-All Pre-License Questions Only and Data. All-in-One Page for easier searching (No Answers, Just Questions)

-All Pre-License Questions Only and Data. All-in-One Page for easier searching (No Answers, Just Questions for Preview)

(Questions ONLY, ANSWERS WILL BE REVEALED WITH PROPER SUBSCRIPTION)

1. List five ways the Real Estate Commission protects consumers.

2. Which of the following is not a duty of the Commission?

A.    Administer oaths

B.     Maintaining licensee records

C.     Keep licensees abreast of relevant real estate topics and laws

D.    Regulate licensee compensation practices

3. Fees and fines collected by the Commission are held in the

A.    General Assembly Citizens Fund.

B.     Arkansas Recovery and Remuneration Fund.

C.     Arkansas Real Estate Commission Fund.

D.    Arkansas License Violations Fund.

4. Licensee members of the Commission are

A.    nominated by the Director of the Commission.

B.     appointed by the outgoing members.

C.     appointed by the Arkansas Governor

D.    nominated by the Arkansas Citizens Review Committee of the Commission.

5. Which of the following powers are vested in the Commission?

A.    Police powers

B.     Subpoena powers

C.     Zoning powers

D.    Power-of-attorney

6. The salaries of the Commission’s employees are established by

A.    the Commission.

B.     the Commission’s chairman.

C.     the Commission’s director.

D.    the Arkansas Legislature.

7. One purpose of real estate license laws is to

A.    establish proper transaction procedures among buyers and sellers.

B.     prevent fraud against real estate licensees.

C.     establish standards of competence among licensees.

D.    eliminate unfair trade practices between lenders and borrowers.

8. What is the minimum required balance of the Real Estate Recovery Fund?

A.    $2,000,000

B.     $50,000

C.     $10,000,000

D.    $250,000

9. Commissioners serve a term of how many years?

A.    1

B.     2

C.     3

D.    4

10. Funds from the Real Estate Recovery Fund are used for which of the following purposes?

A.    Reimbursing licensees for overcharges of fees

B.     Educational programs

C.     Lobbying efforts for pro-licensee laws

D.    Operating deficits incurred by the Commission

11. The executive director of the Commission

A.    is also the Chairman of the Commission.

B.     is authorized to hire staff and set salary levels.

C.     is effectively the CEO of the Commission.

D.    is appointed by the governor.

12.  Which of the following is not required of at least one of the Commission members?

A.    Licensee with five years of experience

B.     Minority status

C.     60 years of age

D.    That they represent consumers

13. The Real Estate License Law established a Real Estate Recovery Fund

A.    to pay for the salaries and activities of the Commission.

B.     to protect consumers if their property is foreclosed.

C.     for the protection of the public against harmful actions by licensees.

D.    for eminent domain purchases by the Commission.

14. Who selects the Commission’s chairman?

A.    The Arkansas Association of Realtors

B.     The governor

C.     The voters of Arkansas

D.    The Commission itself

15. Who needs a license BELOW?
a.       A resident manager rents apartments for tenants in five neighborhood apartment complexes.

                                                               i.      YES

                                                             ii.      NO

b.       A leasing assistant negotiates a 12-month lease for her manager.

                                                               i.      YES

                                                             ii.      NO

c.       A federal employee in the course of her official duties sells one of the buildings in her office complex.

                                                               i.      YES

                                                             ii.      NO

d.       A manager of a title company sells his own house to a broker.

                                                               i.      YES

                                                             ii.      NO

e.       A retired auctioneer auctions a property for a friend.

                                                               i.      YES

                                                             ii.      NO

f.        A salaried employee under written instructions shows a property for sale on behalf of her principal broker.

                                                               i.      YES

                                                             ii.      NO

g.       A college graduate advertises he will sell properties of other students to raise tuition money for college.

                                                               i.      YES

                                                             ii.      NO

h.       A person receives and delivers a $500,000 deposit to her principal broker from a buyer.

                                                               i.      YES

                                                             ii.      NO

i.         A company vice president leases one of the company’s warehouses to a storage firm.

                                                               i.      YES

                                                             ii.      NO

j.         A senior citizen charges an advance fee for referring an individual to her son who owns a leasing office in town.

                                                               i.      YES

                                                             ii.      NO

k.       A homeowner advertises to lease his improved basement to a college student.

                                                               i.      YES

                                                             ii.      NO

l.         An attorney advises a client about how to minimize liability in an upcoming real estate transaction.

                                                               i.      YES

                                                             ii.      NO

16. What do you have to do to get your Arkansas salesperson’s license? List as many of the requirements as you can.

·  Be of majority age (18 years old).

·  Satisfy educational requirements.

·  Satisfy experience requirements.

·  Pass the appropriate licensing examination.

·  Demonstrate a record of professional conduct.

·  Provide evidence of honesty, trustworthiness and integrity.

·  Complete a criminal history background check.

·  Pay the appropriate fees.

17. A friend of yours wants to go into real estate, and she asks you which type of license she should get. For the first part of your answer, you tell her what the four types are and how they differ.

18. Your cousin from Mississippi is moving to Arkansas and wants to go into real estate. He already has a license in Mississippi. How does he get an Arkansas license?

19. Each of the following scenarios relates or best applies to a specific license status, either:

On a separate piece of paper, write down which license status above best suits the scenario depicted.

1.      The licensee may renew, but does not have to take any continuing education. Status _____inactive______

2.      The licensee must cease practicing on December 31 if he fails to renew. Status: ____active________

3.      An inactive licensee who failed to renew until October 15th. Status: ___inactive_________

4.      The licensee must complete CE in order to renew under the same status. Status: ____active_________

5.      The licensee may not practice one month after its issuance. Status: ___temporary_________

6.      The licensee must meet the same requirements as a new applicant to renew. Status: ___Expired more than 2 years_________

7.      A licensee reactivates two years after expiration but is not required to complete the CE requirement. Status: ______inactive_______

8.      A licensee has been disciplined by the Commission. Status: ____Suspended/revoked________ 

20. Which of the following is not a requirement of either a broker or salesperson license?

A.    To complete a criminal history background check

B.     To satisfy educational requirements

C.     To be at least 25 years old

D.    To pass the appropriate licensing examination

21.  The deadline for renewing the license without paying additional fees is

A.    September 30.

B.     December 31.

C.     November 30.

D.    July 15.

22. To activate an inactive license, licensees must

A.    call the Commission to reclassify their license.

B.     complete 6 hours of CE for every year the license was inactive

C.     pay a fine to the Real Estate Recovery Fund.

D.    retake the Arkansas real estate examination.

23. Broker and salesperson license applicants not residing in Arkansas may

A.    request a waiver of the general portion of the exam.

B.     request a waiver of the Arkansas law portion of the exam.

C.     request a waiver of the entire exam.

D.    be required to pay additional fees.

24. Who is ultimately responsible for the company’s activities, notably the activities of other licensees as well as the business’s trust accounts?

A.    The executive broker

B.     The associate broker

C.     The salesperson

D.    The principal broker

25. Which leasing duty is NOT exempt from licensure?

A.    Receiving a rent payment which will be delivered to the owner

B.     Delivering a lease

C.     Showing a rental unit under the written directions of a principal broker

D.    Negotiating a lease offer

26. An hourly employee receives deposits for delivery to his principal broker employer. Here, this party

A.    is exempt from licensure.

B.     is exempt, provided he is a full-time employee.

C.     is not exempt, since this is not an administrative task.

D.    is not exempt, regardless.

27. Which statement regarding non-resident licensure is false?

A.    Broker and salesperson license applicants not residing in Arkansas may request a waiver of the general portion of the exam.

B.     The non-resident must agree that he or she has read and will abide by the Arkansas Real Estate License Law.

C.     The non-resident does not have to affiliate with a resident or non-resident principal broker licensed by the Commission.

D.    The non-resident has to pay the required fees.

28. What are the education requirements for initial salesperson licensure?

A.    60 classroom hours including 30 hours covering the basic principles of real estate

B.     60 classroom hours in addition to a broker’s education requirements

C.     30 classroom hours including 10 hours covering the basic principles of real estate

D.    30 classroom hours in addition to a broker’s education requirements

29. Generally, you can buy, lease, rent, or sell your own property, but when you do those things for others for _____________, you ___________ to be licensed.

A.    free, do need

B.     compensation, do not need

C.     free, do not need

D.    compensation, do need

30. A license applicant carelessly fails to pay the proper fees following completion of the state exam. What happens as a consequence?

A.    The applicant’s fees are doubled.

B.     The applicant must re-test.

C.     The applicant must re-test and re-apply.

D.    The applicant must pay a fine to the Recovery Fund.

31. A license that has been expired for two years may be reactivated as

A.    an active license only.

B.     an inactive license only.

C.     an active or inactive license.

D.    It cannot be renewed after 2 years

32. Licensees must have a real estate license on _________ status in order to engage in real estate practice.

A.    evoked

B.     active

C.     authorized

D.    approved

33. All licenses, active or inactive, expire on ____________ unless the licensee makes timely payment of a renewal fee, and complies with any prerequisite or condition to licensure or renewal.

A.    September 30

B.     December 31

C.     November 30

D.    July 15

34. Who do prospective brokers and salespersons need to get their licenses from?

A.    Any brokerage firm

B.     They do not need a license.

C.     The Arkansas Real Estate Commission

D.    The Arkansas Association of Realtors

35. Generally speaking, what happens if an applicant fails the criminal background check due to a felony conviction?

A.    They are denied licensure.

B.     It depends on how the applicant pleaded.

C.     They are issued a temporary license pending further investigation.

D.    They will only receive an inactive license.

36. The two sections of the Arkansas real estate examination are

A.    a national real estate section and an Arkansas law section.

B.     a leasing law section and national real estate law section.

C.     a salesperson law section and brokerage section.

D.    a national real estate section and an international real estate section.

37. On or about ________ of each year, the Commission sends licensees notice to renew licenses for the upcoming year.

A.    September 30

B.     December 31

C.     November 30

D.    July 15

38. To maintain active status, salespersons, associate brokers, and executive brokers must

A.    complete a closing every three months.

B.     belong to the local Association of Realtors.

C.     be employed by a principal broker.

D.    sell real estate full time.

39.  Challenge Questions: Licensee do’s and don’ts
       In the questions below, answer either “CAN” or “CAN’T”
  a)  Broker Amy names her real estate firm “Hot Springs Investment Brokers” and submits clear photographs of signage to the Commission.

i) CAN

ii) CAN’T

  b) Broker Paul’s ABC Realty office is on the 9th floor of an office building. He places his firm name in the lobby directory, and a sign at the entrance to his suite.

i) CAN

ii) CAN’T

c) Broker James takes on the part-time responsibility of running Joyce’s second branch office in addition to his full-time CPA job.

i) CAN

ii) CAN’T

d) Broker Sherman manages ABC Realty’s branch office for his principal broker, Linda. Sherman reconciles his trust account every month on Linda’s behalf and sends the reports to the Commission.

i) CAN

ii) CAN’T

e) Broker Sean takes a listing and carefully inspects the property immediately after signing the agreement.

i) CAN

ii) CAN’T

f) Broker Maureen sells her own property without notifying her principal broker.

i) CAN

ii) CAN’T

g) Salesperson Jim buys a vacation time share. Since it is personal, he does not inform his principal broker.

i) CAN

ii) CAN’T

h) Broker Susan introduces William to another agent, who lists and sells William’s property. Susan makes a legitimate claim for a referral with the lister’s firm.

i) CAN

ii) CAN’T

i) Salesperson Tommy promises to sell the home of owner Grace for less if she contacts him after her current listing expires.

i) CAN

ii) CAN’T

j)  License applicant Julie represented that she had never been convicted of a crime because, in one instance, she had been arrested for stealing, but had pleaded no lo contendere.

i) CAN

ii) CAN’T

k) Broker Norman listed his brother’s property without the knowledge of his brother’s wife, who was on vacation.

i) CAN

ii) CAN’T

l) Salesperson Cathy placed an ad in the paper assuring prospective buyer’s that the property would appreciate based on the neighborhood’s 15-year record of value increases.

i) CAN

ii) CAN’T

m) Broker Damien entered into a 15-day listing with a prospective buyer on the assumption that that would be sufficient time to make a sale.

i) CAN

ii) CAN’T

n) Salesperson Judith accepted a referral fee from her friend for referring a buyer to her who bought her property.

i) CAN

ii) CAN’T

40) Buyer Simpson hands salesperson Charlene a $5,000 deposit to accompany an offer. What does Charlene do with the check?

41) Charlene’s seller accepts the offer. How does that affect the deposit, if at all?

42) A broker receives and deposits an advance fee from Frank to locate an apartment for him. Three months later, Frank moves to another state. What happens to the advance fee?

43) The Commission wants brokers to keep records for how many years?

44) If a broker deposits monies into a trust account, are those monies necessarily considered trust funds by the Commission?

45) What funds are allowed to be kept in a trust account besides trust funds?

46) A broker earns a commission out of his trust fund account but keeps it in the account. Anything wrong with that?

47) A buyer insists on keeping her deposit with her own escrow agent. Is the broker still responsible for accounting for those funds?

48) Trust fund reconciliation records must be kept for how long?

49) There are proper ways to disburse from a trust account, and there are improper ways. List as many “proper” circumstances where the broker may legitimately disburse trust account funds.

50) Which of the following regulatory restrictions is false regarding to time-share advertising?

A.    Time-share advertising does not have to be registered with the Commission.

B.     Advertising may not be false or misleading

C.     Advertising may not lead one to believe the number of remaining units is limited or time is “running out” unless supported by clear facts

D.    Advertising cannot purport misleading promises of profit or appreciation or impending price increases

51) Who can practice real estate independently of a principal broker?

A.    Salespersons

B.     Associate brokers

C.     Dual agents

D.    Nobody can practice real estate independently of a principal broker.

52) Proper trust fund management includes

A.    making the records available to all transaction principals for inspection.

B.     making the records available for Commission inspection.

C.     maintaining strict confidentiality as to the fund balances.

D.    reporting interest earned prior to operating account transfers.

53) When a licensee is selling their own property, they must

A.    disclose in writing prior to entering into the sale or lease contract that they are a licensed real estate practitioner.

B.     disclose orally at first contact that they are a licensed real estate practitioner.

C.     disclose orally before signing any contract that they are a licensed real estate practitioner.

D.    only disclose if they are asking for $1,000,000 or more for their property.

54) Which of the following would not be on the time-share’s public offering statement?

A.    Disclosure of extra fees for use of the project’s facilities or amenities

B.     A statement of rescission rights declaring that purchaser has 90 days after contract execution to cancel the contract

C.     Written description of any “swapping” program offering the exchange of time-shares with other time-share projects

D.    Disclosure of liens or encumbrances affecting title

55) Deposits accompanying time-share reservations must be placed in

A.    an interest bearing trust account in Arkansas, held by an independent escrow company or federally insured depository institution.

B.     any account in a federally insured depository institution.

C.     a non-interest bearing trust account in any location, held by an independent escrow company or federally insured depository institution.

D.    a non-interest bearing trust account in Arkansas, held by an independent escrow company or federally insured depository institution.

56) Trust fund reconciliation

A.    must be completed monthly by the Commission.

B.     must be reconciled monthly by an approved CPA.

C.     must be reconciled monthly in writing.

D.    must be reconciled every other month and reported to the Commission.

57) It is illegal for the principal broker to deposit non-trust fund monies into the trust account. This illegal act is known as

A.    money laundering.

B.     dipping.

C.     converging.

D.    commingling.

58) The account holder must designate ________________ as the recipient of the interest earned in the allowed interest-bearing account.

A.    themselves

B.     the Arkansas Real Estate Commission

C.     the State of Arkansas

D.    the Arkansas Real Estate Foundation, Inc.

59) Legitimate operating funds in a broker’s general account do not include

A.    unearned commission reserves.

B.     advance fees.

C.     earned commissions.

D.    interest earned on the account.

60)  For-sale signs may only be placed on a property

A.    before the term of the listing agreement.

B.     after the term of the listing agreement.

C.     during the term of the listing agreement.

D.    if the sign is approved by the Commission.

61) A for-sale sign says: “Home for rent by owner”. Is this a legal sign?

A.    Yes, unless the home is owned by a licensee

B.     Yes

C.     No, since there is no mention of who the owner is

D.    No

62) A time share public offering statement is best defined as

A.    a summary of all available time share programs and their prices.

B.     a description of the project and a profile of the developer.

C.     a disclosure statement of all relevant facts regarding the property and selling terms.

D.    a comprehensive promotional piece detailing all aspects of the time share programs.

63) All forms used to document agreements must

A.    also be available in electronic formats.

B.     be approved by a licensed Arkansas attorney prior to use.

C.     be approved by the Commission.

D.    have the HUD logo on it.

64) A salesperson receives an advance fee for a rental service. What must she do with this money?

A.    Deposit it upon lease execution

B.     Deliver it immediately to the principal broker

C.     Deliver it to the principal broker within 3 business days

D.    Deposit it immediately in a trust account

65) A seller’s agent receives an offer from a buyer’s agent to purchase the listed property. Which of the following is true?

A.    The buyer must submit the offer to the listing agent within 7 days.

B.     The listing agent must submit the offer, provided it is reasonable.

C.     The listing agent must submit the offer.

D.    The listing agent must submit the offer within 7 days.

66) Which of the following is not a responsibility for licensees regarding real estate agreements?

A.    Ensuring all agreements are signed by all parties

B.     “Seeing to it” that the exact provisions of real estate agreements between principal parties are in writing

C.     Ensuring that the agreed-to offer is fair for all parties

D.    Ensuring that all parties to the agreement receive copies of the agreements

67) 4 of 15 Disbursement from the time-share’s reservation trust account may only be made

A.    when the purchaser has defaulted, at which time the developer may receive the funds.

B.     before the rescission period has elapsed on a contract.

C.     when the developer has defaulted, at which time the Commission may receive the funds.

D.    to the principal broker.

68) The time-share sale contract is voidable if

A.    the purchaser has received the public offering statement.

B.     it is in writing.

C.     the purchaser has not received the public offering statement.

D.    the purchaser has a time-share in another location.

69) Which of the following tasks may not be delegated to the executive broker by the principal broker?

A.    Training

B.     Signing offers

C.     Handling transfer documents

D.    All may be delegated

70)  It is the principal broker’s responsibility to obtain ____________ approval for his or her company’s name.

A.    municipal

B.     Association of Realtor

C.     Commission

D.    federal

71) If a brokerage ceases to exist, who is responsible for the office’s records?

A.    The Commission

B.     The current principal broker

C.     The original principal broker

D.    The owner

72) Which of the following regulatory restrictions is false regarding to time-share advertising?

A.    Time-share advertising does not have to be registered with the Commission.

B.     Advertising may not be false or misleading

C.     Advertising may not lead one to believe the number of remaining units is limited or time is “running out” unless supported by clear facts

D.    Advertising cannot purport misleading promises of profit or appreciation or impending price increases

73) If a third party company is closing a transaction, the principal broker or executive broker must

A.    provide closing instructions to the third party closer.

B.     follow closing instructions provided by the third party.

C.     pay reasonable fees for the closing from the commission proceeds.

D.    attend the closing in person to assure contract compliance.

74) An executive broker knew another broker was dealing independently of his employing broker. Here, the executive broker

A.    may not disclose the activity to any party.

B.     must report the activity to the Commission.

C.     is also guilty of illegal practice.

D.    is not required to do anything.

75) The principal broker may delegate supervisory authority to

A.    any broker licensee.

B.     an associate broker.

C.     an executive broker.

D.    a salesperson.

A principal broker may delegate supervisory authority to an executive broker that will enable the executive broker to sign offer and acceptance forms, train and supervise licensees, and sign and handle transfer documents.

76) Reasonable cause” for a referral fee is where

A.    a referral claim takes place prior to an offer.

B.     a referral claim takes place prior to closing.

C.     an introduction took place during “substantive discussions”

D.    “an actual introduction” took place.

77) Offers and acceptances must

A.    be approved by the Commission.

B.     be signed.

C.     be under oath.

D.    be oral.

78) Offers received by selling agents must be presented

A.    to the listing firm.

B.     directly to the seller.

C.     directly to the buyer.

D.    Offers do not have to be presented to any party.

Offers received by selling agents must be presented to the listing firm by the close of the following business day.

79) Trust fund reconciliations records must be kept

A.    for 1 year.

B.     for 3 years.

C.     for 5 years.

D.    as long as the trust fund is open.

80) Which of the following is an acceptable circumstance for disbursing trust funds?

A.    Upon filing of an interpleader action and subsequent court instructions

B.     Upon filing of an estoppel by either principal party

C.     Upon filing of a civil action by a third party

D.    Immediately preceding a closing

81) A licensee has reason to believe that a seller is under contract with another firm. In this case, the licensee

A.    may not contact the seller to solicit a listing, whether he was aware of the agreement or not.

B.     must determine the listing status with the listing firm prior to making contact.

C.     may not contact the seller under any circumstances, or for any reason.

D.    may solicit a listing, provided it does not commence prior to expiration of the current listing.

82) First, if you think it is okay to sell real estate on the side without a license, what level of crime will you be charged with?

83) What about a corporation? Can it be charged, and, if so, with what?

84) If a licensee discovers an unlicensed person brokering real estate, what can he or she do about it?

85) What if unlicensed Joe loses unlicensed Mary’s earnest money deposit? What can Mary do?

86) What if seller Peter refuses to pay salesperson April’s commission? What action can April take?

87) What if buyer Jerry is damaged by salesperson April’s incompetence or negligence? What action can Jerry take?

88) The Commission can impose a number of penalties upon a licensee found guilty of a license law violation. What are they?

89) Which of the following is an authorized penalty for a violation of license laws?

A.    License suspension

B.     Temporary license revocation

C.     Denial of a renewal

D.    All of the foregoing

90)  If the licensee has not paid the awarded damages within 30 days, the Commission may pay the amount of the damages from

A.    the Real Estate Damages Trust.

B.     the Real Estate Super Fund.

C.     the Real Estate Super PAC.

D.    the Real Estate Recovery Fund.

91) Violators of Arkansas real estate license law who are officers of a corporation or partnership

A.    are protected from lawsuits.

B.     are subject to prosecution as individuals.

C.     can be forced to cease and desist but cannot be sued for damages.

D.    are subject to the laws of the state in which the business is headquartered.

92)  Which of the following is a violation of license law?

A.    A licensee selling her own home

B.     Paying a commission to an unlicensed auctioneer

C.     Selling a house to a licensee without a license

D.    Being paid a referral fee

93)  Once damages are paid to an aggrieved party for a license law violation, the parties

A.    may proceed to sue the licensee in court.

B.     may sue the Commission for complicity.

C.     may sue the Commission for oversight negligence.

D.    must assign all claims against the licensee to the Commission.

94)  An executive broker is wrongfully cut out of a commission on a transaction. What can this broker do?

A.    Sue the principal for the commission

B.     Nullify the transaction

C.     Sue his principal broker

D.    Sue both his principal broker and the principal party

95) An investigated complaint that is deemed to lack merit

A.    is nevertheless scheduled for a hearing.

B.     is dismissed.

C.     may be appealed within 30 days.

D.    releases the accused licensee from any further exposure to liability.

96) Any licensee whose license is revoked must wait __________ to apply for a new license.

A.    6 months

B.     1 year

C.     2 years

D.    3 years

97) Practicing real estate without a license in Arkansas is classified as a

A.    Class A Felony.

B.     Class D Felony.

C.     misdemeanor.

D.    capital misdemeanor.

98) Parties who may have been damaged by unlicensed persons performing real estate services

A.    cannot sue the unlicensed party.

B.     can sue the unlicensed party according to Section

C.     can sue the unlicensed party according to Section 106 of the license law.

D.    can only sue the unlicensed party in a district court.

99) Once damages are paid to an aggrieved party for a license law violation, the parties

A.    may proceed to sue the licensee in court.

B.     may sue the Commission for complicity.

C.     may sue the Commission for oversight negligence.

D.    must assign all claims against the licensee to the Commission.

100) Any appeal of a ruling must be filed within __________ from the ruling date.

A.    15 days

B.     3 months

C.     1 year

D.    5 years

101) The Commission will investigate a complaint

A.    following receipt of the licensee’s answer to the complaint.

B.     following receipt of the complaint, its answer, and the hearing.

C.     at any time after its receipt.

D.    immediately following the criminal background check of the licensee.

102) Which of the following is NOT a prohibited act?

A.    Acting on behalf of more than one party in a transaction if all parties are informed

B.     Practicing real estate without a license

C.     Dealing independently

D.    Accepting compensation for real estate services from anyone other than the principal broker

103) What section of the license law empowers the Commission to bring court action against any party suspected of violating license law for the purpose of forcing the party to discontinue the suspected violation?

A.    Section 1

B.     Section 107

C.     Section 17

D.    Section 106

104) What is the critical difference between a listing agent’s disclosure requirement and a buyer agent’s disclosure requirement?

A.    The listing agent must disclose upon “first substantive contact” and the buyer’s agent must disclose immediately upon first contact.

B.     The buyer’s agent must disclose upon “first substantive contact” and the listing agent must disclose immediately upon first contact.

C.     There is no difference in the disclosure requirement.

D.    The listing agent does not have to disclose and the buyer’s agent must disclose upon “first substantive contact.”

105)  Licensee Louis renders a number of ministerial services to a buyer customer. In this case, Louis

A.    has violated his fiduciary duties owed his client.

B.     must disclose his performed tasks to his principal.

C.     has performed acceptably in view of his fiduciary obligations owed his client.

D.    has violated his obligations owed this buyer.

106) A licensee is acting under the delegated authority of the agent is known as a

A.    transaction broker.

B.     subagent.

C.     dual agent.

D.    single agent.

107) Which of the following is NOT a fiduciary duty owed to sellers and buyers?

A.    Loyalty

B.     Confidentiality

C.     Full disclosure

D.    Friendship

108) The cornerstone of single agency is that the agent

A.    owes the principal fiduciary duties.

B.     is bound under all cases to abide by the directives of the principal.

C.     must treat customers and clients the same.

D.    must treat customers as fiduciaries.

109)  ___________ is the one duty that extends beyond the expiration of the listing agreement.

A.    Loyalty

B.     Confidentiality

C.     Diligence

D.    Full disclosure

110) You are a buyer’s agent who has encountered a represented seller. Do you have to disclose your agency relationship, and, if so, when?

A.    You don’t, since you are a buyer’s agent

B.     Yes, you must disclose before you submit an offer

C.     Yes, you must disclose before you enter any substantive discussions

D.    Yes, you must disclose immediately

111) A licensee must make agency disclosure “in a timely manner” which is considered to be when?

A.    Before a buyer agent first encounters a listing agent in person

B.     When a listing agent first meets a buyer in person

C.     Before a listing agent begins to ascertain a buyer’s confidential information

D.    When a buyer begins to complete an offer

112) A cooperating licensee from another firm brings a buyer to the listing agent. In this case, the cooperating licensee is

A.    representing the buyer.

B.     representing the seller.

C.     representing the listing agent.

D.    representing the principal broker of the listing firm.

113) In a dual agency transaction, the licensee

A.    may receive compensation from either party.

B.     may receive compensation from the buyer.

C.     may receive compensation from both parties.

D.    may only receive compensation from the principal broker.

114) A common form of dual agency is where

A.    a licensee practices transaction brokerage.

B.     a licensee represents a buyer and a seller in the same transaction.

C.     a licensee represents a seller as a subagent for another brokerage.

D.    a licensee represents a buyer as a subagent for another brokerage.

115) Licensees who fail to disclose their agency relationship properly and in a timely fashion are

A.    acting unethically but not illegally.

B.     in violation of license law and subject to various penalties.

C.     acting in the best interest of the real estate community.

D.    involved in subagency.

116. John places an ad to rent his apartment. He includes the disclosure that he is a licensee. Is this acceptably sufficient according to law?

A.    Yes, John must include this disclosure.

B.     Yes, since he is renting his own property.

C.     No, since he omitted the name of the firm.

D.    No, since he failed to include the name of his principal broker.

117. The Commission may investigate a license law violation

A.    Only upon the filing of a complaint.

B.     Upon completion of a hearing.

C.     On its own behalf if deemed warranted.

D.    The Commission may not investigate violations.

118. One problem with subagency is that

A.    Principals refuse to pay them.

B.     Subagents increase the principal broker’s liability.

C.     It is frequently unclear as to who has earned the commission.

D.    Subagents have no fiduciary obligations to anyone

119. A corporate officer advertises to sublease the corporation’s warehouse through his unaffiliated brokerage company. Here, the officer

A.    Is exempt from licensure.

B.     Is exempt, provided the proper disclosures are made.

C.     Is exempt from licensure if no fee is involved.

D.    Must be licensed.

120. Which of the following is true?

A.    All licenses must be displayed in all offices of a brokerage.

B.     Only the principal broker’s license must be displayed in all offices.

C.     All licenses must be displayed in the broker’s principal place of business.

D.    The principal broker need not display all of the firm’s licenses.

121. A licensee options a property on behalf of the principal broker of another firm. This illegal practice is called

A.    Independent dealing.

B.     Practicing without a license.

C.     Self dealing

D.    Co-representation.

122. The purpose for having a buyer sign the “Agency Representation Disclosure” form is to

A.    Obtain the buyer’s acknowledgement of the agency relationship.

B.     Certify that the buyer and seller have agreed to the dual agency agreement.

C.     Confirm that the buyer is willing to participate in payment of the agent’s compensation.

D.    Eliminate liability for events that may unfold during the transaction.

123. All salespersons licenses expire

A.    One year after renewal.

B.     Two years after renewal.

C.     At the end of the calendar year.

D.    At the end of every odd calendar year.

124. Complaints that are dismissed without a hearing

A.    May be appealed within 30 days.

B.     May be appealed within 60 days.

C.     May not be appealed at all.

D.    May be appealed after a 30-day due diligence period.

125. A listed property has a serious leak in the roof, which has caused discolorations in the ceiling. Which of the following is true?

A.    The listing agent must abide by the seller’s wishes to conceal this fact.

B.     The listing agent should be aware of this condition.

C.     The listing agent should require the seller to fix the leak.

D.    The listing agent is better off not knowing about the leak.

126. Which of the following is true?

A.    An active licensee may voluntarily convert to inactive status.

B.     An inactive license is revoked if it is not renewed.

C.     An active license that is not renewed becomes a suspended license.

D.    An active license can only become inactive through a failure to renew.

127. A licensee attempts to get a principal to cancel a listing in order to get a referral fee through another party. This is the practice of

A.    Legal but unethical dual agency.

B.     Illegal relationship interference.

C.     Legal but unethical relationship interference.

D.    Illegal commission tampering.

128. An Arkansas broker applicant must have how much experience as a salesperson?

A.    None.

B.     1 year.

C.     2 years.

D.    3 years.

129. The Commission has heard and ruled on an alleged violation of license laws. Which of the following is true?

A.    The ruling may be appealed if filed within 15 days.

B.     The ruling may be appealed if filed within 30 days.

C.     The ruling may be appealed if filed within 60 days.

D.    The ruling is final and may not be appealed.

130. Which of the following is true?

A.    Licensees may re-take the state examination one time within six months following license issuance.

B.     Licensees may re-take the state examination twice within one year following license issuance.

C.     Licensees may re-take the state examination one time as a substitute for the initial continuing education requirement.

D.    Licensees may not take the state examination.

131. In order to reactivate an inactive license, licensees must

A.    Wait until the expiration date, then renew according to Commission procedure.

B.     Apply for a temporary license pending receipt of an active license from the Commission.

C.     Follow Commission procedures and pay the required fee.

D.    Inactive licenses cannot be reactivated.

132. What is the operative rule with respect to agency disclosure in a dual agency situation?

A.    To disclose your dual agency status to both parties upon initial contact.

B.     To disclose your dual agency relationship upon first substantive contact.

C.     To follow the same rules set forth for disclosing buyer agency and seller agency.

D.    Never enter a dual agency situation without written approval of the principal broker.

133. A broker landlord leases an apartment to a tenant. In this case the broker

A.    Must disclose he is a licensee immediately.

B.     Must disclose his licensed status prior to signing the lease.

C.     Must not disclose his licensed status at any time.

D.    Is not required to do anything.

134. A cornerstone of a fiduciary relationship is that the agent must demonstrate loyalty and

A.    Obedience.

B.     Obedience, provided the directives are practical and feasible.

C.     Obedience, provided the directives are legal.

D.    Obedience, provided the directives are not counter to the buyer’s interests.

135. What is the proper form and timing of dual agency disclosure in Arkansas?

A.    In writing by both parties prior to substantive communications.

B.     In writing by both parties prior to signing any transaction-related document.

C.     In writing by both parties prior to signing an offer or sale contract.

D.    In writing by both parties prior to closing.

136. A central duty of dual agents is to

A.    Avoid actions which will damage one party to the benefit of the other.

B.     Promote compromise between both parties in negotiating selling terms.

C.     Avoid disclosures that will disadvantage either party.

D.    Disclose all confidentialities to either buyer or seller.

137. Which of the following activities requires a real estate license?

A.    A person claiming to be an expert auctioneer.

B.     An attorney-in-fact acting under a power of attorney.

C.     A resident manager leasing the apartment adjacent to her own.

D.    A trustee in bankruptcy acting under a court order.

138. A broker’s office signage

A.    Must not be permanently attached to the office structure.

B.     Must bear the principal broker’s name.

C.     Must indicate the business is real estate related.

D.    Must be of a specified size.

139. A licensee who witnesses and is damaged by an unlicensed person practicing real estate is entitled to

A.    Institute criminal proceedings against the violator.

B.     Seek recompense from the Real Estate Recovery Fund.

C.     A hearing before the Commission.

D.    File an interpleader action with the court.

140. Which of the following best characterizes the makeup of the Arkansas Real Estate Commission?

A.    Three members who are licensees and two who are non-licensees.

B.     Four members are non-licensed citizens, and three are active licensees.

C.     Five members are licensees, and four members are consumers.

D.    Three members are citizens-at-large, and two are licensees.

141. Trust funds must be deposited within which time frame?

A.    No later than 3 days following execution of a contract or per principals’ instructions.

B.     No later than 7 days following execution of a contract or per principals’ instructions.

C.     No later than 3 days following receipt by the principal broker.

D.    No later than 7 days following receipt by the principal broker.

142. Is it necessary for a listing agent to disclose her agency relationship in writing.

A.    No, that is only required of buyer agents.

B.     No, verbal representation is sufficient.

C.     Yes, it must be in writing at first substantive contact.

D.    Initially, no, but a verbal disclosure must be followed up with a written disclosure.

143. How does an associate broker license differ from a salesperson’s license?

A.    The associate broker is authorized to train and supervise if directed by the principal broker.

B.     The associate broker is authorized to manage a branch office.

C.     The associate broker is both a broker and a salesperson.

D.    The associate broker holds a broker’s license.

144. Licensees holding expired licenses may

A.    Practice real estate for no more than 7 days following expiration.

B.     Not practice real estate.

C.     Practice real estate until notice is received of the expired status by the Commission.

D.    May practice real estate only if they continue to be employed by a principal broker.

145. Non-licensee Commissioners are selected

A.    from the state at large, subject to Senate confirmation.

B.     by the Senate.

C.     By the House of Representatives.

D.    by the Association of Realtors.

146. Which of the following is not an acceptable circumstance for disbursing trust funds?

A.    At the closing of a transaction.

B.     Per a separate agreement signed by the principals.

C.     Per interpretation of the contract authorizing the deposit.

D.    Upon receipt of a buyer’s affidavit.

147. Which of the following is not true of time share programs in Arkansas?

A.    They must be registered.

B.     They are regulated by the Arkansas Commission.

C.     Managing agents must be registered.

D.    Time share instruments do not cover management or operation functions.

148. Which of the following best characterizes the makeup of the Arkansas Real Estate Commission?

A.    Three members who are licensees and two who are non-licensees.

B.     Four members are non-licensed citizens, and three are active licensees.

C.     Five members are licensees, and four members are consumers.

D.    Three members are citizens-at-large, and two are licensees.

149. Trust funds are best defined as

A.    Other people’s money.

B.     Funds entrusted to a broker in connection with a transaction or service.

C.     Conditional funds earned by a broker for future services.

D.    A buyer’s deposit for a property purchase.

150. Which of the following is not a requirement for licensure?

A.    Majority age

B.     Evidence of a high school diploma.

C.     Payment of fees.

D.    Passing an examination.

151. The Commission consists of how many members?

A.    3

B.     5

C.     7

D.    9

152. Which of the following is true?

A.    Once delegated, the executive broker is solely responsible for branch activities.

B.     The principal broker may delegate training and trust account responsibility to the executive broker.

C.     The principal broker is the only party authorized to sign offer and acceptance forms.

D.    The consummation of a transaction must be supervised by the principal or branch executive broker.

153. Which of the following may manage a branch office of a brokerage?

A.    The principal broker only.

B.     The principal broker or executive broker.

C.     The executive broker only.

D.    Any licensee with a broker license.

Ch2 “Math” Questions

(Questions ONLY, ANSWERS WILL BE REVEALED WITH PROPER SUBSCRIPTION)

Tip: to find a certain word or key term,  press at the same time, the buttons:

( Ctrl and F ) on Windows computers

(Command and F ) on Mac computer

to bring up the in-page search box

1) Jamie Spiffup advised her clients they needed to paint their living room before showing the property. The walls of these rooms were all 10’ high. The wall lengths were 16’, 20’, 16’, and 20’. If a gallon of paint covers 200 SF, how many whole gallons would the sellers have to buy?

A.    2

B.     3

C.     4

D.    5

2) A rancher has a rectangular 40 acre piece of property fronting a highway. He wants to put a barbed-wire fence along his road frontage. How much fence does he need if his property depth is 1,200’?

A.    1,200’

B.     4,173′

C.     1,612′

D.    1,452′

3) What is 75% converted to a decimal?

A.    75.0

B.     7.50

C.     0.75

D.    0.075

4) Calculate how many acres are in the Southwestern 1/4 of the Northern 1/2 of the Eastern 1/2 of Section 14.

A.    20

B.     40

C.     80

D.    120

5) Two parcels of land priced at $1,500 per acre were purchased. One parcel was 25 acres in size and the other was 1 mile square in size. How much did these two parcels cost together?

A.    $965,000

B.     $979,500

C.     $997,500

D.    $960,000

6) Stacey owns a lot that has 180 feet of front footage and contains 36,000 square feet. She purchases two lots adjacent to each side of his lot. These side lots are each 200 feet deep and contain 19,000 square feet. What is the total front footage of all three lots?

A.    190

B.     200

C.     275

D.    370

7)  If a square-shaped lot measures 200’ on one side, what is the square footage of the lot?

A.    4,000

B.     40,000

C.     400

D.    40

8) Andre owned a 1/4 acre lot. He wanted to construct a 120’ x 80’ tennis court on the lot. How many square feet will remain uncovered after he builds the tennis court?

A.    1,290 SF remaining

B.     2,580 SF

C.     9,600 SF

D.    The court will not fit on the lot.

9) An investor just purchased a rectangular 1-acre retail lot for $250 a frontage foot. If she paid $100,000 total, what was the depth of the lot?

A.    109 feet

B.     400 feet

C.     174 feet

D.    250 feet

10) If a rectangular house is 50 feet wide and contains 2,500 sq/ft, what is its depth?

A.    100’

B.     75’

C.     50’

D.    125’

11) A commercial builder has a downtown lot with 250 frontage feet on Broadway. The lot is 200’ deep. By code, the builder must allow for a 15’ setback on Broadway, and 10’ on both sides of the lot. How many square feet does the builder have left to build on?

A.    46,000 SF

B.     50,000 SF

C.     42,300 SF

D.    42,550 SF

12) A comparable property has 4 bedrooms and the subject has 3 bedrooms. If bedrooms are valued at $30,000, how would you adjust a CMA to account for this?

13) An apartment building that sold for $450,000 had an annual income of $62,500. What is its gross income multiplier?

14) A rental house has monthly gross income of $1,200. A suitable gross rent multiplier derived from market data is 117. What estimated sale price (to the nearest $1,000) is indicated?

15) A property is being appraised by the cost approach. The appraiser estimates that the land is worth $10,000 and the replacement cost of the improvements is $75,000. Total depreciation from all causes is $7,000. What is the indicated value of the property?

16) A property is purchased for $200,000. Improvements account for 75% of the value. Given a 39-year depreciation term, what is the annual depreciation expense?

A.    $3,846

B.     $5,128

C.     $6,410

D.   $8,294 

17) If gross income on a property is 30,000, net income is $20,000 and the cap rate is 5%, the value of the property using the income capitalization method is

A.    $600,000.

B.     $400,000.

C.     $6,000,000.

D.    $4,000,000.

18) A property is being appraised using the income capitalization approach. Annually, it has potential gross income of $30,000, vacancy and credit losses of $1,500, and operating expenses of $10,000. Using a capitalization rate of 9%, what is the indicated value (to the nearest $1,000)?

A.    $206,000

B.     $167,000

C.     $222,000

D.    $180,000

19) A building has 5 office suites generating annual potential rent of $20,000 each. If the annual vacancy rate is 10% and the annual expenses are $45,000, what is the NOI? 

20) A property is being appraised by the cost approach. The appraiser estimates that the land is worth $32,000 and the replacement cost of the improvements is $220,000. Total depreciation from all causes is $44,000. What is the indicated value of the property?

A.    $176,000

B.     $296,000

C.     $208,000

D.    $252,000

21) A property is being appraised using the income capitalization approach. Annually, it has potential gross income of $40,000, vacancy and credit losses of $3,500, and operating expenses of $16,000. Using a capitalization rate of 8%, what is the indicated value (to the nearest $1,000)?

A.    $300,000

B.     $256,000

C.     $456,000

D.    $500,000

22) A house is being appraised using the sales comparison approach. The house has four bedrooms, three bathrooms, and no pool. The appraiser selects a comparable house that has three bedrooms, three bathrooms, and a pool. The comparable house just sold for $280,000. A bedroom is valued at $18,000, and a pool at $15,000. Assuming all else is equal, what is the adjusted value of the comparable?

A.    $313,000

B.     $277,000

C.     $280,000

D.    $283,000

23) A property’s value is $400,000 and its land value is $75,000. Assuming a depreciation term of 39 years, what is the amount of annual depreciation?

A.    $10,256

B.     $1,923

C.     $8,333

D.    $7,875

24)  The subject property has a no pool and a $5,000 screen porch. A comparable property that sold for $300,000 has no porch, one less $9,000 bathroom, and a small $4,000 pool. Assuming all else is equal, what is the adjusted value of the comparable?

A.    $310,000

B.     $318,000

C.     $300,000

D.    $292,000

25) The owner of a $200,000 property decided to buy a new $15,000 roof (which added no value to the property). The economic life of the roof is 12 years. Assuming the straight-line method of depreciation, what is the depreciated value of the property (attributable to the roof) after 2 years?

A.    $202,500

B.     $200,000

C.     $197,500

D.    $187,500

26) What is the GIM of a gas station with Annual rent of $104,400 and a value of $970,000?

A.    8.3

B.     9.3

C.     10.3

D.    99.9

27) What is the GRM of a condominium with monthly rent of $1,700 and a value of $240,000?

A.    70.8

B.     112.5

C.     141.2

D.    88.5

28) What is the GIM of a strip mall with annual income of $547,500 and a value of $6,345,000?

A.    8.6

B.     139.1

C.     103.2

D.    11.6

29) The subject property does not have a pool or a screen porch. A comparable that sold for $205,000 has a $1,000 screen porch, one more $2,500 half-bathroom, and a $6,000 pool. Assuming all else is equal, what is the adjusted value of the comparable?

A.    $200,500

B.     $195,500

C.     $214,500

D.    $207,500

30) A property has a net income of $770,000 and sells for $9,800,000. What is its cap rate?

A.    0.079

B.     0.127

C.     0.092

D.    0.113

31) A building has 7 office suites generating annual potential rent of $9,000 each. Vacancy = 8% and annual expenses are $25,000. Vending machines yield $3,000. What is the NOI?

A.    $63,000

B.     $35,960

C.     $32,960

D.    $66,000

32) A property is being appraised by the cost approach. The appraiser estimates that the land is worth $32,000 and the replacement cost of the improvements is $220,000. Total depreciation from all causes is $44,000. What is the indicated value of the property?

A.    $176,000

B.     $296,000

C.     $208,000

D.    $252,000

33) A borrower pays $1,000 for a $50,000 loan. How many points are paid?

34) A borrower pays 2 points on a $40,000 loan. What is the fee paid?

35) A borrower has a $500,000 interest only loan @ 5% interest. What are the annual and monthly payments?

36) The loan officer at FirstOne Bank tells Amanda she can afford a monthly payment of $1,300 on her new home loan. Assuming this is an interest-only loan, and the principal balance is $234,000, what interest rate is Amanda getting?

37) The Kruteks obtain a fixed-rate amortized 30-year loan for $280,000 @ 6.25% interest. If the monthly payments are $1,724, how much interest do the Kruteks pay in the second month of the loan?

38) A borrower obtains a loan for $200,000 with a 4.3207 constant. What is the monthly payment?

39) A borrower obtains a 5-year interest only loan of $20,000 @ 7%. How much interest will he or she pay? 

40) A mortgage lender uses an income qualification ratio of 28% of monthly Principal, Interest, Taxes, and Insurance (PITI) payment.  The Poormons earn $82,000 per year.  If annual taxes are estimated to be $6,000 and insurance $1,200 (totaling $7,200 a year or $600 a month), how much can the Poormons afford to pay per month for the loan by itself without the additional cost for Taxes and Insurance?

41) A lender offers an investor a maximum 70% LTV loan on the appraised value of a property.  If the investor pays $230,000 for the property, and this is 15% more than the appraised value, how much will the investor have to pay as a down payment?

42) Assume FHA qualifies borrowers based on a 41% debt ratio, meaning that the borrower’s total monthly debt including the loan, taxes, insurance and non-housing debt cannot exceed 41% of the borrower’s monthly income.  If a borrower grosses $4,000 per month and pays $600 monthly for non-housing debt obligations, what monthly payment for housing expenses can this person afford based on this ratio?

43) *edited out

44) A borrower obtained an 70% loan for $600,000. What was the price of the home (to the nearest thousand)?

A.    $420,000

B.     $857,000

C.     $750,000

D.    $769,000

45) *edited out

46) A borrower has a monthly payment of $1,980 on a loan with a monthly constant of 6.45. What is the loan amount (to the nearest hundred)?

