 8%.
What can your client expect in net operating income?
, He must remind the sellers to disclose the possible presence of lead-based paint to a
buyer if the home was built prior to 1978. - Answer -Jamal is a real estate licensee.
What's his responsibility regarding household lead hazards?
Implied agency - Answer -What type of agency exists because of the actions and
behavior of the parties?
Avulsion - Answer -A late spring snow melt caused a river to swell past its bank. The
flooding led to many landowners losing portions of their properties. What is the process
called that caused this land loss?
Federal Trade Commission Act (1914) - Answer -Which act encourages fair, truthful,
non-deceptive, and evidence-supported claims in advertising?
Sadie - Answer -Ellen and Sadie signed an agreement to list Sadie's condo for sale.
After the contract was signed, Sadie's father, Grant, offered to pay Ellen's commission
as a housewarming present. Sadie's Mom and stepdad, Linda and Rick also chipped in.
Who is Ellen's client?
Assessed value - Answer -Which of the following is a percentage of market value, and
is also the amount of property value to which the tax rate is applied?
Investment Value - Answer -Investors are generally interested in a property's
_________________.
To paint a true picture of a property's condition - Answer -What's the purpose of a home
inspection?
Survey
Surveys determine property boundaries and determine whether there are
encroachments on the property. - Answer -What is typically used to prove there are no
encroachments on the property?
FHEO (Fair Housing and Equal Opportunity) - Answer -Which agency enforces federal
fair housing laws?
No commission is earned if the seller locates the buyer with exclusive agency. - Answer
-What's the difference between an exclusive right-to-sell and an exclusive agency
agreement?
"You might consider a 1031 tax-deferred exchange."
IRC Section 1031 provides an exception and allows you to postpone paying tax on the
gain if you reinvest the proceeds in similar property as part of a qualifying like-kind
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