Real Estate Practice Exam: State Questions and Answers Graded A

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Real Estate Practice Exam: State Questions and Answers Graded A A licensee who has passed the broker's state examination, but desires to continue to operate under an owner-employer, will be a what ... under the law? ✔✔Broker If a home owner was hoping to purchase a second home, but did not have plans to sell their primary residence necessarily, which of the following financing options would work best? ✔✔Equity Loan Who can receive compensation directly from the principal? ✔✔Employing broker A property has an underground oil tank. The owner wishes to remove it. What must she do? ✔✔Have the fire department present If Robert sells his home for $500,000 in Charlestown, MA, is he required to pay recording stamps to the state? ✔✔Yes and it will cost him $2,280 Escrow records must be maintained for at least: ✔✔3 years How much in excise tax stamps would Michael and Holly pay on the sale of their $2,500,000 home in Brewster, part of Barnstable County, Massachusetts? ✔✔$16,200 ----- Explanation: $2,500,000 / $500 = $5,000 x $3.24 (the Barnstable County rate, which you should know for the exam) = $16,200. Which situation would NOT trigger the mandatory agency disclosure form requirement? ✔✔Speaking with a prospective buyer in person at an open house you are running Sarah buys a 1980s ranch home and then adopts a 5 year old child. What are her requirements under Massachusetts lead paint law? ✔✔She doesn't have to do anything Leonard, Raj, Sheldon and Howard have found a multi-family property to purchase together. They would all like to own equal shares interest and Howard wants to be able to leave his share of the equity to his mother if he dies. Leonard has to sell some of his comic book collection in order to come up with his share of the purchase price so it's likely that he won't be able to purchase the property at the same time as his friends. His friends have agreed that he can become a co-owner next month when he has the money. What type of ownership would be best for this group of friends? ✔✔Tenancy in Common Which of the following convenants would not be legal? ✔✔A covenant stating that no dogs, including service animals are allowed The purpose of MGL Chapter 93A is: ✔✔To protect consumers from deceptive business practices 65 Appleton Street in Boston, MA sells for $675,000. The seller gave a $5,000 credit at closing to the buyer. The buyer put down 20%. How much did the seller pay in excise stamps? ✔✔$3,078 ----- Explanation: Excise or recording stamps are paid on the cash value of the sale in Massachusetts. Step 1: $675,000 / $500 = 1,350 stamps Step 2: 1,350 x $2.28/stamp = $3,078 May a broker bring uncashed checks to closing? ✔✔No Dave, a real estate broker in Massachusetts, advertises his rental listing as, "Not deleaded. No children under 6." Can Dave advertise in such a way? ✔✔No, because by advertising this way, Dave is helping the landlord discriminate against children under 6 due to lead paint being present in the property The case establishing when a real estate agent is entitled to his or her commission in Massachusetts is: ✔✔Tristram's Landing v Wait Sarah obtained her real estate salesperson license about 20 years ago and it has been about 15 years since she did anything real estate related. What must Sarah do now to renew her license? ✔✔She will need to send a written request to the Board to be reinstated In which of the following scenarios would a homeowner most likely file a Chapter 93A Claim? ✔✔The real estate agent that represented the seller didn't disclose that there was termite damage in the basement Brokers must maintain trust account records for: ✔✔3 years The landlord of a 2 family property in Massachusetts hires a real estate agent to find a tenant for their vacant 3 bedroom apartment. The landlord tells the agent that the property has not been approved for Section 8. What of the following is true? ✔✔The property must be open to Section 8 tenants and the landlord must be willing to have it inspected and approved Under which statute do the Massachusetts protected fair housing classes fall under? ✔✔MGL 151B Maurice, a real estate agent, is running an open house. Which of the following is his legal requirement? ✔✔He must disclose his agency relationship on the advertising materials A broker gives an old client a gift certificate as thanks for a referral. The client is not a real estate agent. Has the broker risked his license? ✔✔Yes, because he has given a commission to an unlicensed person Dania showed Selena a variety of luxury, full service apartment buildings in downtown Boston. Selena fell in love with the second apartment they viewed that had a water view. Selena filled out an application with the leasing office and after approval, Dania sent an invoice for her commission to the apartment building. Was Dania required to give Selena the broker fee disclosure form? ✔✔Yes, because even if Selena doesn't have to pay a fee she must still be aware of the fee All of the following are true of escrow accounts, except? ✔✔Only licensed agents can manage them Which of the following is exempt from fair housing law in MA? ✔✔80% occupancy by those 55 years and older An investor who wants to calculate the NOI on a specific property, will need to take into account all of the following, except: ✔✔Mortgage on the property Who oversees Massachusetts environmental laws? ✔✔The DEP (Department of Environmental Protection) The maximum penalty for violating MGL Chapter 93A would include any of the following, EXCEPT: ✔✔Double damages The real estate Board is made up of the following EXCEPT: ✔✔An annually selected chairperson Benita purchases a parcel of land from the owner, Betty for $250,000 in Andover, MA. Betty advertised that the lot was a total of 5 acres. Benita plans to build 5 new homes on the land, each with an acre of property, however when she applies for her town zoning permits, she is informed that her land is only 3 acres and therefore she can only build 4 of her homes per zoning rules. Can Benita send Betty a 30 day demand letter requesting damages of up to $600,000 for the loss in profit due to the home that she can not build? ✔✔No, because Betty is not a business or licensee Adam, a real estate salesperson, receives a $1000 check as a deposit for an offer. Adam gives the check to Beth, who is the broker Adam works under. Beth deposits the check into her operating account. Was the check handled correctly? ✔✔No, because the check should have been deposited into an escrow or trust account How many recording stamps would you need if you