A.    $354,800

B.     $283,300

C.     $198,000

D.    $307,000

47) A lender uses a 39% debt ratio. A borrower earns $40,000 / year and has monthly non-housing debt payments of $700. What housing payment can she afford?

A.    $600

B.     $700

C.     $900

D.    $1,300

48) *Edited out

49) A home buyer pays $1,800 / month for the interest-only loan on his new house. The loan’s interest rate is 6%. If he obtained a 80% loan, what was the purchase price?

A.    $216,000

B.     $275,000

C.     $450,000

D.    $360,000

$1,800 x 12 = $21,600, $21,600 ÷ 0.06 = $360,000, $360,000 ÷ 0.80 = $450,000

50) A borrower has a $770,000 interest-only loan @ 5.5% interest. What are the monthly interest payments?

A.    $4,235

B.     $1,855

C.     $3,529

D.    $3,111

51) Jerry recently obtained an 75% loan on his $410,000 home, and he had to pay $5,600 for points. How many points did he pay?

A.    1.4 points

B.     1.8 points

C.     5.6 points

D.    2.8 points

52) Laura obtains a new loan @ 67% of her home’s price of $300,000. The loan constant is 6.321. What is Laura’s monthly payment?

A.    $1,896

B.     $1,270

C.     $1,565

D.    $2,830

53) The Browns obtain a fixed-rate amortized 30-year loan for $310,000 @ 6% interest. If the monthly payments are $1,815, how much interest do the Browns pay in the first month of the loan?

A.    $1,815

B.     $1,550

C.     $265

D.    $1,495

54) Steve is buying Darryl’s house for $360,000. Steve’s loan amount is $275,000. He has agreed to pay 2 points at closing. How much will Steve pay for points?

A.    $3,500

B.     $7,200

C.     $5,500

D.    $6,200

55) A lender determines that a homebuyer can afford to borrow $160,000 on a mortgage loan. The lender requires an 80% loan-to-value ratio. How much can the borrower pay for a property and still qualify for this loan amount?

A.    $180,000

B.     $128,000

C.     $200,000

D.    $168,000

56)  Jackie obtains a 60% LTV loan on her new $250,000 home with an annual interest rate of 5.5%. What is the first month’s interest payment?

A.    $688

B.     $1,146

C.     $458

D.    $750

57) Ginnie has an interest-only home equity loan at an annual interest rate of 7%. If her monthly payment is $1,458, how much is the loan’s principal balance?

A.    $208,300

B.     $102,060

C.     $225,000

D.    $250,000

58) A loan applicant has an annual gross income of $76,000. How much will a lender allow the applicant to pay for monthly housing expense to qualify for a loan if the lender uses an income ratio of 30%?

A.    $2,280

B.     $2,400

C.     $2,700

D.    $1,900

59) A homeowner paid $185,000 for a house three years ago. The house sells today for $239,000. By what percent has the property appreciated?

60) A property sells for $180,000 one year after it was purchased. If the annual appreciation rate is 10%, how much did the original buyer pay for it?

61) An office building has $300,000 net income and sold for $4,800,000. What was the rate of return?

62) An office building has $400,000 net income and a cap rate of 8.25%. What is its value?

63) Yvonne bought a home in Biltmore Estates 3 years ago for $250,000. She obtained an 80% loan. Over the past three years, the total appreciation rate has been 18%, and she has paid down her loan by $4,000. What is Yvonne’s equity after this period?

64) Using the terms Potential Gross Income, Vacancy, Other Income, Operating Expenses, and Gross Operating Income, express the equation for Net Operating Income.

65) Describe the difference between NOI and cash flow. 

66)  An investor sold a property for $3 million and incurred $300,000 in selling costs. He originally paid $2.4 million 3 years ago and has depreciation expense totaling $150,000. What was his capital gain?

67) Mary Bright bought a home for $120,000, paying $24,000 down and taking a mortgage loan of $96,000. The following year she had a new roof put on, at a cost of $5,000. What is Mary’s adjusted basis in the house if she now sells the house for $150,000?

68) An investor pays $300,000 for a property, $50,000 of which is land, puts $50,000 capital improvements into it, and borrows $250,000 to finance the property. What is the property’s depreciable basis?

69) A principal residence is bought for $180,000. A new porch is added, costing $7,000. Five years later the home sells for $220,000, and the closing costs $18,000. What is the homeowner’s capital gain?

70) An income property has a net income of $20,000, interest expense of $12,000, cost recovery (depreciation) of $3,000, and a tax rate of 28%. What is its income tax liability?

71) An investment property generates a cash flow of $50,000 and appraises for $700,000. What is the owner’s return on investment?

72) An investment property generates a cash flow of $200,000. The owner has $450,000 equity in the property. What is the owner’s return on equity?

73) An apartment complex generates $778,000 in effective rental income and $7,000 in other income. The same complex has $378,000 in operating expenses and $12,000 as reserves. What is the net operating income of the complex?

A.    $395,000

B.     $407,000

C.     $400,000

D.    $387,000

74) An investment property generates a cash flow of $420,000 and appraises for $8,800,000. What is the owner’s return on investment?

A.    0.048

B.     0.209

C.     0.084

D.    0.098

75) An office building sells for $979,000 at a cap rate of 8.3%. What is its NOI?

A.    $97,900

B.     $85,173

C.     $92,772

D.    $81,257

76) A principal residence is bought for $110,000. A new garage is added, costing $21,000. Seven years later the home sells for $185,000, and the closing costs are $10,000. What is the homeowner’s capital gain?

A.    $175,000

B.     $65,000

C.     $54,000

D.    $44,000

77) A principal residence is bought for $190,000. A new porch is added, costing $9,000. Five years later the home sells for $261,000, and the closing costs are $21,000. What is the homeowner’s capital gain?

A.    $50,000

B.     $62,000

C.     $71,000

D.    $41,000

78) An apartment complex generates $335,000 in effective rental income and $2,500 in other income. The same complex has $144,000 in operating expenses and $116,000 in debt service payments. What is the pre-tax cash flow of the complex?

A.    $75,000

B.     $77,500

C.     $193,500

D.    $337,500

79) A condominium unit has $30,000 net income and sold for $500,000. What was the rate of return?

A.    0.05

B.     0.06

C.     0.075

D.    0.09

80) A property’s return on equity ratio is 28% and generates a cash flow of $70,000. How much equity does the owner have (to the nearest hundred)?

A.    $216,700

B.     $18,900

C.     $235,000

D.    $250,000

81) Brittany bought a house five years ago for $100,000 and obtained an 80% loan. Now the home is worth $125,000, and her loan balance has gone down $5,000. What is Brittany’s current equity?

A.    $125,000

B.     $75,000

C.     $50,000

D.    $45,000

82) A building generates $87,000 NOI after expenses and has a debt payment of $33,000. What is its cash flow?

A.    $54,000

B.     $87,000

C.     $120,000

D.    $38,000

83) An investment property’s return on equity ratio is 15% and the owner has $85,000 of equity. What is the property cash flow?

A.    $10,200

B.     $12,750

C.     $566,667

D.    $708,333

84) A home that was purchased for $440,000 with a $320,000 loan is now worth $530,000. The current loan balance is $280,000. What is the homeowner’s equity?

A.    $120,000

B.     $160,000

C.     $250,000

D.    $280,000

85) An investment property generates a cash flow of $40,000. The owner has $360,000 equity in the property. What is the owner’s return on equity?

A.    0.111

B.     0.144

C.     0.09

D.    0.069

86) Marcos Pizza has a percentage lease on its 1,500 SF space in the Ashwood Center. The terms are $1.25 / SF / month rent plus 2% of the store’s gross income. If monthly sales averaged $35,000 last year, how much annual rent did Marcos Pizza pay last year?

87) An apartment’s rent is scheduled to increase by 8%. If the current rent is $950, the new rent will be what?

88) A tax rate on a house with a $300,000 taxable value is 11 mills per thousand dollars of assessed valuation. What is the tax?

89) The village of Parrish has an annual budget requirement of $20,000,000 to be funded by property taxes. Assessed valuations are $400,000,000, and exemptions total $25,000,000. What must the tax rate be to finance the budget?

90) A $600,000 property sells at a 6% commission with a 50-50 co-brokerage split and a 50% agent split with her broker.  What are total, co-brokerage, agent’s, and broker’s commissions?

91) A home sells for $460,000 and has a loan balance of $300,000 at closing. If the seller agrees to pay a 7% commission, where closing costs are $4,000, how much will the seller net?

92) A home seller wants to net $80,000. The commission is 7%, the loan payoff is $200,000, and closing costs are $6,000.  What is the minimum listing price that the seller can agree to? 

93) A home sells for $330,000 and has a loan balance of $260,000 at closing. The commission is 6% and other closing costs are $14,000. What is the seller’s net?

A.    $50,200

B.     $70,000

C.     $56,000

D.    $36,200

94) A tax rate on a house with a $350,000 taxable value is 9 mills per thousand dollars of assessed valuation. What is the annual tax bill?

A.    $2,850

B.     $3,150

C.     $2,450

D.    $15,750

95)  A town has a tax base of $88,000,000 and a total assessed valuation of $99,000,000. What is the total amount of the town’s tax exemptions?

A.    $9,000,000

B.     $11,000,000

C.     $187,000,000

D.    $1,100,000

96) A restaurant’s rent is scheduled to increase by 7.1% next year. If the current monthly rent is $2,780, the new rent will be

A.    $2,613

B.     $2,945

C.     $2,919

D.    $2,977

97) An apartment’s rent is scheduled to increase by 4.4%. If the current rent is $1,255, what will the new rent amount be?

A.    $1,310

B.     $1,283

C.     $1,324

D.    $1,200

98) The sellers, Mr. and Mrs. Hernandez, listed their property for $112,000 and agreed to an exclusive right to sell listing agreement at a 4% commission to be paid to Lucky Nines Estate Company at closing. The sellers sold the property themselves during the listing period for $106,000. How much commission, if any, would Lucky Nines Real Estate Company be entitled to at closing?

A.    $4,240

B.     $4,480

C.     $0

D.    $4,360

99)  Seller Jones signed an exclusive right to sell listing on her home with Muller Realty for $155,000 at a commission rate of 5% to be paid to broker Muller at closing. As part of the agreement, broker Muller will split the commission equally with any other broker that can bring a buyer for Jones’ property. If another broker sold the property, how much will broker Muller receive?

A.    $0

B.     $3,875

C.     $7,750

D.    $1,550

100) A $340,000 property sells at a 7% commission with a 50-50 co-brokerage split and a 50% agent split with her broker. What is agent’s commission?

A.    $7,140

B.     $5,950

C.     $11,900

D.    $5,440

101) A town has a tax base of $74,000,000 and a budget of $600,000. What is the tax rate in terms of mills?

A.    12.3 mills

B.     10 mills

C.     8.1 mills

D.    15.2 mills

102)  A restaurant generates $72,000 in sales per month. The lease calls for 2.2% percentage rent. What is the monthly rent amount?

A.    $1,584

B.     $2,160

C.     $1,440

D.    $1,100

103) Chloe wants to net $50,000 on her house. Her closing costs will be $8,000 plus a 7% commission. She owes $200,000 on her loan. What is the minimum contract price that she can accept for her property?

A.    $268,817

B.     $277,419

C.     $223,656

D.    $286,654

104) A homeowner receives a tax bill that includes an amount for the library district, taxed at $2.00 per $1,000, and the fire protection district, taxed at $3.00 per $1,000. How much does the taxpayer have to pay for these two items if the property’s taxable value is $78,000?

A.    $546

B.     $1,560

C.     $390

D.    $234

105)  A property listed for $650,000 receives an offer for $610,000.  This offer’s percentage of the listing price is what?

106) A seller requires a 2.5% deposit on a property listed for $400,000.  The required deposit (assuming a full price offer) is what?

107) An annual tax bill is $2,400. Closing is on February 14th and the day of closing belongs to the seller. What is the seller’s share of the taxes using the 360-day method?

108) A seller receives $1,000 rent in advance on her property that she is selling.  The closing occurs on the 10th of the month.  Using the 360-day method, how is this proration handled, assuming the seller owns the day of closing?

109) A property’s real estate taxes are $1,000, and this amount is paid in arrears. The closing was on May 5th. How would the entry read on the closing statement? Assume the taxes remain the same, the seller owns the day of closing, and use the 360-day method.

A.    Credit the buyer $347.22, debit the seller $347.22

B.     Debit the buyer $347.22, credit the seller $347.22

C.     Credit the seller $342.47, debit the buyer $342.47

D.    Debit the buyer $342.47, credit the seller $342.47

110) A borrower receives a mortgage for a 30 year loan with a principal balance of $225,000, a payment of $1245, and at an interest rate of 4.25%. If she makes 2 payments on the loan, what will her principal balance be after the second payment is applied?

A.    $224,103.00

B.     $224,102.17

C.     $223,406.24

D.    $224,551.88

111)  Jared is buying Victoria’s house. The closing date (day belongs to seller) of the sale transaction is September 1 (day 244 of the year). Current year real estate taxes are $2,100 (will be billed to buyer next year). Use the 365-day method for prorating. What is the seller’s share of the real estate taxes?

A.    $1,403

B.     $2,100

C.     $1,050

D.    $702

112) A seller received a monthly rental payment of $3,000 in advance. At closing, the seller has earned only $900 of this rent. What should appear on the closing statement?

A.    A debit to the seller and credit to the buyer for $3,000.

B.     A debit to the seller for $2,100 and a credit to the buyer for $2,100.

C.     A debit to the seller for $900 and a credit to the buyer for $900.

D.    A credit to the seller for $2,100 and debit to the buyer for $2,100.

113) A buyer will receive a utilities bill for an estimated $400 at the end of the month. At closing, the seller has used an estimated $100 of the bill. What should appear on the closing statement?

A.    A credit to the buyer for $100 and debit to the seller for $100

B.     A credit to the buyer for $300 and debit to the seller for $300

C.     A debit to the buyer for $100 and a credit to the seller for $100.

D.    A credit to the buyer of $200 and a debit to the seller of $200.

114) If the taxes for the current year WERE NOT paid and the property sold during the year, how would the entry appear on a full settlement statement?

A.    Debit the seller and credit the buyer

B.     Credit the seller and debit the buyer

C.     Debit the broker and credit the seller

D.    Credit the broker and debit the buyer

115) A home costing $540,000 is worth $588,000 two years later. What is the one-year appreciation rate?

A.    8.8%

B.     4.4%

C.     4.1%

D.    5.0%

116) Christine has monthly loan payments of $1,857. Her loan is for $300,000 @ 6.3% interest. How much of her first payment goes towards interest?

A.    $1,757

B.     $100

C.     $1,575

D.    $282

117) A shopping mall grosses $625,000 / month. If the market value of this property is $52,000,000, what is its Gross Income Multiplier (GIM)?

A.    6.9

B.     10.4

C.     7.7

D.    83.2

118) Debra wants to net $100,000 on her house. Her closing costs will be 15,000 plus a 6% commission. She owes $310,000 on her loan. What is the minimum listing price that Debra can agree to?

A.    $438,221.39

B.     $425,000

C.     $452,127.66

D.    $452,100

119) An apartment building has $105,000 net income and sold for $1,450,000. What was the rate of return?

A.    7.2%

B.     13.8%

C.     8.3%

D.    9.1%

120) Jerry recently obtained an 65% loan on his $295,000 home, and he had to pay $4,300 for points. How many points did he pay?

A.    2.2 points

B.     1.5 points

C.     1.8 points

D.    3.4 points

121) If an investor wants to combine a 5/8 acre parcel with a 3.9 acre parcel, how big will the parcel be, expressed as a decimal?

A.    4.675 acres

B.     4.525 acres

C.     3.2750 acres

D.    4.58 acres

122) A $150,000 loan has monthly interest-only payments of $1,000. Its annual interest rate is

A.    3 percent.

B.     6.5 percent.

C.     8 percent.

D.    12.5 percent.

123) Seller David requires a 4% deposit on all offers. Buyer Jack wants to offer $115,000 for the property. The property was appraised at $122,000. What must the earnest money deposit be if Jack presents his current offer?

A.    $4,600

B.     $4,740

C.     $4,880

D.    $2,340

125) A house sells for $237,000. What would Jane’s commission rate be as a percent if she received a check for $11,400?

A.    4.6%

B.     4.8%

C.     6.2%

D.    5.4%

126) The subject has $8,000 pool and a $2,000 chimney but no porch. A comparable that sold for $199,000 has a $3,000 porch but no pool or chimney. Assuming all else is equal, what is the adjusted value of the comparable?

A.    $206,000

B.     $186,000

C.     $189,000

D.    $192,000

127) If the monthly rent of a property is $4,000, and the Gross Rent Multiplier (GRM) is 91, what is the value of the property?

A.    $404,000

B.     $364,000

C.     $439,560

D.    $324,000

128) A homeowner receives a tax bill that includes an amount for the school district, taxed at $9.00 per $1,000, and the fire protection district, taxed at $3.00 per $1,000. How much does the taxpayer have to pay for these two items if the property’s taxable value is $336,000?

A.    $4,032

B.     $3,024

C.     $8,064

D.    $5,040

129) If a borrower had an interest rate of 5 1/4 percent and refinanced, lowering the interest rate by 3/8 percent, what is the amount of interest after refinancing?

A.    4 ½ percent

B.     5 percent

C.     4 ¾ percent

D.    4 7/8 percent

130) Seller Trevor receives an offer of $181,000 on a property he listed at $193,000. The property has been appraised at $198,000. How much is the offer as a percent of the listing price?

A.    91.4%

B.     97.5%

C.     95.2%

D.    93.8%

131) Christine has monthly loan payments of $1,857. Her loan is for $300,000 @ 6.3% interest. How much of her first payment goes towards interest?

A.    $1,757

B.     $100

C.     $1,575

D.    $282

132. Amy agreed to a contract price of $100,000 for a home and secured a mortgage loan for $80,000. If the appraised value is $110,000, what is the loan to value ratio?

A.    100%

B.     82%

C.     80%

D.    125%

133. A building generates $103,000 in effective rental income and $900 in vending machine income. The same complex has $40,700 in operating expenses and $36,000 in debt service payments. What is the pre-tax cash flow of the complex?

A.    $26,300

B.     $67,900

C.     $27,200

D.    $62,300

134. If the roof a property cost $14,000 and its economic life is 18 years, what would its value be after four years using a straight-line method of depreciation?

A.    $13,222

B.     $9,240

C.     $10,889

D.    $12,666

135. What is the volume of a 90′ x 20′ x 12′ house?

A.    21,600 cubic feet

B.     1,800 cubic feet

C.     3,750 cubic feet

D.    36,000 cubic feet

136. What is the number one rule of adjusting properties when using the sales comparison approach to value?

A.    If the comparable is inferior to the subject, subtract value from the comparable.

B.     If the comparable is superior to the subject, add value to the comparable.

C.     Never adjust the subject property

D.    Always use assessed value, not market value

137. Brendan’s property taxes are being calculated for county and school taxes. School taxes are 6 mills and county taxes are 5 mills. How much will Brendan pay in taxes if his property’s taxable rate is $350,000?

A.    $38,500

B.     $2,100

C.     $3,850

D.    $3,500

138. A sale transaction closes on April 15th. The day of closing belongs to the seller. Real estate taxes for the year, not yet billed, are expected to be $2,110. According to the 365-day method, what is the seller’s share of the tax bill?

A.    $626

B.     $675

C.     $607

D.    $721

139. An FHA-insured loan in the amount of $57,500 at a 6 ½% interest rate for 30 years was closed on March 17. The first monthly payment is not due until May 1. If the interest is paid monthly in arrears, how much pre-paid interest does the buyer owe at closing? (Use a 360-day year)

A.    $145.32

B.     $311.52

C.     $551.20

D.    $3,737.50

140. An apartment building that sold for $780,000 had a monthly gross income of $8,000. What is its monthly gross rent multiplier?

A.    97.5

B.     62.4

C.     103

D.    158

141. Shelly bought a house five years ago for $150,000 and obtained an 80% loan. Now the home is worth $140,000 and her loan balance has been reduced by $12,000. What is Shelly’s current equity?

A.    $32,000

B.     $42,000

C.     $44,000

D.    $2,000

142. A lender determines that a homebuyer can afford to borrow $220,000 on a mortgage loan. The lender requires an 85% loan-to-value ratio. How much can the borrower pay for a property and still qualify for this loan amount (to the nearest $1,000)?

A.    $187,000

B.     $243,000

C.     $254,000

D.    $259,000

143. A five-sided lot has the following dimensions: side A = 44′, side B = 67′, side C = 91′, side D = 18′, and side E = 55′. What is the perimeter of the lot?

A.    257 feet

B.     220 feet

C.     320 feet

D.    275 feet

144. A borrower obtains a 30-year $210,000 amortized loan at a 6% interest rate. If his monthly payment is $1199.10, how much is applied to the principal balance in the first month?

A.    $143.54

B.     $144.94

C.     $169

D.    $149.10

145. A property is being appraised using the income capitalization approach. Annually, it has an estimated gross income of $48,000, vacancy and credit losses of $3,600, and operating expenses of $15,000. Using a capitalization rate of 8%, what is the property’s value (rounded up to the nearest $1,000)?

A.    $413,000

B.     $368,000

C.     $340,000

D.    $600,000

146. Agent Daisy agrees to a 5% commission to list a home at $330,000. The property is sold through another cooperating brokerage with that firm to receive 50% of the total commission on the $330,000 sale. If Daisy receives 55% of her broker’s commission and does not bring the buyer, how much does Daisy’s broker receive from the sale?

A.    $16,500

B.     $8,250

C.     $4,537.50

D.    $3,712.50

147. A rented office space has a monthly income of $3,800. A suitable gross income multiplier derived from market data is 11.1. What would the estimated value be? Round to the nearest $1,000.

A.    $380,000

B.     $422,000

C.     $506,000

D.    $342,000

148. A homeowner bought a house one year ago for $250,000. Since then, the homeowner has spent $4,000 to pave the driveway and has added a screen porch at a cost of $3,000. Total depreciation has been $6,000. What is the homeowner’s adjusted basis?

A.    $257,000

B.     $251,000

C.     $263,000

D.    $237,000

149. A house is sold for $105,500 and the commission rate is 6 percent. If the commission is split 60/40 between the selling broker and the listing broker, respectively, and each broker splits his share of the commission evenly with his salesperson, how much will the listing salesperson receive from this sale?

A.    $1,266

B.     $2,532

C.     $3,165

D.    $1,899

150. A fine jewelry store leased a space at the mall with a base rent of $1,800 a month, plus 4% of all sales over $200,000. If the gross sales were $325,000, what was the total amount of rent paid by Heinz Fine Jewelry at the end of the year?

A.    $26,600

B.     $21,600

C.     $125,000

D.    $5,000

151. What is 0.0475 converted to a percentage?

A.    4.75%

B.     0.475%

C.     47.5%

D.    475%

152. If a square-shaped lot measures 125’ on one side, what is the square footage of the lot?

A.    250’

B.     15,625 square feet

C.     500’

D.    1,855 square feet

153. Stacey owns a lot that has 180 feet of front footage and contains 36,000 square feet. He purchases two identically-sized lots adjacent to each side of his lot. These side lots are each 200 feet deep and each side lot contains 19,000 square feet. What is the total front footage of all three lots?

A.    190

B.     200

C.     275

D.    370

154. How many acres are there in the N ½ of the NE ¼ and the NE ¼ of the SE ¼ of a section?

A.    20 acres

B.     40 acres

C.     80 acres

D.    120 acres

155. What is 25% converted to a decimal?

A.    25.0

B.     2.50

C.     0.25

D.    0.025

156. Six years ago a commercial property owner paid $490,000 for her complex which included 10 acres of land valued at $100,000. Using a 40-year straight-line depreciation method, what would be the current value of the apartment complex?

A.    $330,000

B.     $390,000

C.     $400,000

D.    $431,500

157. A property currently valued at $450,000 is expected to appreciate 8% each year for the next 3 years. What will be its appreciated value at the end of this period?

A.    $524,880

B.     $566,870

C.     $474,000

D.    $558,000

158. If a hotel has an annual Net Operating Income of $812,000 at a 9.35% cap rate, what is its current value (to the nearest thousand)?

A.    $7,592,000

B.     $9,350,000

C.     $8,684,000

D.    $6,767,000

159. A sale transaction on rental property closes on December 10th. The landlord received the December rent of $4,400 on December 1. Assuming the closing day is the seller’s, and that the 360-day method is used for prorating, how much will the seller owe the buyer?

A.    $1,419

B.     $1,467

C.     $2,933

D.    $2,981

160. A seller of a property, listed at $200,000, accepted a 90% offer. The home appraised at $185,000 and the buyers obtained a loan for 85% for 30 years at 5% interest. What is the first month’s interest?

A.    $637.50

B.     $7,650

C.     $737.50

D.    $6,750

161. If a lot contains 48,000 square feet and is 240’ wide, how deep is the lot?

A.    480’

B.     240’

C.     200’

D.    720’

162. Violet has a FHA loan for $90,000. The lender is requiring a 1% discount point to the lower the interest rate. What amount is the lender charging for the discount point?

A.    $600.00

B.     $90.00

C.     $900.00

D.    $1,000.00

163. If a borrower’s monthly interest payment on an interest-only loan at an annual interest rate of 7.3% is $877, how much was the loan amount (rounded to the nearest hundred)?

A.    $120,100

B.     $100,300

C.     $144,200

D.    $134,200

164. If a buyer purchases 25% of a lot in the spring and then purchases 50% more later in the fall, what percentage of the lot is still available for purchase?

A.    20%

B.     25%

C.     50%

D.    75%

165. A home sells for $150,000 and has a mortgage loan balance of $100,000 at closing. If the commission is 5% and other closing costs are $6,000, what is the seller’s net?

A.    $44,000

B.     $40,000

C.     $32,250

D.    $36,500

166. A seller wants to net $55,614 from the sale of her house after paying a 7% commission. Her minimum sales price will have to be?

A.    $55,341

B.     $59,506

C.     $59,800

D.    $63,000

167. A tax rate on a building with a $530,000 taxable value is 4.5 mills per thousand dollars of assessed valuation. What is the annual tax liability?

A.    $23,850

B.     $1,590

C.     $2,385

D.    $15,900

168. A strip mall generates $215,000 in effective rental income and $3,000 in other income. The same mall has $102,000 in operating expenses and $15,000 as reserves. What is the net operating income of the strip mall?

A.    $113,000

B.     $99,000

C.     $101,000

D.    $116,000

169. A home seller wants to net $15,000. If he has agreed to pay a 5% commission, the loan payoff is $94,000 and closing costs are $16,000, what must the minimum listing price be? Round to the nearest $100.

A.    $125,000

B.     $130,700

C.     $136,300

D.    $131,600

170. Land sells for $9,000 an acre. What will 750,000 SF of land sell for? Round to the nearest thousand.

A.    $105,000

B.     $16,000

C.     $129,000

D.    $155,000

171. The annual property taxes of $1,700 were paid in arrears by the buyer. If the closing took place on June 4th and the seller was responsible through the day of closing, how did this appear on the settlement sheet if the 360-day method is used?

A.    $727 DS, CB

B.     $727 DB, CS

C.     $973 DS, CB

D.    $973 DB, CS

172. Assuming that the listing broker and the seller broker in a transaction split their commission equally, what was the sales price of the property if the commission rate was 6 ½ percent the listing broker received $5,187?

A.    $159,600

B.     $79,800

C.     $119,700

D.    $179,800

173. A buyer secured a $125,000 loan at 4.5% interest rate. To receive a lower interest rate, the buyer was required to buy down three discount points. How much were the discount points?

A.    $3,550.00

B.     $3,750.00

C.     $4,250.00

D.    $3,892.00

174. Ralph is buying Terry’s house. The buyer’s loan amount is $105,580. If the buyer has agreed to pay 3 points at closing, how much will he pay for the points?

A.    $4,223

B.     $1,584

C.     $396

D.    $3,167

175. If a corporate building has nine office suites that rents for $14,800 per month each, but suffers from a 14% vacancy rate and annual expenses of $21,100, what is the NOI of the building (round to the nearest $100)?

A.    $93,500

B.     $1,353,500

C.     $133,200

D.    $84,600

176. Sean, age 37, sold the home he purchased three years ago and now rents an apartment. He had originally purchased his home for $86,500 and sold it for $115,300. What is Sean’s capital gain?

A.    $11,320

B.     $16,980

C.     $28,800

D.    $0

177. Assuming the FHA qualifies borrowers based on a 31% debt ratio, if a borrower’s monthly gross income is $4,400, what monthly payment for housing expenses can this person afford based on this ratio?

A.    $3,036

B.     $4,400

C.     $1,364

D.    $1,244

178. A 198-foot x 330-foot lot sold for $30,000. What was the price per acre?

A.    $20,000

B.     $21,780

C.     $30,000

D.    $43,560

179. Two parcels of land priced at $1,200 per acre were purchased. One parcel was 15 acres in size and the other was 1 mile square in size. How much did these two parcels cost together?

A.    $180,000

B.     $640,000

C.     $786,000

D.    $1,020,000

180. If a house sold for $40,000 and the buyer obtained an FHA-insured mortgage loan for $38,600, how much money would be paid in discount points if the lender charged four points?

A.    $1,600

B.     $1,544

C.     $1,500

D.    $385

181. If one discount point costs the borrower 1% of the loan amount, and increases the lender’s yield by 1/8th of one percent, how many discount points must be purchased to lower the interest rate by 1%?

A.    1

B.     4

C.     8

D.    16

Ch3 Both Law and Math questions sample exam

(Questions ONLY, ANSWERS WILL BE REVEALED WITH PROPER SUBSCRIPTION)

Tip: to find a certain word or key term,  press at the same time, the buttons:

( Ctrl and F ) on Windows computers

(Command and F ) on Mac computer

to bring up the in-page search box

1. An apartment complex generates $905,000 in Effective Gross Income and $14,000 in other income. The same complex has $415,000 in operating expenses and $39,000 as reserves. What is the Net Operating Income of the complex?

A.    $451,000

B.     $465,000

C.     $490,000

D.    $504,000

2. To renew an inactive license as an inactive license, a licensee must

A.    Complete the renewal forms and pay the fees.

B.     Complete the forms only.

C.     Complete the renewal forms, pay the fees, and complete the CE requirement.

D.    Inactive licensees are not required to renew as inactive.

3. A farmer wants to net at least $10,000/acre on the sale of his 80-acre property. If he allows for a total of 10% for commissions and closing costs, what should his listing price be per acre? Assume the farmer has no mortgage.

A.    $11,111

B.     $11,000

C.     $10,900

D.    $10,000

4. Non-resident license applicants

A.    May request a waiver of the state portion of the exam.

B.     May request a waiver of the state and national portions of the state exam.

C.     Must pass the entire state exam, without exception.

D.    Are exempt from taking the Arkansas state exam if there is reciprocity.

5. An investor paid $43,000 for a lot and $520,000 to have a strip mall constructed on it. He has depreciated the property for the past 15 years on a 39-year straight-line schedule. If he sells the property this year and realizes $710,000 after closing expenses, what is his capital gain?

A.    $190,000

B.     $233,000

C.     $347,000

D.    $433,000

6. When a principal broker discontinues business operations, the broker is required to

A.    Surrender his license only.

B.     File for inactive status.

C.     Surrender all licenses of the brokerage.

D.    Surrender all licenses except his own.

7. To maintain a minimum balance in the Real Estate Recovery Fund, the Commission is empowered to

A.    Charge an override on real estate commissions earned on commercial transactions.

B.     Levy a fee on brokerage companies based on licensee headcounts.

C.     Increase licensing fees to a statutory maximum.

D.    Charge licensees annual fees.

8. Tyler Holdlong owns a small retail property that he inherited from his father. There are no mortgages or interest expenses connected with the property. Tyler takes an annual cost recovery expense of $3,000. The property has a monthly gross income of $3,500 and monthly operating expenses of $1,100. Tyler’s taxable income from this property will be taxed at a rate of 25%. What is the tax liability for the year?

A.    $10,500

B.     $7,950

C.     $7,200

D.    $6,450

9. A seller’s closing statement at closing charged him with title insurance, contrary to the agreement between the seller and the buyer. The seller files a complaint, charging negligence. Does the seller have grounds for the complaint?

A.    No, since the closing costs must be paid by the buyer by law.

B.     No, since the title company has the final authority on who pays title insurance.

C.     No, since the broker did not conduct the closing.

D.    Yes, since the broker is responsible for disseminating closing instructions.

10. The name of a residential brokerage

A.    Cannot imply the business performs commercial brokerage.

B.     Must not be confused with other firm names.

C.     Must contain the name of the principal broker.

D.    Is the sole responsibility of the owner.

11. Which of the following is a regulation for branch offices?

A.    All licensees in the branch must display their licenses.

B.     The branch must have an associate broker designated as manager.

C.     The branch office may not have a trust account.

D.    The executive broker is responsible for all trust account activity.

12. An advance fee is

A.    A security deposit.

B.     Money received for services charged but not yet performed.

C.     Moneys paid as an advance of rent.

D.    Charges for any brokerage service.

13. A property has sold for $185,000. The listing agreement calls for a commission of 6.5%. The listing broker and selling broker agree to share the commission equally. What will the listing agent receive if the agent is scheduled to get a 65% share from his broker?

A.    $2,109

B.     $3,908

C.     $4,209

D.    $4,467

14. Anne obtains a new loan @ 80% of her home’s price of $740,000. The loan constant is 5.645. What is Anne’s monthly payment?

A.    $2,883

B.     $3,342

C.     4,177

D.    $3,882

15. The lender quotes closing costs of $800 plus 2 points on a $610,000 loan. How much will the borrower have to pay?

A.    $6,100

B.     $11,400

C.     $13,000

D.    $16,050

16. The purpose of a temporary license is

A.    To allow for short-term practice while the licensee awaits the permanent license.

B.     To allow licensees to practice while they are awaiting a Commission hearing.

C.     To allow licensees a grace-period following a suspension ruling.

D.    To allow licensees to practice once they have affiliated with a principal broker.

17. An unlicensed leasing assistant may NOT perform which of the following?

A.    Deliver a lease application

B.     Receive a security deposit

C.     Receive a rent payment

D.    Negotiate a rental unit without instructions from the owner.

18. A property is being appraised by the Cost Approach. The appraiser estimates that the land is worth $33,000 and the replacement cost of the home is $110,000. A new $20,000 garage was recently added. Total depreciation from all causes is $7,000. What is the indicated value of the property?

A.    $170,000

B.     $156,000

C.     $136,000

D.    $123,000

19. Upon initial licensure, licenses are issued as

A.    Active.

B.     Inactive.

C.     Temporary.

D.    Active or inactive, depending on the applicant’s wishes.

20. A buyer will receive a power bill for an estimated $140 at the end of the month. At closing, the seller has used an estimated $67 in power. What should appear on the closing statement?

A.    Credit the buyer $73 and debit the buyer $67

B.     Credit the buyer $67 and debit the seller $67

C.     Credit the seller $73 and debit the buyer $73.

D.    Debit the power company $73 and debit the buyer $67

21. Phillip advised his clients they needed to paint their master bedroom before showing the property. The walls of this room were 11’ high. The wall lengths were 13’, 19’, 13’, and 17’. If a gallon of paint covers 180 SF, how many whole gallons would the homesellers have to buy?

A.    3 gallons

B.     4 gallons

C.     5 gallons

D.    8 gallons

22. A property’s taxes are $9,540 and are paid for in arrears. The property was sold, and closing took place on March 7. The seller was responsible for the day of closing. Using the 360 day method, how will taxes be prorated?

A.    Credit the buyer $1775.50 and Debit the Seller $1775.50

B.     Credit the seller $186 and debit the buyer $186.

C.     Credit the buyer $1,590 and debit the seller $1,590.

D.    Credit the buyer $1,675.50 and debit the seller $1,675.50.

23. A license applicant has how many days to pay the appropriate fees following successful completion of the state exam?

A.    30 days.

B.     60 days.

C.     90 days.

D.    120 days.

24. In Arkansas, claims for referral fees paid between licensees

A.    Are illegal.

B.     Are legal

C.     Must have a reasonable cause.

D.    Must have a bona fide, documented claim to be legitimate.

25. In what areas do the requirements for a broker’s license differ from those for a salesperson’s license?

A.    The background check and age.

B.     In the background check and experience requirements.

C.     In the passing score percentage and experience requirements.

D.    In the age and education requirements.

26. One’s real estate license may be suspended by the Commission

A.    Provided that it is an active license.

B.     If an active licensee fails to renew.

C.     If an inactive licensee fails to renew.

D.    Regardless of one’s license status.

27. Information contained in a license applicant’s criminal background check is made available to

A.    The Commission only.

B.     To the Commission, the applicant, and the applicant’s authorized representative.

C.     To the Commission, the applicant, and any plaintiffs, if applicable.

D.    To the general public via public records.

28. A license applicant’s criminal history indicates a prior plea of no lo contendere to fraud. In this case, what happens to his application?

A.    It is approved due to the no lo contendere plea.

B.     It is suspended pending a Commission hearing.

C.     It is suspended pending an investigation.

D.    It is denied.

29. A property is purchased for $480,000. The land is valued at 10% of the initial purchase price of the property. Given a 39-year depreciation term, what is the annual depreciation expense?

A.    $5,333

B.     $11,077

C.     $12,308

D.    $18,720

30. The primary task of an executive broker is

A.    Managing the branch and supervising salespersons.

B.     Delegating office tasks to assistants.

C.     Managing the overall training effort of the company.

D.    Accounting and reconciling branch trust funds.

31. Among other requirements for a salesperson’s license, applicants must have which of the following?

A.    30 hours of approved education.

B.     30 hours of approved education, including 15 hours in real estate principles.

C.     30 hours of approved education and one year experience.

D.    60 hours of approved education.

32. Dan is buying Jessica’s house. The closing date (day belongs to seller) of the sale transaction is March 9th. Current year real estate taxes are $1,900 (will be billed to Dan next year). Use the 365-day method for prorating. What is Jessica’s share of the real estate taxes for the current year?

A.    $354

B.     $364

C.     $390

D.    $1,546

33. Jeremy’s license has been expired for 4 years. What must Jeremy do to renew?

A.    Complete the same requirements of a new license applicant.

B.     Complete the same requirements as an inactive licensee.

C.     Re-take the test, complete the CE requirements, apply, and pay the fees.

D.    Re-take the test, apply, and pay the fees.

34. Licensees are charged with which of the following responsibilities when they obtain property listings?

A.    They must certify that the property is in marketable condition.

B.     They must develop an understanding of the seller’s background and motivations.

C.     They must warrant to the seller that they will sell the property within the listing period.

D.    They must acquire a certain degree of knowledge of the property.

35. A building has 9 apartments generating annual potential rent of $1,500 each month. Vacancy = 6% and annual expenses are $84,000. Vending machines yield $1,800 per year. What is the NOI?

A.    $152,280

B.     $88,550

C.     $79,800

D.    $70,080

36. In selling her home, Angela informs a buyer that she used to be a broker, but is no longer licensed. In this case, the broker

A.    Is engaging in illegal self dealing.

B.     Must disclose the identity of her former broker.

C.     Is illegally practicing real estate without a license.

D.    Did nothing illegal.

37. A licensee sells a parcel of land to a neighbor without going through his principal broker. This is an example of which of the following?

A.    Dual agency.

B.     Fraud.

C.     Independent dealing.

D.    Misrepresentation.

38. Management and transaction records

A.    must be maintained as hard copies.

B.     may be electronic.

C.     may be electronic, but must be printable.

D.    must be both electronic and in print.

39. A developer wants to develop a 18-acre subdivision. He figures that the streets and common area will take up about 20% of this overall area. If the minimum lot size is to be 10,000 SF, how many lots can the developer have on this property?

A.    18 lots

B.     48 lots

C.     62 lots

D.    78 lots

40. What is the overall purpose of the Arkansas Real Estate License Act?

A.    To create brokers and affiliate brokers.

B.     To protect the public and establish minimum levels of broker competence.

C.     To regulate real estate markets and broker commissions in Arkansas.

D.    To create a Real Estate Commission and a set of rules for it to enforce.

41. Natalie wants to make a 25% profit on her $70,000 land investment (there is no mortgage). She figures agents charge a 6% commission, and that closing costs will be an additional $1,200. What should she accept as a final sale price (to the nearest hundred)?

A.    $87,500

B.     $94,400

C.     $100,500

D.    $106,700

42. If a rectangular office space is 72 feet wide and has a 410-foot perimeter, what is its area?

A.    5,184 square feet

B.     7,755 square feet

C.     9,576 square feet

D.    19,152 square feet

43. Annette is renewing her license for the first time. What is her CE requirement for her first renewal?

A.    12 hours.

B.     9 hours; three from last year and six for the current year.

C.     6 hours.

D.    no hours.

44. A lender offers an investor a maximum 85% LTV loan on the appraised value of a property. If the investor pays $160,000 for the property how much will the investor have to pay as a down payment?

A.    $16,000

B.     $24,000

C.     $32,000

D.    $136,000

45. A town has a tax base of $411,000,000 and a budget of $850,000. What is the tax rate in terms of mills?

A.    2.1 mills

B.     4.8 mills

C.     21 mills

D.    48 mills

46. A receiver acting under court order

A.    Must be licensed.

B.     Is exempt from licensure.

C.     Must at least have a temporary license.

D.    Is exempt provided the court specifically permits the activity.

47. A property sells for $140,000 two years after it was purchased. If the annual appreciation rate is 6%, how much did the original buyer pay for it?

A.    $120,500

B.     $121,000

C.     $123,740

D.    $124,600

48. In the year of license renewal, what is a broker’s deadline for renewing the license without incurring additional fees?

A.    August 1st.

B.     September 30th.

C.     December 1st.

D.    December 31st.

49. Licensee Alice has been licensed for two years. Her birthday is January 18th. When does her license expire?

A.    On January 18th of the following year.

B.     On January 18th two years later.

C.     Twelve months from the date of last renewal.

D.    The following December 31st.

50. Which of the following is an authorized duty of the Commission?

A.    Establish procedures for auctions.

B.     Establish brokerage office policy and procedures.

C.     Regulate the number of licensees permitted licensure in Arkansas.

D.    Adjudicate law violations in circuit and appellate courts.

Ch4 National Ownership (Questions ONLY, ANSWERS WILL BE REVEALED WITH PROPER SUBSCRIPTION)

Tip: to find a certain word or key term,  press at the same time, the buttons:

( Ctrl and F ) on Windows computers

(Command and F ) on Mac computer

to bring up the in-page search box

What five economic characteristics affect the value of land in the marketplace?
 

What are the three physical characteristics of land?
 

Explain the differences between the legal concepts of land and real estate.
 

Define special purpose real estate and give an example.
5. Name the five major rights included in the bundle of rights to real estate.

6. Define the “right to use” and describe its limitations.

7. What is the difference between littoral rights and riparian rights?

8. What are the legal tests that determine if an item is a fixture? 

9. Name the aspects of real property interests that are regulated by government.

10. Describe the kinds of interests regulated at each level of government.

11.  Even though it is attached to a structure, an item may be considered personal property rather than real property if

A.    the owner originally intended to remove it after a period of time.

B.     it can be removed without altering the appearance of the structure.

C.     it is unnecessary to the physical integrity of the structure.

D.    the owner installed it at some time after acquiring the real property.

12. Which of the following is considered to be real property?

A.    Natural things movable by law.

B.     Notes secured by mortgages on real estate.

C.     House plants.

D.    Permanent fixtures.

13. Name some of the primary uses of legal descriptions.

14. Give a simple description of the metes and bounds method of description.

15. What are the main elements of the rectangular survey system?

16. In the rectangular survey method, why is it necessary to have guide meridians, standard parallels, and quadrangles?

17. Why is it necessary for a complete legal description to include the county and state?

18. A lease is an example of a(n)

A.    transfer of a portion of the bundle of rights.

B.     encroachment on the bundle of rights.

C.     transfer of the complete bundle of rights.

D.    transfer of surface rights.

19. The right to build a taller structure on top of an existing structure is an example of

A.    the right to encumber.

B.     surface rights.

C.     the right to liquidate.

D.    air rights.

20. What are riparian rights concerned with?

A.    Properties within a 3-mile radius of a seaport.

B.     Properties used for grazing livestock.

C.     Properties that are in designated drought areas.

D.    Properties adjacent to flowing bodies of water.

21. Who owns the land under a navigable river?

A.    Owners of properties that abut the river.

B.     No one.

C.     The state.

D.    The municipality, if the area is incorporated.

22. A property owner has the right to transfer water rights

A.    if the owner has not previously separated the bundle of rights.

B.     only to the owner of an adjoining property.

C.     only if there are water rights attached to the property.

D.    without constraint.

23. Real property can be converted into personal property through the process of

A.    severance.

B.     accession.

C.     affixation.

D.    inference.

24. Littoral rights concern which of the following bodies of water?

A.    Lakes entirely contained within the boundaries of an owner’s property.

B.     Streams and rivers.

C.     Navigable lakes, seas, and oceans.

D.    Navigable streams and rivers.

25. What is a “fixture?”

A.    Any item of personal property located within the boundaries of a parcel of real estate

B.     An item of personal property that has been converted to real property

C.     An item of real property temporarily placed on land for the purpose of conducting a business

D.    An item of personal property that has been left in one location for a period of one year

26. An “improvement” is

A.    a modification of land to make it more useful.

B.     a modification of a structure to enhance its value.

C.     a structure intended as a permanent attachment to land.

D.    a parcel of land that has been prepared for development.

27. The legal concept of land does NOT include

A.    the surface of the earth.

B.     minerals below the surface of the earth.

C.     trees and grass.

D.    man made improvements.

28. Which of the following is a role of the federal government in real property rights?

A.    Establishment of broad standards of usage.

B.     Establishment of real estate license laws.

C.     Training and licensing of real estate agents.

D.    Levying of real estate taxes.

29. In a sale transaction, all fixtures are

A.    included in the sale unless named as exceptions.

B.     automatically excluded from the sale.

C.     required to be removed before closing.

D.    sold separately from the real estate.

30. The right to encumber a property means that the owner can

A.    build fences and road blocks.

B.     use the property as collateral for debt.

C.     lease the property.

D.    assign the bundle of rights to another.

31. What is characteristic of the allodial system of ownership?

A.    The government owns the land.

B.     Individuals own land directly.

C.     Land ownership is between 2 or more parties.

D.    Individuals have only temporary use of land.

32. A commercial tenant installed some ice cream coolers to sell ice cream. Which of the following statements best describes what happens to the coolers upon the expiration of the lease?

