REVIEWMississippi Real Estate Exam

NOTEPur Autrie Vie – a life estate. The French translation of pur autre vie is "for another's life”.

USPAP is UNIFORM STANDARDS OF PROFESSIONAL APPRAISAL PRACTICE.

Sample QuestionJoe signed a three year lease with his landlord Mike. Mike died 6 months later. Mike’s heirs inherit the property and want to move in. What is the status of Joe’s lease?

It’s valid.Death voids agreements unless it specifies Mike’s heirs inherit the lease.

Co-Ops vs. CONDOS• Typically, co-ops are less expensive per square foot than

condos, and their maintenance fees -- which cover building expenses like hot water, heating, air-conditioning, grounds maintenance, staff salaries, real estate taxes and insurance -- are tax-deductible.

• Individuals own shares in a corporation. It is private property.

CO-Ops vs. CONDOSBuying a condo, by contrast, is more like buying a house because buyers own their deeds and pay their own taxes. Fee Simple Ownership.

1In general, when the supply of housing increases

1. price tends to rise.2. price tends to drop.3. demand tends to rise.4. demand tends to stay the same.

12. Price tends to drop.

Concept: Supply and Demand

2A realtor and a realtist are

1. both belong to national organizations who subscribe to a strict code of ethics.2. there are only realtors.3. a strict code of ethics are not important,4. none of the above.

21. both belong to national organizations who subscribe to a strict code of ethics.

3A licensee with several years of experience whom helps buyers and sellers explore various alternatives involved in purchasing, using or investing in real estate without being a principal in the transaction is called

1. REALTOR2. real estate appraiser.3. real estate counselor.4. real estate teacher.

33. real estate counselor.

4A large manufacturing company just bought 51 acres of land in Farmville to build a manufacturing plant which they believe will create over 5000 jobs. This announcement most likely

1. will lower the price of real estate in Farmville.2. houses will most likely become more expensive.3. residential housing will not be affected.4. all the cows will have to look for greener pastures.

4 2. houses will most likely become more expensive.

5Real estate generally includes all of the following except

1. trees2. air rights3. emblements4. mineral rights.

53. emblements

From: www.investopedia.comWhat Does Emblements Mean?Annual crops cultivated by a tenant which are treated as the tenant's property rather than the landowner's. If a tenant loses possession of the land, he or she is still entitled to finish raising the crops and to harvest them. If the land passes to someone else because of the tenant's death, the crops pass to the tenant's heirs. If the crops are annual but did not require labor by the tenant or if the crops are not annual, they are not considered emblements.  

6A tenant installed bookshelves in a unit which he uses to sell books from. These shelves are considered

1. emblements.2. real property.3. trade fixtures.4. all of the above.

63. Trade fixtures

Legalexplanations.comit’s a personal property of the business tenant on the real property where the tenant is doing his business and who removes or dismantles those fixtures at the time of completion of the lease or tenancy.

7A term for personal property is

1. a house.2. fixtures3. fructus naturales4. chattels

74. Chattels(comes from the word cattle.)www.lectlaw.comPersonal property, movable or immovable, which is less than a freehold; for example, a book, a coat, a pencil, growing corn.Fructus naturalesIn property law, `fructus naturales` are the natural fruits of the land on which they arise, such as agricultural produce and wild game. In many common law legal systems, `fructus naturales` are considered to be part of the real property, and not separate chattels in relation to any legal conveyance...Found on http://en.wikipedia.org/wiki/Fructus_nat

8Which is a physical characteristic of land?

1. Indestructability2. a building on land3. situs4. area preference

81. Indestructability

9Which is an economic characteristic of land?

1. Indestructability2. both 3 and 43. situs4. area preference

92. both 3 and 4

SitusLatin for location, be it where the crime or accident took place or where the building stands. Area Preference.

10Real Property can be transferred into personal property by

1. emblements2. chattels3. fixtures4. severance

10 4. severance

To sever.

11Tony tore down a wood fence that was attached to his side of the property line. He gathered the lumber into a pile and placed it on his driveway to be picked up tomorrow by a friend who will recycle the lumber. At this time, the lumber is considered

1. real property.2. fixtures.3. trade fixtures.4. personal property.

114. personal property.

12The amount of money a property is worth compared to a loan which is lower in amount is

1. tax amount.2. the appraised value.3. equity.4. cap rate.

123. equity.

13An insurance policy that has to be purchased on property in a designated flood zone in addition to a basic policy is

1. additional theft insurance.2. additional fire insurance.3. flood insurance.4. all of the above.

133. flood insurance.

