Multiple Choice Questions Flashcards

A buyer's agent has a fiduciary duty to act in whose best interest?

Answer: The buyer

A buyer's agent owes fiduciary duties—including loyalty and confidentiality—exclusively to the buyer.

Which clause in a purchase contract allows the buyer to cancel if they cannot obtain financing?

Answer: Mortgage contingency clause

A mortgage contingency clause lets the buyer void the contract and recover their earnest money if they fail to secure a loan.

Under the Truth in Lending Act (TILA), the Annual Percentage Rate (APR) must be disclosed within how many business days of a loan application?

Answer: 3 days

TILA requires lenders to provide the APR disclosure within 3 business days of receiving a completed loan application.

A property sold for $320,000 and the commission rate is 5.5%. The listing broker and selling broker split the commission equally. How much does each broker receive?

Answer: $8,800

$320,000 × 5.5% = $17,600 total commission; split equally = $8,800 each.

Which type of easement is attached to the land and transfers automatically with the property?

Answer: Easement appurtenant

An easement appurtenant runs with the land and automatically transfers to new owners when either parcel is sold.

A licensee who practices real estate without a valid license is guilty of:

Answer: Practicing real estate illegally, which is a criminal offense in most states

Practicing real estate without a license violates state licensing laws and is a criminal offense—typically a misdemeanor or felony—in virtually all states.

What is 'blockbusting' in real estate?

Answer: Inducing homeowners to sell by suggesting minorities are moving into the neighborhood

Blockbusting is an illegal practice under the Fair Housing Act where an agent induces panic selling by implying that the entry of a protected class will harm property values.