A.    The tenant would be able to take the coolers only if the tenant paid the owner the fair market value of the cases.

B.     The tenant would be able to take the coolers prior to the expiration of the lease since they were trade fixtures that were installed by the tenant.

C.     The landlord would be able to keep the coolers because once the coolers were installed they become real property.

D.    The owner would be able to keep the coolers as they would be considered emblements.

33. “Real estate” includes such things as

A.    fences, sidewalks, and piers on a parcel of land.

B.     mobile homes temporarily parked on a parcel of land.

C.     timber that has been cut and is lying on a parcel of land.

D.    business equipment an owner or tenant has placed on a parcel of land.

34. If a tenant farmer’s lease expired, but several months later he is able to go back and harvest the corn crop, the crops would be known as what?

A.    Trade fixtures

B.     Emblements

C.     Fructus naturales

D.    Fixtures

35. Riparian rights concern which of the following bodies of water?

A.    Lakes

B.     Seas and oceans

C.     Streams and rivers

D.    Navigable lakes

36. Which of the following is a simple definition of real estate?

A.    Real estate is property traded between owners and buyers for money.

B.     Real estate is that it is air, water, land, and everything affixed to the land.

C.     Real estate is any building affixed to land owned by an individual.

D.    Real estate is residential property, but not commercial property.

37. Name the components of a description using the recorded plat method.

38. Explain how a datum or benchmark is used to describe the elevation of a property in a legal description.

39. Define “undivided interest” in real estate.

40. Discuss how the right of possession determines what kind of estate or interest a party has in real estate.

41. What primarily distinguishes freehold estates from leasehold estates?

42. What is the highest form of ownership interest one can acquire in real estate and why?

43. What are the essential characteristics of fee simple defeasible estates?

44. How is a life estate different from a fee simple estate?

45. What is the primary distinction between a freehold estate and a leasehold estate?

46. The fee simple freehold estate is called the highest form of ownership interest, even though a fee simple defeasible carries some restriction on usage.  Why are other estates less desirable?

47. Which type of leasehold estate is commonly referred to as a periodic tenancy?

48. What are a tenant’s primary obligations when leasing a property?

49. States that do not have dower and curtsey usually have

A.    Community property laws and full share laws.

B.     Community property laws and elective share laws.

C.     Community property laws and election decree laws.

D.    Community property laws and final decree laws.

50. Homestead, dower and curtesy, and elective share are examples of a

A.    a conventional life estate.

B.     a legal life estate.

C.     an estate created by an owner’s agreement.

D.    a fee simple absolute.

51. Encumbrances are examples of

A.    illegal interests.

B.     eminent domain.

C.     public interests.

D.    private interests.

52. Of the two kinds of fee simple estate, the kind that is a perpetual estate with no usage restrictions is the

A.    fee simple aggregate.

B.     fee simple absolute.

C.     fee simple defeasible.

D.    fee simple determinable.

53. Which of the following statements about eminent domain is TRUE?

A.    It can only be applied in cases where the owner agrees with the government’s superior claim.

B.     The government agency exercising the power is under no obligation to compensate the owner.

C.     The government may take a privately-owned property and use it for any purpose whatever, including reselling for a profit.

D.    No private property is exempt from the exercise of this power.

54. In what kind of estate does ownership revert to the grantor of the estate if usage fails to conform to a stated condition in the grant?

A.    Fee simple absolute

B.     Land Trust

C.     Life estate with a remainderman

D.    Fee simple defeasible

55. To take a property by eminent domain, the government must show that

A.    the owner is not putting the property to its highest and best use.

B.     the property will be used for the public good.

C.     the property has limited value on the open market.

D.    the owner agrees to part with the property.

56. The grantor of a life estate names a third party to receive the title when the life tenant dies. What will the third party hold?

A.    A less-than-freehold estate.

B.     A third party estate.

C.     A remainder estate.

D.    A pass-along estate.

57. If a tenant occupies a leased property without the consent of the landlord after a lease expires, the type of estate that results is called

A.    an estate at sufferance.

B.     a holdover estate.

C.     an adverse leasehold.

D.    a hostile leasehold.

58. If a life tenant purposely damages or misuses a property it is known as what?

A.    Pillage

B.     An act of contempt

C.     Vandalism

D.    An act of waste

59. The distinguishing feature of a condition subsequent estate is

A.    the grantor must retake possession within a certain time frame if the grantee violates a restriction.

B.     the grantor automatically regains title if the grantee violates a restriction.

C.     the estate passes to a third party if the grantee violates a condition.

D.    the grantee can impose new restrictions on the grantee’s use of the property even after title has passed.

60. What is the difference between a fee simple determinable estate and a fee simple condition subsequent estate?

A.    There is no reversion of ownership in determinable estate.

B.     There is no reversion of ownership in condition subsequent estate.

C.     Reversion of ownership is automatic in the determinable estate.

D.    Reversion of ownership is automatic in the condition subsequent estate.

61. If a party has an interest in real estate that includes the right of possession, the party owns

A.    an encumbrance.

B.     a fractional part of an estate.

C.     an enjoinment.

D.    an estate in land.

62. An estate from period-to-period will continue as long as

A.    the tenant makes, and landlord accepts, regular rent payments.

B.     the term specified in the lease.

C.     the period is less than a year.

D.    the landlord has not given notice of termination.

62. Two people own a house, each having an undivided equal interest. Which of the following best describes what they own?

A.    Each owns fifty percent of the physical house and the land it rests on.

B.     Each owns one hundred percent of the physical house and the land it rests on.

C.     Each owns fifty percent of the estate represented by the real property, but no physical portion of the real property.

D.    Each owns one hundred percent of the estate represented by the real property and fifty percent of the physical house and the land it rests on.

63. The distinguishing feature of a leasehold estate is

A.    ownership of an interest by a tenant.

B.     temporary ownership of the full bundle of rights in a property.

C.     unlimited ownership of one right in the bundle of rights in a property.

D.    duration limited by a lease term.

64. Ownership of which of the following is used to define an “interest in real estate?”

A.    Deed

B.     The bundle of rights

C.     Acreage

D.    Attachment

65. Which of the following actions is an expression of the public interest known as police power?

A.    Enforcing of parking regulations on residential streets

B.     Passage of zoning ordinances to control land use

C.     Leasing of office space for government use

D.    Collection of sales tax on purchases of consumer goods

66. Ownership of some combination of the bundle of rights defines

A.    an undivided interest.

B.     an interest in real estate.

C.     an estate in land.

D.    a private interest.

67. What is “escheat?”

A.    The principle that gives governments the right to levy real estate taxes.

B.     The process by which a squatter can obtain legal title to real estate.

C.     The process by which a municipality condemns land and takes it for public use.

D.    The process by which ownership of real estate reverts to the state when there are no legal owners.

68. Once the life tenant dies, the life estate portion reverts back to whom?

A.    Grantee

B.     Life tenant

C.     Grantor

D.    Revisionary

69. Which of the following rights is conveyed with a leasehold estate?

A.    The right to exclude everyone from the premises.

B.     The right to encumber the fee interest.

C.     The right to sell the premises.

D.    The right to possess and use the premises.

70. Unlike a determinable estate, the grantor of a condition subsequent estate

A.    has no control over how the property is used.

B.     automatically retakes ownership if restrictions are violated.

C.     may repossess the property within a limited time frame if restrictions are violated.

D.    is limited in the kind of restrictions that can be placed on the grantee.

71. Which best describes a tenancy at sufferance?

A.    When the tenant has received oral permission to stay.

B.     When the tenant stays beyond her lease without consent.

C.     When the tenant has received notice to terminate a lease.

D.    When the tenant’s lease has a definite termination date.

72. An interest in real estate that includes the right to possess is considered

A.    an estate in land.

B.     a freehold estate.

C.     a fee simple estate.

D.    an encumbrance.

73. If the duration of an owner’s rights in an estate cannot be determined, the owner possesses
A.) an indeterminate legal estate
B.) a leased fee simple estate
C.) a freehold estate
D.) a leasehold estate

74. An estate is transferred with the stipulation that alcohol will never be consumed on the premises or the seller will take back the property. This kind of estate is a
A.) fee simple absolute
B.) pur autre vie
C.) conventional remainder
D.) fee simple defeasible

75. A man had rented a place to live but had stayed beyond his lease without the owner’s consent. This would be
A.) tenancy for years
B.) estate at will
C.) periodic tenancy
D.) estate at sufferance

76. To own an interest in real estate, a person must own
A.) any combination of the bundle of rights
B.) the right to use the real estate
C.) legal title to the real estate
D.) the complete bill of rights

77. A lease agreement was signed for 8 months by the lessor and the lessee. What kind of lease is this?

A.) Tenancy at will
B.) Periodic tenancy
C.) Estate for years
D.) Life estate

78. Which of the following is a freehold tenant?
A.) The owner of a freehold estate
B.) The lessee in a leased property
C.) The lessee of a freehold estate
D.) Any owner of an estate in land

79. Which of the following is NOT an example of an interest in real estate?
A.) A real estate agent’s right to advertise a property for sale
B.) A lender’s right to file a lien against a property
C.) A power company’s right to enter a property to service equipment
D.) A tenant’s right to exclude others

80.  An estate at will
A.) cannot be terminated
B.) is terminated only if so stated in the lessee’s last will and testament
C.) terminates on the death of lessor or lessee
D.) terminates on the date specified in the lease agreement

81. Bill and Bob share ownership of a real property, but neither owns a physical portion of the property. The kind of interest they each own is an
A.) invisible interest
B.) intangible interest
C.) undivided interest
D.) insipid interest

82. What are the two types of fee simple estate?
A.) Absolute and defeasible
B.) Absolut and Smirnoff
C.) Absolved and Repentant
D.) Abseil and Climb

83. Why is a fee simple estate called the highest form of ownership interest?
A.) It cannot be taken by eminent domain or have a lien placed against it
B.) It includes the complete bundle of rights with virtually unlimited duration
C.) It extends upwards to infinity
D.) It is not subject to estate taxes when passed on to legal heirs

84. How does a legal life estate differ from a conventional life estate?
A.) The legal life estate is created by a grant, while the conventional estate is created by custom
B.) The legal life estate is created by statute while the conventional life estate is created by a grant
C.) The conventional life estate focuses on protecting the rights of surviving family members while the legal life estate focuses on laws of descent
D.) The conventional life estate does not have to be described in a written document, while the legal life estate does

85. Who decides how title to real estate will be held?

86. What are the primary differences between tenancy in severalty and co-ownership?

87. What are the primary differences between tenancy in common and joint tenancy?

88. What are the primary differences between tenancy by the entireties and joint tenancy?

89. Describe the main features of the concept of community property.

90. What are some of the apparent advantages of a land trust as a way of owning property?

91. What are the primary differences between a condominium and a cooperative as forms of ownership?

92. Describe the main differences between deeded time-share ownership and vacation interval ownership as forms of ownership.

93. In a cooperative, real property is owned only by

A.    the individual unit owners.

B.     the individual unit owners and the cooperative association.

C.     the cooperative developer.

D.    the corporate entity of the cooperative association.

94.  Which of the following would NOT terminate a joint tenancy?

A.    One of the tenants gets married.

B.     One of the tenants declares bankruptcy.

C.     The property forecloses.

D.    One of the tenants sells his or her interest.

95.  Which of the following is NOT a feature of a living trust?

A.    Can be revoked

B.     Any competent adult can be trustee

C.     Provides benefits while the trustor is alive

D.    Takes effect when the trustor dies

96.  Testamentary trusts are distinct from other kinds of trust in that

A.    they begin and end at specified times.

B.     they may be changed at any time.

C.     they may be used for real and personal property.

D.    they may name a bank or trust company as trustee.

97. How does a condominium association cover regular maintenance costs?

A.    Special levy

B.     Annual tax

C.     Monthly assessment

D.    Mortgage lien

98. In a condominium, who is responsible for maintaining the internal systems of an individual unit?

A.    The condominium association

B.     The developer

C.     The individual unit owner

D.    The management company

99. In a cooperative, who pays the mortgage?

A.    The cooperative corporation

B.     The board of directors

C.     The shareholders

D.    The management

100.  A trust established for the benefit of a third party, but only for the lifetime of the grantor, is called a

A.    living trust.

B.     testamentary trust.

C.     planned trust.

D.    beneficial trust.

105. One of the benefits offered by ownership in a tenancy by the entireties is

A.    the estate is subject to foreclosure only for jointly incurred debts.

B.     the estate may be terminated only by mutual agreement.

C.     the estate is not subject to foreclosure.

D.    a co-owner may transfer his or her fractional interest without the consent of other co-owners.

10  What is needed to create a condominium property?

A.    Condominium declaration and master deed.

B.     Secondary deed and overall deed.

C.     Deed of record and habitation declaration.

D.    Dwelling declaration and deed of premise.

106. The party who holds title to real estate placed in a living trust is

A.    the grantor.

B.     the grantee.

C.     the beneficiary.

D.    the trustee.

107. If a joint tenant sells his or her interest to an outside party,

A.    the new owner becomes a joint tenant.

B.     the new owner is a tenant in common.

C.     the joint tenancy terminates and all owners become tenants in common.

D.    the joint tenancy terminates and the owners must create a new joint tenancy to include the new owner.

108. In a condominium ownership, who owns the individual condo units?

A.    The unit manager

B.     Individual owners

C.     The cooperative

D.    Third party mortgage holders

109. Time-share “ownership” is

A.    illegal in most states.

B.     fee or leasehold ownership.

C.     a form of tenancy by the entireties.

D.    not an estate.

110. When a joint tenant dies, what happens to the tenant’s interest in the estate?

A.    It passes to the decedent’s heirs, who become joint tenants.

B.     It passes as a tenancy in common to the decedent’s heirs.

C.     The joint tenancy terminates and becomes a tenancy in common with the decedent’s heirs and the surviving tenants as co-owners.

D.    It passes to the surviving joint tenants.

111. In contrast to a tenancy in common, in a joint tenancy

A.    there is a single title to the property.

B.     there are as many titles to the property as there are co-owners.

C.     title is held by a corporate entity.

D.    co-owners who are married hold separate titles.

112. A condominium owner’s assessments for maintenance and operation are based on

A.    the unit’s pro rata share of floor space.

B.     the unit’s pro rata share of the property value as defined in the declaration.

C.     the number of shares the owner purchased in the condominium association.

D.    the assessed value of the condominium unit.

113. Which type of property ownership issues stock?

Shared housing

Condominium

Time-share

Cooperative

114. The owner of a condominium unit is responsible for maintaining

A.    hallways, corridors, and stairwells that provide access to the unit.

B.     all common elements on a rotating basis.

C.     structural components that support the unit’s part of the building.

D.    the internal systems of the unit.

115. What type of lease does a cooperative stockholder have?

A.    Short term lease

B.     Net lease

C.     Proprietary lease

D.    Month to month lease

116. Two individuals can own a house as tenants by the entireties if

A.    they so elect at the time of acquiring title.

B.     they are blood relatives.

C.     they are married.

D.    they incorporate.

117. When real property is held in a land trust, who controls the property?

A.    The trustor

B.     The trustee

C.     The beneficiary

D.    The property manager appointed by the trustee

118. Who creates the cooperative association that buys a cooperative property?

A.    The local cooperative board of regulation.

B.     The lending institution financing the development.

C.     The prospective tenants.

D.    The developer.

119. The owner of a unit within a cooperative actually owns

A.    shares in a corporation or association and a proprietary lease in a physical unit.

B.     a fee simple interest in a physical unit plus a tenancy in common in common elements.

C.     a tenancy in common in a physical unit and the common areas.

D.    a ground lease in the physical unit’s pro rata share of land and a proprietary lease in the unit.

120. Which best describes ownership in severalty?

A.    Ownership of several properties by one person

B.     Ownership of property by two or more persons

C.     Ownership of a property by one person

D.    Ownership of several properties by two or more persons

121. How many owners can there be in a tenancy in severalty?

A.    One

B.     Two, if married

C.     Several

D.    Any number

122. A condominium owner can

A.      sell or mortgage the condominium unit without hindrance from individual owners of neighboring units.

B.      sell the interest in the physical unit separately from the interest in the common elements.

C.      exclude non-owners from the unit owner’s pro rata portion of the common elements.

D.      exclusively possess and use those portions of the common areas structurally or functionally necessary for the operation of the unit.

123. In a time-share freehold, owners acquire

A.      undivided interests as tenants in common.

B.      a tenancy from period-to-period for a portion of a year.

C.      a pro rata share of a leased fee.

D.      a tenancy in severalty for a portion of a year.

124. A kind of trust that can only be used with real property is the

A.      estate in trust.

B.      testamentary trust.

C.      land trust.

D.      living trust.

125. Which of the following is TRUE of a joint tenancy?

A.      The tenants can determine the size of the share owned by each tenant.

B.      The size of the tenant’s shares is determined by the amount of equity each has invested in the property.

C.      The tenants have an equal and indivisible ownership interest.

D.      There can be no more than two co-owners, and each has a fifty percent interest.

126. A partition suit is used for which of the following?

A.      Determination of party fences

B.      To allow the construction of party walls

C.      To force a division of property without all the owner’s consent

D.      To change a tenancy by the entireties to some other form of ownership

127. Larry, Moe and Curly own an investment property as tenants in common. Because of a recent business disagreement, Curly wants to divest himself of the property. If the three owners cannot mutually agree on a plan to settle the matter, Curly may seek an equitable distribution of the property by filing what?

A.      Lis pendens

B.       Partnership agreement

C.      Partition suit

D.      Declaration of severalty

128. When does a testamentary trust take effect?

A.      At any specified time within the lifetime of the grantor.

B.      When the grantor’s will is witnessed and dated.

C.      On the death of the grantor.

D.      When the beneficiary reaches legal age.

129. Ownership of real estate by a single party is called

A.      individual ownership.

B.      solitary possession.

C.      tenancy in severalty.

D.      simple tenancy.

130. If several residents of a cooperative apartment building default on their rent, causing the foreclosure proceedings against the cooperative, which of the following would be TRUE?

A.      Only the residents with rent in arrears would be affected because they will be evicted.

B.      The corporation owning the property would be dissolved and all of the residents could lose their interest in the cooperative.

C.      Foreclosure proceedings would be initiated against each resident by the lender.

D.      Only the cooperative’s board of directors would be liable for the mortgage debt.

131. What are the two types of property addressed in community property laws?

A.      Owned property and rented property.

B.      His property and her property.

C.      Real property and common property.

D.      Separate property and community property.

132. When a tenant in common dies, what happens to the tenant’s interest in the estate?

A.      It is divided equally among the surviving tenants in common.

B.      The surviving tenants must buy the interest from the deceased tenant’s heirs or sell their interests to the heirs.

C.      It becomes a joint tenancy.

D.      It passes by probate to the deceased tenant’s heirs.

133. What are the two basic types of easement and what is the difference?

134. What is a common example of an easement by necessity?

135. How are easements created?

136. Define encroachment and give an example.

137. How is a license different from a personal easement in gross?

138. How are the two types of deed restriction created?

139. Most liens do not convey ownership. What is the one exception to that rule?

What type of lien takes priority over all other liens?

Real property tax lien

140. What factors determine lien priority?

141. How can the priority order of a junior lien be changed?

142. What is a judgment lien and how long does it last?

A judgment lien results from a lawsuit. It attaches to real and personal property as a result of a money judgment issued by a court in favor of a creditor. It lasts for ten years, unless the period is extended as provided within the code. 

143. What is a mechanic’s lien?

If a property owner fails to pay for work performed or materials supplied, a worker or supplier can file a mechanic’s lien to force the sale of the property and collect the debt.

144. Which of the following is an example of a voluntary lien?

A.    Judgment lien

B.     Mortgage lien

C.     Vendee’s lien

D.    Mechanic’s lien

145. What kind of interest does a lienor usually have in the liened property?

A.    A possessory interest

B.     Legal ownership of a dominant tenement

C.     A legal interest in a pro rata share of the property

D.    An equitable interest, except a mortgage lienor in a title-theory state

146. In which kind of easement is there a dominant tenement and a servient tenement?

A.    An easement in gross

B.     A commercial easement

C.     A personal easement

D.    An easement appurtenant

147. A lien is a

A.    debt incurred by a property owner.

B.     promissory note granted by a property owner as security for a debt.

C.     creditor’s claim against property as security for a debt of the property owner.

D.    document that creates an easement.

148. Which would terminate an easement?

A.    Sale of the property by the dominant tenement

B.     Sale of the property by the servient tenement

C.     Revocation by the servient tenement

D.    Merger of the two properties

149. An improvement which crosses over the property line without permission is called a(n)

A.    easement.

B.     encroachment.

C.     license.

D.    right of way.

150. A general lien is a lien

A.    imposed by statutory law.

B.     imposed by court order.

C.     placed against an individual rather than against any particular property.

D.    placed against any and all property owned by an individual.

151. What is a lien?

A.    A promissory note

B.     A clouded title

C.     A type of easement

D.    A creditor’s claim

152. Which of the following is NOT a legal property of liens?

A.    Attaches to the property.

B.     Terminates when payment is recorded.

C.     Generally conveys an equitable interest.

D.    Can only exist one at a time against the same property.

153. A property built 23 years ago had a roof overhang that extended 1½ feet onto a neighbor’s property. What could happen?

A.    This could create an easement by prescription.

B.     The owner of the property could make the owner of the roof pay him for the land.

C.     Neither property owner could do anything since it has gone on for so long and hasn’t bothered anyone.

D.    The owner of the property may have a better chance of suing to have the encroachment removed because damages could not be awarded that many years later.

154. A court might grant an easement by prescription if

A.    a municipality needs to dig a trench across an owner’s property to install a sewer line to a neighboring property, and the owner refuses permission.

B.     a property owner sells the front half of a lot and wants to continue using the driveway to reach the rear of the lot.

C.     an intruder has been using an owner’s property for a certain period with the owner’s knowledge but without permission.

D.    a property owner wants to prevent the owner of an adjoining property from building a second-story addition that blocks the sunlight to his rose garden.

155. A real estate tax lien, a federal income tax lien, a judgment lien, and a mortgage lien are recorded against a property. Which lien will be paid first when the property is sold?

A.    Real estate tax lien

B.     Federal income tax lien

C.     Judgment lien

D.    Mortgage lien

156. How can a junior lien’s priority be changed?

A.  The lienee can “promote” one lien above another at the request of a lienee.

B.  A lienor can sue to have its lien reclassified as superior.

C.  If the holder of a superior lien dies, an inferior lien holder automatically moves up on the schedule of priority.

D.  A lienor can voluntarily agree to subordinate its lien to another lien.

157. The lienee in a lien is the

A.  party who initiates the lien.

B.  owner of the property that is subject to the lien.

C.  party who has a claim against the owner of the property subject to the lien.

D.  property that is given as security for a debt.

158. A film company wants to rent a farm from the farm owner for a two-week film shoot. What type of agreement should be used?

A.  Encumbrance

B.  Easement

C.  License

D.  Appurtenance

159. Which of the following is true of easements in general?

A.  They involve the property that contains the easement and a non-owning party.

B.  They apply to a whole property, not to any specific portion of the property.

C.  They cannot be assigned or transferred.

D.  They may require a specific use, but cannot prohibit one.

160. Oak Hill subdivision only allows homes over 2,000 sq ft to be built. What is this an example of?

A.  Deed restriction

B.  Encroachment

C.  Prescription

D.  Zoning restriction

161. If the owner of property A has a court-ordered easement to drive across property B because it is the only way for A to have access to a public road, the easement is a(n)

A.  easement by prescription.

B.  personal easement.

C.  easement by necessity.

D.  easement in gross.

162. Which is NOT a superior lien?

A.  Special assessment lien

B.  Real estate tax lien

C.  Federal and state inheritance tax lien

D.  Judgment lien

163. Special assessment tax liens

A.  are general liens.

B.  are paid on a monthly basis.

C.  take priority over mechanic’s liens.

D.  cannot be prepaid in full without penalty.

164. Neighbor Fred built a retaining wall that was 2 feet outside his property line. What has Fred created?

A.  A deed restriction

B.  A license violation

C.  An encroachment

D.  A zoning exemption

165. Give some examples of when one might own equitable title rather than legal title.

166. Why is “notice” important in determining who holds title to real estate?

167. What is the function of a deed?

168. What is the difference between a bargain and sale deed and a general warranty deed?

169. Describe the four types of will.

170. What happens to Joe’s real estate in your state if Joe dies leaving:
a) a wife, children, and a will; 
b) a wife and children, but no will; 
c) no legal heirs, and no will? 

171. What are the conditions necessary for an involuntary transfer by adverse possession to occur?

172. List the important reasons for creating and maintaining title records.

173. Describe the four principal forms of title evidence.

174. A person receives defective title to a property. The grantor of the title later cures the defect and tries to reclaim the property. The doctrine that may prevent the grantor from succeeding in reclaiming the property is

A.   disavowal.

B.   embargo.

C.   notorious possession.

D.   estoppel.

175. Someone who possesses all ownership interests in real property owns

A.   equitable title to the real property.

B.   legal title to the real property.

C.   equitable and legal title to the real property.

D.   statutory title to the real property.

176. What are the two forms of owner’s title insurance?

A.   Formal and Informal

B.   Basic and Comprehensive

C.   Short and Long

D.   Standard and Extended

177. What is the function of recording a deed?

A.   It makes the deed valid.

B.   It causes title to pass.

C.   It gives constructive notice of ownership.

D.   It removes all prior recorded encumbrances.

178. Which is NOT a conveyance clause?

A.   A granting clause.

B.   A habanero clause.

C.   A reserving clause.

D.   A tenendum clause.

179. Which document would note a lien on the title?

A.   Abstract

B.   Title of Record

C.   Mirror Title

D.   Title of Liens

180. A property may escheat to the state or county if

A.   it is abandoned for a period prescribed by law.

B.   it is occupied by a hostile possessor.

C.   its owner fails to maintain it according to covenants.

D.   the state or county needs it for a public project.

181. One of the conditions an adverse possessor must meet in order to obtain legal title to a property is

A.   openly possessing and claiming the property without the owner’s consent.

B.   occupying the property without an occupancy permit.

C.   using the property intermittently and without permission over a period of years.

D.   building a permanent structure on the property.

182. Which is NOT one of the four main forms of evidence an owner can use to show marketable title to a buyer?

A.   Title insurance policy.

B.   Broker’s certificate.

C.   An attorney’s opinion of abstract.

D.   Torrens certificate.

183. A person who dies without a will is said to be

A.   prostrate.

B.   intestate.

C.   estateless.

D.   undevised.

184. Which of the following best describes constructive notice?

A.   It is notice published in a newspaper.

B.   It is knowledge one could have or should have obtained.

C.   It is notice explicitly stated in a legal document.

D.   It is knowledge received or imparted through direct experience.

185. Which of the following best describes actual notice?

A.   It is notice published in a newspaper.

B.   It is knowledge one could have or should have obtained.

C.   It is notice explicitly stated in a legal document.

D.   It is knowledge received or imparted through direct experience.

186. The court proceeding that generally settles a decedent’s estate is called

A.   testate.

B.   probate.

C.   escheat.

D.   distribution.

187. Which of the following is TRUE of a nuncupative will?

A.   It is in the testator’s handwriting.

B.   Generally, it does not need to be signed in order to be valid.

C.   It is valid for the transfer of real property, even if it is not witnessed.

D.   Generally, it is not valid for the transfer of real property.

188. All of the following are ways for involuntary alienation to occur EXCEPT

A.   abandonment.

B.   eminent domain.

C.   private grant.

D.   foreclosure.

189. A break in the chain of title to a property results in ?

190. The owner of a property creates a deed, leaving the name of the grantee blank, and puts it in a drawer, where it is forgotten for several years. One day, a visitor finds the deed, fills in his name as grantee, and attempts to record it. However, the owner will probably have no trouble disputing the validity of the deed because ?

191. The only clause that is actually required in a deed is the ?

granting clause.

192. A municipality wants to build a water treatment facility, and requires some privately owned land to do so. What procedure enables the municipality to buy the property, even against the owner’s wishes?

A.   Estoppel

B.   Escheat

C.   Alienation

D.   Eminent domain

193. A lender’s title insurance policy generally protects

A.   the seller against liability for conveying unmarketable title.

B.   the buyer against loss of equity through fraud or a disputed title.

C.   the lender against the possibility that the lender’s lien cannot be enforced.

D.   the lender against liability for certifying that the title records have been searched.

194. Which of the following is TRUE of a nuncupative will?

A.   It is in the testator’s handwriting.

B.   Generally, it does not need to be signed in order to be valid.

C.   It is valid for the transfer of real property, even if it is not witnessed.

D.   Generally, it is not valid for the transfer of real property.

195.Which of the following circumstances is likely to render a will invalid?

A.   The testator is only 21 years old.

B.   The devisee is under duress.

C.   The will is unsigned.

D.   The will is signed by three witnesses.

196. If an owner of real property dies without leaving a will and with no legal heirs, what will generally happen to the property?

A.   It will revert to the state or county by escheat.

B.   It will transfer to the decedent’s executor.

C.   It will be divided equally among adjoining property owners.

D.   It will become a public easement.

197. A buyer has signed a contract to purchase a property but is uncertain of the condition of the title. Who is legally responsible for knowing the condition of the title?

A.   The County Recorder

B.   The seller’s agent

C.   The buyer

D.   The mortgage lender

198. Title can be voluntarily transferred by

A.   grant, deed, and will.

B.   escheat, deed, and covenant.

C.   title certificate, will, and deed.

D.   sale contract, deed, and warrant of seisin.

199. The property transferred by a will is called the

A.   devise.

B.   demise.

C.   device.

D.   assigns.

200. Under the laws of descent, who gets a property when its owner dies without a will and no legal heirs can be found?

A.   The federal government

B.   The heirs of the previous owner of record

C.   The state or county

D.   The nearest municipality

201. A person who dies without a will is said to be

A.   prostrate.

B.   intestate.

C.   estateless.

D.   undevised.

202. Which of the following best describes actual notice?

A.   It is notice published in a newspaper.

B.   It is knowledge one could have or should have obtained.

C.   It is notice explicitly stated in a legal document.

D.   It is knowledge received or imparted through direct experience.

203. What is the function of recording a deed?

A.   It makes the deed valid.

B.   It causes title to pass.

C.   It gives constructive notice of ownership.

D.   It removes all prior recorded encumbrances.

204. The question of who owns title to a property is generally a function of

A.   who has a bill of sale for the property.

B.   who has physical possession of the property.

C.   who has the best evidence of ownership.

D.   who has a deed for the property.

205. A property may escheat to the state or county if

A.   it is abandoned for a period prescribed by law.

B.   it is occupied by a hostile possessor.

C.   its owner fails to maintain it according to covenants.

D.   the state or county needs it for a public project.

206. The type of deed that offers the grantee the fullest protection against claims to the title is the

A.   general warranty deed.

B.   special warranty deed.

C.   quitclaim deed.

D.   bargain and defend deed.

207. What is a documentary stamp tax?

A transfer tax based on the price of the property being conveyed

208. A standard owner’s title insurance policy generally protects

the owner against liabilities and losses resulting from title defects

209. A standard owner’s title insurance policy generally protects

the owner against liabilities and losses resulting from title defects

210. What document shows legal alienation of a property?

A.      Contract

B.      Deed

C.      Purchase Agreement

D.      Promise to Sell

211. What is a will?

A.      A legal instrument for the voluntary transfer of real estate after death.

B.      A document that creates an involuntary transfer of property to heirs.

C.      A form of deed used to transfer title after the death of a property owner.

D.      An executory contract that gives constructive notice of property ownership by an heir.

212. Where would one find information based on constructive notice?

A.      Newspaper Postings

B.      Court House Records

C.      Personal Records

D.      Historical Letters

213. Which is NOT one of the three channels of probate deliberation?

A.      Testate proceeding.

B.      Interstate proceeding.

C.      Intestate proceeding with heirs.

D.      Intestate proceeding without heirs.

214. The owner of a property creates a deed, leaving the name of the grantee blank, and puts it in a drawer, where it is forgotten for several years. One day, a visitor finds the deed, fills in his name as grantee, and attempts to record it. However, the owner will probably have no trouble disputing the validity of the deed because

A.      the grantee was not competent at the time of delivery.

B.      there was no intent to deliver it, and no consideration was given.

C.      the grantee did not sign it at the time of execution.

D.      it was not accompanied by a transfer certificate.

215. James created his own will by writing it out on legal pad. What kind of will is this?

A.    Holographic

B.     Topographic

C.     Transposed

D.    Biographical

216. In the Torrens System of recording,

A.    public records must be searched to discover the status of title.

B.     title insurance is not required.

C.     title passes when the conveyance is registered on the title certificate.
encumbrances are not recorded.

D.    title passes when the conveyance is registered on the title certificate.

217. Why would a property owner file a quiet title suit?

A.    To force the grantor to defend the title against a third party claim

B.     To terminate a co-ownership estate when one co-owner is unwilling

C.     To keep the owner’s name out of the title records

D.    To have an encumbrance removed if the lien holder cannot prove its validity

218. Which of the following is the distinguishing characteristic of a special warranty deed?

A.    It makes warranties only for the time the property was owned by the grantor.

B.     It conveys both present and any future interest that may be acquired by the grantor.

C.     It is the finest and most complete warranty deed that a grantee may receive.

D.    It must specify the actual amount of valuable consideration paid by the purchaser.

219. Adverse possession is a form of

A.    constructive notice.

B.     estoppel.

C.     involuntary title transfer.

D.    title plant.

===

220. What basically happens in a foreclosure?

221. What are the basic differences between the three types of foreclosure?

222. What are the differences between the two kinds of right of redemption and the right of reinstatement?

223. What happens to the sale proceeds in a judicial sale?

224. What is the purpose of a deficiency judgment?

225. What power does a lender have if a mortgagor defaults in a state that allows non-judicial foreclosure and the mortgage document includes a “power of sale” clause?

226. What happens to the title to a foreclosed property in a strict foreclosure?

227. What is the function of a deed in lieu of foreclosure?

 

228. All of the following are common consequences suffered by a mortgagor in a foreclosure procedure EXCEPT

A.    all or most equity is lost.

B.     the mortgagor is embarrassed by public knowledge of the foreclosure.

C.     the borrower’s credit is damaged for a long time.

D.    the borrower is not allowed to apply for another mortgage for the rest of his or her life.

229. Which statement about a deed in lieu of foreclosure is TRUE?

A.    It gives the borrower an opportunity to change the loan terms.

B.     It is a deed to the lender in exchange for a reduction in the loan payoff.

C.     It avoids public notice of the foreclosure.

D.    It is always accepted by the lender since it reduces the costs of foreclosure.

230. One of the negative features of foreclosure for the borrower is

A.    the borrower’s credit is damaged, making it difficult to purchase another home.

B.     the borrower loses any right to seek another mortgage for seven years.

C.     the borrower loses all equity, even if the sale yields more than the amount owed.

D.    the process happens so quickly that the borrower has no time to cure the problem.

231.  What action must the lender take when a notice of reinstatement occurs?

A.    The lender must declare a moratorium on mortgage payments.

B.     The lender must pay all fees and renegotiate the mortgage.

C.     The lender must dismiss the suit and continue the mortgage.

D.    The lender must dismiss the lien and continue the suit.

If reinstatement occurs, the lender must dismiss the suit and the mortgage continues in effect as if no foreclosure had been undertaken.

232. What is a short sale?

A.    A lender forces the sale of a mortgaged property without first giving notice of default.

B.     A deficiency judgment forces a defaulted borrower to sell personal property to settle a debt.

C.     A borrower sells the mortgaged property for less than what is owed on the loan balance.

D.    A foreclosed property is sold quickly at a public auction instead of through a standard sales process.

233. Which of the following statements best defines equitable right of redemption?

A.    The legal right of a borrower to seek a reduction in payments on a property mortgage.

B.     The legal right of a borrower to redeem property between the time of default and the foreclosure sale.

C.     The legal right of a borrower to seek a statutory right of reinstatement.

D.    The legal right of a borrower to appeal a deficiency judgment within 7 months of notice.

234. Which type of foreclosure involves sale of the mortgaged property under court supervision?

A.    Non-judicial

B.     Strict

C.     Judicial

D.    Equitable

235. In a strict foreclosure,

A.    a lender takes title to the liened property directly.

B.     a lender receives the proceeds from the forced sale of the liened property.

C.     the defaulting owner does not have the opportunity to prevent the foreclosure by paying the amounts owed.

D.    a foreclosure suit is optional.

236. Which of the following is NOT one of the means of enforcing a lien against real estate?

A.    Operation of the law

B.     Direct takeover

C.     Court action

D.    Powers granted in the loan document

237. How long after default does the foreclosure process begin?

A.    90 days

B.     120 days

C.     The period set by statute

D.    Whatever length the lender customarily uses

238. The period of delinquency allowed before a lender begins foreclosure proceedings is determined by

A.    statute.

B.     the secondary mortgage market.

C.     investors.

D.    the lender.

239. In what type of foreclosure is the lender required to file suit asking a court to order the borrower to pay the mortgage debt by a certain date or the lender will automatically gain full title to the property?

A.    Standard

B.     Judicial

C.     Strict

D.    Non-judicial

240. Ronald defaulted on his home mortgage payments. The lender obtained a court order to foreclose on the property. At the foreclosure sale, Ronald’s house sold for $29,000 and the unpaid balance of his loan is $40,000. What must the lender do to recover the $11,000 Ronald still owes?

A.    Sue for damages.

B.     Sue for specific performance.

C.     Seek a deficiency judgment.

D.    Seek a lis pendens.

245. One reason a deed in lieu of foreclosure is attractive to some borrowers is that it

A.    terminates all existing liens on the property.

B.     minimizes the damage to the borrower’s credit.

C.     enables the borrower to share in the proceeds when the property is sold.

D.    demonstrates that market conditions, not any failure of the mortgagor, are the cause of the default.

246. What basically happens in a foreclosure?

Lienors force a property owner to give up title. This may involve either the lienors’ forcing the owner to sell and pay off the creditors, or taking title directly.

247. What power does a lender have if a mortgagor defaults in a state that allows non-judicial foreclosure and the mortgage document includes a “power of sale” clause?

The lender can give the borrower notice of the default and a chance to cure it, after which the lender may auction the property.

248. What happens to the title to a foreclosed property in a strict foreclosure?

It transfers immediately to the lienholder.

249. What is the function of a deed in lieu of foreclosure?

It avoids foreclosure by transferring legal title to the mortgagee.

250. A property is secured by a mortgage that does not contain a “power of sale” clause. To foreclose, the lien holder will have to

A.    file a deficiency suit.

B.     file a foreclosure suit.

C.     obtain a deed in lieu of foreclosure.

D.    obtain a writ to extinguish the lien.

251. Foreclosure is

A.    a court-ordered acceleration of loan payments.

B.     the final step in a bankruptcy filing.

C.     a proceeding to enforce a lien by forcing sale or transfer of a secured property.

D.    a proceeding to take equitable title to a property that was liened as security for a mortgage loan.

252. The first step in a judicial foreclosure is

A.    acceleration of the loan.

B.     filing a suit.

C.     obtaining a lis pendens.

D.    obtaining a writ of execution.

253. The completion of a foreclosure sale would terminate which of the following?

A.    Statutory redemption rights

B.     All rights of redemption by the borrower

C.     Equitable redemption rights

D.    All liability of the borrower to the lender

254. In what type of foreclosure does a lender give a borrower a notice of default in a form prescribed by the state?

A.    Judicial foreclosure

B.     Strict foreclosure

C.     Standard foreclosure

D.    Non-judicial foreclosure

255. A strict foreclosure begins with

A.    a writ of execution.

B.     an appeal to a court.

C.     surrender of the deed.

D.    proper notice to the delinquent borrower.

256. Which BEST describes an owner’s equity in the property?

257. A promissory note would usually contain each EXCEPT:

258. An instrument that evidences one person owing another money is a (n) :

259. A clause in a mortgage releasing the indebtedness once the loan is paid off is:

260. A mortgage which is subordinate to another mortgage is called a:

261. In an installment land contract, what type of title did the seller retain until the loan was paid?

262. Which form of financing would be the greatest risk to the buyer?

262. When the buyer’s mortgage is more than the market value of a home and the buyer MUST sell the home a/an _________ might be negotiated with the bank

263. What is provision is required in a mortgage to allow a non-judicial foreclosure to force a sale without a foreclosure suit?

A power of sale clause

264. List at least three goals of land use control.

.

265. What are the three phases of land use planning?

266. Why do communities care about growth trends?

267. Name four common types of zone.

268. Give an example of a legal and illegal nonconforming use.

269. What conditions are necessary for a special exception to a zoning regulation?

270. What do subdivision regulations usually cover?

271. What is the policy of concurrency?

272. What does eminent domain allow a government to do?

273. What do deed restrictions do?

274. What is the Doctrine of Laches?

275. Give some examples of materials that are regulated as being harmful to air quality.

 

276. Give some examples of materials that are regulated as being harmful to soil and water quality.

277. What responsibilities does a seller’s agent have as a result of the Lead-based Paint Act of 1992?

278.  One of the major considerations in planning where to allow growth is

A.    the number of developers asking for permits.

B.     the effect of development on traffic patterns.

C.     the median age of the community.

D.    the number of housing starts reported for neighboring communities.

279.  What is unregulated property use likely to jeopardize?

A.    The rights of developers to build new properties.

B.     The levels of income tax within the area.

C.     The value of properties within an area.

D.    The rights of owners to sell their properties.

280. What is the relationship between master planning and zoning ordinances?

A.    The compilation of zoning ordinances is the master plan.

B.     A master plan eliminates the need for zoning ordinances. v

C.     Master planning is a state-level function; zoning is limited to the county level.

D.    Zoning ordinances are a primary means of keeping land use in line with the master plan.

281. The National Environmental Policy Act of 1969 requires developers of large projects to

A.    carry out a carbon footprint analysis.

B.     conduct an environmental impact survey.

C.     establish an environmental oversight committee.

D.    hire an environmental consultant.

282. A property owner acquired a property by means of a deed that included a deed restriction against building any kind of unattached structures on the property. The owner now wants to build a small office in a separate structure. What can the owner do to overcome the restriction?

A.    Apply to the Zoning Board of Appeals for a special permit.

B.     Have the necessary parties execute a quitclaim deed.

C.     Sue in court to have the deed declared invalid.

D.    Obtain written permission to violate the restriction from the original grantor.

283.  Leakage of underground storage tanks is a source of

A.    air pollution.

B.     water and soil pollution.

C.     flood hazards.

D.    ambient toxicity

284. Which of the following was an important result of the National Environmental Policy Act of 1969?

A.    Money was provided for hazardous waste disposal.

B.     The Environmental Protection Agency was created.

C.     Lead was banned in the manufacture of plumbing materials.

D.    Transportation-related noise was banned.

285. Private land use control is primarily exerted by

A.    the courts via placement of deed restrictions on private property.

B.     the owner of the controlled property via deed restrictions.

C.     the owner of the property via zoning ordinances.

D.    the grantee of a property via restrictive covenants.

286. One limitation on deed restrictions is that they may not

A.    prohibit commercial activities.

B.     prohibit construction of buildings.

C.     require minimum setbacks.

D.    restrict ownership on the basis of race or religion.

287. Who is usually responsible for site plans, subdivision plans, building permits, and ruling on zoning issues?

A.    The state legislature

B.     The planning commission

C.     The zoning board of appeals

D.    The city manager

288. The basic intent of zoning ordinances is to

A.    establish the basis for public ownership of land for the common good.

B.     establish subdivision rules and regulations.

C.     specify usage for every parcel within the zoning authority’s jurisdiction.

D.    restrict development in unincorporated areas.

289. As evidence that building inspectors have found that a structure complies with building codes and is ready for use, the municipality or county issues a(n)

A.    inspection report.

B.     release bond.

C.     certificate of occupancy.

D.    user permit.

290. In what year was the use of lead in paint banned?

A.    1976

B.     1978

C.     1988

D.    1992

291. Which of the following is guaranteed by the U.S. Constitution?

A.    The uncontrolled use of real estate.

B.     The right to develop the land for the public good.

C.     The individual right to own real estate.

D.    The individual right to limit land use.

292. How are private usage restrictions such as declaration restrictions enforced?

A.    By zoning

B.     By condemnation

C.     By police power

D.    By injunction

293. Which of the following is NOT normally a basic land use consideration of master planners?

A.    Social growth

B.     Economic growth

C.     Building codes and code enforcement

D.    Infrastructure adequacy

294. What environmental legislation particularly targeted the cleanup of former industrial sites?

A.    Resource Recovery Act of 1970

B.     Toxic Substances Control Act of 1976

C.     UFFI ban of 1982

D.    Brownfields legislation of 2002

295. The individual right to own land is guaranteed by

A.    police power.

B.     the U.S. Constitution.

C.     federal regulations.

D.    state law.

296. Under the Superfund Act (CERCLA) and Superfund Amendment and Reauthorization Act of 1986, who can be held liable for environmental violations?