14Fiduciary refers to

1. an agent’s relationship to a client.2. an agent’s relationship to a customer.3. a broker’s relationship to her client.4. both 1 and 3.

144. both 1 and 3.

15A property manager and a Real Estate broker finding a home for a customer differ in relationship

1. The property manager has an implied agency and the broker has a general agency.2. The property manager has a general agency and the broker has a special agency.3. The property manager has a expressed agency and the broker has a implied agency.4. The property manager has a long tern agency and the broker has an implied agency.

152. The property manager has a general agency and the broker has a special agency.

Think of it like this:The property manager has a general power of attorney and the broker has a limited or special power of attorney.The property manager is hired to do several general acts for the owner and the broker is authorized to do one special act, find a property.

16Arnold, a real estate broker lists Tammy’s house for sale. Later that day Cindy walked into Arnold’s office and requested information on Tammy’s house.

1. Tammy is Arnold’s client and Cindy is Arnold’s customer.2. Both are Arnold’s clients.3. Both are Arnold’s customers.4. Tammy is out of luck because Arnold listed her house 80,000 below comparative properties and Cindy is in luck because she will get a great deal.

161. Tammy is Arnold’s client and Cindy is Arnold’s customer.

17Which of the following will terminate agency?

1. All of the below.2. death of the broker.3. bankruptcy of the client.4. insanity.

17 1. All of the below.

An agency relationship will automatically terminate upon the occurrence of certain events. Such events include death, insanity, or bankruptcy of either the principal or agent.Legalmatch.com

18In a dual agency relationship. The broker may represent both buyer and seller if

1. the broker calls the seller and tells him.2. the broker informs both buyer and seller of the matter and is given written permission by both parties.3. the broker tells the buyer the least amount of money the seller will take for his property.4. the broker calls the buyer and tells him.

182. the broker informs both buyer and seller of the matter and is given written permission by both parties.

19Which is an unethical practice for the Listing Broker?

1. Tell the purchaser the highest price a seller will accept.2. Tell the purchaser the lowest price the seller will accept.3. Not tell the seller anything.4. all of the above.

19 2. Tell the purchaser the lowest price the seller will accept.

UNETHICAL

20When money is deposited into a Broker Trust Account

1. It is ok for the broker to take some out to pay his electric bill.2. It is ok for the broker to add his last commission to the Trust Account.3. He can pay himself a commission out of the funds if the sale fails.4. He can not co-mingle funds.

20 4. He can not co-mingle funds.

21The Real Estate Settlement Procedure Act is designed to regulate which of the following?

1. Disclosure of closing information. 2. Procedures for recording title.3. Disclosure of agency.4. Proration of expenses.

211. Disclosure of closing information.

22A seller hired multiple agents to sell his property. Which agent will be paid a commission if the property sells?

1. The agent that was the procuring cause. 2. The first agent hired.3. The last agent hired.4. No one gets paid.

22 1. The agent that was the procuring cause.

23When a seller wants to retain the right of selling her property as well as hire an agent, what type of agency relationship is that?

1. Exclusive 2. Exclusive right3. Net4. Gross

231. Exclusive

An Exclusive Right is when the agent gets paid no matter what.

Remember: If it doesn’t say RIGHT, then it’s wrong for you.

24A history of title on a property is called?

1. Abstract of title. 2. Title insurance.3. A judgment.4. Title Insurance.

241. Abstract of title.

25Title insurance

1. protects the buyer from any claims he may be responsible for2. insures the title up to the date of purchase. 3. insures against theft.4. allows for title to your car to get sold.

25 2. insures the title up to the date of purchase.

26A property managers duties typically include

1. Collecting rents.2. Advising the seller how to manage his money3. keeping the rent from the owner and telling him everyone moved out.4. none of the above.

261. Collecting rents.

27Blockbusting is

1. steering people of a certain race into certain neighborhoods.2. the illegal practice of inducing homeowners to sell their properties by making statements regarding the entry of persons of a particular race or national origin into the neighborhood.3. the legal practice of telling homeowners when to move.4. all of the above.

272. The illegal practice of inducing homeowners to sell their properties by making statements regarding the entry of persons of a particular race or national origin into the neighborhood.

28Puffing is?

1. raising the price of a property for certain customers.2. exaggerated statements, opinions or comments.3. smoking in the parking lot at lunch.4. none of the above.

28 2. exaggerated statements, opinions or comments.

29Know the definition of Fiduciary Obligations to a client versus the Listing Agents obligation to the seller/non client. (reasonable care)

The fiduciary responsibilities in a fiduciary relationship of trust and confidence with the principal are

1. care obedience and loyalty.2. disclosure and accounting.3. confidentiality.4. all of the above.