were buying a house in Boston and the value of the property is $400,125? ✔✔801 stamps ----- Explanation: When a property is being transferred in MA and you wish to record the deed, you will need to pay for recording stamps, which cost $2.28 for every $500 of value (unless you're in Barnstable County, where it's $3.24). If the amount is over a $500 increment, you would round up. Therefore, you would round $400,125 to $400,500 and divide by $500 (400,500 / 500 = 801). You would need 801 recording stamps to record this deed. Which person is exempt from licensing requirements when performing real estate services? ✔✔Auctioneers Broker Jim, a sole proprietor, dies. What is true about his replacement? ✔✔They may be anyone The major source of Federal monies available to clean up environmentally polluted properties was originally created by: ✔✔CERCLA Why must real estate brokers be bonded? ✔✔To insure trust accounts When a breach of a lease contract has occurred, the lessor has to give the lessee how many days' notice to vacate? ✔✔14 days The Wetlands Protection Act permits minor alterations of property bordering wetlands after how many feet? ✔✔50 feet An agent is involved in a real estate sale where they have no fiduciary obligation to the buyer or the seller. This agent is likely a: ✔✔Facilitator Landlords in Massachusetts may charge tenants at most: ✔✔First month's rent, last month's rent, security deposit, and lock and key fee The biggest reason that the gross rent multiplier approach is of limited use to investors because: ✔✔It doesn't include operating expenses A property will always go through a four stage lifecycle. These four stages include: ✔✔Growth, Stability, Decline, Revitalization The maximum interest due payable on a security deposit is: ✔✔5% Captain Kirk owns a two family owner occupied house in Somerville. Worf, a Klingon by race, is looking for a place to live with his wife and children. Worf finds an advertisement online for the apartment in Kirk's house. The ad says, "No Klingons!" Has Captain Kirk violated the law? ✔✔Yes, because Kirk is not allowed to discriminate on the basis of race A real estate agent receives 2 P&S checks from 2 different transactions, along with a commission payment check for a recently closed deal from their employing broker. Which of the following is the most correct thing for the agent do with these checks? ✔✔Deposit the commission check and give the P&S checks to the employing broker Sally is a real estate licensee. She advertises her client's home, but does not put her brokerage's name in the ad. Has she risked her license? ✔✔Yes - it is blind advertising Who is legally entitled to hold an escrow deposit? ✔✔Seller Dania showed Selena a variety of luxury, full service apartment buildings in downtown Boston. Selena fell in love with the second apartment they viewed that had a water view. Selena filled out an application with the leasing office and after approval, Dania sent an invoice for her commission to the apartment building. Was Dania required to give Selena the broker fee disclosure form? ✔✔Yes, because even if Selena doesn't have to pay a fee she must still be aware of the fee How many years' experience must brokers on the Board of Registration of Real Estate Brokers and Salespersons have? ✔✔7 When must a real estate agent provide a prospective tenant with a fee notice? ✔✔At first meeting A home is sold for $152,121 in Suffolk County. At recordation, the grantor will pay how much in transfer stamps? ✔✔$695.40 ----- Explanation: Recording stamps are paid in increments of $2.28 per whole $500 of value transferred. So, to calculate the cost of the grantor's payment, we must first round the price up to the nearest $500 increment: $152,500. Next, we divide this number by $500 to find the number of stamps necessary: $152,500 / $500 = 305 stamps x $2.28 per stamp = $695.40. The maximum lease term in the state of Massachusetts is: ✔✔99 years How must buyers be notified of the agency relationship at an open house? ✔✔By sign, poster, literature, or property description forms After 50 years in her single family home in Winchester, Massachusetts Connie is ready to move to sunny Boca Raton, Florida. She asks her son, Arnold, to help her with the sale of her home since she will be flying to Florida often and may not be around for showings. Arnold loves his mother and agrees to help her. He hires a professional photographer to take photos of the home and creates brochures to give to prospective buyers. While Connie is touring homes in Florida, Arnold hosts the open house and answers any questions about the home to the buyers who visit. When Connie returns, Arnold shares with her the feedback from the prospective buyers who toured the home. Does Arnold need a real estate license to help his mother sell her home? ✔✔No, because the general public is able to buy and sell property for themselves In which of the following scenarios would a homeowner most likely file a Chapter 93A Claim? ✔✔The real estate agent that represented the seller didn't disclose that there was termite damage in the basement The MA Board of Registration of Real Estate Brokers and Salespersons is made up of all of the following, EXCEPT: ✔✔Three lay people Marty represents a landlord who owns 5 apartment buildings that were all built between 1950- 1970. When Marty drafts the leases for the apartments, it's important that which of the following documents are included? ✔✔Tenant Lead Law Notification Form A home in Essex County sells for $1,205,250. What does the seller owe in Massachusetts recording stamps? ✔✔$5,497 ----- Explanation: We must first round up $1,205,250 to the nearest $500 increment. $1,205,500 is then divided by $500 = giving us 2,411 stamps needed. Each stamp costs $2.28 in Essex County so we multiple 2,411 x $2.28 which gives us $5,497.08 Septic systems must: ✔✔Receive Title V certification Thelma, a broker, agrees to create an entry only listing for Louise, who is the property owner. Thelma advertises the property on MLS, but Louise handles all of the emails or calls for the property, and shows the property to all of the potential buyers. Does Louise need a license? ✔✔No, because she is not advertising the property on MLS, and she has Thelma to do that How many members comprise the Board of Registration? ✔✔5 Howard wants to sell his mother's home after she has passed away. Because she died intestate, what will likely happen with the house? ✔✔The house will have to pass through probate and an administrator will need to be assigned What is reciprocity? ✔✔One state honoring the license of another [Show More]

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