A.    The current owner of a property.

B.     The party who last surveyed the property.

C.     The previous owner of a property.

D.    The current and previous owners of a property.

297.  The basic intent of zoning ordinances is to

A.    establish the basis for public ownership of land for the common good.

B.     establish subdivision rules and regulations.

C.     specify usage for every parcel within the zoning authority’s jurisdiction.

D.    restrict development in unincorporated areas.

298. What is a “buffer zone?”

299. The overall guideline for creating and enforcing zones, building codes, and development requirements is the

300. Which of the following is NOT a way of terminating a restrictive covenant?

301. Which of the following statements about restrictive covenants is TRUE?

302. To obtain a change of the zoning for a particular property, for example, from residential to

303. Which of the following is TRUE of a successful eminent domain proceeding?

304. Why do zoning authorities create different types of zones?

A.    To ensure that a variety of construction types is available in the community.

B.     To separate different types of uses so that they do not interfere with each other.

C.     To preserve low density land uses.

D.    To encourage industrial and commercial users to relocate.

305. The Doctrine of Laches states that if property owners are

A.    stringent in protecting their property rights, the property owner may lose those rights.

B.     stringent in protecting their property rights, the property owner may gain new rights.

C.     lax in protecting their property rights, the property owner may lose those rights.

D.    lax in protecting their property rights, the property owner may gain new rights.

306. Which of the following situations is most likely to represent an illegal nonconforming use?

A.    A homeowner in a residential zone converts her residence to offices.

B.     A homeowner builds an attached garage in a neighborhood where all the garages are detached.

C.     A storeowner remodels a storefront in accordance with regulations, and then the zoning is changed to residential.

D.    A new zoning ordinance outlaws two-story additions after a homeowner completes an addition.

307. Which legislation holds current owners responsible for environmental violations committed by previous owners?

A.    The National Environmental Policy Act of 1969

B.     The Clean Air Amendment of 1970

C.     The Toxic Substances Control Act of 1976

D.    The Comprehensive Environmental Response, Compensation and Liability Act (CERCLA, 1980) and Superfund Amendment (1986)

308. To obtain a change of the zoning for a particular property, for example, from residential to commercial, a property owner would ask the zoning board for a(n)

A.    amendment.

B.     special exception.

C.     plat approval.

D.    special ordinance.

309. How does Planned Unit Development zoning differ from ordinary zoning?

A.    It applies only to industrial and office parks.

B.     It incorporates a number of different zones within a single property boundary.

C.     It requires that multiple tracts of land be developed according to a single design for efficient use of space.

D.    It requires developers to obtain a separate building permit for every structure.

310. Why are volatile organic compounds (VOCs) considered an environmental hazard?

A.    They make groundwater unsafe for consumption.

B.     They cause decomposition of any material they are applied to.

C.     They emit toxic fumes.

D.    They are known to cause cancer if eaten.

311. If a subdivision has a restrictive covenant, it

A.    must be adhered to by all subdivision owners.

B.     is an ordinance set by the local zoning board.

C.     means that the properties cannot be rented.

D.    supersedes public policy or law.

312. Private land use controls are primarily implemented by

313. What appraisal methods do tax assessors use to determine the assessed value of a property?

314. What are some circumstances that typically trigger a reassessment of a property?

315. What is a “homestead exemption?”

316. The high school district in your town needs operating funds.  How does it regularly obtain them?

317. Is a special assessment a voluntary tax lien or an involuntary tax lien?

318. What protections might your state offer to a homeowner against the inadvertent loss of ownership for failure to pay property tax?

319. Certain classes of property owner and types of property are exempted or immune from real property taxation in many areas. The protected categories usually include

A.    recreational properties.

B.     properties owned by a government agency.

C.     properties that comply with the Americans with Disabilities Act.

D.    properties occupied by single-parent families.

320. What is the role of local tax districts?

A.    To encourage the sale of properties.

B.     To increase the value of properties within the district.

C.     To collect property taxes.

D.    To assess property taxes on commercial properties.

321. What option is available to a homeowner who receives a tax bill that he or she feels is too high?

A.    File an appeal to adjust the millage rate.

B.     Ask for an adjustment to the district’s budget.

C.     File a complaint with the local board of assessment review.

D.    Live with it until the next assessment period.

322. Which of the following can levy real estate property taxes?

A.    The Internal Revenue Service.

B.     A utility company.

C.     A tax district.

D.    A court of law.

323. What is the purpose of an equalization factor in ad valorem taxation?

A.    It modifies a local tax rate to bring it into conformity with statutory tax rates.

B.     It changes the assessed value of an individual property to make it reflect the assessed values of other properties in the same neighborhood.

C.     It adjusts assessments in a locality to make them more consistent with an average level for the state or other higher-level jurisdiction.

D.    It adjusts the amount of the homestead exemption in a certain area to make it proportionally equivalent to the average homestead exemption in other areas.

324. What is a unique characteristic of a special assessment tax?

A.    It only applies to properties that will benefit from the public improvement.

B.     The equalization board discounts levies for properties not affected by the public improvement.

C.     More valuable properties that stand to benefit will pay proportionately more taxes.

D.    It creates an involuntary junior lien on the property.

325. A tax rate of 4% might be expressed in any of the following ways EXCEPT

A.    4 mills

B.     $4 per $100

C.     $40 per $1,000

D.    40 mills

326. The purpose of a homestead tax exemption is

A.    to exempt qualified property owners from ad valorem taxation.

B.     to offer some amount of tax relief on an owner’s principal residence.

C.     to encourage multiple property investment.

D.    to exempt owners of principal residences who rent their properties.

327. In calculating the tax base of an area,

A.    exemptions are added to assessed values.

B.     exemptions are subtracted from assessed values.

C.     the tax levy is added to the budget shortfall.

D.    the millage rate is multiplied by the tax levy.

328. A special assessment creates a voluntary tax lien if

A.    all taxpayers in a taxing district have voted for it.

B.     the affected property owners have requested the improvement.

C.     a taxing entity initiates the assessment.

D.    the improvement to be funded is for the general good.

329. To qualify for a homestead exemption, a property owner generally must

A.    reside on the property.

B.     have a house on the property.

C.     be 55 years old.

D.    have children.

330. A homeowner’s property tax bill is derived by

A.    dividing the tax requirement by the tax base.

B.     multiplying each district’s tax rate by the assessed value of the owner’s property.

C.     dividing tax dollars needed by the taxable assessed value.

D.    multiplying the tax requirement by the tax base.

331. What does a tax certificate do?

A.    Certifies to tax collectors that a property owner has paid all ad valorem taxes on the property for the calendar year.

B.     Entitles its holder to apply for a tax deed after a certain period.

C.     Exempts its holder from paying taxes on the particular property referenced by the certificate.

D.    Waives a property owner’s rights of redemption in a foreclosure.

332. The buyer of a tax certificate

A.    obtains immediate legal title to a foreclosed property.

B.     is exempted from the payment of property taxes for one calendar year.

C.     agrees to pay the taxes due on a property in return for the right to apply for a deed.

D.    obtains the right to bid on a property at a tax sale.

333. What is a tax deed?

A.    A conveyance instrument for a property that is sold to enforce a tax lien.

B.     A document recorded in title records showing that property taxes have been paid.

C.     A notice to a homeowner that a tax lien has been entered against the property.

D.    A document that gives a municipal authority the power to collect an individual tax bill.

334. Which of the following does NOT receive revenues from property taxes?

A.    Parks

B.     Fire services

C.     School districts

D.    Private enterprises

335. Local taxing authorities find taxing land to be beneficial. Which of the following is NOT one of those benefits?

A.      Property tax revenue is predictable

B.      Property taxes are hard to conceal from taxing authorities

C.      Property taxes raise more revenue than income and sales tax

D.      In most cases, land has some measure of productivity and the government shares in that

336. Where does a property owner file an assessment complaint?

337. As part of the assessment process, taxing entities sometimes use an equalization process to

338. What are ad valorem taxes based on?

339. What is an ad valorem tax levy?

340. Assessors are usually not allowed to do “spot” assessments of individual parcels unless:

341. The same millage rate might be expressed in any of the following ways EXCEPT

A.    3 mills.

B.     $3 per $100.

C.     $30 per $1,000.

D.    3 percent.

342. What are 2 reasons for making land the basis of taxation

343. Special tax district vs. permanent tax district

344. Tax bills are calculated based on?

345. Which of the following is a benefit to the local taxing authorities to taxing property?

346. A millage rate is derived by?

347. A town is replacing a sidewalk that serves five homes. The length of the sidewalk is 200 feet. Mary’s property has 38 feet of front footage. If the cost of the project to be paid by a special assessment is $7,000, what will Mary’s assessment be?

A.      $1,400

B.      $1,330

C.      $184

D.      $1,840

348. The tax assessment ratio for a house valued at $250,000 is 80%. If the tax rate is $2.00 per $100 what is the annual tax?

A.      $500

B.      $5,000

C.      $400

D.      $4,000

349. A school district’s tax rate is 10 mills. The school district’s required revenue from taxes is $1,000,000. What is the tax base of the area?

A.      $1,000

B.      $1,000,000

C.      $10,000,000

D.      $100,000,000

350. Which of the following jurisdictions are empowered to levy ad valorem taxes on real property?

A.      Federal, state, and county jurisdictions

B.      State, county, and local jurisdictions

C.      Counties, cities, and municipalities

D.      Federal, state, and county special assessment districts

351. What is a contract?

352. John Junior, age 14, under duress from his father, signs a contract to buy a $75,000 sports car from his father, John Senior, for $10 a week plus a promise to “be a good boy” around the house, even though both father and son know that Junior intends to drive the car without license or insurance.  Do you think a court would enforce this contract if either party decided not to go through with it?

353. The Statute of Frauds requires that most contracts that convey an interest in real estate be in writing.  What does it mean to say under this doctrine that an oral contract may be valid, but not enforceable?

354. What happens to an offer made to a seller if the seller changes one of the terms, signs the offer, and returns it to the buyer?

355. When does an offer or counteroffer become a contract?

356. What is the relationship between an executory contract and an executed contract?

357. Describe the legal remedies a damaged party has when another party to a contract breaches the contract.

358. All of the following will terminate a contract EXCEPT

A.    performance of the contract.

B.     mutual agreement to cancel the contract.

C.     assignment of the contract.

D.    abandonment of the contract.

359. Which is NOT one of the three factors needed for the capacity to contract?

Being currently employed.

Being of legal age.

Being of legitimate authority.

Being of mental competency.

360. An implied contract may be deemed to exist if

A.    the parties do not disavow an express contract that has expired.

B.     the parties act as if there is a contract.

C.     an offering party does not receive written notice that the offer has been rejected.

D.    the parties promise to perform their part of the agreement if the other party performs.

361. A buyer submits an offer to a seller and then dies in a car accident. Before learning of the buyer’s death, the seller accepts the offer. Which of the following is true?

A.    The seller can force the buyer’s estate to go through with the purchase.

B.     The buyer’s death terminated the offer.

C.     The seller must make a new offer with the same terms to the buyer’s heirs.

D.    The buyer’s heirs have the option of enforcing the contract.

362. The necessary condition of mutual consent may be found lacking in a contract if

A.    the two parties did not discuss every possible interpretation of the contract’s provisions.

B.     the offer that was accepted is vague.

C.     one party did not have the legal authority to sign the contract.

D.    the agreement is unwritten.

363. A buyer decides after making an offer on a house that he would rather buy a different one. What does he have to do to get out of the first offer?

A.    Re-submit the offer with a lower price that the seller is sure to reject

B.     Wait for the offer to expire

C.     Revoke the offer before the seller has accepted it

D.    Make an offer on the second house and let the first seller keep the earnest money deposit

364. Why are insurance policies called “aleatory” contracts?

A.    The insurance company dictates the terms of the policy.

B.     The considerations offered by the parties are extremely unequal.

C.     The rights of the insured party to seek court relief are extremely limited.

D.    The insurer performs the promised action only if a specified chance event occurs

365. A person sells a summer cottage appraised at $100,000 to a stranger for $50,000. The seller’s family wants to challenge the validity of the sale contract. The most apparent weakness of the contract that they might be able to attack is the

A.    illegality of the contract’s intent.

B.     insufficiency of the consideration exchanged for the property.

C.     lack of consent on the part of the seller’s family.

D.    lack of good faith on the part of the buyer.

366. What is forfeiture?

A.    The party breaching a contract to enter into an alternative contract.

B.     The party breaching a contract to give up a consideration.

C.     The party suffering the breach having the right to sue the breaching party.

D.    The party suffering the breach seizing property from the breaching party.

367. What is a contract?

A.    A legal form signed by two parties agreeing to exchange considerations.

B.     An agreement between the legal representatives of two parties committing their principles to take action if certain conditions arise.

C.     A document in which one or more parties promise to deliver goods or services in return for payment of an agreed price.

D.    An intangible agreement between parties to perform or refrain from performing some act.

368. Which of the following statements about contract revocation is TRUE?

A.    It may not relieve the revoking party of contract obligations.

B.     It cancels all obligations of both parties.

C.     It can only be used if both parties agree to the revocation.

D.    It leaves the non-revoking party without any legal remedies.

369. A contract that conveys an interest in real estate must

A.    contain a legal description of the property.

B.     be written on a form approved by the state bar association.

C.     be either nuncupative or holographic.

D.    be recorded within three days to be enforceable.

370. In a suit for damages by reason of default, the damaged party may claim liquidated damages if

A.    the contract stated a specific amount due to a damaged party.

B.     the contract stated that a defaulting party could not profit from the contract.

C.     the defaulting party owns property that can be foreclosed to pay the damages.

D.    the contract stated that a damaged party could take legal action to enforce the contract.

371. Oral contracts are

A.    always illegal.

B.     sometimes valid, but never enforceable.

C.     sometimes valid, but possibly unenforceable.

D.    no different from implied contracts in the eyes of the law.

372. Which of the following contracts can be assigned to another party?

A.    An exclusive listing agreement

B.     An exclusive agency agreement

C.     A contract for the sale of a house

D.    An employment contract between a broker and a salesperson

373. A buyer makes an offer with a 48-hour expiration time. 12 hours later, she changes her mind and informs the seller that the offer is withdrawn? What is the status of the offer?

A.    The offer remains an offer until the expiration time has passed, and the seller may accept it.

B.     The contract is invalid but enforceable; the seller may sue for breach of contract.

C.     The offer is extinguished along with the seller’s right to accept it.

D.    The contract is valid but unenforceable unless the buyer reinstates it within the original expiration period.

374. A bilateral contract is one in which

A.    both parties promise to do something in exchange for the other party’s performance.

B.     both parties receive equal consideration.

C.     both parties agree to perform a service.

D.    one party promises to do something if the other party performs first.

375. An unconscionable contract is one that

A.    illegal in purpose.

B.     gives one party only the option of accepting or rejecting the contract.

C.     is triggered by unforeseeable, random events.

D.    takes unfair advantage of the party with weaker bargaining power.

376. If a state allows for a cooling-period rescission in the contracting process, a party may

A.    extend the expiration period for accepting or rejecting an offer.

B.     cancel a contract within a statutory period for any reason with no penalty.

C.     revoke a contract at any time before the other party has performed its obligations.

D.    return the contract to the status of an offer or counteroffer that has not yet been accepted.

377. Can an oral contract between a buyer and a seller to transfer real estate be enforced?

A.    Yes, any oral contract is legally binding.

B.     Yes, provided it was witnessed by a broker.

C.     No, real estate sales contracts must be in writing.

D.    No, unless the property is worth less than $75,000.

378. Al offered seller Tim $60,000 for a parcel of land but Tim never responded to Al’s offer. Two weeks later Tim sold the land for $58,000 to an out-of-state buyer. Neighbor Al has sued for breach of contract. What can be said about Al’s actions?

A.    Al has legal rights due to his being the first offer.

B.     Al has legal rights due to his offer being higher than the out-of-town buyer’s amount.

C.     There is a contract because there was a good faith offer by Al.

D.    There is no contract unless both parties have an agreement.

379. Once a transaction closes, a contract is said to be

A.    executed.

B.     executory.

C.     executive.

D.    executant.

380. A homeseller signs a listing agreement with a broker and the next week decides not to sell and revokes the listing. Which of the following is true?

381. What is rescission?

382. A breach of contract is

383. A party sells a summer cottage appraised at $100,000 to a stranger for $50,000. The seller’s family wants to challenge the validity of the sale contract. The most apparent weakness of the contract that they might be able to attack is the?

384. An oral contract to sell mineral rights is performed by both parties. Six months later, the seller has second thoughts and wants to reclaim the rights under the Statue of Frauds. What is the likelihood that the seller will succeed?

385. The valuable consideration necessary to make a contract valid must be?

386. An implied contract may be deemed to exist between parties if

387. If an offeree alters any part of an offer and then signs it,

A.    the offeror must accept the contract with its alterations.

B.     the original offer is extinguished and the offeror is not bound by any agreement.

C.     the original offer becomes a contract with the alterations subject to acceptance or rejection by the offeror.

D.    the altered offer is a valid contract.

388. In which circumstances would a buyer most likely sue for specific performance?

389. What is the statute of limitations?

390. Parties can agree to replace a cancelled contract with another contract by the process of?

391. Which of the following is an executory contract?

392. How much time does a seller have to accept a buyer’s offer if the offer does not have an expiration date?

393. When does an offer become a contract?

394. Which of the following is a legally-required element of a valid and enforceable real estate contract?

A.) Notarized agreement
B.) Valuable consideration
C.) An offer
D.) Earnest money

395. What are some of the assurances about construction quality provided to home buyers by federal laws and regulations?

396. What are some of the typical requirements for well and septic systems?

397. What does a footing do?
398. What is a sill plate and what does it do?

399. What are the three types of frame construction?

400. What is the most common type of heating system in North America and how does it work?

401. What are the two types of heat pumps available?

402. Name three types of pipes used in plumbing systems.

403. What is the difference between voltage and amperage?

404.  The Minimum Property Standards is

A.    a national building code.

B.     a model zoning law.

C.     a set of construction standards promulgated by the American Association of Property Insurers.

D.    a set of HUD regulations for buildings constructed under HUD housing programs.

405. Which of these types of wire would probably not be found in a residence?

A.    Romex cable

B.     Copper wire

C.     Greenfield conductor

D.    Steel wire

406. Which is the most common type of framing for residential construction?

A.    Balloon

B.     Platform

C.     Stud

D.    Post and beam

407. What type of pipe is inexpensive, lightweight and utilized in areas where hard water is a problem?

A.    Brass

B.     PVC

408. Which of the following is NOT part of a septic system?

A.    Leach field

B.     Floating slab

C.     Distribution box

D.    Septic tank

409. How is amperage calculated?

A.    Cubic feet per minute

B.     Voltage

C.     Meters per second

D.    Watts or kilowatts

410. What dictates the minimum and maximum pressures allowed for plumbing fixtures?

A.    The building codes

B.     The certificate of occupancy

C.     The zoning laws

D.    The blueprints

411. All of the following are guidelines usually provided by a state’s Department of Health for the location of wells EXCEPT

A.    location must allow access for inspection and maintenance.

B.     well must not be located where the water table is less than 10 feet below the surface.

C.     location must not be subject to seasonal flooding.

D.    well must be uphill from known sources of pollution.

412.  What kind of refrigerant is used for cooling in air conditioners?

A.    Methane

B.     Carbon dioxide

C.     Propane

D.    Freon

413. What amount of heat energy is needed to raise the temperature of one pound of water by one degree F?

A.    A British Thermal Unit

B.     One watt

C.     One joule

D.    An American Thermal Unit

414. Which foundation is a flat concrete pad poured directly on the ground?

A.    Fundamental foundation

B.     Joist framing

C.     Slab-on-grade

D.    Pitch foundation

415. The part of the foundation that transmits loads directly to the soil is called

A.    the basement.

B.     the stud.

C.     the transmitter.

D.    the footing.

416. In wood framing, what are the members called that frame the structure?

A.    Studs

B.     Beams

C.     Joists

D.    Rafters

417. What is the National Electric Code?

A.    A professional code prescribing safe practices for members of the United Brotherhood of Electrical Workers.

B.     A federal law mandating procedures and materials that must be used in all residential construction in the United States.

C.     A national standard for the safe installation of electrical wiring and equipment voluntarily adopted by many states and municipalities.

D.    A national standard for professional practices voluntarily adopted by many electrical workers’ unions and associations.

418. To ensure that a proposed construction project will not have a negative impact on the environment, developers may be required to

A.    comply with the Minimum Property Standards code.

B.     obtain a building permit from HUD.

C.     file an environmental impact statement.

D.    hire a federal environmental engineer as project foreman.

419. What does the R-factor measure?

A.    The range of temperatures that a heating unit can provide.

B.     How much insulation a material provides.

C.     How many gallons of water a well can replenish per day.

D.    How much shade a property possesses.

420. Which type of pipe is typically found in drainage systems?

421. Construction standards for the provision of building accessibility for elderly and disabled persons are mandated by the federal

422. Ventilation air is the air used for providing

423. Which of the following is NOT an aspect of a house’s construction that a competent real estate agent is expected to know about?

424. What onsite system is designed to treat and dispose of domestic sewage?

425. A _________ is a protective device containing a wire that melts and breaks the circuit when the current exceeds a certain value.

426. The slope of the roof is also known as

427. What type of insulation is used for work on flat roofs, on basement walls, as perimeter insulation at concrete slab edges, and in cathedral ceilings?

428. In _____________ construction, exterior wall studs continue through the first and second stories.

429. Real estate licensees should know enough about building ordinances to be able to

430. Why do taxing entities sometimes use an equalization process when assessing properties?

A.    To level out the unevenness of valuations from one area to another

B.     To tailor millage rates to a wide range of assessed values within the taxing district

C.     To make tax rates equal across all jurisdictions

D.    To make all tax bills equal within the taxing district

431. The primary agents of private land use control are

A.    courts by means of police power.

B.     property owners by means of zoning ordinances.

C.     property owners by means of deed restrictions.

D.    grantees by means of restrictive covenants.

432. A metes and bounds description must

A.    describe the parcel’s boundaries as a complete, closed perimeter.

B.     conform to the standards set for the plat of survey.

C.     use rods and acres to quantify linear and area measurements.

D.    contain a distinct point of beginning and point of ending.

433. An item associated with an item of real property may be distinguished as real or personal property by determining whether it

A.    is valued at a certain percentage of the value of the associated item.

B.     is physically smaller than the associated item.

C.     is permanently attached to land or structures of the associated item.

D.    was acquired at the same time as the associated item.

434. Included in the definition of “real estate” are

A.    a mobile home parked temporarily on a rented lot.

B.     fences and roads on a parcel of land.

C.     trees cut down and lying on a parcel of land.

D.    business equipment installed by a tenant on leased property.

435. What purpose is served by recording a deed?

A.    It clears all encumbrances.

B.     It validates the deed.

C.     It transfers title.

D.    It gives constructive notice of ownership.

436. To own an “interest in real estate,” one must own

A.    a deed.

B.     an improvement.

C.     some part of the bundle of rights.

D.    acreage.

437. Zoning ordinances are primarily intended to

A.    prevent urban development from encroaching on rural areas

B.     establish how every parcel in the zoning authority’s area of control can be used.

C.     regulate subdivision expansion.

D.    buffer residential and industrial uses.

438. What does an owner own if the duration of his or her rights in an estate cannot be determined?

A.    A permanent life estate

B.     A freehold estate

C.     A leasehold estate

D.    A durable leased fee estate

439. Restrictive covenants

A.    can never be changed or removed.

B.     are never used for residential properties.

C.     take priority over less restrictive zoning ordinances.

D.    may be discriminatory if established before ownership transfers.

440. Which of the following is required for a legal description to be adequate?

A.    It must be written by a licensed real estate attorney.

B.     It must accurately locate and identify the boundaries of the property and distinguish it from all other properties.

C.     It must be included in a survey of the property conducted by a licensed surveyor.

D.    It must accurately identify property boundaries and locate and describe all improvements on the property.

441. A person who owns all ownership interests in real property is said to own

A.    statutory title.

B.     juridical title.

C.     equitable title.

D.    legal title.

442. Conditions and covenants differ in that

A.    conditions can be created only at the time of transferring ownership.

B.     conditions can be created at any time.

C.     a breach of covenant causes ownership to be forfeited.

D.    covenants are enforceable in court.

443. To be valid and enforceable, a contract must

A.    include earnest money.

B.     be notarized.

C.     convey legal title.

D.    include valuable consideration.

444. The owner of a cooperative owns a(n)

A.    proprietary lease.

B.     estate for years.

C.     commercial lease.

D.    periodic lease.

445. Where do the overall guidelines for zoning, building codes, and development requirements in a jurisdiction come from?

A.    The jurisdiction’s master plan

B.     The jurisdiction’s economic development committee

C.     State enabling acts

D.    State court decisions

446. When no legal heirs can be found for the deceased owner of a property, the laws of descent give the property to

A.    the winning bidder in a sheriff’s sale.

B.     the county or state.

C.     the heirs of the previous owner of record.

D.    a registered charity in the nearest municipality.

447. Except in a title-theory state, a mortgage lienor has a (an) _________ in the liened property.

A.    security interest

B.     an equitable interest

C.     a pro rata share of a legal interest

D.    a dominant interest

448. One day, a nosy visitor finds a deed in the attic of a house. The deed is signed by the grantor, who is deceased, but the grantee is not named. The visitor writes in his own name and attempts to record the deed. However, the deed will probably not hold up because

A.    there was no consideration and no intent to deliver.

B.     the grantor did not sign a transfer certificate and attach it to the deed.

C.     the grantee did not sign the deed in the presence of the grantor.

D.    the grantor was deceased at the time of delivery.

449. Bob can grant his sister Mary an estate for as long as she lives without the right to pass it to heirs by granting a(n)

A.    ordinary life estate.

B.     estate for years.

C.     legal life estate.

D.    estate pur autre vie.

450. What is the basis for determining the amount of a condominium owner’s monthly assessment for operations and maintenance?

A.    The unit’s appraised value

B.     The number of shares the owner purchased in the condominium association

C.     The unit’s pro rata ownership share as defined in the declaration

D.    The unit’s pro rata share of total floor space in the building

451. A deed in lieu of foreclosure

A.    changes the loan terms.

B.     wipes out all liens.

C.     increases the costs of foreclosure.

D.    avoids public notice of a foreclosure.

452. When a joint tenant dies, that tenant’s interest

A.    passes to the surviving joint tenants.

B.     passes to the decedent’s heirs as a tenancy in common.

C.     passes to the decedent’s heirs and the surviving tenants as a divided tenancy in common.

D.    passes to the decedent’s heirs as a joint tenancy.

453. What is the result of a break in the chain of title to a property?

A.    A quitclaim deed is issued.

B.     Title escheats to the state.

C.     Title reverts to the last owner before the break.

D.    There is a cloud on the title.

454. A court orders Jerry to allow neighbor Loretta to drive across his property because it is the only way Loretta can reach her property from a public road. The easement created is an

A.    easement in gross.

B.     easement by prescription.

C.     easement by personal license.

D.    easement by necessity.

455. In a case of mortgage loan delinquency, it is the ______ that determines when foreclosure proceedings will commence.

A.    law

B.     lender

C.     borrower

D.    investors

456. Stan’s home undergoes foreclosure. The property has the following liens recorded against it: an unpaid real estate tax bill for the current year; a first mortgage dated ten years earlier; a second mortgage dated three years earlier; and a mechanic’s lien entered for work beginning six months earlier. When the property is sold, the LAST lien to be paid off is the

A.    property tax lien.

B.     first mortgage.

C.     mechanic’s lien.

D.    second mortgage.

457. Of the wood framing systems used in residential construction today, the most common is

A.    platform-frame.

B.     balloon-frame.

C.     pillar and girder.

D.    post and beam.

458. Unlike deed restrictions, declaration restrictions

A.    cannot be extinguished by a quitclaim deed.

B.     do not attach to the property.

C.     focus on construction requirements.

D.    are used only on commercial properties.

459. What is the purpose of Planned Unit Development zoning?

A.    To regulate the placement of industrial and office parks

B.     To combine multiple zoning categories within a single property boundary

C.     To enable a single building permit to cover every structure in a subdivision

D.    To promote an efficient land use design that maximizes open space when whole tracts are developed

460. When a contract is revoked,

A.    the non-revoking party has no legal recourse but to accept the revocation.

B.     both parties must agree for the revocation to take effect.

C.     neither party has any further obligations.

D.    the revoking party may still have obligations to the other party.

461. A valid contract that conveys an interest in real estate must contain

A.    a novation clause.

B.     a title certificate.

C.     a legal description of the property.

D.    the signature of a member of the state bar association.

462. Unlike other property taxes, a special assessment tax

A.    does not create a lien on the property.

B.     applies a reduced tax rate to properties not affected by the project to be funded.

C.     applies only to properties which will directly benefit from the project to be funded.

D.    taxes properties with a higher assessed value at a proportionately higher rate.

463. What kind of clause in a mortgage or trust deed enables a non-judicial foreclosure to occur?

A.    Power of attorney

B.     Power of sale

C.     Due on sale

D.    Damages

464. Ownership rights, such as those to possess and use a property,

A.    cannot be violated.

B.     are absolute.

C.     vary with the type of property involved.

D.    are subject to what the law allows.

465. How is the tax base of an area calculated?

A.    Exemptions are added to the sum of assessed values.

B.     The tax levy is subtracted from the budget shortfall.

C.     The millage rate is divided by the tax levy.

D.    Exemptions are subtracted from the sum of assessed values.

466. A court orders transfer of a mortgaged property to the lender in a ___________ foreclosure.

A.    possessory

B.     judicial

C.     no-fault

D.    strict

467. In a foundation, the load is transmitted to the soil by the

A.    load exchanger.

B.     footings.

C.     platforms.

D.    lintels.

468. A seller accepts an offer without realizing that the buyer has died since making the offer. Which of the following best describes the status of the contract?

A.    The contract requires the buyer’s estate to complete the purchase before the estate is probated.

B.     The contract requires the buyer’s heirs to complete the purchase after the estate is settled.

C.     The offer was terminated by the buyer’s death; there is no contract.

D.    The seller must convey the property to the buyer’s heirs under the terms of the contract as originally accepted.

469. Plumbing fixtures in a building have a minimum and maximum pressure requirement that is dictated by

A.    the plumbing contractor.

B.     the water company.

C.     the building code.

D.    zoning.

470. If ABC Company has the right to build a structure on top of DEF’s existing structure, ABC owns

A.    a dominant tenement.

B.     air rights.

C.     the right to improve.

D.    surface rights.

471. Two individuals own a house as tenants by the entireties. They can do this because they

A.    are incorporated.

B.     acquired title at the same time.

C.     are related by blood.

D.    are married.

472. Bob signs a six-month apartment lease agreement with John. What kind of lease is this?

A.    Tenancy at sufferance

B.     Estate from period to period

C.     Estate at will

D.    Estate for years

473. In a tenancy in common, the co-owners

A.    are necessarily married.

B.     own equal shares of the estate.

C.     share an indivisible interest.

D.    acquire their interests at the same time.

474. An estate is transferred with the stipulation that trees on the premises will never be cut down or the seller will take back the property. This kind of estate is a

A.    fee simple defeasible.

B.     fee simple absolute.

C.     pur autre vie.

D.    conventional remainder.

475. Legal title to an estate in trust is held by the

A.    trustor.

B.     trustee.

C.     beneficiary.

D.    grantor.

476. Eminent domain

A.    is applicable only when the owner agrees with the government’s superior claim.

B.     may be exercised with no obligation to compensate the owner.

C.     may be applied to any privately-owned property and for any purpose whatever, including reselling for a profit.

D.    can take a property from an unwilling property owner by a process of condemnation.

477. One of the unique features of the Torrens System of recording is that

A.    conveyance occurs when it is registered on the certificate.

B.     it requires a complete title search to discover title status.

C.     title insurance is mandatory.

D.    encumbrances are recorded in order of priority.

478. An encroachment arises when

A.    a property owner grants a neighbor permission to build a structure that hangs over the property boundary.

B.     an easement is recorded on the title of a property.

C.     one property physically intrudes into another without authorization.

D.    a property owner builds a structure that is at variance with a zoning ordinance.

479. At what level of government is the real estate business primarily regulated?

A.    The U.S. Constitution

B.     The federal court system

C.     The U.S. Congress

D.    The state legislature

Ch5 National Brokerage (Questions ONLY, ANSWERS WILL BE REVEALED WITH PROPER SUBSCRIPTION)

Tip: to find a certain word or key term,  press at the same time, the buttons:

( Ctrl and F ) on Windows computers

(Command and F ) on Mac computer

to bring up the in-page search box

1. What actions demonstrate exercising care when representing a buyer?

2. What exception exists to the duty of obedience when working with a client?

3. An agent’s fiduciary responsibilities to a client usually end when the transaction closes. This is not true of which duty?

4. A seller’s agent must disclose what kinds of things to the seller?

5. Typically, what actions are not considered to be part of a broker’s authority?

6. What obligations do licensees owe to their customers?

7. Describe the difference between active and passive fraud.

8. What could happen if a licensee violates a duty to a client or customer?

9. What principles govern an agency relationship?

10. Define implied agency.

11. If a transaction doesn’t complete, under what circumstances would the broker still be entitled to a commission?

12. Describe the difference between constructive notice and actual notice.

13. What is market allocation? Give an example.

14. What’s the penalty for violating the Sherman Antitrust Act?

15. What does the Clayton Act allow private individuals to do?

16. What kinds of discussions about commission rates are brokers allowed to have that would not violate the Sherman Act?

17. An agent is

A.    one who is the source of another’s authority

B.     one who represents and acts for another

C.     one who has conferred authority to another

D.    one who has been paid a commission by another

18. Misrepresenting facts to a buyer might result in

A.    an extended contract and protracted compensation

B.     federal sanctions

C.     loss of a business license

D.    a voided contract and loss of commission

19. Obedience of the agent to the principal means what?

A.    The agent may disobey those instructions in good faith if the agent feels it is necessary

B.     The agent must follow all the instructions of the seller even if they violate state law

C.     The agent must follow those instructions regardless of personal feelings about them, as long as they do not violate the state or federal laws.

D.    The agent must follow all those instructions regardless of the consequences.

20. Murphy, a buyer (customer), does not know about the leaking basement so he proceeds to make an offer. Should the broker (salesperson) who represents the seller have told Murphy about the defect?

A.    No, caveat emptor would apply in this case.

B.     No, the broker is the agent for the seller he should not mention the basement unless he is asked.

C.     Yes, any defects known to the broker should have been disclosed to Murphy.

D.    Yes, the broker owes Murphy a fiduciary relationship.

21. A contract in which an owner hires a broker to market the property creates an agency relationship between

A.    buyer and seller.

B.     buyer and broker.

C.     broker and seller.

D.    broker, buyer, and seller.

22. What do we call the unreasonable restriction of business activities that results from conspiracy among members of a trade?

A.    Market allocation

B.     Group boycott

C.     Restraint of trade

D.    Tie-in arrangement

23. Violations of the Sherman Anti-Trust Act can include prison terms and fines of up to how much per violation?

A.    $50,000

B.     $250,000

C.     $500,000

D.    $1,000,000

24. An agency relationship

A.    can occur through implication (what you might say or do) without a written contract

B.     always require a written contract

C.     is always derived by express act

D.    is better accomplished through implication or ratification

25. Agent Paul is bound to inform his client of all facts that might affect the client’s interests – both what Paul knows and what he “should have known.” Which of these situations would not be something Paul “should know?”

A.    There is a crack in the basement wall.

B.     The air conditioner does not work.

C.     The owner of the property is HIV positive.

D.    The casement windows have broken seals.

26. Which of the following duties is NOT owed to a customer?

A.    Confidentiality

B.     Honesty

C.     Reasonable care and skill

D.    Proper disclosure

27. The principles of an agency relationship include all of these factors except which one?

A.    Mutual consent

B.     Authorization

C.     Compensation

D.    Fiduciary duties

28. What is special about a universal agent?

A.    A universal agent has power of attorney.

B.     A universal agent has veto power.

C.     universal agent has unilateral power.

D.    A universal agent has statutory powers.

29. Which of the following does a principal owe to his or her licensee?

A.    Information

B.     Access

C.     Accounting

D.    Performance

30. Matt Bower is a developer. Will Jones is a builder. Matt agrees to sell Will a lot, but he conditions the sale by insisting that Will agree to list the property with him after the home is built. What is this called?

A.    Market allocation

B.     Price fixing

C.     Coercion

D.    Tie-in arrangement

31.  The broker, who has listed a property for sale, has the obligation to

A.    do whatever the broker believes to be in the best interest of the owner.

B.     do whatever the owner has instructed him to do legally.

C.     discriminate at the owner’s instructions.

D.    accept and sign offers in the name of the owner.

32. The act of creating an agency relationship in which the principal accepts the conduct of someone who acted without prior authorization is called what?

A.    Revision

B.     Reaction

C.     Ratification

D.    Presumptive

33. Seller Joe Needy lists his home for $40,000 and the broker tells the prospective buyer to submit a low offer because the seller is desperate. The buyer offers $38,000 and the seller accepts. Which statement is TRUE about this situation?

A.    The broker was unethical but because no one was hurt, it is not improper.

B.     The broker violated the agency relationship.

C.     The broker’s action was proper in obtaining a quick offer.

D.    Any broker is authorized to encourage bidders.

34. An agent fails to discover flood marks on the walls in the basement of a property. The agent sells the property, and the buyer later sues the agent for failing to mention the problem. Which statement best describes what can happen in this case?

A.    The agent may be guilty of intentional misrepresentation.

B.     The agent has an exposure to a charge of negligent misrepresentation.

C.     The agent has little exposure, since the problem was not mentioned on the signed disclosure form.

D.    The agent is not vulnerable, since the problem was not discovered.

35. Agent Sam told a buyer that the fence line also marked the property line. Agent Sam knew that the property line did not extend to the fence line. Agent Sam’s actions are an example of what?

A.    Passive fraud

B.     Unintended fraud

C.     Active fraud

D.    Puffing

36. Agent Fred fronts his cousin Norm money to buy a client’s house. Shortly after the closing, Agent Fred flips the house and realizes a substantial profit. Agent Fred’s actions might be describe as

A.    across the table.

B.     arms length.

C.     direct intent.

D.    self-dealing.

37. A person who hires an agent to represent his or her interests is known as what?

A.    Customer

B.     Referral

C.     Advocate

D.    Principal

38. What is a form of implied agency relationship created by the actions of the parties involved rather than by written agreement?

A.    Defined agency

B.     Ostensible agency

C.     At-Large agency

D.    Non-Facto agency

39. Which of these is not a violation of Sherman Antitrust laws?

A.    Boycott

B.     Price Fixing

C.     Redlining

D.    Market allocation

40. A special agent is also known as a

A.    single or solo agent.

B.     directed or assigned agent.

C.     limited or specific agent.

D.    general or area agent.

41. Which of the following duties best describes what an agent owes customers?

A.    Fairness, care and honesty

B.     Obedience, confidentiality and accounting

C.     Diligence, care, and loyalty

D.    Honesty, diligence and skill

42. An agency relationship is based on

A.    compensation

B.     commission

C.     authorization and mutual consent

D.    contact and access

43. Which of the following statements best defines agency?

A.    The fiduciary relationship between the agent and the principal

B.     The fiduciary relationship between the agent and the broker

C.     The fiduciary relationship between the agents

D.    The fiduciary relationship between the agent and the customer

44. Paul Shafer is acting as the agent of David Smith. He

A.    can agree to a change in price without Smith’s approval.

B.     may share his commission with a licensed attorney.

C.     must report all offers to Smith.

D.    can make a profit in addition to his commission.

45. “Everyone charges the same so you might as well list with me” is an example of what?

A.    Price fixing

B.     Boycott

C.     Market allocation

D.    Tying agreement

46. Which of the following is NOT a form of agency?

A.    Express agency

B.     Implied agency

C.     Closed agency

D.    Ostensible agency

47. Under what conditions can an agent provide advice and counsel to the customer?

A.    Upon a verbal request by the customer

B.     Upon a written request by the customer.

C.     When the request benefits the agent’s client

D.    Never

48. An agent’s duties to a principal include all of the following except which?

49. The principal of Notice is sometimes called what?

50. Puffing is best characterized as which of the following

51. Which of the following is a common complaint buyers have against brokers?

52. Which of the following best describes “agency coupled with an interest?”

53. An agency relationship is created in each of the following situations EXCEPT which?

54. Which duty requires that the agent act in good faith and obey the principal’s directions?

55. Which BEST describes the role of a fiduciary?

56. Which of the following types of information can a licensee legally provided to both a principal and a customer?

57. When the real estate agent has produced a buyer who is ready, willing and able, the agent has generally done what?

58. Which of the following is a common complaint buyers have against brokers?

59. Which of the following best defines the term procuring cause?

60. Agent Mary forgot to complete a sales contract rider. This resulted in a $300 loss for her client. Agent Mary’s actions can be described as

61. After listing a home with a broker, the seller told the broker NOT to disclose a major structural defect in the house. What should the broker do?

62. When a home is listed, what is the minimum which can be created?

63. What are the three primary areas of disclosure?

64. What is the definition of a single agent?

65. How is subagency created?

66. How does a cooperating broker accept a unilateral blanket offer of subagency?

67. What obligations does a subagent of the seller owe to the seller and what obligations does the subagent owe to the buyer?

68. What is dual agency?

69. What is undisclosed dual agency and what happens in this situation?

70. Under what circumstances will most states allow dual agency and what is it called?

71. What is designated agency and why is it important?

72. What is meant by single agency?

73. Why would a tenant enter into an agency agreement with a broker?

74. What are three advantages to entering into a buyer agency agreement?

75. List four ways an agency agreement can be involuntarily terminated.

76. All of the following may involuntarily terminate an agency relationship except which?

A.    Bankruptcy

B.     Expiration of the agreement term

C.     Agent abandonment

D.    Condemnation of the property

77. Revocation of a broker’s license results in

A.    reassignment of the relationship.

B.     termination of the relationship.

C.     extended agreement.

D.    open offer agreement relationship.

78. What do we call an agent who represents a seller exclusively in a real estate transaction?

A.    Exclusive agent

B.     Single agent

C.     Subagent

D.    Broker agent

79. What is the arrangement called when the agent is accountable only to the buyer?

A.    Buyer’s agent

B.     Seller’s agent

C.     Broker’s agent

D.    Assigned agent

80. Which of the following would be deemed an advantage of a subagency arrangement?

A.    Subagency is an easy way for the cooperating broker to share in the commission.

B.     Subagency relieves the seller and the listing broker from liable for the actions of the subagents.

C.     Subagency requires a written agreement from the buyer.

D.    Subagency allows the subagent to act like a buyer’s agent without the risk of undisclosed dual agency.

81. Sally is a subagent working for Seller Pat. What does Sally owe to Buyer Brad?

A.    Honesty and fair dealing

B.     Confidentiality

C.     Advice on negotiations

D.    Information about Pat’s motivation to sell

82. Which of the following are common types of agency relationships?

A.    Single agency

B.     Each of these

C.     Consensual dual agency

D.    Seller/Landlord agency

83. Which type of compensation is more likely to be used in a commercial rather than a residential transaction?

A.    Kick-back

B.     Percent of sale

C.     Margin payment

D.    Retainer

84.  A seller can agree to accept or reject which of these options when he or she signs the listing contract?

A.    Subagency

B.     Facilitator

C.     Disclosure

D.    Non-agency

85. Licensee Jim listed a property and Licensee Sally sold the property to her client. Jim and Sally work for the same brokerage. This type of sale is known as what?

A.    Dual-agency sale

B.     Principal sale

C.     In-house sale

D.    Net sale

86. What is the term given to an agent who is acting as a buyer’s and seller’s agent in the same transaction?

A.    Co-agent

B.     Tri-agent

C.     Dual agent

D.    Assigned agent

87. Which type of agency would be most advantageous to a buyer?

A.    Broker’s agency

B.     Buyer brokerage

C.     Designated agency

D.    Consensual dual agency

88. What condition occurs when dual agency is not disclosed and agreed to in writing?

A.    Non-disclosed dual agency

B.     Agency by association

C.     Undisclosed dual agency

D.    Dual agency by design

89. What form of limited agency is a good alternative to dual agency?

A.    Non-agency

B.     Undisclosed dual agency

C.     Designated agency

D.    Buyer brokerage

90. Once an agency relationship has been terminated, which of the following responsibilities remain in place?

A.    Compensation

B.     Obedience

C.     Confidentiality

D.    Care

91. What do you call a licensed real estate salesperson, working under the supervision of a real estate broker, who has been assigned to represent a client when a different client is also represented by such real estate broker in the same transaction?

A.    Subagent

B.     Designated agent

C.     Dual agent

D.    Single agent

92. When the agency relationship has been terminated, the licensee is no longer considered the principal’s agent and does not owe any further duties to the principal, except for the following

A.    Loyalty

B.     Obedience

C.     Confidentiality

D.    Care

93. Before a buyer broker shows a property, what must he or she disclose to the seller?

A.    Seller agency relationship

B.     Subagency relationship

C.     Buyer agency relationship

D.    Dual agency relationship

94. A subagent owes customer level services to the buyer which include which of these?

A.    The same fiduciary duties owed to the client

B.     COALD

C.     Honesty, fair dealing and the proper disclosure of pertinent facts that affect the value of the property

D.    Only material facts

95. Which of the following terminations of an agency relationship could result in legal or financial ramifications?

A.    Contract performance

B.     Contract expiration

C.     Mutual agreement between broker and client

D.    Renunciation by the client

96. An agency relationship may be involuntarily terminated by which of the following?

A.    By destruction of the property through fire, vandalism or natural disaster

B.     By performance

C.     By termination of the relationship by mutual agreement

D.    By the expiration of the agency agreement

97. An agency relationship may be involuntarily terminated by which of the following?

A.    Performance

B.     Condemnation of the property

C.     Termination of the relationship by mutual agreement

D.    Expiration of the agency agreement

98. What is the term given to the person who has entered into a listing agreement with a seller?

99. Which of the following is an example of involuntarily termination of agency?

100. Which of the following types of agency is not allowed in most states?

101. Designated agency means the clients do not have the full level of fiduciary duties available to them that they would have if they were fully involved in seller agency or buyer agency. In this situation, the client gives up the fiduciary duty of undivided what?

102. What is the primary purpose for agency disclosure?

103. What exists when a real estate firm or a real estate licensee represents both the seller and the buyer or the landlord and the tenant in the same transaction?

104. If a cooperating broker accepts the offer of subagency from a listing broker, to whom does the cooperating broker owe fiduciary duties?

105. All of the following are common types of agency relationships that exist except which?

106. A broker can enter into a single agency agreement with any of the following except?

107. A broker can enter into a single agency agreement with any of the following except?

108. When a seller gives permission to a broker to submit the property to the MLS, the seller is authorizing the broker to make a blanket unilateral offer of what to all the other members of that MLS?

109. Which of these is not a way a buyer’s agent might receive compensation?

110. In most states, in all residential transactions when must licensees give potential sellers or buyers a written disclosure form?

111. What is an important thing to remember about listing agreements?

 

112. Describe an open listing.

113. What is the major difference between an exclusive right to sell listing and an exclusive agency listing?

114. Give an example of a compensation agreement that is not a listing agreement.

115. Most states require what four components to be on a listing agreement?

116. How can an agent determine who has title to a property he or she is listing?

117. When must the seller receive a copy of the listing agreement?

118. Licensee Tim works for Broker Marty. Tim lists Seller Gary’s home, fills out all the paperwork and signs the agreement. The listing agreement is a contract between whom?

119. What is an MLS?

120. Give some examples of the kind of site information you might collect to submit to the MLS.

121. What are the two most common changes to an original listing agreement?

122. When an amendment is made to a listing agreement, what happens to the terms of the original listing agreement?

123. When is a seller typically required to provide a copy of the Property Disclosure Statement to a buyer?

124. List two types of transfers that are exempt from the Property Disclosure Statement requirement. 

125. If a transaction doesn’t complete, under what circumstances would the broker still be entitled to a commission?

126. Broker Sara has lost her license for unprofessional conduct. What will happen to her listings?

127. Which of the following types of sale does NOT typically require a property disclosure statement?

A.    A sale of a single family home

B.     A transfer made by a trustee in bankruptcy

C.     The sale of a duplex

D.    Newly built homes in a subdivision

128. Which of these sources would NOT be a way to determine who holds title to a property?

A.    Seller

B.     Title Company

C.     County Tax office

D.    Mortgage Bank

129. Licensee Jake found a buyer for seller Norm’s house within three days of taking the listing. Seller Norm has now refused to sell. How does this impact licensee Jake’s compensation?