294. all of the above.

NOTEKnow the definition of Fiduciary Obligations to a client versus the Listing Agents obligation to the buyer/non client. (reasonable care)

30In a dual agency a buyer wanted to tell his agent information (secret) that he would pay more money for one of the agent’s listings on which the customer wants to make an offer. The agent

1. should tell his buyer to tell him everything that would help the seller make more money.2. should ask to tape the conversation so he can let the seller listen to the recording later.3. should copy down what the buyer says and have him acknowledge it before he takes the information to the seller.4. should tell the customer not to tell him anything that the customer doesn’t want the seller to know.

30 4. should tell the customer not to tell him anything that the customer doesn’t want the seller to know.

NOTE: the agent owes the buyer reasonable care.

31The Equal Opportunity Poster must be posted in the company office along with

1. pictures of all the agents.2. all the licenses of the agents who the responsible broker is responsible for.3. family pictures.4. a lunch menu from the corner deli.

31 2. all the licenses of the agents who the responsible broker is responsible for.

32

Police power encompasses all of the following except

1. zoning ordinances.2. building codes.3. protection of the public health, welfare and safety.4. deed restrictions.

324. A deed restriction is not Police Power.

A Police Power can easily be identified by asking yourself, “Does it protect the public?

33 A new sidewalk was installed in a specific neighborhood and a special assessment was imposed. Who needs to pay the special assessment?

1. everyone living in the city.2. everyone in the city that owns real estate3. only owners of those specific parcels that benefitted.4. no one.

33 3. only owners of those specific parcels that benefitted.

34A girl’s aunt had a will stating that her niece gets all of her real estate at passing. Before the niece can take legal ownership to the property what needs to happen?

1. probate2. intestate3. interstate4. interstate succession

341. probate

35Regulation Z

1. Implements real estate advertising policies.2. requires that a buyer’s closing statement is given to the buyer.3. Implements the Truth in Lending Act requiring credit institutions to inform borrowers of the true cost of credit.4. implements the practice of one party cancelling or terminating a contract.

35 3. Implements the Truth in Lending Act requiring credit institutions to inform borrowers of the true cost of credit.

What Does Regulation Z Mean?A specific Federal Reserve Board regulation that requires debt lenders to disclose all the specifics of a given loan. This was done to promote a level of credit protection for the underlying consumer. Most of the requirements imposed by the 1968 Truth in Lending Act are contained within Regulation Z, and the two terms are often used interchangeably.Investapedia.com

36Usury is

1. Using friends and family to get listings.2. Charging interest at a higher rate than the maximum rate allowed by law.3. a mortgage loan given under the VA loan program4. none of the above.

362. Charging interest at a higher rate than the maximum rate allowed by law.

37

In Cooperative ownership

1. owners are stockholders of the corporation.2. each owner holds a proprietary lease and it is personal property.3. is held by a trust or corporation that is owned by and operated for the benefit of persons living within the building who are the beneficial owners.4. All of the above.

374. All of the above.

38VA loans are

1. insured.2. guaranteed.3. nominal.4. all of the above.

38guaranteed.

NOTE: It is guaranteed by the Department of Veterans Affairs in order to limit the lenders possible loss.

FHA loans are insured.

39

Friable asbestos is

1. A mineral once used in insulation and has become air born.2. gases permeating the basement floor.3. lead poisoning.4. It can be any of the above.

39 1. A mineral once used in insulation and has become air born.

40An example(s) of lead in which people need to be cautious of is/are

1. paint, paint chips and particles in dirt.2. radon.3. asbestos.4. really bad beer.

401. paint, paint chips and particles in dirt.

42Federal, state, and local governments may take private property when just compensation is paid through their power of

1. priority property rights.2. laches.3. eminent domain.4. substitution.

413. eminent domain.

42An easement appurtenant runs with the land. A way in which it can end is

1. When the house on the dominant landowner’s house burns down.2. when the easement is no longer needed by one of the parties.3. when the same individual becomes the owner of the dominant as well as the servient estate.4. All of the above.

423. when the same individual becomes the owner of the dominant as well as the servient estate.

43Broker Jim presented an Offer to Purchase to his client who wanted to take a day to think about accepting it. Before the client accepted the first offer, Broker Jim received a lower offer. What should Broker Jim do.

1. Wait to see if his client accepts the first offer before presenting the second offer.2. Present the offer immediately to his client.3. Call his client and tell him to hurry up.4. None of the above.