A.    Licensee Jake would not be entitled to his compensation.

B.     Seller Norm would have to sell as a FSBO and licensee Jake would be out his compensation.

C.     Licensee Jake can appeal to the MLS board for partial compensation payment.

D.    Licensee Jake would still be entitled to his compensation.

130. Broker Jill has an agreement with seller Alice that says Jill will receive compensation if anyone except Alice sells Alice’s home. What kind of agreement is this?

A.    Exclusive agency

B.     Net listing

C.     Exclusive right to sell

D.    Open listing

131. Which of these listing agreements is considered a unilateral contract?

A.    Open

B.     Exclusive Agency

C.     Net

D.    Exclusive Sale and Listing

132. With regard to listings, in which situation would the state licensing authority not get involved?

A.    Broker dies.

B.     Licensee transfers brokers.

C.     Broker loses license.

D.    Firm closes.

133. Which of the following situations might impact a listing agreement?

A.    Death of a Broker

B.     Change of broker’s business address

C.     Transfer of broker to another MLS board

D.    Out of state move by seller

134. Which is TRUE about listings?

A.    A net listing is illegal in all states.

B.     An open listing is an exclusive contract.

C.     A seller can sell his or her own home and owe no commission if he or she signs an exclusive agency listing.

D.    An exclusive listing must always be at least 30 days long.

135. Which component is not required in most listing agreements?

A.    Identification of the property

B.     Specifics of compensation defined

C.     Signatures collected

D.    Escrow company named

136. Which of the following information would you NOT likely find on an MLS listing?

A.    A record of previous property owners

B.     School district

C.     Driving directions to the property

D.    Phone number to call for showing

137. What does a carryover clause do?

A.    Protects the broker if the seller cancels the listing agreement.

B.     Allows an automatic six-month extension to the listing contract.

C.     Prevents the seller from doing a FSBO sale after the listing expires.

D.    Allows the broker to collect a commission for some period of time after the listing expires.

138. In what section on a seller’s disclosure would you find information regarding issues in relation to drainage problems?

A.    Structural

B.     Systems and Fixtures

C.     Water

D.    Environmental

139. What document is submitted to the MLS when a listing agreement is signed?

A.    A copy of the original listing agreement

B.     The original listing agreement

C.     An MLS listing form

D.    Form 45-A

140. What is the best course for a licensee who has been denied compensation due to a fraudulent seller?

A.    The licensee should inform his or her broker.

B.     The licensee should bring a civil suit against the seller.

C.     The licensee should seek damages in a lower court.

D.    The licensee should petition MLS for compensation payment.

141. What are the three most common types of listings?

A.    Open Listing, Exclusive Right to Sell Listing, and Exclusive Agency Listing

B.     Closed Listing, Special Listing and Net Listing

C.     Agency Listing, Basic Listing, and Extended Listing

D.    Comprehensive Listing, Closed Listing, and Market Listing

142. Which of the following is NOT a form of listing contract termination?

A.    Performance

B.     Expiration

C.     Market breach

D.    Termination

143. Which party is responsible for filling out a property disclosure statement?

A.    The cooperating agent

B.     The listing agent

C.     The broker

D.    The sellers

144. In what section of a property disclosure would you find information regarding existing water treatment systems?

A.    Personal Property

B.     Water

C.     Flood Zones

D.    Permits

145. Seller Janet delivers a disclosure statement to Buyer Amanda. Amanda reads it over and decides everything looks good enough to continue with the purchase. A few weeks later, a major hail storm damages the roof and now it leaks. So the original disclosure is no longer accurate. Which statement is false?

A.    Janet should amend the disclosure statement and deliver it to Amanda.

B.     Janet can correct the damage to the roof and tell Amanda nothing.

C.     Amanda can rescind the purchase agreement within three business days after she receives an amended disclosure.

D.    Amanda can require Janet to replace the roof.

146. Which item would NOT appear on a property disclosure statement?

A.    Condition of any outdoor sprinkler system

B.     Basement problems

C.     Deed Number

D.    Pest infestations

147. Licensee Jones is in the process of closing on a sale. However, the property title has been found to have uncorrectable defects. What is the result regarding Jones compensation?

A.    If the property doesn’t close, there will be no compensation.

B.     The title company owes licensee Jones compensation.

C.     Compensation will be prorated based on work performed by licensee Jones.

D.    The seller is still liable for licensee Jones’ compensation.

148. A safety clause in a listing contract means what?

A.    The broker may claim a commission if the owner sells to a person the broker introduced to the property within a certain time after the listing expired.

B.     The owner is protected from any liability from actions the broker performed while the listing was in force.

C.     The broker can extend the term of the listing agreement if a buyer is preparing to make an offer.

D.    The seller may not have to pay a commission if the buyer doesn’t complete the offer.

149. Which of these components is NOT required in most listing agreements?

A.    Property ID

B.     Consent to dual agency

C.     Promise of compensation

D.    Seller signatures

150. Which component is not required in most listing agreements?

A.    Identification of the property

B.     Specifics of compensation defined

C.     Signatures collected

D.    Escrow company named

151. What is the process to make changes to a listing agreement contract?

A.    The broker owns the listing and can make changes as needed.

B.     All parties must agree to in writing to any changes.

C.     The listing agent is the only one that can make changes to the listing contract.

D.    All changes can be made by attaching a hand-written note to the existing contact.

152. What are the two changes most often made to a listing agreement?

153. Which is the best method to identify a property?

154. Sales of manufactured and mobile home

155. Which of the following sales typically do NOT come with a property disclosure?

A.    Single family residence

B.     A foreclosure or deed-in-lieu of foreclosure

C.     New construction

D.    Multi-family dwelling of up to four units

156. Martha signs a listing agreement with Broker Patrick. Which of the following would probably not be found in the agreement they signed?

A.    Patrick’s commission

B.     Martha’s price

C.     Expiration date of the contract

D.    Martha’s average utilities

157. Which of these statements is true?

A.    Once a listing agreement is signed by all parties, it cannot be changed.

B.     The seller can change the listing agreement whenever he or she wants.

C.     A listing agreement can be modified, but only if all parties agree in writing.

D.    A listing agreement can change by the mutual verbal agreement of all parties.

158. The listing type that assures a broker that he or she will receive compensation no matter who procures the buyer is what kind of agreement?

159. Which type of listing allows a seller to sell the property himself or herself without having to pay any commission to any broker?

160. What is the term given to the action when both parties mutually agree to end the listing relationship

161. Broker Alice has a listing agreement with Jack. If Broker Tom procures a buyer for Jack, Tom will get the commission and Alice will not. What kind of listing agreement does Alice have with Jack?

162. When a listing agent signs an agreement, in reality he or she is

163. Which of the following types of transactions typically contain a property disclosure?

164. Licensee Frank works for Broker Harry. Frank lists a home. Licensee Mary, who works for Broker Sam, sells Frank’s listing. With whom does the seller have the agency agreement?

165. In what section on an MLS listing form would an agent look at to determine the type of foundation used in the construction of the home?

166. A multiple listing service (MLS) is an organization of member brokers who agree to

cooperate in the sale of properties listed by other brokers in exchange for a share of the broker’s resulting commission.

167. A listing agreement is a

168. The difference between an exclusive right to sell listing and an exclusive agency listing has to do with what issue?

169. On an MLS listing form, in what section would you find information regarding waterfront footage?

170. Licensee Mike was owed a commission from seller Jane. Jane has refused to make payment. What recourse does licensee Mike have?

171. What is the difference between a void contract and a voidable contract?

172. What is the difference between an express contract and an implied contract?

173. What are the five criteria of a valid contract?

174. When must a suit for damages be initiated?

175. How does a contract for deed differ from a contract of sale?

176. Define an option.

177. What happens when a counteroffer is made?

178. What happens when both buyers and sellers sign the purchase and sale agreement?

179. Name four items that must be present in a purchase and sale agreement for it to be legal.

 

180. What is important to note about the street address of a property when writing a purchase and sale agreement?

181. What does “time is of the essence” mean?

182. What is a right of first refusal?

183. Which type of leasehold estate is commonly referred to as a periodic tenancy?

184. What are a tenant’s primary obligations when leasing a property?

 

185. List three covenants that are essential in a lease.

186. How can a landlord restrict the use of a residential property?

187. Why do landlords collect security deposits?

188. What is the difference between a sublease and an assignment?

189. List three common causes of a lease termination.

 

190. Define a gross lease.

191. Under what type of contract is a seller obligated to sell, but the buyer is not obligated to buy?

A.    Lease

B.     Recission

C.     Option

D.    Purchase

192.  Issues that are not covered in the purchase and sale agreement itself are usually dealt

A.    through verbal agreements.

B.     via handwritten notes.

C.     using preprinted riders.

D.    using a schedule of changes.

193. What do we call the right of a person to have the first opportunity to purchase or lease a property?

A.    Right of first refusal

B.     First right to buy

C.     Right to resend

D.    Right to counteroffer

194. Which kind of lease has no time limit?

A.    Estate for years

B.     Estate at will

C.     Estate from period to period

D.    Estate at sufferance

195. What document is used to make adjustments to an existing sales contract?

A.    Addendum

B.     Repeal

C.     Side bar

D.    Adjunct

196. The Statute of Limitations requires that parties to a contract who have been damaged or who question the contract’s provisions do what?

A.    Act within a statutory period.

B.     Select a specific, limited course of action for recouping their losses.

C.     Arbitrate prior to taking court action.

D.    Wait a statutory period before they may take legal action.

197. A lease is

A.    both an instrument of conveyance and a contract.

B.     neither an instrument of conveyance nor contract.

C.     a promise note.

D.    a document that conveys legal title.

198. Jim signed a six months lease. What type of lease did Jim sign?

A.    Estate at will

B.     Estate for time

C.     Estate for years

D.    Estate at sovereignty

199. Which contract provision allows for the transfer of the contract to another person?

A.    Assignment of a Contract

B.     Operation of Law

C.     Transfer Clause

D.    Execute Clause

200. Which of the following is a characteristic of land leases?

A.    Inherently long-term leases

B.     Inherently short-term leases

C.     Tax advantage limitations

D.    Reduction in finance options

201. Landlord Frank terminated Jerry’s lease because gross sales did not meet expectations. Jerry agreed to what type of lease?

A.    Retail Level Lease

B.     Percentage Lease

C.     Reorder Lease

D.    Market Level Lease

202. Most home sales are

A.    not contingent on financing.

B.     covered by FDIC insurance.

C.     contingent on financing.

D.    based on a cash sale.

203. A contract which neither party can enforce is called

A.    voidable

B.     void

C.     open

D.    denied

204. Which of these items is not included in a lease agreement?

A.    Use provisions

B.     Demising clause

C.     Description of premises

D.    Alienation clause

205. Which of the following summarizes the general terms of a ground lease?

A.    The landlord sells the ground to another, then leases it back.

B.     A tenant buys the landlord’s ground, then leases the improvements.

C.     The landlord leases the ground floor of the building to a commercial tenant.

D.    The tenant leases the ground from the landlord and owns the improvements.

206. Which of the following best defines a marketable title?

A.    A title that has been recorded at the county court house

B.     A title to a property that is free from encumbrances, litigation, and other defects and that can be readily be sold or mortgaged

C.     A title that has been reviewed by an attorney

D.    A title that has at least one lien attached to the property

207. A lease automatically terminates under which of the following circumstances?

A.    The tenant fails to pay rent.

B.     The leased property is foreclosed.

C.     The tenant goes out of business.

D.    The landlord cancels the lease.

208. Jim holds a commercial lease. Last year his rent went up 4% based on a 4% increase in the wholesale price index. What type of lease does Jim have?

A.    Revolving Lease

B.     Wholesale Lease

C.     Index Lease

D.    Leading Indicator Lease

209. Which statement best defines the concept of “quiet enjoyment?”

A.    A tenant’s requirement to comply with contract obligations

B.     A landlord’s obligation to provide the tenant with egress

C.     A landlord’s obligation to provide the tenant with reasonable privacy and freedom from interference

D.    A tenant’s requirement to allow access for inspections and repairs

210. In which contract provision would the length of the lease be outlined?

A.    Statement of Limits

B.     Clear Statement of Term

C.     Clear Notice of Terms

D.    Order of Terms

211. In which of these contracts is the payment of all or part of the sale price deferred?

A.    Lease

B.     Contract for deed

C.     Option

D.    Contract of sale

212. According to contract law, every valid contract is also what?

A.    Void

B.     Enforceable

C.     Enforceable or unenforceable

D.    Voidable

213. What does a rescission contract do?

A.    Releases all parties from any present and future liability.

B.     Makes the buyers liable for damages if they default for no good reason.

C.     Specifies the terms under which either party may sue the other in a default.

D.    Releases the sellers from any responsibility for returning the buyers’ earnest money deposit.

214. A contract that conveys an interest in real estate must

A.    include a title closing entity.

B.     contain default penalties.

C.     include all outstanding liens against the property.

D.    contain a legal description of the property.

215. What is one important difference between a sublease and a lease assignment?

A.    In an assignment, responsibility for the original lease is transferred completely to the assignee.

B.     In a sublease, the original tenant retains primary responsibility for performance of the original lease contract.

C.     A sublease does not convey any of the leasehold interest.

D.    A sublease conveys the entire leasehold interest.

216. What kind of lease contains a recapture clause?

217. Which of the following statements best defines closing costs?

A.      Marketing expenses incurred to sell the property

B.      All listing fees

C.      Expenses above the price of the property that buyers and sellers normally are required to pay to complete a real estate transaction

D.      Expenses not paid by the brokerage

218. What is an important legal characteristic of an option to buy agreement?

A.      The potential buyer, the optionee, is obligated to buy the property once the option agreement is completed.

B.      The optionor must perform if the optionee takes the option, but the optionee is under no obligation to do so.

C.      The contract can be executed at no cost to the optionee.

D.      It is a bilateral agreement.

219. A prospective homebuyer submits a signed offer to buy a house with the condition that the seller pays financing points at closing. The seller disagrees, crosses out the points clause, then signs and returns the document to the buyer. At this point, assuming all other contract validity items are in order, what is the status of the offer?

A.      It’s an accepted offer; therefore a valid contract.

B.      It’s an invalid contract.

C.      It’s still an offer.

D.      It’s an invalid offer.

220. A title that a court of equity considers to be so free from defect that it will legally force its acceptance by a buyer.

221. The best practice is to

A.      have the buyers take possession on the day of the transaction close.

B.      have the buyers take possession at least 2 days after the day of the transaction close.

C.      have the seller remain on the property at least 2 days after the closing date.

D.      have the sellers move from the property at least 5 business days before the close date

222. How might a voidable contract become valid?

A.      If neither party agrees to the terms.

B.      If the party who has reason to disaffirm the contract elects instead to perform it.

C.      If the party who wants to enforce the contract seeks legal relief.

D.      If the party who wants to enforce the contract seeks damages.

223. When a tenant agrees to pay all taxes, insurance, maintenance and repairs, that tenant has what kind of lease?

A.    Gross

B.     Periodic

C.     Net

D.    Graduated

224. Which party has legal authority to sign a sales contract for a property that is part of an estate?

225. When an owner leases her property, she temporarily relinquishes the right to?

226. Among the usual remedies available to the injured party if tenant or landlord defaults on the terms of a lease is the right to?

227. If a lease does not state a specific ending date, when does it terminate?

228. One of the aims of the Uniform Residential Landlord and Tenant Act is to?

229. A lease contract is best described as?

230. An owner leases a property to a business in exchange for rent. The tenant is required to pay all operating expenses as well. This is an example of a

231. Which of the following lease types conveys rights other than the rights to exclusive use and occupancy of the entire property?

232. A landlord and tenant complete a one-year lease. The following week, the landlord dies. Which of the following is true?

233. The percentage lease is most often used by?

234. Which of the following happens when a leased property is sold?

235. A primary theme of the Uniform Residential Landlord and Tenant Act is that both landlord and tenant

236. When a tenant acquires a leasehold estate through a lease, what does the property owner acquire?

237. Buyers Sam and Linda Pope are entering into a contract with sellers, Jim and Alana Jones in which part of the sale price of the property will be deferred. What kind of contract is it?

238. Bill has informed his landlord that he will be moving in 30 days. What action has Bill taken regarding his lease requirement?

239. A lease conveys exclusive use and

240. Jim has part ownership in a house. He has decided to sell his interest. He signs an agreement with a local real estate broker without informing the other two owners. Jim is most likely holding his part ownership as

241. What is the main difference between an employee and an independent contractor?

242. What are the three common-law categories that determine the level of control an employer has?

243. What are the conditions of the IRS safe harbor test?

 

244. Due to the potential for broker responsibility for a licensee’s actions, what do many brokers require their licensees to carry?

245. What are three important questions to ask when negotiating a contract?

246. What are the consequences to the broker if an IRS audit reveals that a contractor is actually an employee?

247. What five topics must be included in every written agreement with an employee or independent contractor?

248. Why should an independent contractor keep expense records?

249. What kind of training do new salespersons need?

250. What kind of training is best for small firms?

251. What types of information might the policy manual contain about advertising?

252. What types of information might the policy manual contain about open houses?

253. How can a broker choose to pay his or her licensees?

254. What is a 100 percent commission plan?

255. What is the compensation for a licensee who sells one of his or her own listings?

256. Jack sells one of his own $225,000 listings for $220,000.  The commission is 7%.  Jack has an 80% commission split with his broker.  What is Jack’s share of the commission?  What is his broker’s share?

257. What are the two most common forms of compensation that brokers use?

A.    Salary draw or escrow draw

B.     Kickback payments and direct deposits

C.     Hourly and flat rates

D.    Salary or a percentage of the commission

258. Most licensees are hired as

A.    employees.

B.     salaried employees.

C.     independent contractors.

D.    quasi-employees.

259. Which of the following is NOT a responsibility that brokers have to their licensees?

A.    Provide and pay for networking opportunities to allow licensee to make business contacts.

B.     Provide access to all the firm’s listings and marketing data.

C.     Provide the appropriate level of office support.

D.    Provide agreed upon training.

260. Gladys sells another broker’s $300,000 listing for $290,000 at a commission rate of 6%. She has a 60% commission split with her broker. If there is also a 50% brokerage split, what commission will Gladys receive?

A.    $5,220

B.     $8,700

C.     $17,400

D.    $3,480

261. If a licensee joins a company as an independent contractor, which of these will he probably have to pay for on his own?

A.    MLS Fees

B.     Social Security Tax

C.     Advertisement Expenses

D.    Utility Expenses

262. Agent Jim works on a flat 2% commission. He sells an in-house listing for $120,000 and also earns a $2,000 bonus from the listing client. What is owed Agent Jim?

A.    $2,860

B.     $2,680

C.     $4,400

D.    $3,220

263. Which of the following must a broker legally provide to an employee?

A.    Pension plan

B.     Unemployment insurance

C.     Health insurance

D.    Sales commission

264. Agent Sue listed and sold the same property. Agent Sue is owed a

A.    listing commission.

B.     a selling commission.

C.     a listing and selling commission.

D.    combination commission.

265. Who is responsible to ensure that all agents in a brokerage are properly licensed?

A.    The broker

B.     The real estate licensee board

C.     MLS licensee board

D.    State Board of Professional Licensing

266. In an IRS audit, which of the following situations would cause the IRS to think that a contractor might really be an employee?

A.    The licensee attends sales meetings.

B.     The licensee gets a commission.

C.     The licensee takes unpaid sick days.

D.    The licensee receives an hourly wage.

267. Which of the following is typically NOT a licensee’s duty to the brokerage?

A.    Work to promote and sell the broker’s listings.

B.     Be appropriately licensed.

C.     Remain knowledgeable about the license laws and rules.

D.    Establish compensation agreements with other ancillary service providers.

268. Work agreements

A.    should be individualized.

B.     should be signed by all parties and a witness.

C.     should be standardized.

D.    should be notarized and a copy sent to the Real Estate Board office.

269. Which training method is conducive for a small brokerage office?

A.    Classroom training

B.     Lecture style training

C.     One-on-one training

D.    Group problem-solving training

270. Which of these statements about an independent contractor is true?

A.    He or she gets a regular salary with bonuses.

B.     He or she is reimbursed for all business expenses.

C.     He or she is paid commission on all sales.

D.    He or she will get three weeks of paid vacation every year.

271. Which of these statements is TRUE?

A.    Salesperson Harry can solicit his own listings.

B.     Salesperson Julie can receive her commission from the cooperating broker in her latest transaction.

C.     Salespersons must perform all of their activities on behalf of their employing broker.

D.    Broker Tom has only limited responsibility for the actions of his licensees.

272. What type of training is frequently conducted by multiple office companies?

A.    Self-study

B.     Organized classroom training

C.     One-on-one

D.    On-the-job

273. Agent Mary sold a listing for another brokerage. Agent Mary is entitled to a

A.    selling side commission.

B.     listing side commission.

C.     shared listing side commission.

D.    finder’s fee commission.

274. Should a policy manual contain a section on referral fees?

A.    No, this should be discussed privately.

B.     No, this should only be shared in the interview meeting.

C.     Yes, provided the MLS Board has a policy.

D.    Yes, all licensees should be given the same information in writing.

275. Agent Norm just started working for Sunshine Realty. He was required to pay an initial fee of $120 for training and $50 for business cards. The $170 is usually referred to as what?

A.    Allowance Fee

B.     Working Costs

C.     Attendance Fee

D.    Start-up Costs

276. What type of methodology works well to ensure that all agents are given and hear the same information?

A.    Memos

B.     Newsletters

C.     Staff Meetings

D.    Office Announcements

277. Behavioral, Financial, and Type of Relationship are

A.    IRS verification levels of control and independence regarding contractor status.

B.     Title IX verification levels of payment.

C.     HUD levels of reimbursement.

D.    compensation levels due a contractor based on performance.

278. Under what type of compensation plan is the agent responsible for the costs of advertising and promotion?

A.    70% plan

B.     80/20 plan

C.     Net plan

D.    100% plan

279. Which of the following statements is FALSE?

A.    A broker may require licensees to carry high levels of automobile insurance.

B.     It’s a good idea for brokers to carry workers’ compensation coverage.

C.     A broker is not responsible for the acts of independent contractors.

D.    Employee status versus independent contractor status is an IRS issue.

280. In a company’s policy and procedures manual, where would you find information regarding acceptable business standards and practices?

A.    Listing Agreements

B.     Code of Ethics

C.     Compensation Policy

D.    Floor Time

281. The policy and procedures manual should include

A.    business agreements.

B.     the firm’s commission policy.

C.     itemization of the managing broker’s short-term and long-term business goals.

D.    the unique role of each individual employee.

290. Which of these statements about an independent contractor is true?

A.    He or she gets a regular salary with bonuses.

B.     He or she is reimbursed for all business expenses.

C.     He or she is paid commission on all sales.

D.    He or she will get three weeks of paid vacation every year.

291. As a listing agent, in most cases your listing will be sold by

A.    yourself

B.     your broker

C.     a cooperating broker

D.    an assigned agent

292. What is the payment program, when an agent starts out at a lower percentage payment but then graduates to higher percentage rates?

A.    Programmed

B.     Step

C.     Graduated

D.    Ramped

292. Which of the following circumstances would concern you about working for Broker John?

292. What item is typically NOT in an independent contractor’s work agreement?

293. Which of the following benchmarks might be used by a licensee when selecting a brokerage?

A.    The firm employs a number of successful agents.

B.     The firm employs a number of unsuccessful agents.

C.     The firm encourages self-training.

D.    Most agents have short term work histories with the broker.

294. Which of these guidelines is not part of the IRS safe harbor test?

A.    Income must be based on sales input.

B.     Contractors must have access to workers compensation benefits.

C.     The contractor must be licensed as a real estate salesperson or broker.

D.    There must be a written contract in place.

295. What is the term given to assigned office duty?

296. Broker Al offers his agents the ability to sell their own homes without any commission owed to the brokerage. In what part of the work agreement might this information be located?

297. As a listing agent, in most cases you listing will be sold by

298. Name and define the two forms of advertising.

 

299. Explain the method used to write good advertising.

 

300. What is important to remember about capturing the reader’s attention?

 

301. What do many firms do to avoid confusion with their advertising plan?

302. What kind of ad is illegal in states?

303. What is the difference between classified ads and display ads?

304. Why is television becoming a more common advertising venue?

305. List three types of web pages that are commonly found on real estate websites.

306. What is bait-and-switch advertising?

 

307. Why is it not prudent to describe buyers in ad copy?

 

308. Give four examples of words or phrases that would be considered discriminatory, and three that would not, with regard to handicap when writing an ad.

 

309. How would you avoid the impression of racial steering when doing newspaper advertising?

310. Salesperson Larry is writing an advertisement for one of his listings. Which of the following phrases should he avoid?

A.    Desirable neighborhood

B.     Apartment complex with chapel

C.     Mother-in-law suite

D.    No wheelchairs

311.  Which form of advertisement works well for an agent that deals with specialized properties?

A.    Billboards

B.     Newspaper Ads

C.     Newsletters

D.    Flyers

312.  If broker Tim advertises a property for sale that he doesn’t intend to sell so that he can attract potential buyers, Tim is practicing

A.    display advertising.

B.     ethical advertising.

C.     product advertising.

D.    bait-and-switch advertising.

313. Ads should be written

A.    from the perspective of all the protected classes

B.     from the perspective of targeting specific classes.

C.     from the perspective of maintaining the culture of the neighborhood.

D.    from the perspective of maintaining familial status in neighborhood.

314. Which of these is a free form of advertising?

A.    Shopping guides

B.     Telephone directory

C.     Press release

D.    Blind ad

315. Which of the following methods allows you to keep track of your advertising results?

A.    Mark outs

B.     Assigning a code

C.     Override notes

D.    Run testing

316. Which of these statements is FALSE?

A.    Radio advertising is not as effective as other methods because listeners can be distracted by their activities and not hear the ads.

B.     Newsletters can be a very effective advertising forum for niche marketers.

C.     Advertising in the telephone directory is cost effective because the directories reach every home in the state.

D.    Magazine ads are significantly more expensive than newspaper ads.

317. Broker Barb takes out a two-page color full-page ad in the weekend paper of her listed properties. What form of advertisement is this?

A.    Service

B.     Institutional

C.     Product

D.    Batch

318. Which of the following real estate ads would not be acceptable?

A.    Property sits on a corner lot with 3 bedrooms, new master bath and large family room.

B.     Great location for empty nesters, close to park and hospitals.

C.     Cozy 2 bedroom cottage in quiet neighborhood.

D.    Home is located in gated community with security entrance.

319. Which of these words or phrases might be considered discriminatory when used in advertising?

A.    No smoking

B.     Couples only

C.     Handicap accessible

D.    Kids welcome

320. Broker Tami has a very low advertising budget. Which of these forms of advertising is she most likely to avoid?

A.    Internet

B.     Magazine ad

C.     Direct e-mail

D.    Newspaper ad

321. What piece of information is missing from a blind ad?

A.    The price

B.     The property’s address

C.     The broker’s identification

D.    The property’s features

322. Which of the following is not in violation of the CAN-SPAM Act?

A.    A deceptive subject line in a commercial e-mail.

B.     Misleading information as to the sender’s identity.

C.     Including an opt-out method for the recipient.

D.    Failing to identify a commercial e-mail as such.

323. Which of the following types of newspaper ad is the most expensive?

A.    Classified Ad

B.     Display Ad

C.     Block Ad

D.    Line Ad

324. Which form of real estate advertisement is typically visible at retail locations?

A.    Shopping Guides

B.     Flyers

C.     Door Hangers

D.    Promotional Items

325. Promotional items are also known as

A.    tossaways.

B.     tradeaways.

C.     giveaways.

D.    runaways.

326. Which kind of advertising aims at increasing sales by informing the public of a company’s capabilities?

A.    Operational

B.     Institutional

C.     Product

D.    Classified

327.  Which of the following phrases should Salesperson Brenda avoid when writing an advertisement for one of her listings?

A.    Kosher meals available

B.     Christian home

C.     Fourth-floor walk-up

D.    Walk to bus stop

328. Which of the following real estate ads would not be acceptable?

A.    Property sits on a corner lot with 3 bedrooms, new master bath and large family room.

B.     Great location for empty nesters, close to park and hospitals.

C.     Cozy 2 bedroom cottage in quiet neighborhood.

D.    Home is located in gated community with security entrance.

329. Which of the following type of advertisement reach the greatest number of people?

A.    Newspaper ads

B.     Flyers

C.     Business Cards

D.    TV ads

330. If broker Tim advertises a property for sale that he doesn’t intend to sell so that he can attract potential buyers, Tim is practicing

A.    display advertising.

B.     ethical advertising.

C.     product advertising.

D.    bait-and-switch advertising.

331. Agent John just listed a home in a mid-range priced neighborhood. Which of these ad headlines would probably be the least effective for this home?

A.    Large Back Yard

B.     Three Bedrooms

C.     $125,000

D.    Needs Paint

332. Based on the National Do Not Call Registry, how long after a company listing has expired may a licensee call the owner to solicit business?

A.    18 months.

B.     Never, if the seller is on the National Do Not Call Registry.

C.     3 months.

D.    1 month.

333. Which of these is not a tool to help evaluate advertising effectiveness?

A.    Telephone log

B.     Code in a print ad

C.     Advertising budget

D.    Designated telephone number

334. Which technique tracks the source of incoming calls and helps with evaluating the benefits of advertisement choices?

A.    Batch Log

B.     Override Log

C.     Schedule Line Log

D.    Telephone Log

335. Which of the following payment arrangements are associated with a press release?

A.    Index payment schedule

B.     Same cost as a display ad

C.     Same cost as a classified ad

D.    Free advertisement

336. At times, the woman’s shelter at St. Mary’s Catholic Church has rental units open to the public. Are they allowed to advertise for female renters only?

A.    Yes, gender based ads for shared living housing is acceptable.

B.     Yes, provided all renters are Catholic.

C.     No, ads cannot target specific gender types.

D.    Religious-type institutions do not have to comply with fair housing laws.

337. The acronym AIDA stands for

A.    Action, Involvement, Detail, and Allowance

B.     Action, Increase, Develop, and Allowance

C.     Attention, Interest, Desire, and Action

D.    Allowance, Involvement, Develop, and Action

338. All of these would be effective at capturing a reader’s attention except which?

A.    Use as little white space as possible.

B.     Use a question as a headline.

C.     Use available color.

D.    Make the headline bold and all caps.

339. How should you follow up on direct mail advertising?

A.    Track and repeat those campaigns that show results.

B.     Repeat the same mailing, until you get results.

C.     Call all homes that received a direct mail piece.

D.    Never repeat a mailing to a previously-contacted neighborhood.

340. What kind of ad usually combines both institutional and product advertising?

A.    Classified

B.     Display

C.     Press release

D.    Classified-display

341. Which of the following is an accurate statement regarding the National Do-Not-Call Registry?

A.    The fine for violations is a maximum of $5,000 per phone call.

B.     Brokerage companies must have a Do Not Call Policy, even if they do not engage in cold calling.

C.     Licensees may call any expired listing within 18 months, whether it is their company listing or the listing of another company.

D.    Companies must access and update the National Registry at least semi-annually.

342. Licensee Judy takes a weekly ad out in the South Side Journal. Judy does not place ads in any of the other neighborhood newspapers. What might be said about Judy’s advertisement practices?

A.    Judy is targeting her market area.

B.     A city-wide ad would be more cost-effective.

C.     Ads in only one local paper may appear to be discriminatory.

D.    Judy is marketing to potential buyers who fit the profile of those already established homeowners and not practicing discrimination.

343. How frequently must companies access and update the Do-Not-Call Registry?

344. The cost of doing direct mail advertising depends on all of these things except which?

345. All but which of the following is an AIDA feature?

A.    Action

B.     Desire

C.     Aspiration

D.    Interest

356. The CAN-SPAM Act requires all of the following EXCEPT:

A.    A valid physical address in all commercial e-mails.

B.     Identification of the party who initiated the e-mail.

C.     Prior permission of the recipient to send commercial e-mails.

D.    An opt-out method for the recipient to unsubscribe.

357. The CAN-SPAM act is federal regulation governing

EXPLANATION: unsolicited commercial e-mails

358. Newsletter Ads

EXPLANATION: Focuses on specialize properties and effectively targets niche markets

359. Which of these is not an AIDA characteristic?

A. Interest
B. Attention
C. Desire
D. Activity

360. An unlicensed person engages in advertising that conveys the clear impression that he is a licensed real estate broker or is an officer or employee of a corporation who knowingly advertises a false statement concerning any land or subdivision. In this scenario, which of the following is not true?

A. The advertiser is subject to a fine.
B. The advertiser can be sentenced to up to a year in prison.
C. The person is breaking the law.
D. The advertiser must prove he was grandfathered in as a licensee.

361. If a couple shows up at the sellers’ door unexpectedly to see the home, what should the sellers do?

A.    Tell them to call your office.

B.     Invite them in and show them around.

C.     Take their names and call your office.

D.    Ask them to leave.

362. What is a good technique to elicit honest feedback regarding the property’s listed price and desirability?

A.    Hold an open house for mortgage lenders.

B.     Seek feedback from HUD field agents.

C.     Hold an open house for agents

D.    Seek feedback from neighbors.

363. Which marketing technique is used to provide information to neighbors about the listed property?

A.    Block Party

B.     Newspaper Flyer

C.     Neighborhood Canvass Letter

D.    Social Calls

364. Why is it important to provide a market analysis to the seller?

365. What is the most common reason a property fails to sell?

366. Angie’s home sold for $324,500 and her mortgage is paid off. She owes her broker 7% commission on the sale. What will Angie net?

367. Brian purchased a lot for $12,500. After the zoning was changed, it is sold for $9,000. What was percentage of loss?

368. What is the primary criticism that sellers have about their agents?

367. When you meet with your sellers after you obtain the listing, what is one of the first things you should share with them to get them involved in the process?

368. What kinds of things should you include in a weekly activity report?

369. How can you prepare your sellers for receiving offers?

370. What is the primary criticism that sellers have about their agents?

371. When you meet with your sellers after you obtain the listing, what is one of the first things you should share with them to get them involved in the process?

372. What kinds of things should you include in a weekly activity report?

373. How can you prepare your sellers for receiving offers?

380. Name four traditional marketing tools that you should use with every listing you get.

 

381. What are some important tips for home tours?

 

382. In addition to office and MLS home tours, what are some other ancillary tools you can use?

 

383. What should you keep in mind when developing your marketing plans?

384. All of these items are important to include on your weekly activity report except which?

A.    Number of calls that week

B.     Agent comments about the property

C.     Classified ads placed on the property

D.    Number of hits on the company website

385. What technique is frequently used to increase attendance when holding an agent’s open house?

A.    Bonus commission points

B.     Drawing for incentives

C.     Home tour punch cards

D.    Compensation awards

386. What strategy should you take when the listing is about to expire?

A.    Let the listing expire and send a seller a letter.

B.     Draw up an extension contract and mail it to the sellers a month before the listing expires.

C.     Schedule a meeting with your sellers a few weeks before the listing is set to expire and review with them your previous marketing plan.

D.    Meet with the sellers on the day the listing expires and determine what to do.

387. You should try to attach a rider strip to your For Sale sign that has what information on it?

A.    Your home telephone number

B.     Your GRI designation

C.     Your cell phone number

D.    Your fax number

388. Jim and Jane’s home sold for $345,800. They owe $240,000 on their mortgage. What will their net be after they pay $10,000 in expenses and a 9% commission?

A.    $53,500

B.     $64,678

C.     $74,678

D.    $82,700

389. What is a major concern regarding virtual home tours?

A.    Picture resolution is of poor quality.

B.     Most homebuyers skip over virtual tours.

C.     Virtual tours don’t capture the type of neighborhood that the property is located in.

D.    Thieves may use the information to their advantage.

390. What is the term given to those items that are attached to a yard sign that provide additional information to the passers-by?

A.    Flags

B.     Rider Strips

C.     Cookies

D.    Stripes

391. Who controls the internet site at www.realtor.com?

A.    Realtor Inc.

B.     National Association of REALTORS®

C.     Realtor Property Inc.

D.    Realtor Corp.

392. What is the best suggestion to give a seller if an interested party shows up at their front door unannounced?

A.    Get the person’s name and then call your office immediately so an agent can come to do the showing.

B.     Tell the seller to conduct a tour.

C.     Have the seller give the visitor a flyer and then tell them to call you.

D.    Tell the visitor when the next open house is scheduled.

393. Video tours

A.    are geared especially towards marketing low-valued homes.

B.     are geared especially towards marketing high-end properties.

C.     are difficult to convert to web formats.

D.    should not be posted on a licensee’s website.

394. What document is prepared and given to a seller outlining the marketing activities on their listing?

A.    A follow-up report

B.     A post-listing report

C.     A marketing evaluation

D.    An activity report

395. Which of these statements is FALSE?

A.    Sellers should be away from home during an open house.

B.     Agents should not invite the next door neighbors to the open house.

C.     Sellers should be sure all yard work is done before the open house.

D.    Before the open house, the agent should open the drapes on all windows to let in the natural light.

396. Harold’s firm bought an investment property for $150,000 and later sold it for $225,000. What was the firm’s percentage of profit?

A.    25%

B.     50%

C.     75%

D.    100%

397. Mr. Smith told his REALTOR® that he wanted to net $140,250 after he paid the 6.5% sales commission. How much did the house have to sell for so that Mr. Smith could net what he wanted?

A.    $142,700

B.     $150,000

C.     $151,800

D.    $163,250

398. Jim bought his home for $250,000 and it sold for $202,500. What was Jim’s percentage of loss?

A.    8%

B.     10%

C.     19%

D.    24%

399. Which of the following actions by an agent would most probably upset the sellers?

A.    Conducting an agent open house

B.     Sending a weekly activity report

C.     Sharing all visitor comments two weeks before the listing ends. 

D.    Placing a classified ad in the weekend paper

400. The Burks received $25,000 profit on the sale of a property. This figure represents a 20% profit. What was the property’s original price?

A.    $100,000

B.     $115,500

C.     $125,000

D.    $150,000

401. Which of these is not a helpful homeowner tip?

A.    Display lots of family photos to impress potential buyers

B.     De-clutter your garage and basement.

C.     Bake muffins or cinnamon rolls to create a “homey” feel.

D.    Make sure all light bulbs and lamps are working and are bright.

402. What is the best suggestion to give sellers when a showing is scheduled?

A.    Leave the property.

B.     Greet the agent at the door.

C.     Assist the agent with the showing.

D.    Move to a private area in the house and remain quiet.

403. Participation in an MLS

A.    decreases the sales inventory available to licensees.

B.     allows a broker to list more properties.

C.     requires a broker to list fewer properties.

D.    increases the sales inventory available to licensees.

404. Mr. Jones wanted to make a $50,000 profit after paying his first mortgage of $21,275 and paying a 6% commission. What would the sale price have to be?

A.    $53,000

B.     $74,275

C.     $75,552

D.    $75,825

405. What marketing technique uses AM/FM radio transmissions that broadcasts a message about the listing?

A.    Talking Sign

B.     Virtual Agent

C.     Talking House

D.    Broadcast Listing

406. Grace and Bill bought a vacation home for $182,000. A serious medical crisis forced them to sell at $110,000. What was their percentage of loss?

A.    30%

B.     40%

C.     50%

D.    55%

407. Which of these marketing tools is not considered a traditional tool?

408. All of these activities are appropriate to do within the first few days of obtaining a listing except which?

409. What is a good technique to use to collect feedback from agents when conducting a property showing?

410. Mr. Smith told his Realtor that he wanted to net $140,250 after he paid the 6.5% sales commission. How much did the house have to sell for so that Mr. Smith could net what he wanted?

A.    $142,700

B.     $150,000

C.     $151,800

D.    $163,250

411. Gary’s Home sold for $140,500. He owes $87,000 on his mortgage. What will his net be after he pays $5,000 in expenses and an 8% commission to his broker?

A.    $25,200

B.     $32,260

C.     $37,260

D.    $42,260

412. If there is no interest in the property on a given week, what should the agent do?

A.    Skip the activity report for that week.

B.     Share that information with the sellers.

C.     Tell the sellers you expect an offer to be coming soon.

D.    Tell the sellers it’s time to reevaluate the price.

413. All of these statements are true except which one?

A.    Virtual tours are an expensive marketing tool to use.

B.     An agent should print off a copy of the listing on the company’s internet site to send to the sellers.

C.     Participation in the MLS increases a licensee’s inventory.

D.    Property evaluations from other agents have valuable information for sellers.

414. Which type of home tour is designed expressly for other licensees?

415. What is another term give to a property flyer?

416. The Deckers want to net $25,000 from the sale of their property. They still have a $70,000 mortgage and will be paying a 7% commission to the broker. What will the sale price need to be?

417. What forms can an earnest money deposit take?

 

418. What type of account must an escrow account be and where must it be maintained?

 

419. In most cases, when must earnest money be deposited?

420. When a transaction has consummated or terminated, when and how must the sponsoring broker disburse the funds?

421. What is a master escrow account log?

422. What does a journal show?

423. In most cases, for how long does the broker need to keep escrow records?

424. What should a broker do if escrow records are stolen, lost, or destroyed?

425. All non-interest bearing escrow accounts

A.    must be maintained at a state-insured depository.

B.     must be maintained at a inter-state depository.

C.     must be maintained at a federally-insured depository.

D.    must be open to private and public annual review.

426. Buyer Norm had his father put up earnest money in the amount of $4,000. The contract fell through. The sponsoring broker should

A.    release the full amount back to buyer Norm’s father.

B.     release the full amount back to buyer Norm.

C.     release $2,000 to Norm and $2000 to Norm’s father.

D.    transfer the full amount to an escrow dispersal company for distribution.

427. Most states require that the broker make available to the real estate licensing agency

A.    all escrow records and related documents.

B.     a ledger of accounts.

C.     a yearly audit report of escrow accounts.

D.    all escrow deposits on a monthly basis.

428. Who holds the escrow money when a dispute occurs?

A.    The sponsoring broker

B.     Title Company

C.     The seller

D.    Mortgage Lender

429. All licensees should give earnest money checks to their sponsoring broker immediately who must deposit said earnest money by

A.    the third day following the contract acceptance.

B.     the next business day of contract acceptance.

C.     within seventy four hours from the time the offer is delivered.

D.    the third day following the final counteroffer.

430. What is the log that identifies all escrow bank account numbers and the name and address of the bank where the escrow accounts are located?

A.    Log of Accounts

B.     Accounts Receivable Escrow Log

C.     Earnest Money Log of Accounts

D.    Master Escrow Account Log

431. What is the legal requirement regarding the number of escrow accounts that can be opened?

A.    No limit

B.     One per transaction

C.     No more than 5 per quarter

D.    One per office licensee

432. Where would you find every escrow entry showing the running balance after each receipt or disbursement?

A.    Escrow Transactions

B.     Summary of Account

C.     Journal

D.    Report of Escrow Transactions

433. Sponsoring Broker Jones received an order from a court of competent jurisdiction directing the disbursement of the escrow moneys. What action should broker Jones take?

A.    Broker Jones must seek agreement from the buyer prior to disbursement of the escrow moneys according to the terms of the order.

B.     Broker Jones must seek agreement from the seller prior to disbursement of the escrow moneys according to the terms of the order.

C.     Broker Jones must disburse the escrow moneys according to the terms of the order.

D.    Broker Jones must direct the request to a State Revenue Tax Board for payment.

434. Under what conditions might a broker hold an authorized disbursement of escrow moneys claim?

A.    Never

B.     To receive compensation from all parties

C.     To allow the escrow agent to move funds into an active account

D.    To allow the listing contract to expire

435. Where would you find the names of all parties to a transaction, the amount of escrow funds the sponsoring broker received, and the date the broker received the funds?

A.    Record of Transactions

B.     Ledger

C.     Summary Journal

D.    Monthly Balance Sheet Report

436. Which of the following statements is TRUE regarding earnest money?

A.    Must be in the form of cash or a check.

B.     Earnest money is required with all contract offers

C.     Personal property can be offered as an earnest deposit.

D.    Earnest money is also known as evidence trust account money.

437. Buyer Jim put down a deposit in the form of a boat title worth $5,000. The boat is owned by Jim’s parents. The transaction was not completed, who should the boat title be returned to?

A.    Jim

B.     Jim’s Parents

C.     The Title Company

D.    The agency that holds the escrow account

438. When must an escrow account be interest bearing?

A.    By default, all escrow accounts are interest bearing.

B.     When all parties make the request

C.     When the escrow account is held in an FDIC backed bank

D.    When the amount is over $2,000

439. What document is used to show the chronological sequence in which funds are received and disbursed by the sponsoring broker?

A.    Summary Account

B.     Ledger

C.     Journal

D.    Master Log

440. Earnest money is usually made in the form of a

A.    check.

B.     money order.

C.     letter of credit.

D.    cash deposit.

441. Which of the following statements best describes an authorized disbursement?

A.    Any release of funds prior to a property inspection

B.     One which is made on behalf of, and at the written direction of, all principals to the transaction or their duly authorized agents

C.     The release of all funds by a civil appellate court

D.    One which is made at the direction of a title company officer

442. Brokers who are responsible for earnest money deposits for property sales (and security deposits for leases)

A.    must be bonded with the state Sponsoring Brokers Insurance Trust.

B.     must maintain a separate business account in any type of financial institution for depositing these monies.

C.     must open special trust (or escrow) accounts in which to deposit the funds they have been given.

D.    must deposit these monies in a brokerage operations account with special accounting procedures to segregate brokerage monies from escrow monies.

443. Broker John received three earnest money checks on Friday. The upcoming Monday is a holiday. When is broker John required to make an escrow deposit?

444. It’s common for a sponsoring broker to be required to keep all escrow records for

445. If any dispute between the parties arises regarding the deposited escrow money, the sponsoring broker should

446. Most states require that the sponsoring broker reconcile an escrow account

447. What happens to escrow monies when the parties are unable to reach a resolution?

448. What happens at the title closing?

449. What is the most important document at closing and why?

450. Define the term marketable title.

451. What is an abstract of title?

452. What does a title search reveal?

453. Who needs title insurance and why?

454. What is escrow?

455. List three activities that take place during the escrow period.

456. Gary carries an insurance policy that equals 60% of the replacement value of his home. He suffers $8,000 in damage on his home after a windstorm. How will his insurance claim be handled?

457. What factors determine whether a company will issue an insurance policy on a property and what premium the company will charge?

458. What does RESPA require lenders to give to borrowers?

459. RESPA does not apply to what kinds of loans?

460. List three items that a buyer usually pays at closing.

461. If an item is paid for in advance by the seller, how will it be handled on the settlement statement?

462. What do you call those items that the seller has incurred but have not been paid and how will they be handled on the settlement statement? 

463. Sally and Sam have sold their home to Tina and Max. The closing is set for August 23. The insurance policy of $1,700 was prepaid. Using the 12-month/30-day method, what will be Tina and Max’s share of the insurance expense and how will it be handled on the settlement statement?

464. Where in the Closing Disclosure will you find the items that are to be prorated between the buyer and seller at closing? 

465. Where on the Closing Disclosure would you find information about the real estate broker’s commission?
 

466. What is important about the last line on page 3 of the disclosure?

467. Who is responsible for reporting the real estate sale to the IRS?

468. Taxes on the property Buyer Alan is purchasing are $3,200 due on December 31. If the closing is set for October 15, using the 365-day method, how much of the taxes will be credited to the buyer? (Assume it is not a leap year and the day of closing belongs to the seller.)

A.    The seller’s share of $2,533.38

B.     The buyer’s share of $666.62

C.     The seller’s share of $2,525.76

D.    The buyer’s share of $674.24

469. In what section of the Closing Disclosure would you find the names and addresses for both the borrowers and sellers and the lender’s name?

A.    Address Section

B.     Loan Information

C.     Closing Information

D.    Transaction Information

470.  The most important document at closing is the

A.    deed.

B.     survey.

C.     settlement statement.

D.    property inspection.

471. Amounts collected by the lender and held in a trust or impound account for future payment are called what?

A.    Advances

B.     Impounds

C.     Trust funds

D.    Reserves

472. How does the buyer know how much money to bring to closing?

A.    The lender calculates what’s owed and tells the buyer what to bring.

B.     The buyer brings a blank check and finds out the final amount at the closing meeting.

C.     The broker finds out from the lender and tells the buyer how much to bring.

D.    The escrow agent will subtract the total of the buyer’s credits from the total debits and the result is what the buyer needs to bring.

473. What is it called when a mortgage loan amount becoming larger than the original loan amount, resulting in a decrease of the equity the borrower has in the property?

A.    Reverse Amortization

B.     Negative Amortization

C.     Regressive Amortization

D.    Progressive Amortization

474. Who is responsible for ordering the preliminary title report?

A.    Buyer

B.     Escrow officer

C.     Seller

D.    Real estate salesperson

475. Who should have title insurance?

A.    Buyer

B.     Seller

C.     The buyer and the lender

D.    The buyer and the seller

476. What action identifies if any liens are on a property?

A.    Title Search

B.     Lien File Dispatch

C.     Application for HUD-2

D.    Opinion of Sale

477. What form notifies the borrower of the total amount of interest and property taxes paid in the previous year?

A.    1098

B.     1099

C.     1199

D.    1198

478. What type of inspection deals with issues such as radon and asbestos?

A.    Environmental

B.     Mechanical

C.     Soil

D.    Geological

479. Which type of inspection covers a home’s major mechanical systems?

A.    Resale Inspection

B.     Structural Inspection

C.     Standard Home Inspection

D.    Soil Inspection

480. What occurs during a walkthrough?

A.    An escrow adjustment

B.     A final inspection

C.     A signing of the deed

D.    An acceptance of occupancy

481. What is the real estate transfer tax based on?

A.    Sale price of the property

B.     The amount of the mortgage

C.     The sale price minus the earnest money deposit

D.    The seller’s profit on the sale

482. Which of the following is not an item that a buyer usually pays at closing?

A.    Fee for clearing the title

B.     Mortgage recording fee

C.     Homeowner’s insurance

D.    Title search

483. Escrow agents are also known as a

A.    party of record.

B.     disinterested third party.

C.     party of deed.

D.    vested party.

484. Which statement is true about accepting referral fees?

A.    It is common business practice.

B.     It could be a violation of state licensing laws.

C.     It is forbidden under any circumstances.

D.    It is permissible in amounts under $50.

485. Which of these would be a CREDIT to the seller at closing?

A.    Pest inspection

B.     Insurance premium paid in advance

C.     Soil test

D.    Survey

486. A preliminary title report

A.    provides insurance for the seller.

B.     shows those items that the title policy must charge extra to cover.

C.     provides insurance for the buyer.

D.    shows those items that the title company would exclude from coverage if a policy is issued at a later time.

487. A homeowner’s insurance policy typically covers all but which of these?

A.    Fire

B.     Flood

C.     Theft

D.    Explosion

488. Most lenders require buyers to purchase? _______________so that their interest in the property is also protected.

A.    a survey of the property.

B.     title insurance.

C.     homeowner’s insurance.

D.    closing insurance.

489. Both the buyer and the

A.    seller should have title insurance.

B.     broker should have title insurance.

C.     lender should have title insurance.

D.    escrow agent should have title insurance.

490. RESPA applies to all of the following EXCEPT which?

A.    Condominium purchase

B.     Seller-financed loan

C.     Loan involving a second mortgage

D.    Federally-insured loan

491. Which statement about the Torrens system is FALSE?

A.    To enter a property in the Torrens system, a court action must first clear title.

B.     It is necessary to search public records to ascertain the status of title.

C.     The Torrens title record is the title itself.

D.    The Torrens registry retains the original registration documents and provides copies to the recorder or other appropriate office.

492. RESPA would apply to which of these?

A.    Second mortgage on a condominium

B.     Seller-financed loan

C.     Hotel mortgage

D.    Loan assumption

493. Which of the following items does the seller usually pay?

A.    Title insurance

B.     Private mortgage insurance

C.     Credit report fees

D.    Satisfaction of existing liens

494. If a seller prepaid the taxes of $2,100 and the closing is set for March 15, using the 12month/30 day method what will the buyer owe the seller as prorated taxes?

A.    $431.62

B.     $437.45

C.     $1,662.55

D.    $1,668.38

495. Which of the following is an item that is not normally prorated?

A.    Title fees

B.     Taxes

C.     Rent

D.    Utilities

496. On what form would you find information regarding itemized closing costs due to other parties, such as tax assessments, recording fees and attorney’s fees?

A.    Closing Disclosure form 

B.     Loan Summary

C.     Mortgage Rate form

D.    Closing Fees form

497. A coinsurance clause requires a homeowner to have what kind of insurance?

A.    Flood and fire

B.     80% of the home’s cost

C.     Equal to home’s replacement value

D.    80% of home’s replacement value

498. Escrow funds also go by the names

A.    holding or kickback funds.

B.     step or holding funds.

C.     impound or reserve funds.

D.    holding or blank funds.

499. On the Closure Disclosure form, homeowner’s insurance and property taxes are classified as what?

A.    Prepaids

B.     Paid Forward

C.     Advanced Payments

D.    Payments in Arrears

500. Money that the buyer or seller needs to pay at closing is called what?

A.    Expense

B.     Credit

C.     Debit

D.    Proration

501. Recording the deed is done through which of these?

502. Which of the following is TRUE regarding the recording of a deed?

A) It is not a legal requirement that a deed be recorded in the County Clerk’s office.
B) It is a legal requirement that a deed be recorded by the selling broker.
C) A deed must be recorded, but a title does not need to be.
D) It is a legal requirement that a deed be recorded in the County Clerk’s office.

503. Proof of ownership of a property is called what?

A) Marketable title
B) Abstract of title
C) Evidence of title
D) Title commitment

504. Where would a borrower look to determine if the mortgage lender intends to service the loan or transfer it to another lender?

A) At RESPA Form 23-B
B) At the Mortgage Servicing Transfer Statement
C) At the Mortgage Servicing Disclosure Statement
D) At the Mortgage Servicer Transfer Form

505. A sponsoring broker must keep all escrow records for

A) 1-2 years.
B) 3-5 years.
C) 5-7 years.
D) 7-10 years.

506. How does a lender normally base the estimate on a loan that is in-progress?

507. What is “chain of title?”

508. What ethical standards guide real estate professionals?

509. Identify two duties to clients set forth in the Code.

510. List two duties to the public set forth in the Code.

511. List two steps a managing broker should take to ensure compliance with fair housing laws.

512. What is significant about the Fair Housing Amendments Act of 1988?

513. Describe the exemption that exists for familial status discrimination.

514. Alex Jones owns a duplex and lives in one unit.  He refuses to rent the other unit to families with children.  What would you say about Alex’s actions?

515. Why is it important for licensees to understand the Americans with Disabilities Act?

516. List three activities that are considered discriminatory in real estate.

517. What is blockbusting?

518. How is “testing” defined?

519. If a person feels like he or she has been discriminated against, how long does that person have to file a complaint?

520. Testing for fair housing compliance must

A.    be reported by the victims to the Real Estate commission.

B.     be treated with indifference.

C.     be recognized as a risk and a cost of doing business.

D.    be ignored.

521. Which of the following is not a source of information for professional ethics codes?

A.    State laws

B.     Licensing regulations

C.     Real estate associations

D.    Real estate schools

522.  Laws tend to set

A.    a very high standard for acceptable behavior.

B.     an unattainable standard for performance.

C.     a minimum standard for acceptable behavior.

D.    an unrealistic standard for behavior.

523. Which of the following items are usually recorded by a fair housing tester?

A.    The age of the licensee

B.     The number of houses that were volunteered as serious possibilities by the agent

C.     The number of years a licensee has been working in real estate

D.    The type and amount of fair housing training completed by the licensee

524. A broker only shows homes in certain neighborhoods based on matching existing residents with similar potential buyers. This broker is guilty of what prohibited activity?

A.    Redlining

B.     Blockbusting

C.     Steering

D.    Misrepresentation

525. Which of the following action is an example of discrimination in mortgage lending?

A.    Advertising that a property is restricted

B.     Discriminating when doing a property appraisal

C.     Changing rental terms based on race

D.    Refusing to sell to any person in a protected class

526. Which of these is not an exemption to fair housing law?

A.    Senior housing for residents 62 or older

B.     A religious organization providing housing to members only

C.     The sale of a single-family home by an owner who owns five residences

D.    Rental of a unit in an owner-occupied four-family flat

527. If a seller will not follow fair housing laws, the licensee should

A.    not take the listing.

B.     take the listing anyway.

C.     list the property with the restrictions.

D.    honor the seller’s wishes.

528. Ethics

A.    deals with stated goals.

B.     tends to deal with what is right.

C.     relies on measurable behavior.

D.    represents the stated purpose of a group of people.

529. To prevent being caught committing Fair Housing violations by testers or anyone else, licensees

A.    should attend a continuing education course in Fair Housing once a year.

B.     should avoid testers.

C.     should treat each buyer with the same respect, dignity, and fairness that everyone deserves.

D.    should not accept any business from members of the protected classes.

530. The penalty an Administration Law Judge can issue for violating the fair housing act is dependent on what factor(s):

A.    The state in which the violation occurred

B.     How long an agent has been licensed

C.     How many previous violations the agent has

D.    How many people were discriminated against

531. Being ethical

A.    limits you success.

B.     results in long-term success.

C.     is not cost productive.

D.    lowers your earning potential.

532. What is the deadline within which HUD must complete a discrimination investigation once a complaint is received?

A.    90 days

B.     100 days

C.     1 year

D.    120 days

533. A client asks you the following specific question: “Would you live in this home or this neighborhood?” How should you answer?

A.    By answering whatever will get a sale

B.     By focusing on factual statements based on various features within the home

C.     By stating opinions based on the local demographics

D.    By stating that you have to turn him in to HUD for asking a question that violates fair housing laws

534. What is the best strategy to use when dealing with a tester?

A.    Treat the tester as any other buyer.

B.     Hand-off the tester to your broker.

C.     Direct the tester to another real estate company.

D.    Refuse to work with a tester.

535. What tool do government agencies use to uncover fair housing violations?

A.    Absent Buyers

B.     Bouncers

C.     Terminals

D.    Testers

536. What are persons called who pose as customers to check on fair housing compliance?

A.    Block watchers

B.     Testers

C.     Compliance officers

D.    Civil rights workers

537. Panic selling is also known as

A.    blockbusting.

B.     streetbusting.

C.     marketbusting.

D.    localbusting.

538. The seller cannot withhold property from a “protected class” individual, and the real estate professional must definitely not be involved should this happen. If this does occur,

A.    both the seller and the agent or broker could be found in violation of the fair housing laws.

B.     only the broker could be found in violation of the fair housing laws.

C.     only the seller could be found in violation of the fair housing laws.

D.    both the buyer and seller could be found in violation of the fair housing laws.

539. What legislation mandates that persons with disabilities have equal access to jobs, public accommodations, government services, public transportation and telecommunications?

A.    Human Rights Law

B.     Americans with Disabilities Act

C.     Brown v. Board of Education

D.    Title IX

540. What is not a reason to understand Fair Housing Laws?

A.    It is right.

B.     It is the law.

C.     It is recommended.

D.    It reduces risk.

541. All real estate offices

A.    should keep a fair housing policy copy on file with their State Board.

B.     should keep a fair housing policy copy on file with HUD.

C.     should have an attorney draft their fair housing policy.

D.    should include a fair housing policy in their policy and procedures manual.

542. Which of these statements about the Americans with Disabilities Act is FALSE?

A.    A broker might need to change the layout of the office to make the aisles wider for clients in wheelchairs.

B.     A duplex owner might need to remodel the kitchen in the rental unit to accommodate persons with disabilities.

C.     An apartment manager might be required to allow a tenant with a disability to widen a doorway.

D.    A shopping center could have to remodel their public restrooms.

543. What is NOT a licensee’s responsibility when complying with fair housing laws?

A.    Know the fair housing laws.

B.     Complete and record all HUD-96 marketing report forms.

C.     Keep accurate records.

D.    Periodically attend fair housing seminars.

544. What are the three keys to good ethical practices?

A.    Knowledge, Power, and Direction

B.     Honor, Skills, and Performance

C.     Communication, Follow-up, and Observation

D.    Trustworthiness, Honesty and Competence

545. Regarding fair housing, licensees

A.    have ethical and legal responsibilities to their clients and customers.

B.     have long-term and short-term responsibilities to their clients.

C.     are exempt from laws passed after 1999.

D.    are required to maintain a Fair Housing Distribution Journal.

546. What does the Supreme Court say regarding fair housing testers?

A.    Testing is legal provided the subject is given 120 days notice.

B.     Testing is illegal, unless testers are pre-approved by State Board of Ethics.

C.     Testing is illegal.

D.    Testing is legal.

547. What is a good policy regarding a seller who refuses to accept an offer from a potential buyer that is in a specific protected class?

A.    Do not advertise and hold open houses on this property.

B.     Do not allow the brokerage’s licensees to show the property.

C.     Document the discrimination

D.    Terminate the listing.

548. What is a person called who is asked to simulate a housing transaction in order to obtain evidence of fair housing violations?

A.    Sampler

B.     Faux Buyer

C.     Blockbuster

D.    Tester

549. If a buyer asks for the “Jewish” area, what do you do?

A.    Answer the buyer’s question to the best of your abilities.

B.     Refer them to a another realtor.

C.     Explain to the buyer that you, ethically and legally, cannot recommend housing based on religion.

D.    Report the buyer to HUD as a Fair Housing violator.

550. Fair housing violations

A.    are covered by general business insurance.

B.     are mostly covered by MLS association insurance.

C.     are mostly covered by errors and omissions insurance.

D.    are mostly not covered by any insurance.

551. What practice helps move low-income persons into previously-owned higher income owner properties?

A.    Layer Down

B.     Filtering Down

C.     Flatten Down

D.    Roll Down

552. During the investigation period, HUD can attempt to resolve the complaint by getting assurance from the person against whom the complaint was filed that he or she will remedy the alleged violation. This is known as

A.    a concessionary mandate.

B.     conciliation.

C.     concurrence.

D.    a warrant of siezen

553. To whom is a property manager responsible? 

554. What is the definition of a resident manager?

555. What is the difference between a management proposal and a management agreement?

556. How do the owner and the property manager arrive at a management fee?

557. What accounting skills are important for a property manager to have?

558. What is a rent roll?

559. List three skills needed by office building managers.

560. What tasks do managers of condos, coops and PUDs do that are different from other property managers?

561. What is a property manager’s first responsibility to the owner?

562. What are the three types of budgets that should be established for each project?

563. How does preventive maintenance differ from corrective maintenance?

564. What kind of reports should a property manager be giving to the owner?

565. What is a property manager’s first responsibility to the owner?

A.    Get liability insurance.

B.     Prosecute delinquent tenants.

C.     Realize maximum profit.

D.    Cure functional obsolescence.

566. Which IREM designation is reserved for individuals who meet a certain level of education and experience?

A.    CPM

B.     ARM

C.     CPR

D.    AMO

567. A property’s rent roll

A.    is an alphabetical listing of each tenant.

B.     can help determine the annual rental income for a property.

C.     is a master list of a property’s marketing plan.

D.    should be updated every 10 years.

568. A property manager working for more than one owner

A.    should have a real estate license.

B.     does not need a real estate license.

C.     should have a mortgage broker’s license.

D.    is illegal under state law.

569. When setting up a rent schedule, a property manager should analyze all of the following EXCEPT

A.    neighborhood amenities.

B.     community growth.

C.     area vacancy rates.

D.    new home sales.

570. When a property manager or management company performs real-estate-related tasks (such as collecting rent) for one owner, and that owner is paying the manager a salary,

A.    the property manager must have a real estate salesperson license.

B.     the property manager must have a real estate brokers license.

C.     the property manager is not required to have a real estate license.

D.    the property manager must have a dual license (real estate and mortgage).

571. A rental space may be unintentionally vacant due to

A.    a high vacancy factor in the area.

B.     a low vacancy factor in the area.

C.     being located in a high traffic area.

D.    having rental rates similar to nearby properties.

572. Which of the following would not be found in a management proposal?

A.    Tenant credit histories

B.     Property description

C.     Schedule of property inspections

D.    Management fee information

573. Preventive maintenance

A.    is the repair or replacement of components which have failed or broken down.

B.     is a schedule of planned maintenance actions aimed at the prevention of breakdowns and failures.

C.     involves remodeling, interior redecorating or new capital improvements.

D.    determines which structures should be demolished.

574. An individual property manager

A.    is usually a real estate broker who manages properties for one owner or a number of owners.

B.     usually manages a single large property.

C.     lives on the property and may be employed on a full or part-time basis.

D.    acts as the property owners’ agent and adviser for the property.

575. The Institute for Real Estate Management (IREM) was created as a subsidiary group of

A.    Building Owners association

B.     National Association of REALTORS

C.     The Multiple Listing Service

D.    American Industrial Real Estate Association

576. When thinking about tenant retention and owner profits, a property manager should

A.    be more concerned with retaining tenants to keep a property fully occupied.

B.     give tenants the most benefits possible while still ensuring a good return to the owner.

C.     limit benefits to tenants as much as possible to maximize owner profits.

D.    only be concerned with the profit they are returning to an owner.

577. It is important for a property management agreement to include provisions defining the responsibilities of

A.    the manager and owner.

B.     the manager and tenant.

C.     only the manager.

D.    it is best not to define these duties as they will change from day to day.

578. When demand falls and the vacancy rates rise, the result is

A.    decreased competition for tenants and increased rental rates.

B.     decreased competition for tenants and reduced rental rates.

C.     fierce competition for tenants and increased rental rates.

D.    fierce competition for tenants and reduced rental rates.

579. A property’s rent roll

A.    is an alphabetical listing of each tenant.

B.     can help determine the annual rental income for a property.

C.     is a master list of a property’s marketing plan.

D.    should be updated every 10 years.

580. What is an annual budget that includes income and expenses for ongoing operations?

A.    Capital reserve

B.     Operating

C.     Fixed

D.    Stabilized

581. Which of the following would NOT be included on a property management report?

A.    Rental receipts

B.     Delinquent accounts

C.     Total expenses for the month

D.    Employee handbook

582. What is an important task for a manager of a condominium or cooperative?

A.    Allocating shares of stock for the units

B.     Evaluating utility services

C.     Physically managing the property

D.    Evaluating tax incentives

583. Class A office buildings

A.    are newer buildings and offer prestige to its occupants.

B.     are older, but very well-maintained buildings.

C.     are older buildings which are not located in prime areas.

D.    have poor location, maintenance is at a bare minimum, and the tenants have no statutory duties to maintain the property.

584. A property manager is responsible to

A.    the property owner.

B.     the tenants.

C.     the property owner and tenants.

D.    the mortgage company.

585. “PUD” stands for

586. Which of the following is NOT a valuable skill for a property manager to have?

587. Which of these usually contributes to the property manager’s fee?

588. What does the management agreement create?

589. Which function is not performed by a property manager?

590. Pedestrian Shopping Streets

591. Which of these items would not be considered a variable expense?

592. Which of these items would be considered a variable expense?

593. What are the subcategories of commercial real estate?

594. Define mixed-use development.

595. What is included in recreational real estate?

596. What makes institutional real estate different from other types?

597. List three reasons why a business might prefer leasing over purchasing property.

598. What factors affect net operating income?

599. Define market rent.

600. What kinds of expenses are normally associated with income properties?

601. Why do retail leases often contain provisions that affect how tenants may or may not operate their businesses

602. Why might tenants leasing industrial property prefer to have very long-term leases?

603. What might you find in a farming lease that you wouldn’t see in other leases?

604. List two advantages of investing in nonresidential property.

605. Which of the following strategies would require a business to outlay the most amount of capital for building space?

A.    Purchasing a building

B.     Renting a building

C.     Leasing a building

D.    Rent with option to buy

606. Market rent is also known as

A.    street value rent.

B.     economic rent.

C.     net rental rent.

D.    transferred rent.

607. Which office location would most likely have a more expensive monthly lease payment?

A.    Top floor with a view

B.     Middle of the building

C.     Basement

D.    Subbasement

608. What is the impact on nonresidential property when a local government requires extensive building safety improvements?

A.    A reduction in property values

B.     A reduction in market value

C.     Required generation of a loss-leader accounting report

D.    A substantial amount of capital outlay

609. Agricultural property is classified under which of the following real estate types?

A.    Residential

B.     Nonresidential

C.     Extended

D.    Rural

610. Older office buildings that become obsolete

A.    are taxed at a higher rate than modern buildings.

B.     frequently become available for warehouse or light industrial use.

C.     frequently become available for retail shops.

D.    frequently become available for recreation centers.

611. Which of the following is NOT a nonresidential property subcategory?

A.    Industrial

B.     Recreational

C.     Institutional

D.    Co-ops

612. Which property lease usually lasts the longest?

A.    Home lease

B.     Apartment lease

C.     Office lease

D.    Sublease

613. Which of the following is a nonresidential property investment advantage?

A.    There are no cost-of-living provisions.

B.     There is little risk of any kind of rent control.

C.     Lease insurance does not cover production interruptions.

D.    Taxes are based on assessed evaluation.

614. Leases for hunting rights

A.    are typically shorter than farming leases.

B.     are typically longer than farming leases.

C.     are typically shorter than motel leases.

D.    must be written for a term of no less than 12 months and 10 days.

615. What are the two major property classifications in real estate?

A.    Opened and closed

B.     Listed and nonelected

C.     Residential and nonresidential

D.    Base and extended

616. Which factor does NOT effect Net Operating Income?

A.    Intended use

B.     Vacancy

C.     Expenses

D.    Market rent

617. What does the acronym NOI stand for

A.    Net operating insurance

B.     Net operating income

C.     Negative operating income

D.    Net open income

618. What type of lease is most often used in industrial complexes?

A.    Net leases

B.     Gross lease

C.     Pro-forma leases

D.    Retracted leases

619. Most shopping centers have what type of lease?

A.    A lease based on traffic flow with minimum rents

B.     A net 50 lease

C.     A lease based on a sales percentage with minimum rents

D.    A lease based on income minus expenses

The length of retail space leases vary considerably, but most shopping centers have percentage leases with minimum rents.

620. Which of the following is considered a variable expense

A.    Real estate taxes

B.     Utilities

C.     Advertising

D.    Insurance

621. Which two factors determine a building’s potential for generating income?

A.    Location and style

B.     Deprecation and insurance expenses

C.     Ability to attract tenants and operating expenses

D.    Overhead and expenses

622. Commercial real estate includes all of the following except which?

A.    Hotel

B.     Condominium

C.     Gas station

D.    Parking lot

623. A shopping center would be primarily categorized as what type of property?

A.    Recreational

B.     Office

C.     Investment

D.    Retail

624. What property type comprises buildings used for light or heavy manufacturing?

625. What is a major downside for a business to own its own building?

626. What is the term given to property that has residential and nonresidential occupant?

627. Condominiums and co-ops are classified as

628. Owning a building typically

A.    increases the flexibility of the business.

B.     allows better market share of the business.

C.     reduces product liability.

D.    reduces the flexibility of the business.

629. Which property lease usually has the shortest occupancy?

A.    Land lease

B.     Mineral rights lease

C.     Office lease

D.    Motel room

630. Which of these factors does not affect net operating income?

A.    Amenities

B.     Vacancies

C.     Market rent

D.    Expenses

631. How should a seller deal with an interested party that shows up at their front door unannounced and wants to see the house?

A.    The seller should conduct a tour.

B.     Take the person’s name and then call the office immediately so an agent can come to do the showing.

C.     Give the visitor a flyer and the agent’s business card.

D.    Tell the visitor when the next open house is scheduled.

632. A building with integrated office and retail space would be considered

A.    a Class A building.

B.     a mixed-use property.

C.     institutional real estate.

D.    a flex-space development.

633. Which of the following is considered a variable expense?

A.    Real estate taxes

B.     Insurance

C.     Advertising

D.    Utilities

634. What is the best approach to establishing a buyer’s possession?

A.    Buyers take possession 2 days after the transaction close.

B.     Buyers take possession on the day of the close.

C.     Sellers should remain on the property at least 3 days after the closing date.

D.    Sellers should move from the property at least 5 days before the close date.

635. Which method can be helpful in tracking your advertising results?

A.    Mark outs

B.     Error codes

C.     Assigning a code

D.    Back testing

636. What type of budget is used to forecast income and expense over some period of years?

A.    Operating

B.     Variable

C.     Capital Reserve

D.    Stabilized

637. Disclosure is sometimes called what?

A.    Openness

B.     Honesty

C.     Notice

D.    Diligence

638. Which type of agreement assures that a broker will receive compensation regardless of who procures the buyer?

A.    Gross listing

B.     Net listing

C.     Exclusive right to sell

D.    Exclusive agency

639. The Brooks’ paid-off property sold for $247,600. What will they net after paying a 7.5% commission to their broker?

A.    $215,830

B.     $219,700

C.     $227,792

D.    $229,030

640. A licensee tells a neighborhood watch group that Vietnamese are moving into the neighborhood. What is this broker guilty of?

A.    Redlining

B.     Typecasting

C.     Steering

D.    Panic selling

641. Which of the following is an advantage of investing in a nonresidential property?

A.    No cost-of-living provisions

B.     Reduced payroll taxes

C.     No lease coverage for production interruptions

D.    Limited rent controls

642. Which party holds the escrow money when a dispute occurs?

A.    Title Company

B.     Court Appointed Escrow Agent

C.     The Sponsoring Broker

D.    Mortgage Lender

643. All closing real estate sales must be reported to the IRS on which form?

A.    Estate Tax Form

B.     Hud-78 Form

C.     Form 1099

D.    Form 1199

644. Which of the following referral fees are NOT prohibited by RESPA?

A.    Title search referral fees

B.     Fees among cooperating brokers

C.     Title insurance referral fees

D.    Inspection referral fees

645. What is the purpose of the Statute of Frauds?

A.    It invalidates certain oral contracts.

B.     It requires certain conveyance-related contracts to be in writing.

C.     It nullifies oral leases and listing agreements.

D.    It eliminates fraud in real estate contracts.

646. What is the purpose of a carryover clause?

A.    Protects the seller if the buyer cancels the sale

B.     Allows a six-week extension to the listing contract

C.     Allows the broker to collect a commission for some period of time after the listing expires

D.    Prevents the seller from doing a FSBO sale up to six months after the listing expires

647. Earnest money is usually made in the form of a

A.    holding draft.

B.     check.

C.     letter of credit.

D.    cash deposit.

648. When agency relationship is terminated, which of the following responsibilities still remains in force?

A.    Skill

B.     Confidentiality

C.     Obedience

D.    Care

649. What process determines how much money the buyer needs to bring to closing?

A.    The escrow agent will subtract the total of the buyer’s credits from the total debits and the result is what the buyer needs to bring.

B.     The buyer brings a open bank draft and finds out the final amount at the closing meeting.

C.     The broker finds out from HUD and tells the buyer how much to bring.

D.    The lender calculates what’s owed and tells the buyer what to bring.

650. AIDA stands for

A.    Allowance, Involvement, Develop, and Action

B.     Attention, Interest, Desire, and Action

C.     Action, Involvement, Detail, and Allowance

D.    Advanced, Intake, Design, and Action

651. What can you do to increase your chances of extending a listing that is about to expire?

A.    Call some friends and ask them to tour the property.

B.     Meet with your sellers a few weeks before the listing expiration and review with them your marketing efforts.

C.     Draw up an extension contract and mail it to the seller’s two weeks before the listing expires.

D.    Meet with the sellers after the listing expires and write a new listing.

652. Owning a building typically

A.    increases marketing abilities for the company.

B.     allows better market share of the business.

C.     reduces the flexibility of the business.

D.    increases the flexibility of the business.

653. Property briefs are also called

A.    property notes.

B.     cheat sheets.

C.     property flyers.

D.    house information pads.

654. What kind of lease conveys a leasehold interest to an owner of a cooperative?

A.    Net-net

B.     Proprietary

C.     Percentage

D.    Index

655. Which statement about property management is FALSE?

A.    Property management is a specialized field in real estate.

B.     A property manager is a fiduciary.

C.     Asset manager and resident manager mean the same thing.

D.    A management agreement is an employment contract between the owner and the manager.

656. If a group of brokers have a meeting to set commission rates, what does this violate?

A.    Fair Housing Act

B.     Sherman Antitrust Act

C.     Civil Rights Act of 1968

D.    Jones v. Mayer

657. What is the definition of a principal?

A.    A broker who owns a real estate firm

B.     A person who delegates another to act on his or her behalf through an agency relationship

C.     Someone who buys a property directly from an owner with no representation

D.    A person who expects loyalty and accounting from the person who purchases the property

658. Most apartment leases are

A.    estates at will.

B.     freehold estates.

C.     estate at sufferance.

D.    estates from period to period.

659. Which document is the most important at closing?

A.    Settlement statement

B.     Deed

C.     Inspection reports

D.    Listing contract

660. Which person is responsible for filling out a property disclosure statement?

A.    Broker’s office assistant

B.     The cooperating agent

C.     The sellers

D.    The listing agent

661. What is the typical time period required to maintain escrow records?

A.    3-5 days

B.     3-5 weeks

C.     3-5 months

D.    3-5 years

662. An agent owes all but which of these to his or her customer?

A.    Disclosure

B.     Funds accounting

C.     Advertising

D.    Skill

663. Which form of agency is illegal in most states

A.    Single agency

B.     Buyer’s agency

C.     Undisclosed dual agency

D.    Subagency

664. What does risk management mean as it applies to property management?

A.    Controlling and limiting risk through proper insurance

B.     Limiting financial risk through the operating budget

C.     Overseeing preventive maintenance

D.    Keeping the grounds cleared to eliminate accident risk

665. Agent Sally has been with Black Realty for over three years and has worked up to the top agent in the firm. Her commission percentage rate is double that of a starting agent. Based on this information, what type of compensation plan does the Black agency have in place?

A.    Graduated

B.     Level Grade

C.     Ramped

D.    Step

666. Which of the following situations would cause the IRS to think that a contractor is really an employee?

A.    The licensee attends sales meetings.

B.     The licensee gets a commission.

C.     The licensee takes paid sick days.

D.    The licensee pays for transportation expenses.

667. Agent Sam gets about 6 hours of floor time each week. What is a major duty for Agent Sam during this time?

A.    File office documents from previous transactions.

B.     Assist other agents.

C.     Prepare mailings.

D.    Respond to incoming sales calls.

668. Which of the following classes are not protected by federal law?

A.    Military status

B.     Sex

C.     Color

D.    Handicap

669. Which type of real estate advertisement is typically located in areas with a high presence of foot traffic?

A.    Billboards

B.     Radio Ads

C.     Door Hangers

D.    Shopping Guides

670. After a listing agreement is signed, and if the agent is a member of a marketing service called a Multiple Listing Service (MLS). What specific form must be completed before the agent can post and market the property to other licensees who are members of MLS?

A.    MLS Form BB-1

B.     A copy of the original listing agreement

C.     The original listing agreement

D.    An MLS form

671. Which of the following situations would give concern about working for the Sunny Valley Brokerage?

A.    The office holds weekly staff meetings.

B.     Most agents appear successful.

C.     Agents seem to come and go quickly.

D.    Office has a selection of training materials.

672. If a buyer asks about homes in the “Muslim” area, what should you do?

A.    Explain to the buyer that you, ethically and legally, cannot recommend housing based on religion.

B.     Refer them to another licensee.

C.     Answer the buyer’s question to the best of your abilities.

D.    Report the buyer to the Fair Housing Board.

673. An agreement in which a seller hires a broker to market a property creates an agency relationship between

A.    the listing agent, buyer, and seller.

B.     buyer and broker.

C.     broker, buyer, and seller.

D.    broker and seller.

674. What are persons called who act as buyers and check on fair housing compliance?

A.    Fair housing guides

B.     Compliance officers

C.     Block watchers

D.    Testers

675. Puffing is a term characterized by which of the following actions?

A.    Providing opinions

B.     Giving fraudulent statements

C.     Giving objective information

D.    Misrepresenting the facts

676. A utility right-of-way is an example of

A.    an encroachment.

B.     a lien.

C.     an encumbrance.

D.    a permit.

677. Which of the following is NOT a resource for information regarding professional ethics?

A.    Federal laws

B.     Licensing regulations

C.     Real estate marketing copy

D.    Real estate associations

678. Which type of contract can have tax benefits for a seller?

A.    Option to buy

B.     Purchase and sale

C.     Contract for deed

D.    Lease

679. A broker can enter into a single agency agreement with

A.    seller and secondary principal.

B.     a renter and landlord.

C.     a buyer.

D.    a seller and buyer.

Ch6 National Finance (Questions ONLY, ANSWERS WILL BE REVEALED WITH PROPER SUBSCRIPTION)

Tip: to find a certain word or key term,  press at the same time, the buttons:

( Ctrl and F ) on Windows computers

(Command and F ) on Mac computer

to bring up the in-page search box

1. Which is true about a promissory note?

A.    It may not be executed in connection with a loan on real property

B.     It is an agreement to do or not to do a certain thing

C.     It is the primary evidence of a loan

D.    It is the term used for a note that is guaranteed or insured by a governmental agency

2. The term, PITI refers to the parts of a mortgage loan payment, which of the following correctly describes PITI,

A.    Principal, Investment, Taxes, and Insurance.

B.     Principal, Interest, Tenement, and Insurance.

C.     Due on sale (alienation)

D.    Principal, Interest, Taxes, and Insurance.

3. A buyer assumes the mortgage. How is the seller relieved of the liability?

A.    Subject to mortgage

B.     Novation

C.     Deed of release

D.    Defeasance

4. Tom, the borrower, gave Joe, the lender, his mortgage as security for his loan. Under the terms of the mortgage, Tom is identified as the

A.    mortgagor.

B.     mortgagee.

C.     trustee.

D.    trustor.

5. Which mortgage clause allows a lender to regain their investment if the borrower does not pay his payment?

A.    Alienation

B.     Defeasance

C.     Acceleration

D.    Prepayment

6. When a lender requires tax and/or insurance amounts to be deposited with the lender by placing the monies in an escrow account, a “Budget Mortgage or Deed of Trust” occurs. These escrow accounts may also be referred to as

A.    impound or Reserve Accounts.

B.     compound or Reserve Accounts.

C.     insured or Restricted Accounts.

D.    interlocked and Restricted Accounts.

7. A mortgage clause used in refinancing the first mortgage which allows the second mortgage to take the first place is called

A.    acceleration.

B.     subordination.

C.     refinance.

D.    priority.

8. A DEBENTURE is defined as a long-term note that is not secured by a specific property. When the lender holds the security so that if the borrower does not pay the promise made in the note they can foreclose on the property, the real estate loan is called

A.    a secondary market loan.

B.     an upside down loan.

C.     a subordinated loan

D.    a collateralized loan.

9. In which way are a mortgage document and promissory note similar?

A.    Both are non-negotiable instruments

B.     Both are debt-reducing instruments

C.     Both are contracts

D.    Both are fully standardized instruments of conveyance

10. An “Acceleration” clause most nearly means

A.    to pay off a debt in equal installments.

B.     to sell a property quickly.

C.     a clause in a deed.

D.    to speed up payment of an overdue debt.

11. Typically, a mortgage loan monthly payment consists of PITI, (P) the amount borrowed from the lender is called

A.    the primary loan.

B.     the penalty.

C.     the principal.

D.    the promulgated covenant.

12. When a mortgage is paid off, what clause allows the lender to release the mortgage rights and issue a satisfaction piece?

A.    Acceleration

B.     Defeasance

C.     Codicil – change in a will

D.    Writ of execution

13. If prioritizing loans as when recording, a second mortgage or deed of trust is referred to as

A.    a secondary loan.

B.     an underwater mortgage.

C.     a factored loan or mortgage.

D.    a junior mortgage.

14. Of the following parties to a mortgage, whose interest is benefitted by an acceleration clause?

A.    The mortgagor

B.     The mortgagee

C.     The trustee

D.    The trustor

15. Which clause protects a lender if he does not want the loan to be assumed by another party?

A.    Defeasance

B.     Subordination

C.     Due on sale (alienation)

D.    Subrogation

16. Before foreclosure who has the right to reclaim the property forfeited due to a mortgage default

A.    the borrower, under the right of Statutory Redemption.

B.     the borrower, under the right of Equitable Redemption.

C.     the trustee, under the right of Statutory Redemption.

D.    the lender, under the right of Strict Redemption.

17. If the amount realized at a Sheriff’s sale upon a delinquent mortgage is more than the indebtedness, the excess belongs to

A.    the Sheriff’s office.

B.     the mortgagee.

C.     the mortgagor.

D.    the purchaser.

18. Ronald defaulted on his home mortgage loan payments; therefore, the lender obtained a court order to foreclose on the property. At the foreclosure sale, Ronald’s house sold for only $29,000 and the unpaid balance of his loan is $40,000. What must the lender do to recover the $11,000 Ronald still owes?

A.    Sue for damages

B.     Sue for specific performance

C.     Seek a judgment by default

D.    Seek a deficiency judgment

19. Which would be first in priority?

A.    First mortgage of $20,000

B.     Special assessments

C.     Judgment liens

D.    You cannot tell unless you know the order of recording

20. The first item to be paid out of foreclosure funds is

A.    the Costs of Sale – advertising, attorney fees, trustee fees, etc.

B.     the first mortgage.

C.     any properly recorded junior liens.

D.    special assessment taxes, and general taxes.

21. In a Deed of Trust, the party who holds, “Naked Legal Title” (one without possessory rights), and can claim the property without going through the courts is the

A.    grantee.

B.     mortgagor.

C.     beneficiary.

D.    trustee.

22. Foreclosure would terminate which of the following?

A.    Statutory redemption rights

B.     All rights of redemption by the borrower

C.     Equitable redemption rights

D.    All liability of the borrower to the lender

23. When a lender is required to foreclose on a Deed of Trust, the lender does not have to go through the courts to foreclose; and the process is quicker. This is known as

A.    non-Judicial foreclosure.

B.     judicial foreclosure.

C.     strict foreclosure.

D.    short sale foreclosure.

24. A buyer got a 30 year loan with a loan balance of $65,000 with an interest rate of 10% and a factor of 8.78. What will be the borrowers monthly P & I payment?

A.    $425.30

B.     $570.70

C.     $3,456.98

D.    $570,700

25. Based on the theory, (a rule of thumb) how many discount points are required to increase the percentage yield on a mortgage from 11% to 12%?

A.    4 points

B.     6 points

C.     12 points

D.    8 points

26. The cost of points is not deducted from the loan. Points are treated as a

A.    separate credit on a settlement statement, charged to the party who has agreed to pay them.

B.     proration on the settlement statement.

C.     credit to the borrower and a debit to the seller.

D.    separate debit or charge on a settlement statement, charged to the party who has agreed to pay them.

27. The loan amount is $60,000, and the monthly principal and interest payment will be $459.00 a month for 30 years. How much interest will be paid over the term of the loan?

A.    $105,240

B.     $108,000

C.     $30,000

D.    Cannot be determined.

28. A lender charges discount points on a loan to

A.    make their ads more attractive.

B.     lower the borrower’s down payment.

C.     improve the lender’s yield.

D.    be competitive in the market place.

29. The loan amount is $60,000, and the monthly principal and interest payment will be $459.00 a month for 30 years. How much interest will be paid over the term of the loan?

A.    $105,240

B.     $108,000

C.     $30,000

D.    Cannot be determined.

30. On a $150,000 loan, the lender charges a 1 point service charge. How much does the borrower have to pay?

A.    $15

B.     $150

C.     $1,500

D.    $15,000

31. The buyer was required to pay $4,000 in discount points. The loan balance was $80,000. How many points did the lender require?

A.    3

B.     4

C.     5

D.    6

32. The loan amount is $80,000, and the monthly principal and interest payment will be $499.00 a month for 30 years. How much interest will be paid over the term of the loan?

A.    $99,640

B.     $89,820

C.     $75,000

D.    Cannot be determined.

33. The loan amount is $70,000, and the monthly principal and interest payment will be $479.00 a month for 30 years. How much interest will be paid over the term of the loan?

A.    $126,000

B.     $102,440.00

C.     $50,000

D.    Cannot be determined.

34. How many discount points will a lender charge the borrower if they want a 15% loan and the current rate is 15.75%?

A.    4

B.     5

C.     6

D.    7

35. If a borrower purchases a property for $200,000, and borrows $160,000 he/she is said to have a LTV ratio of?

A.    100%

B.     80%

C.     90%

D.    Cannot be determined.

36. What is the balance on an amortized loan of $340,000 after the first payment if the interest rate is 6% with a monthly P&I payment of $2,028?

A.    $338,300

B.     $339,672.00

C.     $339,020.00

D.    $337,972

37. Steps I and 2 deal with calculating the monthly interest amount, solve for the amount of monthly interest based on the following facts; Loan amount $36,000, annual interest rate of 5%?

A.    $1,800.00

B.     $150.00

C.     $300.00

D.    $5.00

38. Determine the monthly interest on a loan with a balance of $168,300, a monthly payment of $1,356.80, and an interest rate of 7.75%?

A.    $1,086.94.

B.     $1,304.33

C.     $866.67

D.    Cannot be determined.

39. When determining a mortgage loan balance, the monthly loan payment

A.    interest is added to the balance.

B.     principal is added to the balance.

C.     interest is deducted from the payment.

D.    principal is deducted from the payment.

40. To determine the monthly principal portion of a monthly loan payment you must deduct the

A.    monthly interest from the monthly payment.

B.     monthly principal from the monthly payment.

C.     yearly interest from the monthly payment.

D.    monthly interest from the yearly payment.

41. A mortgage has a balance of $70,000 at 11.5% interest for a period of 25 years. The monthly P & I payment is $711.53, what is the interest charge for the second monthly payment?

A.    $690.72

B.     $711.53

C.     $670.44

D.    $40.70

42. A homeowner has a mortgage balance of $149,570.75. If the interest rate on the loan is 9.5% and the monthly payment is $1,303.55 what will be the mortgage balance after the next two payments?

A.    $148,630.90

B.     $149,850.21

C.     $148,300.00

D.    $149,330.91

43. Remember for purposes of determining the new loan balance, you will not have to know how to determine the

A.    principal portion of the loan payment.

B.     interest portion of the payment.

C.     payment amount.

D.    monthly interest amount.

44. A loan on real estate, that includes fixtures, and appliances used extensively in the sale of condominiums is a (an)

A.    reverse annuity mortgage.

B.     blanket mortgages.

C.     open-end mortgage.

D.    package mortgage.

45. The purchaser of real estate by deed or the buyer under a contract for deed is called the

A.    beneficiary.

B.     vendor.

C.     vendee.

D.    obligor.

46. An Adjustable Rate Mortgage (ARM) contains an escalator clause that allows the interest to adjust over the loan term. How often the loan rate may be changed is determined by the

A.    life margin cap.

B.     index cap.

C.     adjustment period.

D.    LTV ratio.

47. A final payment of a mortgage loan that is considerably larger than the other monthly payments because the loan was not fully amortized is called a

A.    margin payment.

B.     package payment.

C.     balloon payment.

D.    graduated payment.

48. A real estate loan where a homeowner receives monthly payments based on accumulated equity rather than a lump sum and is repaid upon the death of the owner or sale of the property is a (an)

A.    open-end mortgage.

B.     blanket mortgage.

C.     contract for deed.

D.    reverse annuity mortgage.

49. A type of payment plan where a buyer pays interest only and the final payment is principal at the end of the loan period.