432. Present the offer immediately to his client.

44The difference between a property manager and a Broker listing a property is

1. there is no difference.2. the property manager is a special agent and the listing broker is a general agent.3. the property manager is a general agent and the listing broker is a special agent.4. the property manager is an employee and the listing broker is an independent agent.

443. the property manager is a general agent and the listing broker is a special agent.

45Black mold can cause several illness’. The scientific name for black mold is

1. organic Stachybotrys.2. naturally occurring staph.3. salmonella.4. stachybotrys chartarum.

454. Stachybotrys chartarum

46Ana decided to rent to a person who she later found out was a convicted drug dealer. Ana mailed his deposit back to him with a note stating that she changed her mind when she found out he was a convicted drug dealer. Can Ana get in trouble for discrimination?

1. Yes, convicted drug dealers have rights.2. No, convicted drug dealers are not a protected class.3. Yes because he has served his sentence and has been out of jail for two days.4. Both 1 and 3.

462. No, convicted drug dealers are not a protected class.

47Must Anna rent to a person declared mentally incompetent?

1. Only if the person is on meds and swears to stay on them.2. Only if a court ordered guardian is involved. A mentally incompetent person can not sign legal documents.3. Only if the person is not a danger to the other tenants or herself. A mentally incompetent person can sign legal documents.4. Only if a relative lives nearby.

472. Only if a court ordered guardian is involved. A mentally incompetent person can not sign legal documents.

48Ana refused to rent to a homosexual couple based on their sexual orientation. Has Ana violated any Fair Housing Laws?

1. Absolutely. Sexual Orientation is protected under Fair Housing Laws.2. Although Ana my have been unethical, a person’s sexual orientation is not protected by Fair Housing Laws.3. Yes. Ana may be fined by Housing and Urban Development4. Both 1 and 3.

482. Although Ana my have been unethical, a person’s sexual orientation is not protected by Fair Housing Laws.

49Ana was asked by a prospective tenant whom uses a wheelchair to get around if the tenant can alter the apartment to make the apartment handicapped friendly. What should Anna do?

1. Let the tenant know that a handicap person who wants to rent her apartment can make “RESONABLE” alterations to the apartment, but must pay for the alterations and return the property to it’s original state upon vacating.2. Tell the tenant that no alterations can be made.3. Let the person know of another complex that may be better equipped is located.4. Ana should call the landlord 200 times that day.

491. Let the tenant know that a handicap person who wants to rent her apartment can make “RESONABLE” alterations to the apartment, but must pay for the alterations and return the property to it’s original state upon vacating.

50A listing agent noticed her client had a brown spot on her ceiling in the living room. The agent

1. needs to tell her client to paint over it.2. tell the client to use sealer before painting over it.3. should take the first course of action and ask the client what it is from.4. should tell the client not to disclose any leaks.

503. should take the first course of action and ask the client what it is from.

51The system of measurement that uses physical features of the local geography, along with directions and distances, to define and describe the boundaries of a parcel of land is

1. address method.2. metes and bounds.3. lots and Plots.4. All of the above.

512. Metes and bounds

The boundaries are described in a running prose style, working around the parcel in sequence, from a point of beginning, returning back to the same point.The term "bounds" refers to a more general boundary description, such as along a certain watercourse, a stone wall, an adjoining public road way, or an existing building.

Alluvian: soil increase resulting from accretion

Accretion: an increase of land by deposit of sand naturally from a river, lake sea.

Avulsion: sudden tearing away of land

VA LoansA VA loan may be assumable regardless of whether the buyers are civilian or military.

FHAThe seller (or other interested third parties such as real estate agents, builders, developers, etc., or a combination of parties) may contribute up to six percent of the property’s sales price toward the buyer’s actual closing costs, prepaid expenses, discount points, and other financing concessions.

FHAYour down payment can be as low as 3.5% of the purchase price, and most of your closing costs and fees can be included in the loan. Available on 1-4 unit properties.

FYIThe seller does not have to accept an offer lesser than the listing terms.

When ownership of earnest money is in question, the broker should turn it over to the court.

Brokers spend less money on listings when they don’t have an Exclusive Right Listing.

A counter offer voids the original offer,

FYIMaterial facts. Your agent’s felony is not a material fact.

A buyer representation agreement does not have to have “consideration” to make it valid.

Encapsulation is the easiest way to handle asbestos.Lead paint particles can be found in soil.Zoning is a city’s plan for development.

FYIBefore you extend your patio in the front of your house, check into Setback limits first.

Private Club Membership, not commercially available, no agent vs. having an agent and discrimination.

You have ten days to inspect for lead based paint.

Thanks for your Attention.Y’all are SUPER STARS!