A.    Straight

B.     Graduated

C.     Adjustable

D.    Amortized

50. With an Adjustable-rate Loan the interest rate fluctuates and is usually tied to an index. The interest rate for any given period is the indexed rate plus the

A.    points.

B.     margin amount.

C.     cap adjustment

D.    markup factor.

51. A type of long term permanent financing for residential construction or large construction projects, that replaces the construction loan is called a (an)

A.    bridge loan.

B.     construction loan.

C.     takeout loan.

D.    wraparound loan.

52. A type of loan where interest and principal are paid on an equal basis until the final payment, which is larger, is called a Balloon Loan or

A.    partially amortized loan.

B.     blanket mortgage.

C.     reverse annuity mortgage.

D.    open-end mortgage.

53. When a real estate loan uses both real and personal property as collateral for the loan it is called a (an)

A.    contract for deed.

B.     participation mortgage.

C.     blanket mortgage.

D.    package mortgage.

54. What kind of a loan would be fully paid out over the life of the loan?

A.    Fully amortized loan

B.     Straight term loan

C.     Balloon loan

D.    Package loan

55. A mortgage given as part of the buyer’s consideration for the purchase of real property, and delivered at the same time that the real property is transferred as a simultaneous part of the transaction is a (an)

A.    Purchase Money Mortgage (PMM).

B.     wraparound mortgage.

C.     participation mortgage.

D.    blanket mortgage.

56. A developer would most likely obtain which of the following types of mortgage on a new subdivision?

A.    Open end mortgage

B.     Package mortgage

C.     Blanket mortgage

D.    Wraparound mortgage

57. A Budget Mortgage is a loan, which has a payment composed of the following?

A.    Principal and interest only

B.     Principal, interest, taxes and insurance

C.     Interest only

D.    Principal and compound interest

58. A situation where an owner sells his or her improved property and at the same time, signs a long-term lease with the buyer is called a (an)

A.    bridge Loan.

B.     sale-leaseback.

C.     contract for deed.

D.    wraparound loan.

59. On a government backed loan, which of the following would be permitted concerning pre-payment penalties?

A.    An FHA loan with a maximum of a 2% pre-payment penalty of the outstanding loan balance

B.     On an FHA or VA loan as long as the pre-payment penalty did not exceed 2% of the original loan amount

C.     A VA loan may contain a maximum of a 3% pre-payment penalty on the loan balance at the time of payoff

D.    Prepayment penalties are not allowed, under any circumstances, on VA or FHA loans.

60. For a veteran to obtain a VA loan, the VA must issue a certificate of

A.    eligibility.

B.     entitlement.

C.     endorsement.

D.    enterprise.

61. A borrower applied for a VA guaranteed first time mortgage for $50,000; however, the property appraised for $46,000. If the buyer still wanted to buy the property which could happen?

A.    The broker could write up a contract, different from the actual offer price, to take to the lender

B.     The VA could allow the borrower to make up the difference in cash

C.     The VA could make the borrower get a second mortgage for the difference

D.    The veteran could not get a VA loan because it appraised for over $35,000

62. Rural Economic and Community Development (RECD) loans are either made

A.    directly by RECD or made by a private lender with RECD guaranteeing a certain percentage.

B.     directly by RECD or made by a private lender with the FHA insuring a certain percentage.

C.     directly by RECD or made by a private lender with RECD insuring a certain percentage.

D.    directly by HUD or made by a private lender with HUD guaranteeing a certain percentage.

63. Conventional mortgage loans are

A.    guaranteed by a government agency.

B.     insured by a government agency.

C.     guaranteed by private insurance.

D.    not guaranteed or insured by any government agency.

64. In 1975 a veteran paid off his VA loan and sold his house. Would he be entitled to another VA loan?

A.    Yes, veterans can apply for more than one loan in their lifetime as long as the first is paid off.

B.     Yes, because he paid off the first loan and sold the mortgaged property.

C.     No, a veteran can only have one VA loan in his lifetime.

D.    No, because he is only entitled to one allotment in his lifetime even if he paid off his loan and sold the mortgaged property.

65. What can the VA require a veteran do when obtaining a loan?

A.    Make the down payment directly to the VA

B.     Make a down payment in cash

C.     Make the veteran automatically assume liability for the loan

D.    Not allow the veteran to make prepayments on that amount

66. An FHA mortgage loan is obtained through which of the following?

A.    Qualified lending institutions

B.     Any government agency

C.     The Federal Housing Authority

D.    The Federal Deposit Insurance Corporation

67. What is the purpose of FHA?

A.    To loan money for first mortgages

B.     To loan money for second mortgages

C.     To act as an insurance company of first mortgages

D.    To loan money in areas of high risk

68. Rural Economic and Community Development (RECD) loans may be

A.    insured loans or direct loans.

B.     guaranteed loans or direct loans.

C.     guaranteed loans or insured loans.

D.    direct loans only.

69. A veteran desired a loan to buy a 200 acre residence. There are no VA lenders in the area. Which could happen?

A.    The VA could loan the money themselves.

B.     The VA cannot loan the money but the Federal National Mortgage Company will.

C.     You cannot get a VA loan for a farm.

D.    The VA can require local lenders to make the VA loan.

70. Private mortgage insurance is associated with

A.    FHA loans.

B.     VA loans.

C.     conventional loans.

D.    RECD loans.

71. A veteran had a VA loan using his full entitlement. He allows another veteran to assume the loan without VA approval. Could he immediately get another VA loan?

A.    Yes, because another veteran assumed the loan.

B.     Yes, because he is no longer liable for the loan.

C.     No, because he is still liable for the loan.

D.    No, as he can NOT use VA eligibility more than once.

72. Conventional mortgages usually require

A.    insurance by FHA.

B.     guarantee by VA.

C.     A larger down payment.

D.    A loan by FNMA.

73. If a Veteran wanted to buy a $60,000 house in a city with a population of 100,000 people, which of the following loans could he NOT apply for?

A.    VA loan

B.     FHA loan

C.     RECD loan

D.    Conventional loan

74. The primary purpose of private mortgage insurance (PMI) is to protect the

A.      lender.

B.      borrower.

C.      lender and borrower.

D.      borrower and the VA

75. Protection to an owner of property against losses sustained as a result of a defective title to real estate can be accomplished by

A.    title search.

B.     title abstract.

C.     title Insurance.

D.    title Opinion.

76. The legal doctrine by which a person is prevented from asserting rights or facts that are inconsistent with a previous position or representation made by act, conduct or silence is known as

A.    disintermediation.

B.     exculpation.

C.     laches.

D.    estoppel.

77. When underwriting a mortgage loan a lender considers all of the following, except

A.    quality of the property that is being financed.

B.     credit worthiness of the buyer.

C.     quality of the title to the property being financed.

D.    credit worthiness of the seller.

78. A list of successive changes of ownership, each one linked to the next, is called a:

A.    underwriting title.

B.     chain of title.

C.     abstract of title.

D.    equitable title.

79. A lender will look at which items when deciding to qualify a property?

A.    Location

B.     Condition (repairs and predications)

C.     Type of property (residential, commercial, agricultural)

D.    All of these items.

80. A written pledge by a lender to lend a certain amount of money to a qualified borrower on a particular piece of real estate for a specified time under specific terms is a

A.    conditional approval.

B.     application analysis.

C.     estoppel letter.

D.    application settlement.

81. Prior to closing, a final walkthrough of the property should be performed to ensure that everything has remained as stated in the sales contract. The walkthrough is generally completed by the

A.    appraiser.

B.     lender.

C.     seller.

D.    buyer.

82. A Buyer has demonstrated the financial capacity and creditworthiness required to afford the asking price by providing the lender with all of the following, except

A.    an appraisal equal to or higher than the contract price.

B.     explanation of derogatory items (judgments, late payments, tax liens etc).

C.     a satisfactory Credit Report.

D.    a satisfactory mortgage history rating.

83. A type of closing where a third party acts as the escrow agent for the buyer and seller and conducts all the closing activities is called a

A.    face to face closing.

B.     qualified closing.

C.     non-recourse closing.

D.    closing in escrow.

84. When qualifying a buyer the lender will calculate the Debt Coverage ratio, which measures

A.    the ratio of monthly net income to annual debt service.

B.     the ratio of annual net income to monthly debt service.

C.     the ratio of annual net income to annual debt service.

D.    the ratio of annual gross income to annual debt service.

85. Many states charge what is called a transfer tax when the property is conveyed by one of the following means

A.    condemnation.

B.     inheritance.

C.     deed.

D.    gift.

86. Assets include all of the following, except

A.    revolving and installment loan accounts.

B.     liquid savings, checking, CD’s.

C.     personal property.

D.    real estate.

87. Most lenders require an impound or escrow account to cover future payments of

A.    negative amortization.

B.     homeowners insurance and real estate taxes.

C.     title insurance premiums.

D.    transfer taxes.

88. Settlement is another name for closing and

A.    brings the real estate transaction to completion.

B.     is always a face to face meeting between buyer and seller.

C.     is always conducted at the office of the seller’s attorney.

D.    requires the presence of an appraiser, underwriter and notary public.

89. Under which of the following would one MOST likely see an estoppel certificate?

A.    A lender sells a loan and the new mortgagee wants to know the existing balance

B.     A lender attempts to prevent a loan assumption to an unqualified party

C.     A developer attempts to have a parcel released from under a blanket mortgage

D.    A lender calls for full payment of a note

90. A settlement agent could be

A.      an attorney.

B.      a real estate agent.

C.      a lender.

D.      all of the above.

91. Transfer taxes are generally paid by the

A.    broker.

B.     seller.

C.     buyer.

D.    lender.

92. The primary purpose of the secondary mortgage market is to

A.  improve employment in the construction industry.

B.  provide low cost mortgages to consumers.

C.  provide liquidity (funds) for the primary market.

D.  regulate the interest rates on residential mortgages.

93. S&Ls are now regulated by the Federal Housing Finance Board (FHFB) and deposits are insured by the

A.  Deposit Insurance Fund for at least $250,000.

B.  Federal Deposit Insurance Corporation for up to $250,000 per account.

C.  Deposit Insurance Fund for at least $100,000.

D.  Federal Deposit Insurance Corporation for up to $1,000,000 per account.

94.The primary distinction/s between the primary and secondary mortgage market is?

A.  The primary market is not active in the origination of mortgage loans.

B.  The secondary market is fundamentally a holding or warehousing process.

C.  The homebuyers can get a mortgage from both primary and secondary markets.

D.  Only lenders can get loans in the primary market.

95. The two biggest money lenders of residential real estate mortgages are

A.  banks and insurance companies.

B.  mortgage brokers and mutual banks.

C.  savings and loans and banks.

D.  insurance companies and mutual savings banks.

96. All of the following are sources for obtaining a residential mortgage for the purchase of a single-family residence, except

A.  savings and loans.

B.  commercial banks.

C.  mortgage brokers.

D.  FNMA.

97. Which is not an agency that deals (buys loans) in the secondary market?

A.  Government National Mortgage Association

B.  Federal Home Loan Mortgage Corporation

C.  Federal Housing Administration

D.  Federal National Mortgage Association

98. All of the following purchase mortgages from savings and loans in the secondary market EXCEPT the

A.  Government National Mortgage Association.

B.  Federal National Mortgage Association.

C.  Federal Home Loan Mortgage Corporation.

D.  Federal Housing Administration.

99. The Federal Reserve controls the money supply by

A.  maintaining a fund from which member banks may borrow.

B.  requiring how much of a bank’s assets have to be on reserve.

C.  lending money to qualified customers.

D.  setting the maximum interest rate that can be charged.

100. Which of the following is considered a part of the secondary mortgage market?

A.  Mutual Savings Bank Assoc. (MSBA)

B.  Federal Reserve Board (FED)

C.  American Credit Union Board (ACUB)

D.  Federal Home Loan Mortgage Corporation (FHLMC)

101. A mortgage in which the lender participates in the income of the mortgaged property beyond a fixed return is called

A.  participation financing.

B.  coop-purchase money mortgaging (CMM).

C.  wraparound financing.

D.  co-underwriting mortgage partnering.

102. The Federal National Mortgage Association is authorized to purchase which of the following types of mortgage loans?

A.  FHA only

B.  VA only

C.  FHA and VA, but not conforming conventional

D.  FHA , VA, and conventional

103. A commercial bank would usually make all of the following loans EXCEPT,

A.  construction.

B.  home improvement loans.

C.  loans for a mobile home.

D.  a pension fund loan.

104. An increase in the availability of money would lead to which effects?

A.  Interest rates would go up

B.  Interest rates would go down

C.  Interest rates would NOT be affected due to RESPA guidelines.

D.  Interest rates would not be affected due to Truth in Lending laws.

105. All of the following were originally established to buy and sell mortgages in order to stimulate mortgage lending, except

A.  Fannie Mae (FNMA).

B.  Maggie Mae (MGIC).

C.  Freddie Mac (FHLMC).

D.  Ginnie Mae (GNMA).

106. Which private organization has been under the Federal Government’s conservatorship since 2008?

A.  Ginnie Mae

B.  Fannie Mae

C.  Sallie Mae

D.  FHA

107. The Federal National Mortgage Association (FNMA) sells seasoned mortgages and deeds of trust to individual investors and financial institutions. A seasoned mortgage is one that has been

A.  in existence for some time and has a good record of repayment by the mortgagor.

B.  in existence for some time and has a good record of repayment by the mortgagee.

C.  in existence for more than ten years and has a fair record of repayment by the mortgagor.

D.  in existence for some time and has been certified by the FDIC.

108. Which of the following secondary market organizations is a quasi-government corporation?

A.    Fannie Mae (FNMA)

B.     Maggie Mae (MGIC)

C.     Freddie Mac (FHLMC)

D.    Ginnie Mae (GNMA)

109. As a group, the three secondary mortgage market participants; Fannie Mae, Ginnie Mae and Freddie Mac

A.    insure mortgage loans originated by primary market lenders.

B.     regulate the low cost housing market.

C.     provide an outlet for primary lenders to sell their mortgage loans.

D.    guarantee any losses suffered by primary lenders.

110. Real estate can be a poor investment if

A.  the inflation rate is high.

B.  the investor plans to hold the investment for a long time.

C.  the investor needs ready cash.

D.  land values are appreciating in the area.

111. Under the ECOA, a lender can base lending decisions on all of an individual’s information, except

A.  income.

B.  job stability.

C.  credit rating.

D.  sex.

112. Real estate is generally a good investment because it

A.  is highly liquid.

B.  keeps up with inflation trends.

C.  is inflation proof.

D.  delivers a very high return for no risk.

113. The Real Estate Settlement Procedures Act and Regulation Z

A.  prohibits lenders from discriminating in the granting of credit to consumers.

B.  mandates material fact disclosures by brokers.

C.  apply to both residential and commercial properties.

D.  are separate acts dealing with separate financing issues.

114. In terms of stating mortgage rate interest, the standardized rate required by the Truth in Lending Act to facilitate comparison loan shopping is called the

A.  contract rate.

B.  annual percentage rate.

C.  discount rate.

D.  effective rate.

115. A standardized yardstick expressing the true annual cost of borrowing is expressed as the “APR” and includes

A.  title insurance premiums.

B.  the contract interest rate and points.

C.  survey fees.

D.  legal fees to prepare deeds.

116. As with most investments, there is a high degree of risk in buying and selling investment real estate because

A.  market conditions are changing all the time.

B.  market equilibrium is dictated by the global market.

C.  market conditions are always driving prices down.

D.  market conditions have taken all the profit out of real estate investment due to national rent control regulations.

117. Under the Real Estate Settlement Procedures Act (RESPA), lenders are

A.  allowed to take kickbacks.

B.  encouraged to take kickbacks to increase yield.

C.  limited to $1,000 of kickbacks per loan.

D.  prohibited from taking kickbacks or unearned fees.

118. The two major sections of the Truth In Lending law, includes

A.  advertising and Annual Percentage Rate (A.P.R.).

B.  Consumer Protection Rate (C.P.R.) and Annual Percentage Rate (A.P.R.)

C.  advertising and disclosure of material facts.

D.  lender profit transparency and Annual Percentage Rate (A.P.R.).

119. The Equal Credit Opportunity Act prohibits lenders from discriminating against consumers in the granting of credit based on the following protected classes;

A.  race, income, religion, national origin, sex, marital status, age or dependency on public assistance.

B.  race, color, religion, national origin, sex, marital status, age or dependency on public assistance.

C.  race, national origin, age or dependency on public assistance.

D.  race, color, religion, national origin, sex, or dependency on public assistance.

120. Regulation Z is not concerned with

A.  the disclosure of loan cost information to a consumer.

B.  the loan to value ratio

C.  the annual percentage rate.

D.  finance charges.

121. Which of the following mortgage closing transactions require compliance under TRID rules?

A.  Unimproved property

B.  Reverse mortgages

C.  Home equity loans

D.  Mobile homes

122. The following real estate financing statements all contain trigger terms under Regulation Z of the Truth in Lending Act, except

A.  “Only $12,000 down and $750 a month payments”.

B.  “Owner financing available at 6%.”

C.  “Great assumable low interest rate loan”.

D.  “Easy to qualify on this 30 year loan.”

123. Which of the following laws require(s) that finance charges be stated as an annual percentage rate (APR)?

A.  Equal Credit Opportunity Act

B.  Real Estate Settlement and Procedures Act

C.  Fair Housing Act

D.  Truth in Lending Act, Regulation Z

124. A settlement agent must provide the seller with the Closing Disclosure

A.  three days before consummation of the mortgage.

B.  at consummation of the mortgage.

C.  three business days before consummation of the mortgage

D.  six business days before consummation of the mortgage

125. The Truth-in-Lending Act applies to which of the following?

A.  An owner extends a second mortgage to a buyer.

B.  A broker assists a buyer with finding an available source of credit.

C.  An advertisement for a house for sale by a broker which discloses financing terms.

D.  A broker recommends that a buyer go to a bank of their choice and get pre-qualified for a loan amount.

126. Real estate can be a poor investment if

A.  the inflation rate is high.

B.  the investor plans to hold the investment for a long time.

C.  the investor needs ready cash.

D.  land values are appreciating in the area.

127. Real estate is generally a good investment because it

A.  is highly liquid.

B.  keeps up with inflation trends.

C.  is inflation proof.

D.  delivers a very high return for no risk.

128. Which agency administers RESPA?

A.  Consumer Federal Protection Bureau (CFPB)

B.  Consumer Federal Consumer Board (CFCB)

C.  Consumer Financial Protection Bureau (CFPB)

D.  Consumer Financial Credit Bureau (CFCB)

129. A primary purpose of the Truth in Lending Act is to

A.  enforce usury mortgage laws.

B.  set and standardize loans on FHA and VA mortgages.

C.  protect lenders from losses due to foreclosure.

D.  make loan cost information readily available to consumer borrowers.

130. A settlement agent must provide the seller with the Closing Disclosure

A.  three days before consummation of the mortgage.

B.  at consummation of the mortgage.

C.  three business days before consummation of the mortgage

D.  six business days before consummation of the mortgage

131. RESPA requires lenders to provide a HUD “Guide to Settlement” booklet and a Good Faith Estimate (GFE) of all costs related to settlement to borrowers within

A.  5 days of loan application.

B.  3 days of loan application.

C.  2 days of loan application.

D.  at time of loan application.

132. Unsophisticated investors should seek

A.  advice from only their broker as they know everything.

B.  advice from a stockbroker before investing in real estate.

C.  legal and tax counsel before making any real estate investments.

D.  Never purchase investment real estate.

133. The Truth in Lending laws apply to the financing of

A.      single family residences.

B.      industrial plants.

C.      multi-family housing projects over 25 units.

D.      business assets.

134. Purchasing an investment property , like an apartment complex may be more rewarding if the investor has the required

A.      computer skills.

B.      trade skills.

C.      management skills.

D.      human relations skills.

135. An advantage of real estate investment is tax savings, the capital gain exclusion on a principal residence excludes the gain up to

A.  $250,000 per individual (up to $750,000 for a couple).

B.  $250,000 per individual (up to $500,000 for a couple).

C.  $500,000 per individual (up to $1,000,000 for a couple).

D.  $500,000 per individual (up to $750,000 for a couple).

136. The Truth in Lending Law is also known as _______.

137. All of the following are true of conventional loans except what?

A.  They are made to the buyer without governmental insurance or guarantee.

B.  The policy requirements of the lenders are not uniform.

C.  The requirements to qualify are uniformly fixed by state law.

D.  They require a higher down payment than non-conventional loans.

138. When the amortized payment of a mortgage remains constant over the period of the loan but leaves an outstanding balance to be paid at the end, this payment is called:

A.  An escalation payment

B.  A balloon payment

C.  A satisfaction payment

D.  An acceleration payment

139. A home improvement company was negotiating with a home owner to add two rooms onto a home. The company agreed to take a second mortgage as long as the homeowner also included the rest of the property in the loan. The company and the homeowner agreed to a price and the company provided the necessary disclosure form on Monday and the homeowner signed the agreement at noon the following day. Assuming that the week had five business days, until what time could the homeowner rescind the loan?

A.  Tuesday, midnight

B.  Thursday, midnight

C.  Friday, midnight

D.  There is no rescission on a house.

140. RESPA would prohibit which of the following acts?

A.  Steering

B.  Paying of kickbacks

C.  Blockbusting

D.  Redlining

141. The finance charges recorded on the Truth in Lending statements would include all of the following EXCEPT:

A.  Loan fees charged by the lender

B.  Insurance premiums for mortgage insurance payment

C.  Discount points and service fees

D.  Recording fees and title insurance premiums

142. In a repayment of a mortgage loan, which type of interest is used?

A.  Simple

B.  Discount

C.  Compound

D.  Floating

143. On an 8% straight term loan of $6,071 the borrower paid total interest of $1,700. What is the term of the loan?

A.  30 months

B.  36 months

C.  42 months

D.  48 months

144. If advertised alone, which would be in violation of TRUTH IN LENDING?

A.  “FHA financing available”

B.  “Assumable loan”

C.  “No down payment required”

D.  “Easy financing terms”

145. A buyer wanted to use a promissory note for consideration on the purchase of a property. Can he do this?

A.  Yes, the buyer can do as he wishes since he is making the contract.

B.  Yes, this is acceptable as long as the seller agrees.

C.  No, only money can be used for consideration.

D.  No, only the seller can write a promissory note.

146. In which of the following markets may a lender sell a loan that a mortgage banker has previously originated?

A.  Primary market

B.  Secondary market

C.  Mortgage market

D.  Consumer market

147. The primary purpose of Truth in Lending is to _____________

A.  control interest rates on behalf of the consumer.

B.  control the true costs to close a transaction.

C.  disclose the true costs of only an FHA loan.

D.  disclose the true costs of obtaining credit.

148. ______ is the cost per thousand that is required to create the principal and interest payment necessary to pay off a loan.

A.  A rate

B.  A point

C.  A factor

D.  A power

149. Under Regulation Z, consummation is defined as the time when a consumer

A.  requests a loan application.

B.  becomes contractually obligated on a credit transaction.

C.  is within three days of closing a transaction.

D.  is given a completed Loan Estimate.

150. A mortgage company makes a number of loans to be assembled into one package and sold to permanent investors. This process is an example of interim financing to the mortgage company and is called:

A.  Blanket financing

B.  Packing financing

C.  Warehousing

D.  Discounting

151. In an installment land contract, what type of title did the seller retain?

A.  Joint

B.  Legal

C.  Equitable

D.  Record

152. Which of the following would usually occur in a sale-and-leaseback transaction?

A.  The seller gets a return on the purchase in the form of rental payments.

B.  The property is sold on the condition that the new owner lease it back to the seller at the time title passes.

C.  The buyer keeps capital in inventories rather than in realty.

D.  The rent that the seller pays is not income-tax deductible.

153. A house sold for $42,000. The buyer made a 20% down payment. Monthly interest on the loan was $252. What was the interest rate on the loan?

A.  5%

B.  7%

C.  9%

D.  11%

154. On a $50,000 loan the borrower is required to pay 2 points. How much does the borrower have to pay the lender?

A.  $49,000.00

B.  $50,000.00

C.  $51,000.00

D.  $52,000.00

155. An increase in the availability of money would lead to which effect?

A.  Interest rates would go up.

B.  Interest rates would go down.

C.  Interest rates would NOT be affected due to RESPA guidelines.

D.  Interest rates would NOT be affected due to TRUTH IN LENDING.

156. An owner was selling his own home. Can he advertise the down payment?

A.  No, because it violates RESPA

B.  No, because it violates Regulation Z

C.  Yes, as long as it was listed with a broker

D.  Yes, because it was his own home

157. The clause in a trust deed or mortgage which permits the mortgagee to declare the entire unpaid sum due upon a default by a mortgagor is called a(n) ______________

A.  judgment clause.

B.  acceleration clause.

C.  escalator clause.

D.  forfeiture clause.

158. Why would a mortgagee (beneficiary) have an appraisal on the property?

A.  To make sure the buyer did not pay too much

B.  To determine the property’s potential for appreciation

C.  To protect the buyer from fraud

D.  To assure the property value is sufficient to cover the loan

159. Effective October 1, 2015, the real estate industry has new requirements as specified in the

A.  HUD-1A Rules.

B.  TILT/RESPA Loan Disclosure (TRLD) Rule.

C.  Consumer Protection Rules (CPR).

D.  TILA/RESPA Integrated Disclosure (TRID) Rule.

160. Which of the following is considered a conventional loan?

A.  FHA insured

B.  VA guaranteed

C.  Commercial bank ARM loan

D.  FNMA mortgages

161. Usury MOST nearly means ______________

A.  making loans without the benefit of co-signors.

B.  lending money at fluctuating interest rates.

C.  being capable of multiple usage.

D.  illegal interest.

162. A borrower bought a $74,000 house with no down payment. The loan was probably ______________

A.  a conventional insured loan.

B.  a VA loan.

C.  a FHA loan.

D.  a conventional loan.

163. The Smiths’ purchased a residence for $75,000. They made a down payment of $15,000 and agreed to assume the seller’s existing mortgage, which had a current balance of $23,000. The Smiths’ financed the remaining $37,000 of the purchase price by executing a second mortgage whereby the seller became a mortgagee. This type of loan is called a

A.  Wraparound mortgage

B.  Package mortgage

C.  Balloon note

D.  Purchase money mortgage

164. An impound or reserve account MOST benefits whom?

A.  The borrower

B.  The lender

C.  The trustee

D.  The trustor

165. Which transaction requires a securities’ license?

A.  Leasing a commercial building

B.  Selling a commercial warehouse

C.  Selling shares in Fannie Mae

D.  Arranging a sale-leaseback on a commercial property

166. A buyer assumes the mortgage. How is the owner relieved of the liability?

A.  Subject to mortgage

B.  Novation

C.  Substitution

D.  Graduation

167. An owner advertised “beautiful acreage only $5,000 down, owner will personally finance down payment.” Would this be in violation of the Truth in Lending Act?

A.  Yes, acreage is not exempt from Reg Z.

B.  Yes, since a down payment was stated.

C.  No, owners are not covered by Reg. Z.

D.  No, brokers can advertise the down payment.

168. Which of the following describes a mortgage that requires principal and interest payments at regular intervals and calls for the liquidation of the debt by periodic installments until the debt is satisfied?

A.  Amortized loan

B.  Annuity loan

C.  Acceleration loan

D.  Assemblage loan

169. The Pickets are purchasing a home for $78,000 and the lender is giving them a 90% loan at 10% interest, plus a 2% loan origination fee. How much is the loan origination fee?

A.  $1,404

B.  $1,560

C.  $1,650

D.  $7,020

170. A mortgage broker _____________

A.  arranges loans between borrowers and investors.

B.  is a lender.

C.  buys mortgages in the secondary mortgage market.

D.  buys mortgages and resells them at a profit.

171. A buyer wants to take out an FHA loan. The broker should refer the buyer directly to ______________

A.  any approved lending institution such as a bank or savings and loan association.

B.  an FHA appraiser in the area.

C.  the Federal Housing Administration office.

D.  the Federal National Mortgage Association.

172. The seller under a land contract is called _____________

A.  the grantor.

B.  the grantee.

C.  the vendor.

D.  the vendee.

173. The maximum permissible “loan to value ratios” are _____________

A.  based on sale price or appraised value, whichever is lower.

B.  not determined by federal statute in the case of FHA loans.

C.  based on the banker’s competitive market analysis.

D.  fixed by law for conventional loans.

174. In most states, by paying the debt after a foreclosure sale, the mortgagor has the right to regain the property. What is this right called?

A.  Equitable right of redemption

B.  Owner’s right of redemption

C.  Vendee’s right of redemption

D.  Statutory right of redemption

175. A VA loan may be granted for the purchase of a one-family to four-family if _________________

A.  the veteran certifies the rent collected will equal the mortgage payments.

B.  the loan will be amortized for not more than 20 years.

C.  the down payment will be at least ten percent.

D.  the veteran agrees to live there.

176. The Loan Estimate must be delivered to an applicant

A.  at the time the loan request is first made.

B.  within three calendar days prior to closing.

C.  within three calendar days of loan application.

D.  within three business days of loan application.

177. The discount points charged by a lender on a federal VA or FHA loan are a percentage of the ________________

A.  sale price.

B.  appraised price.

C.  loan amount.

D.  down payment.

178. Which of the following is true of a second mortgage?

A.  It has priority over a first mortgage.

B.  It cannot be used as a security instrument.

C.  It is not negotiable.

D.  It is usually issued at a higher rate of interest.

179. When the lender under a deed of trust required title insurance, who would be the most likely person to pay for it?

A.  The mortgagee

B.  The trustee

C.  The trustor

D.  The beneficiary

180. Who is NOT an originator of primary loans?

A.  Savings and loans

B.  Credit unions

C.  Mortgage brokers

D.  FHA

181. A standardized yardstick expressing the true annual cost of borrowing is expressed as a/an

A.  ECOA

B.  Regulation Z

C.  APR

D.  RESPA

182. The lender is not insured or guaranteed against a loss, by reason of the borrower’s default in repayment, under which type of loan?

A.  FHA

B.  Conventional

C.  VA

D.  GI

183. If a single parent is applying for a real estate loan, when would the fact have to be revealed that part of the parent’s income is from child support?

A.  When applying for a VA or FHA loan if the parent’s income is less than $25,000

B.  If more than 50% of the parent’s income is non-wage sources

C.  If the parent was relying on the income for repayment of the loan

D.  This type of income never needs to be disclosed. It would be a violation of ECOA.

184. Discrimination is prohibited in lending practices under _____________

A.  ECOA.

B.  RESPA.

C.  Truth in Lending Act.

D.  FNMA.

185. Under an FHA graduated payment mortgage, which of the following fluctuates over the term of the loan?

A.  Interest rate

B.  Monthly payments

C.  Finance charge

D.  Annual rate

186. Who is the largest purchaser in the secondary market?

A.  Ginnie Mae

B.  Fannie Mae

C.  FHA

D.  Freddie Mac

                                                                                                        

Ch7 National Valuation

(Questions ONLY, ANSWERS WILL BE REVEALED WITH PROPER SUBSCRIPTION)

Tip: to find a certain word or key term,  press at the same time, the buttons:

( Ctrl and F ) on Windows computers

(Command and F ) on Mac computer

to bring up the in-page search box

1. The three types of appraisal reports are

A.  the letter, the short report and the narrative.

B.  the summary, the data report, and the narrative.

C.  the short report, the long report, and the review report.

D.  the letter, the summary report, and the mass appraisal report.

2. Which of the following types of value is the type most often sought by an appraiser?

A.  Exchange

B.  Economic

C.  Market

D.  Replacement

3. The first step in the appraisal process is to

A.  compare similar sold properties.

B.  define the problem.

C.  analyze the neighborhood.

D.  gather data.

4. An appraiser is looking for the growth, stability, change and decline of an area. The appraiser is dealing with

A.  the neighborhood cycle.

B.  site analysis.

C.  economic obsolescence.

D.  the community cycle.

5. An arm’s length transaction is defeated whenever

A.  the parties are ready, willing and able to contract.

B.  a buyer acts under duress.

C.  the seller fails to disclose material defects.

D.  the seller decides to reduce the price for a quick sale.

6. Prior to preparing the report, the last step in the appraisal process involves

A.  estimating the land value.

B.  reconciling the comparables.

C.  completing the income approach.

D.  reconciling the values derived from the three approaches.

7. Market value is defined by all of the following EXCEPT

A.  the assumption that buyer and seller are sufficiently informed.

B.  the allowance of a reasonable time for market exposure.

C.  the relation to the price for which the property should sell in the open market.

D.  the broker’s opinion of value.

8. Burger King locates a franchise across the street from a McDonalds. At play here is the principle of

A.  anticipation.

B.  competition.

C.  conformity.

D.  assemblage.

9. A two-family residential property is now located in a central business district. The decision to convert this two-family residential house to a commercial office, housing a real estate firm and an insurance company, is an example of what appraisal principle?

A.  Plottage and assemblage

B.  Highest and best use

C.  Anticipation of income

D.  Conformity

10. The principle of contribution is best exemplified as

A.  the value increase caused by movements in a capitalization rate.

B.  the amount of value a garage adds to the total property value.

C.  the decrease in value caused by an adverse zoning change.

D.  the increase in value caused by combining properties.

11. If a manufacturing plant that employs 20% of the local labor force closes, the likely effect on the area’s real estate values will reflect the principle of

A.  supply and demand.

B.  transferability.

C.  substitution.

D.  highest and best use.

12. The value principle of anticipation is best characterized as

A.  an investor’s cash flow projection.

B.  a future event affecting property value.

C.  the expection of a financial return on investment.

D.  a value trend based on historical circumstances.

13. The phrase ‘buy the cheapest house on the block’ stems from which principle of value?

A.  Regression and progression

B.  Substitution

C.  Contribution

D.  Competition

14. A property was originally purchased for $160,000. The land portion is 25% of total value. If depreciation totals $20,000, what is the value of the property using the cost approach?

A.  $132,000

B.  $140,000

C.  $160,000

D.  $180,000

15. of A property’s roof is twenty years old and has not been replaced. This condition would most likely be considered to be an example of

A.  curable physical deterioration.

B.  curable functional obsolescence.

C.  external obsolescence.

D.  incurable depreciation.

16. of Using a 12% capitalization rate, an apartment complex is valued at $480,000. Find the value of the same property if a 10% cap rate is used.

A.  $400,000

B.  $440,000

C.  $520,000

D.  $576,000

17. An investor’s return on an income property appraisal is based on which of the following?

A.  Potential Rental IncomeI

B.  Potential Income less vacancy

C.  Gross Income

D.  Gross Income less expenses

18. The Unit-in-Place method of estimating costs is best described as

A.  estimating costs per square foot.

B.  estimating costs on item-by-item basis.

C.  estimating costs of installation.

D.  estimating costs of labor units.

19. The final step in the Sales Comparison Approach is to

A.  average the values of the comparables.

B.  complete the adjustment of all comparables.

C.  reconcile the adjusted values of the comparables.

D.  complete all adjustments to the subject.

20. The Sales Comparison Approach relies on which of the following principles of value?

A.  Conformity

B.  Change

C.  Anticipation

D.  Substitution

21. of A property has been depreciated @ $3,000 for 15 years. The land, which comprises 20% of total value is worth $20,000. What was the original value of the property?

A.  $80,000

B.  $100,000

C.  $125,000

D.  $145,000

22. A property owner must spend $10,000 to pave his driveway. Upon completion of construction, his property value will increase by $7,500. In this case the deficiency would be considered to be

A.  incurable deterioration.

B.  curable functional obsolescence.

C.  incurable economic obsolescence.

D.  incurable functional obsolescence.

23. of A property owner installs a new air conditioning system. How does this affect the property’s effective age?

A.  It has no effect.

B.  It increases it.

C.  It decreases it.

D.  The effective age cannot be adjusted for air conditioning systems.

24. If a comparable has one more bedroom than the subject, an adjustment is made by

A.  adding value to the subject.

B.  deducting value from the subject.

C.  adding value to the comparable.

D.  deducting value from the comparable.

25. Which of the following is NOT one of the three classes of depreciation according to cause?

A.  physical deterioration.

B.  economic obsolescence.

C.  financial deterioration.

D.  functional obsolescence.

26.A property valued at $150,000 earns $750 per month. What is the annual percent of return?

A.  6%

B.  7.50%

C.  9%

D.  12%

27. of Mike wanted a capitalization rate of 14% if he bought Joe’s property. If three units rented for $450 per month, two units @ $550, and one unit @ $600 per month, what is the maximum amount Mike could pay in order to net the cap rate he wants?

A.  $36,600

B.  $45,000

C.  $261,429

D.  $291,832

28. If the subject has a swimming pool and the comparable does not, the appraiser makes an adjustment by

A.  adding value to the subject.

B.  deducting value from the subject.

C.  adding value to the comparable.

D.  deducting value from the comparable.

29. Economic life is best defined as

A.  the length of time during which an improvement will contribute to the value of a property.

B.  the age of a non-income producing improvement.

C.  the depreciation period for the land component of a property.

D.  the period during which the land and improvements are depreciated for tax purposes

30. Which of the following best defines reproduction cost?

A.  The cost to cure deterioration.

B.  The cost to replace an improvement with original materials

C.  The cost to replace an improvement with similar materials

D.  The cost to replace a destroyed property

31. Ad valorem taxes are based on

32. Ad valorem taxes are based on

A.  the replacement value of the property.

B.  the assessed value of the property

C.  the value of the property’s homestead exemption.

D.  the appraised value of the property.

33. A homeowner receives a tax bill that includes an amount for the library district, taxed at $1.00 per $1,000, and the fire protection district, taxed at $2.00 per $1,000. How much does the taxpayer have to pay for these two items if the property’s taxable value is $470,000?

A.  $1,567.00

B.  $157.00

C.  $1,410.00

D.  $141.00

34. The tax assessment ratio for a house valued at $250,000 is 80%. If the tax rate is $2.00 per $100 what is the annual tax?

A.  $500

B.  $5,000

C.  $400

D.  $4,000

35. A millage rate is derived by

A.  dividing the tax requirement by the tax base.

B.  multiplying the tax base times the tax requirement.

C.  adding an inflation factor to the prior year’s tax rate.

D.  dividing the tax base by the tax requirement.

36. The purpose of a homestead tax exemption is

A.  to exempt qualified property owners from ad valorem taxation.

B.  to offer an amount of tax relief on an owner’s principal residence

C.  to encourage multiple property investment.

D.  to exempt owners of principal residences who rent their properties.

37. A unique characteristic of a special assessment tax is that

A.  it only applies to properties which will benefit from the public improvement.

B.  the taxing district discounts levies for properties not affected by the improvement.

C.  more valuable properties which stand to benefit will pay proportionately more taxes.

D.  it creates an involuntary junior lien on the property.

38. To qualify for a homestead exemption, a property owner generally must

A.  reside on the property.

B.  have a house on the property.

C.  be 55 years old.

D.  have children.

39. Which of the following jurisdictions are empowered to levy ad valorem taxes on real property

A.  Federal, state, and county jurisdictions

B.  State, county, and local jurisdictions

C.  Counties, cities, and municipalities

D.  Federal, state, and county special assessment districts

40. A school district’s tax rate is 10 mills. The school district’s required revenue from taxes is $1,000,000. What is the tax base of the area?

A.  $1,000

B.  $1,000,000

C.  $10,000,000

D.  $100,000,000

41. A town is replacing a sidewalk that serves five homes. The length of the sidewalk is 200 feet. Mary’s property has 38 feet of front footage. If the cost of the project to be paid by a special assessment is $7,000, what will Mary’s assessment be?

A.      $1,400

B.      $1,330

C.      $184

D.      $1,840

42. What is an ad valorem tax levy?

A.  The total of the assessed values of all real properties within a taxing jurisdiction

B.  The sum of all the taxes a local taxing jurisdiction collects in a tax year

C.  The part of a taxing body’s budgeted expenses that must come from real property taxes.

D.  The number of dollars per thousand dollars of assessed value that a real property owner must pay in property taxes.

43. A tri-plex generates $700 rent for each of its three units per month. The property has been recently appraised for $413,000. What is this property’s GIM?

A.  16.4

B.  13.65

C.  196

D.  49.17

44. Each unit in a fourplex rents for $850 per month. If the appraised value is $460,000, what is the GRM for the fourplex?

A.  541.2

B.  135.3

C.  45

D.  11.3

45. A home recently sold for $360,000 with an monthly rental income of $3,000. Find the Gross Rent Multiplier for the property.

A.  15

B.  120

C.  25

D.  30

46. A property has a Gross Income Multiplier of 12, and value of $500,000. What is its annual income?

A.  $3,472

B.  $60,000

C.  $41,667

D.  $600,000

47. An income property produces $40,000 per year. Its GIM is 15. What is the value of the property?

A.  $50,000

B.  $500,000

C.  $600,000

D.  $800,000

48. Comparable sales of duplexes in a market indicate a GRM of 146. If the annual income of the subject is $24,000, what is the property’s estimated value?

A.  $3,504,000

B.  $2,400,000

C.  $2,920,000

D.  $292,000

49. An income property generates $2,000 per month, and is valued at $218,000. What is its Gross Rent Multiplier?

A.      109

B.      9.09

C.      90.9

D.      115

50. A property valued at $340,000 has a Gross Rent Multiplier of 148. What is this property’s monthly income?

A.  $2,297

B.  $4,352

C.  $3,627

D.  $4,298

51. An income producing property rents for $1,000 per month and the GRM is 84. What is the estimated market value of the property?

A.  $325,000

B.  $55,600

C.  $84,000

D.  $1,008,000

52. The purpose of a buffer zone is to accomplish which of the following?

A.  Privacy space between residences in an upscale subdivision.

B.  A neutral zone between differing forms of land use.

C.  Isolation of a non-conforming use in a municipality.

D.  A green area for large-scale residential developments.

53. Private land use control is primarily exerted by

A.  the courts via placement of deed restrictions on private property.

B.  the owner of the controlled property via deed restrictions.

C.  the owner of the property via zoning ordinances.

D.  the grantee of a property via restrictive covenants.

54. Restrictive covenants are enforced by which of the following?

A.  Zoning

B.  Condemnation

C.  Police power

D.  Injunction

55. Zoning regulations are justifiable so long as they

A.  protect public health, safety, and welfare.

B.  conform to federal zoning standards.

C.  do not interfere with fair trade practices.

D.  do not favor private interests over public interests.

56. A nonconforming use may be deemed illegal if

A.  the property is sold or abandoned.

B.  the use occurred prior to the zoning change which made it illegal.

C.  the owner obtains a variance.

D.  a conditional use permit is renewed.

57. The purpose of a building permit is

A.  to override a deed restriction.

B.  to regulate the volume of a market’s building activity.

C.  to regulate minimum construction standards.

D.  to establish an enabling act.

58. Public land-use regulations may regulate all of the following except

59. The underlying justification for eminent domain proceedings against a property owner is

60. A convenience store may be permissible in an industrial zone under the authorization of

61. One characteristic of a Planned Unit Development is

A.  to cluster homes in smaller lots to allow for more common area.

B.  to enact enabling restrictions to maintain maximum market value.

C.  to encourage maximum lot sizes to enhance highest and best use.

D.  to maximize zero lot lines, party walls, and land use restrictions.

62. A form of zoning which regulates density is referred to as

A.  bulk zoning.

B.  aesthetic zoning.

C.  directive zoning.

D.  subdivision regulation.

63. Which of the following are not forms of public land use control?

A.  Police power and eminent domain.

B.  Taxation and zoning.

C.  Subdivision regulations.

D.  Restrictive covenants.

64. The right to exert public land use control is primarily authorized by which of the following?

A.  A grantor’s written and recorded deed provisions.

B.  A municipality’s self-legislated police power

C.  The 14th Amendment to the Constitution

D.  The constitution of individual states.

65. A zoning variance is obtainable in a municipality provided that

A.  there is no existing use on the property.

B.  existing zones do not conflict with the use.

C.  any pre-existing structures are demolished.

D.  it is obtained prior to the commencement of the varying use.

66. One important characteristic of environmental protection legislation is that it

A.  can require affirmative action on the part of owners and developers.

B.  cannot violate existing zoning laws where it may apply to.

C.  cannot violate public interest or jeopardize unfettered use of land.

D.  can be nullified by municipal enabling acts.

67. A lot that measured 330’ x 198’ sold for $30,000. What was the cost per acre?

A.  $10,000

B.  $20,000

C.  $25,000

D.  $30,000

68. You as a broker sold a TRIANGULAR piece of land for $900 per acre. What is the approximate amount of your commission at 7% if the land had a base of 1500 feet and a height of 600 feet?

A.  $350

B.  $651

C.  $1,301

D.  $3,150

69. What is a critical characteristic of a metes and bounds description?

A.  It MUST conform to the standards set for the plat of survey.

B.  It MUST quantify linear and area measurements.

C.  It describes a rectangularly measured area of townships and sections.

D.  The Point of Beginning and Point of End MUST be the same.

70. A plat of survey is best described as

A.  a survey of an entire subdivision.

B.  a completed lot survey.

C.  a registered metes and bounds legal description.

D.  a plat map recorded in the state land bureau of records where the property is located.

71. A scale drawing shows a room to be 3 inches by 4 ½ inches. Carpet is $15 per square yard is to be installed in the room. If the scale is 1 inch to 4 feet, how much would it cost to install the carpet?

A.  $120

B.  $202

C.  $360

D.  $3,240

72. How many acres are there in the S 1/2 of the N 1/2 of the SW 1/4 of a section of land?

A.  10 acres

B.  20 acres

C.  40 acres

D.  160 acres

73. The essential criteria for an acceptable legal description is that it

A.  accurately locates the parcel in the opinion of a court.

B.  Always starts at the POB and ends at the POB.

C.  contains the current post office address of the parcel.

D.  is written by a surveyor.

74. A property sold for $2100 per acre. The front of the property measured 640′ the rear measured 570′ and the depth of the property was 720′. What was the sale price of the property?

A.  $2,100

B.  $21,000

C.  $22,215

D.  $173,250

75. A parcel’s street address is an insufficient legal description because

A.  street addresses do not contain a lot an block.

B.  it does not contain a POB.

C.  it lacks permanence and sufficient data for a surveyor to locate it.

D.  it creates a cloud on title.

76. Which of the following lines in the Rectangular Survey System run north and south?

A.  Base lines

B.  Range lines

C.  Township lines

D.  Section lines

77. Beginning at the SE corner of the intersection of Olive & 270, thence south 350 feet, thence west 350 feet, thence north 400 feet, thence east 400 feet. Is this a good legal description?

A.  No, this is not a good legal description because it does not begin and end at the point of beginning.

B.  No, legal descriptions cannot be determined in this manner.

C.  Yes, this is a good legal description of a parcel of land.

D.  Yes, it is not necessary for a legal description to begin and end at the point of beginning.

78. As a legal descriptor of land, a township square consists of

A.  one section.

B.  36 square miles.

C.  640 acres.

D.  1 square mile.

79. Which land description method employs a subdivision plat map?

A.  The lot and block system

B.  The Rectangular Survey System

C.  The metes and bounds system

D.  The government survey system

80. Mr. Jones owned a lot measuring 200′ x 200′. An appraiser valued his lot @ $1.60 per square foot. What was the lot’s total value?

A.  $640

B.  $6,400

C.  $12,800

D.  $64,000

81. How many acres are there in the NE ¼ of the SW ¼ of the NW ¼ of a section?

A.  5 acres

B.  6 acres

C.  9 acres

D.  10 acres

82. A legal description of real property:

83. What is the starting point called in a metes and bounds description

84. How many acres are there in a 1/8 mile squared? (1/8 mile squared is the same as 1/8 mile times 1/8 mile)

85. Beginning at the SE corner of the intersection of Olive and 270; thence south 350 feet; thence north 400 feet; thence east 400 feet. Is this an adequate legal description?

86. The description that follows contains how many acres? The NE 1/4 of the NE 1/4 of section 20.’

87. Objects used by surveyors in legal descriptions are:

88. Which of the following would never be included as part of a legal description?

89. Because of the curvature of the earth; it is necessary to compensate for the changes in the lines through the use of:

90. How are directions described in a metes and bounds survey?

91. The legal description of a recorded plat is incomplete if it lacks

92. How many sections are there in a township, and what are their dimensions?

93. How far apart are common parallels?

94. What are the dimensions of a township?

95. To make it easier to describe elevations, surveyors refer to standard elevation points called

96. What method of legal description was the first one used in America?

97. A check or quadrangle is defined by the intersection of pairs of

98. The critical characteristic of a metes and bounds description is that

99. A range is defined by

100. What is a guide meridian?

101. A legal description in the rectangular survey system will also include a metes and bounds or lot and block description if the property

102. What is a datum in a legal description?

103. The fundamental components of the metes and bounds system are

104. The cost approach would be more heavily relied on for which type of property?

105. A property owner in a recently zoned area was permitted to continue to use his property in a manner that did not comply with the zoning requirements. This use is described as which of the following?

A.    Exclusive-use zoning.

B.     Deviation.

C.     Nonconforming use.

D.    Private control of land use.

106. The capitalization rate is best described as:

A.    the value of the property in relation to the gross income the property produces.

B.     an investment property’s fixed cash flow on an annual basis.

C.     the relationship between net operating income and estimated value or cost.

D.    a fixed rate of return for the investor of a commercial property.

107. One business attracts another business of similar type and together they may make more money than they would have singularly. This is an example of what principle of value?

A.    Contribution

B.     Competition

C.     Progression

D.    Assemblage

108. A development company owned property that the city wanted so it could extend the runways at the municipal airport. If the company refuses to negotiate with the city, then the city may acquire the property by:

A.    Escheat.

B.     Accretion.

C.     Confiscation.

D.    Eminent domain.

109. What is the principal mechanism for implementing a master plan?

A.    Zoning

B.     Referendum

C.     Public election

D.    Property management

110. The definition of depreciation is

A.    A loss in value.

B.     Mortgages and foreclosures.

C.     Loss from scarcity of a product.

D.    A gain from cost.

111. Commercial income producing property is best appraised using which method?

A.    Market Data Approach.

B.     Cost Approach.

C.     Income Approach.

D.    Sales Comparison Approach.

112. Which principle of value holds that the value of any component of a property is what it gives to the value of the whole or what its absence detracts from the whole?

A.    Substitution

B.     Conformity

C.     Contribution

D.    Progression

113. Functional obsolescence is due to:

A.    Normal wear and tear.

B.     Poor design or floor plan.

C.     Poor location.

D.    An adjacent, adverse property use.

114. Which principle of value holds that a property can increase or decrease in value in expectation of something in the future?

A.    Conformity

B.     Highest and best use

C.     Anticipation

D.    Contribution

115. Which of the following approaches to value figures the land separately from the value of the improvements?

A.    Market Data.

B.     Cost Approach.

C.     Income Approach.

D.    Functional obsolescence.

116. An office building has a Potential Gross Income of $12,600 per year. The vacancy rate is 5% and the annual expenses are $3,600. What is the market value if the capitalization rate is 12%?

A.    $15,120.00

B.     $69,750.00

C.     $99,750.00

D.    $105,000.00

117. A property’s land-to-improvements value ratio is 20% – 80%. The property was purchased 10 years ago, and depreciation has averaged $1,200 per year on the 3,000 SF house. If the improvements were built @ $120 / SF what is the current value of the property using the cost approach?

A.    $360,000

B.     $420,000

C.     $438,000

D.    $450,000

118. Which of the following is an accurate statement?

A.    To derive Net Operating Income, deduct the annual operating expenses from Annual Gross Income to derive Net Operating Income.

B.     To derive the GRM, net income is used.

C.     To derive the capitalization rate, the value is divided by income.

D.    The GRM and cap rate are equally desirable to an investor in determining a price to offer.

119. Which aspect of depreciation is almost always incurable?

A.    Economic obsolescence

B.     Physical deterioration

C.     Internal obsolescence

D.    Functional obsolescence

120. The metes and bounds method of surveying is based primarily upon:

A.    Survey lines that run east and west.

B.     Survey lines that run north and south.

C.     A map of the subdivision.

D.    A point of beginning.

121. The tax base in a jurisdiction is derived by subtracting exemptions from

A.    sales values.

B.     the tax rate.

C.     assessed values.

D.    residual values.

122. Which method of determining cost adds estimates of material and labor costs to indirect costs to arrive at the total cost of a structure?

A.    Chapter in place

B.     Square foot cost

C.     Reproduction cost

D.    Quantity Survey

123. A tire company has a manufacturing plant located in an area that has just been re-zoned for residential usage. The company is allowed to continue operating the plant under the new zoning classification. However, if the plant is destroyed by fire, the tire company:

A.    May not construct another plant in the neighborhood without first applying for a zoning variance.

B.     May not construct another plant in the neighborhood under any circumstances.

C.     May construct another plant if it obtains the consent of the residents living in the neighborhood.

D.    May construct another plant without the resident’s consent as long as the homeowners’ association approves it.

124. An appraiser deducts $5,000 for a property that has defective wiring. This defect is curable obsolescence, provided that

A.    The repair costs $4,000 to complete.

B.     The repair costs $6,000 to complete.

C.     The defect can be repaired at all.

D.    This defect is inherently incurable due to external obsolescence.

125. For which of these properties would an appraiser most likely choose to use the cost method of appraisal?

A.    Single-family home

B.     Land

C.     Church

D.    Apartment building

126. The concept of economic life is best characterized as

A.    The actual age of a structure or structural component.

B.     The effective age of a structure or structural component.

C.     The anticipated period of time an improvement will last for depreciation purposes.

D.    The anticipated physical life of an improvement as a function of its durability.

127. The depreciation most difficult to remedy would be:

A.    Physical.

B.     Economic.

C.     Functional.

D.    Premise.

128. Functional and economic obsolescence are aspects of

A.    depreciation.

B.     effective age.

C.     land value.

D.    ability to generate income.

129. A building has a potential gross rental income of $145,000 with vending receipts of $5,000 and a vacancy rate of 5%. The annual expenses of the building are $15,000 in taxes, insurance $4,000, maintenance $10,000, utilities $6,000, repairs $3,500, legal fees $1,500, management fees @ 4% of Effective Gross Income. What is the Effective Gross Income of the property?

A.    $135,000

B.     $142,750

C.     $145,000

D.    $162,000

130. The primary survey line running east and west in the rectangular survey system is the:

A.    Township line.

B.     Base line.

C.     Range line.

D.    Principal meridian.

131. Public land use controls in the form of building ordinances are an exercise in the form of:

A.    Eminent domain.

B.     Police power.

C.     Interstate land sales.

D.    Deed restrictions.

132. A 20-unit apartment building rented for $750 per unit, per month. The annual Gross Income Multiplier was 9. What is the value of the property?

A.    $135,000

B.     $1,350,000

C.     $1,800,000

D.    $1,620,000

133. An acre contains:

A.    3840 square feet.

B.     6490 square feet.

C.     34,875 square feet.

D.    43,560 square feet.

134. A developer put two lots together and sold them as one large lot. The increase in value is referred to as:

A.    Appreciation.

B.     Contribution.

C.     Plottage.

D.    Partition.

135. What is the purpose of a homestead tax exemption?

A.    To exempt qualified property owners from ad valorem taxation

B.     To offer some amount of tax relief on an owner’s principal residence

C.     To encourage multiple property investment

D.    To exempt owners of principal residences who rent their properties

136. An apartment building contains twenty units. Each unit rents for $900 per month. The vacancy rate is 5%. Annual expenses are $17,500 for maintenance, $7,200 insurance, $7,500 taxes, $6,400 utilities, $7,500 mortgage debt and 10% of the gross effective income for the management fee. What was the investor’s rate of return for the property if she paid $1,170,000 for the property?

A.    7.6%

B.     8.9%

C.     12.48%

D.    22.05%

137. To find the value of a property using the Income Approach to value, if the Net Operating Income and capitalization rate were known, the appraiser would:

A.    Multiply the Net Operating Income by the capitalization rate.

B.     Multiply the Effective Gross Income by the capitalization rate.

C.     Divide the Net Operating Income by the capitalization rate.

D.    Divide the capitalization rate by the Net Operating Income.

138. A new home sold for $350,000. The tax rate is $.825 per hundred or fraction thereof. How much will the annual taxes be on this property?

A.    $287.00

B.     $287.50

C.     $2,887.00

D.    $2,887.50

139. The best definition of an appraisal is:

A.    A means of determining depreciation.

B.     A method to keep values current with reproduction cost.

C.     A statement of facts that may not be necessarily true.

D.    An estimate of value.

140. A $175,000 house was built next to a $75,000 house. Which of the following principles of value would apply?

A.    Substitution.

B.     Competition.

C.     Progression and Regression.

D.    Anticipation.

141. The primary intent of zoning ordinances is to:

A.    Assure the health, safety and welfare of the community.

B.     Demonstrate the police power of the state.

C.     Limit the amount and types of business in a given area.

D.    Protect residential neighborhoods from commercial encroachment.

142. An improvement to a local restaurant does not comply with the zoning ordinances because it was constructed prior to the adoption of the zoning laws, and its use is one that clearly differs from current zoning. This is known as

A.    an illegal nonconforming use.

B.     a variance.

C.     a special exception.

D.    a legal nonconforming use.

143. A permitted deviation from the standards of a building ordinance is called:

A.    Unlawful non-conforming use.

B.     Variance.

C.     Legal nonconforming use.

D.    Testimonial.

144. An appraiser, using the Cost Approach method would do which of the following?

A.    Make an adjustment if the economic conditions have changed between the date of sale and the date of the appraisal.

B.     Use comparable properties as the basis for the decision.

C.     Use replacement cost minus depreciation.

D.    Use the ability of the property to produce income as the basis of the decision.

145. A house is constructed in a neighborhood that is substantially larger than the existing houses. Based on the value principle of ___________________, the larger house’s value will therefore be adversely affected.

A.    anticipation

B.     conformity

C.     inadequacy

D.    competition

146. A CMA is performed when:

A.    Accessing property.

B.     Pricing property.

C.     Taxing property.

D.    Condemning property.

147. What is a unique characteristic of a special assessment tax?

A.    More valuable properties which stand to benefit will pay proportionately more taxes.

B.     It applies only to properties which will benefit from the public improvement.

C.     The equalization board discounts levies for properties not affected by the public improvement.

D.    It creates an involuntary junior lien on the property.

148. The premise of the Sales Comparison Approach rests on the principle of:

A.    Conformity.

B.     Competition.

C.     Highest and best use.

D.    Substitution.

149. Which of these controls would be used to prevent a neighboring lot owner from violating the recorded deed restrictions in a subdivision?

A.    Zoning.

B.     Injunction.

C.     Police power.

D.    Condemnation.

150. What are ad valorem taxes based on?

A.    The replacement value of property

B.     The assessed value of property

C.     The millage value of property

D.    The broker’s estimate of value

151. What is the fundamental purpose of a building permit?

A.    To restrict the number of new development projects

B.     To establish the basis for an inspection

C.     To ensure that improvements comply with codes

D.    To promote certificates of occupancy

152. How is a homeowner’s total tax bill derived?

A.    Divide the tax requirement by the tax base.

B.     Divide tax dollars needed by the taxable assessed value.

C.     Multiply each district’s tax rate times the taxable value of the owner’s property.

D.    Average the tax rate for each tax district, and then multiply the average tax rate times the assessed value.

153. Which of the following is an example of economic obsolescence?

A.    Four bedrooms and one bath in a house.

B.     Lack of insulation in an apartment building.

C.     A house abutting a closed factory.

D.    Lack of paint on a barn.

154. One way for an appraiser to account for a property’s deterioration is to

A.    Increase the chronological age of the property.

B.     Decrease the chronological age of the property.

C.     Raise the effective age of the property.

D.    Decrease the effective age of the property.

155. Which of the following would be found in a management proposal?

A.    Tenant credit histories

B.     The desired demographic of the property

C.     Schedule of maintenance requirements

D.    A list of all pets residing in the complex

156. What is a disadvantage of real estate investment?

A.    There is very low risk.

B.     It is not highly liquid.

C.     The cost of improvements may be depreciated or deducted over an arbitrary period of time.

D.    Real Estate has shown an above average rate of return.

157. Of the following liens: a $100,000 mortgage, a $2,500 property tax bill, and a $8,000 mechanic’s lien, and a $25,000 judgment lien, which will be paid off first after a foreclosure sale?

A.    The $8,000 mechanic’s lien

B.     The $25,000 judgment lien

C.     The $100,000 mortgage

D.    The $2,500 property tax lien

158. Which of these listing agreement statements is false?

A.    The listing price is listed on the listing agreement.

B.     The seller can change the listing agreement whenever he or she wants.

C.     A listing agreement can be modified, but only if all parties agree in writing.

D.    Contract law applies to listing agreements.

159. If a cooperative corporation cannot pay its bills, what would happen?

A.    Only the residents who have not paid their rents on time can be affected.

B.     The HUD will bail out the struggling cooperative.

C.     The corporation owning the property would be dissolved, and all of the residents could lose their interest in the cooperative.

D.    The cooperative must evict all of the current stock holders.

160. A(n) ________ contract is one that unduly favors the party with superior bargaining power.

A.    equal

B.     dual

C.     reasonable

D.    unconscionable

161. The first step in the appraisal process is to

A.    estimate the value of the land.

B.     state the problem.

C.     analyze the neighborhood.

D.    gather data.

162. Which of the following legal description methods has been used the longest in the US?

A.    The rectangular survey system

B.     The recorded plat system

C.     The British survey system

D.    The metes and bounds system

163. If a cooperating broker accepts the offer of subagency from a listing broker, to whom does the cooperating broker owe fiduciary duties?

A.    Seller

B.     Listing broker

C.     Buyer

D.    Nobody

164. Which statement about a deed in lieu of foreclosure is false?

A.    It gives the borrower an opportunity to change the loan terms.

B.     The borrowers’ credit is hurt less than in a formal foreclosure.

C.     It avoids public notice of the foreclosure.

D.    There is less risk to the lender that the borrower will damage the property in revenge for the loss of the property.

165. The cost to replace an improvement with original materials is known as

A.    replacement cost.

B.     placebo cost.

C.     cloning cost.

D.    reproduction cost.

166. How does the Federal Reserve control lenders?

A.    They set the range of acceptable loan amounts.

B.     All loan underwriters are employed by the Federal Reserve.

C.     They tell lenders what percentage of assets they must keep as reserves.

D.    They set the number of loans that can be made.

167. Alex’s home has been on the market for eight months. What is the most likely reason Alex’s home has not been sold yet?

A.    There has not been enough advertising done by the broker.

B.     The property is overpriced.

C.     The kitchen is ugly and outdated.

D.    The air conditioner is old.

168. Which of these statements about the Americans with Disabilities Act is TRUE?

A.    The Americans with Disabilities Act did not take effect until 2004.

B.     A duplex owner might need to remodel the kitchen in the rental unit to accommodate persons with disabilities.

C.     An apartment manager might be required to allow a tenant with a disability to widen a doorway.

D.    Since most real estate firms are private places, they do not fall into ADA’s definition of a public accommodation.

169. Owner Tom decided to lease out his basement to a college student. By leasing the basement, Tom has

A.    exercised one of his police powers.

B.     permanently transferred his subsurface rights.

C.     transferred a portion of his bundle of rights.

D.    encroached his bundle of rights.

170. New salesperson Juliet has been assigned office duty for Saturday and Sunday. What is another common term for office duty?

A.    Compliance time

B.     Floor time

C.     Chill time

D.    Time-in

171. What type of clause allows a broker to collect a commission for some period of time after the listing expires?

A.    A return on investment clause

B.     A recovery clause

C.     A self-dealing clause

D.    A carryover clause

172. Which of the following statements best describes what happens with a judicial foreclosure?

A.    The mortgaged property is transferred directly to the lender.

B.     The mortgaged property is sold without the supervision of a court.

C.     The mortgaged property is sold under the supervision of a court.

D.    The mortgaged property is transferred directly to the state.

173. When the agency relationship has been terminated, the licensee is no longer considered the principal’s agent and does not owe any further duties to the principal except for

A.    loyalty and accounting.

B.     accounting and confidentiality.

C.     obedience and loyalty.

D.    care and obedience.

174. 160 County Drive has 4 acres of open pasture and a 1,900 square foot home. The home has 2 bedrooms and 4 bathrooms. Call 555-555-5555 now for information! What is missing from this advertisement that makes it a blind ad?

A.    The price

B.     The broker’s identification

C.     The reason the property is for sale

D.    How long the property has been on the market

175. Why would a property with a rectangular system description also have a metes and bounds legal description?

A.    Because the property is irregular in shape

B.     Because the property is larger than 20 acres

C.     Because the law requires it

D.    Because the property is agricultural

176. Should a licensee who represents both the buyer and seller tell the buyer about material defects on the seller’s property?

A.    No, material defects cannot be shared with the buyer when dual agency exists.

B.     Yes, any defects known to the broker should have been disclosed to the buyer.

C.     No, the broker can only disclose material facts that the seller tells him to disclose.

D.    No, caveat emptor would apply in this case.

177. Home Hoarding Realty is advertising to the public that their managing broker has been in the business 37 years and has sold over 1,250 homes. This is an example of

A.    selfish advertising.

B.     product advertising.

C.     institutional advertising.

D.    antitrust advertising.

178. Which of these statements about an independent contractor is false?

A.    A broker cannot tell an independent contractor how to work.

B.     He or she is reimbursed for all business expenses.

C.     He or she is paid commission on all sales.

D.    He or she will have to pay income taxes.

179. Robert owns his property and enjoys the full bundle of rights. Can he use his property as collateral for debt?

A.    Yes, Robert can encumber the property, but only if the debt is less than $10,000.

B.     Yes, Robert can encumber his property.

C.     No, Robert cannot encumber his property.

D.    Yes, Robert can encumber the property, but only if the debt is more than $50,000.

180. Broker Torrey hires salesperson Wes as an independent contractor. As an independent contractor, Wes can expect which of the following from Broker Torrey?

A.    Company laptop

B.     Performance expectations

C.     Paid time off

D.    Healthcare policy

181. Broker Jack has an agreement with seller Mauve that says Jack will receive compensation if anyone except Mauve sells Mauve’s home. This is an example of

A.    enclave agency.

B.     exclusive agency.

C.     net agency.

D.    exclusive right to sell agency.

182. Broker Ron wants to open a separate escrow account for each transaction he is involved in. Is this legal?

A.    No, only lawyers and trust companies can open escrow accounts.

B.     No, each broker can only have one escrow account.

C.     Yes, this is legal unless he has more than three escrow accounts open at once.

D.    Yes, there is no legal limit on the number of escrow accounts a broker can have.

183. What is the most common lease term for space in an office building?

A.    3-6 months

B.     2 years

C.     1 year

D.    3-5 years

184. If a comparable has one less bathroom than the subject, an adjustment is made by

A.    adding value to the subject.

B.     deducting value from the subject.

C.     adding value to the comparable.

D.    deducting value from the comparable.

185. Under the _______ of recording, title passes when the conveyance is registered on the title certificate.

A.    Binder system

B.     Torrens system

C.     Metes system

D.    Meridans system

186. In the appraisal process, looking at the number of recreational facilities, the distances to schools and adequacy of public transportation is called

A.    demographic analysis.

B.     market data approach.

C.     neighborhood analysis.

D.    comparative market analysis.

187. Which is false regarding a promissory note?

A.    The property is collateral for the promissory note.

B.     A promissory note is a negotiable instrument, which means that the lender can sell the note to a third party.

C.     It is the primary evidence of a loan.

D.    It is the term used for a note that is guaranteed or insured by a governmental agency.

188. The system of land ownership in the United States is known as what?

A.    The allodial system

B.     The feudal system

C.     The aristocratic system

D.    The riparian system

189. The assessed value of Sidney’s home is $350,000 but the home was recently appraised at $225,000. As a result, Sidney believes her tax bill is way too high. What option does Sidney have?

A.    She can file a complaint with the local board of assessment review.

B.     She can opt to pay her tax bill based on the appraisal of $225,000.

C.     She must file an appeal to adjust the millage rate.

D.    Sidney has no option and must simply pay the large tax bill.

190. How might a voidable contract become valid?

A.    If the party who has reason to disaffirm the contract elects instead to perform it

B.     If neither party agrees to the terms

C.     If the party who wants to enforce the contract seeks damages

D.    If the party who wants to enforce the contract seeks legal relief

191. Seller Monica is selling her property to Harriet. What is Monica’s primary responsibility at closing?

A.    To deliver marketable title

B.     To ensure the closing is conducted properly

C.     To ensure her agent gets paid

D.    To sign Harriet’s new mortgage documents

192. Why is designated agency a good alternative to traditional dual agency?

A.    Fair housing laws do not apply to transactions involving designated agency.

B.     Even though the same broker represents each party, both the buyer and seller have a licensee who exclusively acts as their agent in the transaction.

C.     Designated agency is legal in all 50 states while dual agency is banned in every state.

D.    Only the broker is involved in the transaction and the parties do not have an exclusive agent.

193. Which parties typically purchase title insurance once the transaction is complete?

A.    The HUD and seller

B.     The lender and buyer

C.     The licensee and buyer

D.    The broker and lender

194. Justin defaulted on his home mortgage payments. The lender obtained a court order to foreclose on the property. At the foreclosure sale, Justin’s house sold for $339,000 and the unpaid balance of his loan is $400,000. What must the lender do to recover the $61,000 Justin still owes?

A.    Nothing, they cannot recover the $61,000.

B.     Seek a deficiency judgment.

C.     Contact their state’s Recovery Fund for compensation.

D.    Seek a quitclaim suit.

195. A seller decided to back out of a sales contract for no good reason. What recourse does the buyer have?

A.    To sue for specific performance

B.     To sue the state’s Recovery Fund

C.     No recourse

D.    To sue the seller’s broker for breaking the contract

196. Which of the following statements is false regarding a tenancy in common?

A.    The co-owners must be married.

B.     The tenants share an indivisible interest.

C.     All tenants in common have distinct and separable ownership of their respective interests.

D.    Any number of people may be co-tenants in a single property.

197. Vicky was posing as a customer of Establishment Realty. However, she was really there to see if Establishment Realty was following fair housing laws. Vicky was a

A.    tester.

B.     block watcher.

C.     yellowliner.

D.    checker.

198. Gerald is 55, single, and resides on his 3 acre property. Why will Gerald qualify for a homestead exemption?

A.    Because he is over 50 years old

B.     Because he is single

C.     Because he lives on the property

D.    Because the property is larger than 1 acre

199. An income producing property rents for $2,790 per month and the GRM is 97. What is the estimated market value of the property?

A.    $270,630

B.     $287,370

C.     $1,004,400

D.    $301,550

200. Broker Jon is attaching a rider strip to a For Sale sign. What information is most likely on this rider strip?

A.    Jon’s license number

B.     A picture of Jon

C.     The owner’s phone number

D.    Jon’s cell phone number

201. Neal’s home has been foreclosed on and sold at a Sheriff’s sale. The sale brought in $500,000 and the total liabilities on the home were $425,000. Who receives the additional $75,000?

A.    The lender

B.     Neal

C.     The purchaser of the property

D.    The state’s Real Estate Commission or Recovery Fund

202. A(n) ________ is one that conflicts with the ordinances that were enacted after the use commenced.

A.    illegal conforming use

B.     enhanced nonconforming use

C.     escheat use

D.    legal nonconforming use

203. The size of jurisdiction’s tax base is derived by

A.    adding exemptions to market values.

B.     dividing the number of eligible properties by the total number of properties.

C.     subtracting exemptions from assessed values.

D.    multiplying the total income of the jurisdiction’s property owners by the millage rate.

204. A written pledge by a lender to lend a certain amount of money to a qualified borrower on a particular piece of real estate for a specified time under specific terms is a(n)

A.    bridge approval.

B.     delivered approval.

C.     conditional approval.

D.    permanent acceptance.

205. Under what type of contract is a seller obligated to sell, but the buyer is not obligated to buy?

A.    Bilateral

B.     Option

C.     Chance

D.    Recovery

206. Non-judicial foreclosure is required to foreclose on a

A.    Deed of Recovery.

B.     Chain Deed.

C.     Deed of Trust.

D.    Deed of Liability.

207. What is the balance on an amortized loan of $780,000 after the first payment if the interest rate is 5% with a monthly P&I payment of $3,780?

A.    $779,470

B.     $776,220

C.     $776,750

D.    $779,121

208. Homeowner Louise has been lax in protecting her property rights. According to the ___________, Louise may lose those property rights.

A.    Doctrine of De Jure

B.     Doctrine of Laches

C.     Stringent Theory

D.    Torrens Theory

209. Which of the following would be considered community property in a community property state?

A.    A car the spouses bought together after the marriage

B.     Income received from stocks owned by one spouse

C.     Property inherited by one spouse after the marriage

D.    A coin collection bought by a spouse before the marriage

210. One of the major considerations in a master plan is

A.    how to best maximize tax revenue.

B.     the effect of new development on traffic patterns and the environment.

C.     the effect on the voting boundaries of an area.

D.    the effect on the culture of an area.

211. Which clause protects a lender if he does not want the loan to be assumed by another party?

A.    Abandonment

B.     Subordination

C.     Satisfaction

D.    Alienation

212. Which of the following is a valuable skill for a property manager to have?

A.    Knowledge of building systems

B.     Knowledge of how to steer tenants into specific buildings

C.     Knowledge of appraisal

D.    Knowledge of mortgage disclosure

213. A tenant who stays beyond his lease without consent of the landlord is known as

A.    a tenant at request.

B.     a freeload tenant.

C.     a tenant at sufferance.

D.    an encroaching tenant.

214. Which principle is used with the Sales Comparison Approach to value?

A.    Substitution

B.     Anticipation

C.     Contribution

D.    Assemblage

215. A town is replacing a sidewalk that serves eight homes. The length of the sidewalk is 900 feet. Laura’s property has 60 feet of the sidewalk. If the cost of the project to be paid by a special assessment is $18,000, what will Laura’s assessment be?

A.    $775

B.     $900

C.     $1,200

D.    $2,400

216. A cooperative is

A.    a type of residential property.

B.     a type of commercial property.

C.     a hybrid between residential and recreational property.

D.    a type of institutional property.

217. Ownership of a property reverted to the grantor of the estate when its usage failed to conform to a stated condition in the grant. What type of estate existed?

A.    Fee simple defeasible

B.     Freehold estate with reversion

C.     Life estate with condition subsequent

D.    Fee simple absolute

218. “This property has the best view in the entire county.” This statement is an example of

A.    fraud.

B.     unintentional misrepresentation.

C.     puffing.

D.    a fair housing violation.

219. A property has a Gross Income Multiplier of 14, and value of $800,000. What is its annual income?

A.    $50,000

B.     $57,143

C.     $66,667

D.    $11,200,000

220. Carla has been walking across a path on John’s property for the past 22 years. John knows about this but has never given Carla permission. What might a court grant to Carla?

A.    An easement by necessity

B.     An easement by prescription

C.     An encroachment by necessity

D.    Ownership by prescription

221. Which of the following best describes the principle of conformity?

A.    The value of a home increases when the supply is short.

B.     A home maintains its highest value by being in a neighborhood with similar-type housing.

C.     A property will decrease in value if there are rumors of a zoning change.

D.    Valuewise, it is best for a neighborhood to have little demographic diversity.

222. Who can qualify for an FHA loan?

A.    Eligible veterans only, or widows of veterans who have not remarried

B.     People with a net worth over $1,000,000

C.     Anyone with qualified income

D.    Only members of protected classes

223. Francis just signed the papers on a conventional 30-year, $210,000 loan. He was wondering what type of interest will he be paying on the loan. What is the correct answer?

A.    Complex interest

B.     Simple interest

C.     Revolving interest

D.    Repetitive interest

224. Why is the condition of bearing walls more important than non-bearing walls?

A.    Bearing walls protect the home from the outdoor elements and radon gas.

B.     Bearing walls are part of the interior framework of the house.

C.     Bearing walls support the ceiling and the roof.

D.    Bearing walls are much weaker than non-bearing walls.

225. Jordan has a month-to-month lease with landlord Greg. What type of lease did Jordan sign?

A.    Estate from period-to-period

B.     Estate at sufferance

C.     Estate at will

D.    Estate at easement

226. Unlike buyer/seller agency agreements that create _________, the management agreement creates ________.

A.    general agency, special agency

B.     universal agency, special agency

C.     special agency, universal agency

D.    special agency, general agency

227. Bobbie decided to redeem her property after a tax sale. Bobbie exercised her

A.    legal right of rescission.

B.     statutory right of redemption.

C.     optional right of disclosure.

D.    required right of recourse.

228. A broker induces an owner to sell by telling him that Muslims are moving into the neighborhood. This broker is guilty of

A.    greenlining.

B.     conversion.

C.     testing.

D.    blockbusting.

229. What is another common name for the lot and block system of legal descriptions?

A.    The metes and bounds system

B.     The recorded plat method

C.     The urban survey system

D.    The triangular plat method

230. Which of these activities is appropriate to do within the first few days of obtaining a listing?

A.    Discuss modifying the listing price.

B.     Discuss the protected classes the sellers do not want to show the home to.

C.     Require the sellers to pay for a formal appraisal.

D.    Have the managing broker send a “thank you for listing” letter to the sellers.

231. Mary abandoned her property by failing to pay its property taxes, and the property reverted to the state. This is an example of

A.    condemnation.

B.     a zoning exception.

C.     escheat.

D.    eminent domain.

232. How does Planned Unit Development zoning differ from ordinary zoning?

A.    It applies only to residential and commercial properties.

B.     It is organized by HUD instead of local zoning committees.

C.     It requires developers to obtain a separate building permit for every structure.

D.    It requires that multiple tracts of land be developed according to a single design for efficient use of space.

233. Morgan owned a large condominium on the ocean. She died and no legal heirs were found. Who will receive title to the property?

A.    The state or county

B.     The previous owner of the condominium unit

C.     The Federal Government

D.    The developer of the condominium complex

234. On a $280,000 loan, the lender charges a 2 point service charge. How much does the borrower have to pay for just these two points?

A.    $28,000

B.     $560

C.     $2,800

D.    $5,600

235. Given the net income of a property, the appraiser can determine an opinion of the value for that property by

A.    multiplying by the rate of depreciation.

B.     multiplying by the rate of economic appreciation.

C.     dividing by the percent of capital gains.

D.    dividing by the rate of capitalization.

236. Which of these is a violation of Sherman Antitrust laws?

A.    Commingling

B.     Zoning

C.     Redlining

D.    Market allocation

237. Which of the following types of property sales typically requires a property condition disclosure?

A.    A transfer of an interest that is less than fee simple

B.     A foreclosure or deed-in-lieu of foreclosure

C.     A property transferred to the seller’s parent

D.    A three unit, multi-family dwelling

238. What are the primary advantages of PEX piping?

A.    PEX piping is lightweight but not flexible.

B.     PEX piping is able to withstand both high and low temperatures and it is highly resistant to chemicals.

C.     PEX piping is strong and sturdy.

D.    PEX piping is ideal for septic systems and sewer systems.

239. A buyer told broker Lena that she wants to move to a Cuban neighborhood. Then the buyer asked if Lena could show her the best home in a Cuban area. How should Lena respond to this request?

A.    Lena should comply with this request to the best of her abilities.

B.     Lena should explain to the buyer that she ethically and legally cannot recommend housing based on national origin.

C.     Lena should not answer the question unless the buyer offers to pay her more.

D.    Lena should refer the buyer to a brokerage that can legally steer buyers.

240. What is a forecast of income and expenses that can be projected over five years?

A.    Cash flow statement

B.     Stabilized budget

C.     Balance Sheet

D.    Capital budget

241. Which of the following would qualify as an example of retail property?

A.    A hospital

B.     A farm

C.     A shopping center

D.    A warehouse

242. Escrow moneys should be held in the broker’s

A.    business account.

B.     personal account.

C.     escrow account.

D.    safe.

243. A type of mortgage which allows the lender to increase the outstanding balance of a loan up to the original amount of the loan in order to advance additional funds is called an

A.    wraparound mortgage.

B.     take-out mortgage.

C.     open-end mortgage.

D.    spiral mortgage.

244. Which form does RESPA require lenders to use to detail the costs that the buyer and seller will pay at closing?

A.    Loan Estimate

B.     Truth-in-Lending Form

C.     Closing Disclosure

D.    RESPA Settlement Statement

245. Broker Austin represents a party in a transaction where there is a dispute regarding the deposited escrow money. What should Austin do?

A.    Hold the money until both parties (or their lawyers) provide a written release.

B.     Claim the escrow money for himself and move it into his personal account.

C.     Split the money evenly between the buyer and seller and let them fight it out.

D.    Immediately release the money to the party he represents.

246. The cost of doing direct mail advertising depends on

A.    the amount you have to pay the state’s Real Estate Commission for approval.

B.     the frequency of the mailings.

C.     the percent of people that reply.

D.    the date of the mailing.

247. Which of the following wills may be considered invalid?

A.    A will written by someone who is only 23

B.     A will that is not signed

C.     A will that is indicated to be a “last will and testament”

D.    A will that has been completed voluntarily

248. What type of agency cannot be revoked by the principal, nor is terminated if the principal dies?

A.    Dual agency

B.     Universal agency

C.     Agency coupled with an interest

D.    Agency coupled with fraud

249. What is the definition of “valuable consideration” in regard to contract validity?

A.    Cash or cash equivalents

B.     Tangible goods

C.     Something specifically offered in exchange for something else

D.    Something offered by only one party

250. Real estate licensees should know enough about building ordinances to be able to

A.    conduct a professional home inspection.

B.     provide solid legal advice.

C.     answer all client questions about a building’s compliance.

D.    alert clients of potential problems in a home.

251. The Quarry Mountain Subdivision requires all properties to have fences that are at least 8 feet tall surrounding each property. This is an example of

A.    a zoning restriction.

B.     an easement.

C.     escheat.

D.    a deed restriction.

252. The essential criteria for an acceptable legal description is that it

A.    only contains the mailing address.

B.     accurately locates the parcel when using Google Maps.

C.     accurately locates the parcel in the opinion of a court.

D.    includes at least 2 landmarks.

253. Licensee Alex only represents the buyer in a transaction. What is Alex called in this situation?

A.    A listing agent

B.     A dual agent

C.     A single agent

D.    A married agent

254. Earl orally agreed to a 18-month lease with landlord Blake. Is this contract enforceable?

A.    Yes, all oral leases are enforceable.

B.     No, all leases for longer than one year must be in writing to be enforceable.

C.     Yes, all leases for longer than 6 months are enforceable.

D.    No, it is not enforceable unless Earl is older than 50 years old.

Ch8 National Practice Exam (Questions ONLY, ANSWERS WILL BE REVEALED WITH PROPER SUBSCRIPTION)

Tip: to find a certain word or key term,  press at the same time, the buttons:

( Ctrl and F ) on Windows computers

(Command and F ) on Mac computer

to bring up the in-page search box

1 of 100 Which of the following would be found in a management proposal?

A.    Tenant credit histories

B.     The desired demographic of the property

C.     Schedule of maintenance requirements

D.    A list of all pets residing in the complex

2 of 100 What is a disadvantage of real estate investment?

A.    There is very low risk.

B.     It is not highly liquid.

C.     The cost of improvements may be depreciated or deducted over an arbitrary period of time.

D.    Real Estate has shown an above average rate of return.

3 of 100 Of the following liens: a $100,000 mortgage, a $2,500 property tax bill, and a $8,000 mechanic’s lien, and a $25,000 judgment lien, which will be paid off first after a foreclosure sale?

A.    The $8,000 mechanic’s lien

B.     The $25,000 judgment lien

C.     The $100,000 mortgage

D.    The $2,500 property tax lien

4 of 100 Which of these listing agreement statements is false?

A.    The listing price is listed on the listing agreement.

B.     The seller can change the listing agreement whenever he or she wants.

C.     A listing agreement can be modified, but only if all parties agree in writing.

D.    Contract law applies to listing agreements.

5 of 100 If a cooperative corporation cannot pay its bills, what would happen?

A.    Only the residents who have not paid their rents on time can be affected.

B.     The HUD will bail out the struggling cooperative.

C.     The corporation owning the property would be dissolved, and all of the residents could lose their interest in the cooperative.

D.    The cooperative must evict all of the current stock holders.

6 of 100 A(n) ________ contract is one that unduly favors the party with superior bargaining power.

A.    equal

B.     dual

C.     reasonable

D.    unconscionable

7 of 100 The first step in the appraisal process is to

A.    estimate the value of the land.

B.     state the problem.

C.     analyze the neighborhood.

D.    gather data.

8 of 100 Which of the following legal description methods has been used the longest in the US?

A.    The rectangular survey system

B.     The recorded plat system

C.     The British survey system

D.    The metes and bounds system

9 of 100 If a cooperating broker accepts the offer of subagency from a listing broker, to whom does the cooperating broker owe fiduciary duties?

A.    Seller

B.     Listing broker

C.     Buyer

D.    Nobody

10 of 100 Which statement about a deed in lieu of foreclosure is false?

A.    It gives the borrower an opportunity to change the loan terms.

B.     The borrowers’ credit is hurt less than in a formal foreclosure.

C.     It avoids public notice of the foreclosure.

D.    There is less risk to the lender that the borrower will damage the property in revenge for the loss of the property.

11 of 100 The cost to replace an improvement with original materials is known as

A.    replacement cost.

B.     placebo cost.

C.     cloning cost.

D.    reproduction cost.

12 of 100 How does the Federal Reserve control lenders?

A.    They set the range of acceptable loan amounts.

B.     All loan underwriters are employed by the Federal Reserve.

C.     They tell lenders what percentage of assets they must keep as reserves.

D.    They set the number of loans that can be made.

13 of 100 Alex’s home has been on the market for eight months. What is the most likely reason Alex’s home has not been sold yet?

A.    There has not been enough advertising done by the broker.

B.     The property is overpriced.

C.     The kitchen is ugly and outdated.

D.    The air conditioner is old.

14 of 100 Which of these statements about the Americans with Disabilities Act is TRUE?

A.    The Americans with Disabilities Act did not take effect until 2004.

B.     A duplex owner might need to remodel the kitchen in the rental unit to accommodate persons with disabilities.

C.     An apartment manager might be required to allow a tenant with a disability to widen a doorway.

D.    Since most real estate firms are private places, they do not fall into ADA’s definition of a public accommodation.

15 of 100 Owner Tom decided to lease out his basement to a college student. By leasing the basement, Tom has

A.    exercised one of his police powers.

B.     permanently transferred his subsurface rights.

C.     transferred a portion of his bundle of rights.

D.    encroached his bundle of rights.

16 of 100 New salesperson Juliet has been assigned office duty for Saturday and Sunday. What is another common term for office duty?

A.    Compliance time

B.     Floor time

C.     Chill time

D.    Time-in

17 of 100 What type of clause allows a broker to collect a commission for some period of time after the listing expires?

A.    A return on investment clause

B.     A recovery clause

C.     A self-dealing clause

D.    A carryover clause

18 of 100 Which of the following statements best describes what happens with a judicial foreclosure?

A.    The mortgaged property is transferred directly to the lender.

B.     The mortgaged property is sold without the supervision of a court.

C.     The mortgaged property is sold under the supervision of a court.

D.    The mortgaged property is transferred directly to the state.

19 of 100 When the agency relationship has been terminated, the licensee is no longer considered the principal’s agent and does not owe any further duties to the principal except for

A.    loyalty and accounting.

B.     accounting and confidentiality.

C.     obedience and loyalty.

D.    care and obedience.

20 of 100 160 County Drive has 4 acres of open pasture and a 1,900 square foot home. The home has 2 bedrooms and 4 bathrooms. Call 555-555-5555 now for information! What is missing from this advertisement that makes it a blind ad?

A.    The price

B.     The broker’s identification

C.     The reason the property is for sale

D.    How long the property has been on the market

21 of 100 Why would a property with a rectangular system description also have a metes and bounds legal description?

A.    Because the property is irregular in shape

B.     Because the property is larger than 20 acres

C.     Because the law requires it

D.    Because the property is agricultural

22 of 100 Should a licensee who represents both the buyer and seller tell the buyer about material defects on the seller’s property?

A.    No, material defects cannot be shared with the buyer when dual agency exists.

B.     Yes, any defects known to the broker should have been disclosed to the buyer.

C.     No, the broker can only disclose material facts that the seller tells him to disclose.

D.    No, caveat emptor would apply in this case.

23 of 100 Home Hoarding Realty is advertising to the public that their managing broker has been in the business 37 years and has sold over 1,250 homes. This is an example of

A.    selfish advertising.

B.     product advertising.

C.     institutional advertising.

D.    antitrust advertising.

24 of 100 Which of these statements about an independent contractor is false?

A.    A broker cannot tell an independent contractor how to work.

B.     He or she is reimbursed for all business expenses.

C.     He or she is paid commission on all sales.

D.    He or she will have to pay income taxes.

25 of 100 Robert owns his property and enjoys the full bundle of rights. Can he use his property as collateral for debt?

A.    Yes, Robert can encumber the property, but only if the debt is less than $10,000.

B.     Yes, Robert can encumber his property.

C.     No, Robert cannot encumber his property.

D.    Yes, Robert can encumber the property, but only if the debt is more than $50,000.

26 of 100 Broker Torrey hires salesperson Wes as an independent contractor. As an independent contractor, Wes can expect which of the following from Broker Torrey?

A.    Company laptop

B.     Performance expectations

C.     Paid time off

D.    Healthcare policy

27 of 100 Broker Jack has an agreement with seller Mauve that says Jack will receive compensation if anyone except Mauve sells Mauve’s home. This is an example of

A.    enclave agency.

B.     exclusive agency.

C.     net agency.

D.    exclusive right to sell agency.

28 of 100 Broker Ron wants to open a separate escrow account for each transaction he is involved in. Is this legal?

A.    No, only lawyers and trust companies can open escrow accounts.

B.     No, each broker can only have one escrow account.

C.     Yes, this is legal unless he has more than three escrow accounts open at once.

D.    Yes, there is no legal limit on the number of escrow accounts a broker can have.

29 of 100 What is the most common lease term for space in an office building?

A.    3-6 months

B.     2 years

C.     1 year

D.    3-5 years

30 of 100 If a comparable has one less bathroom than the subject, an adjustment is made by

A.    adding value to the subject.

B.     deducting value from the subject.

C.     adding value to the comparable.

D.    deducting value from the comparable.

31 of 100 Under the _______ of recording, title passes when the conveyance is registered on the title certificate.

A.    Binder system

B.     Torrens system

C.     Metes system

D.    Meridans system

32 of 100 In the appraisal process, looking at the number of recreational facilities, the distances to schools and adequacy of public transportation is called

A.    demographic analysis.

B.     market data approach.

C.     neighborhood analysis.

D.    comparative market analysis.

33 of 100 Which is false regarding a promissory note?

A.    The property is collateral for the promissory note.

B.     A promissory note is a negotiable instrument, which means that the lender can sell the note to a third party.

C.     It is the primary evidence of a loan.

D.    It is the term used for a note that is guaranteed or insured by a governmental agency.

34 of 100 The system of land ownership in the United States is known as what?

A.    The allodial system

B.     The feudal system

C.     The aristocratic system

D.    The riparian system

35 of 100 The assessed value of Sidney’s home is $350,000 but the home was recently appraised at $225,000. As a result, Sidney believes her tax bill is way too high. What option does Sidney have?

A.    She can file a complaint with the local board of assessment review.

B.     She can opt to pay her tax bill based on the appraisal of $225,000.

C.     She must file an appeal to adjust the millage rate.

D.    Sidney has no option and must simply pay the large tax bill.

36 of 100 How might a voidable contract become valid?

A.    If the party who has reason to disaffirm the contract elects instead to perform it

B.     If neither party agrees to the terms

C.     If the party who wants to enforce the contract seeks damages

D.    If the party who wants to enforce the contract seeks legal relief

37 of 100 Seller Monica is selling her property to Harriet. What is Monica’s primary responsibility at closing?

A.    To deliver marketable title

B.     To ensure the closing is conducted properly

C.     To ensure her agent gets paid

D.    To sign Harriet’s new mortgage documents

38 of 100 Why is designated agency a good alternative to traditional dual agency?

A.    Fair housing laws do not apply to transactions involving designated agency.

B.     Even though the same broker represents each party, both the buyer and seller have a licensee who exclusively acts as their agent in the transaction.

C.     Designated agency is legal in all 50 states while dual agency is banned in every state.

D.    Only the broker is involved in the transaction and the parties do not have an exclusive agent.

39 of 100 Which parties typically purchase title insurance once the transaction is complete?

A.    The HUD and seller

B.     The lender and buyer

C.     The licensee and buyer

D.    The broker and lender

40 of 100 Justin defaulted on his home mortgage payments. The lender obtained a court order to foreclose on the property. At the foreclosure sale, Justin’s house sold for $339,000 and the unpaid balance of his loan is $400,000. What must the lender do to recover the $61,000 Justin still owes?

A.    Nothing, they cannot recover the $61,000.

B.     Seek a deficiency judgment.

C.     Contact their state’s Recovery Fund for compensation.

D.    Seek a quitclaim suit.

41 of 100 A seller decided to back out of a sales contract for no good reason. What recourse does the buyer have?

A.    To sue for specific performance

B.     To sue the state’s Recovery Fund

C.     No recourse

D.    To sue the seller’s broker for breaking the contract

42 of 100 Which of the following statements is false regarding a tenancy in common?

A.    The co-owners must be married.

B.     The tenants share an indivisible interest.

C.     All tenants in common have distinct and separable ownership of their respective interests.

D.    Any number of people may be co-tenants in a single property.

43 of 100 Vicky was posing as a customer of Establishment Realty. However, she was really there to see if Establishment Realty was following fair housing laws. Vicky was a

A.    tester.

B.     block watcher.

C.     yellowliner.

D.    checker.

44 of 100 Gerald is 55, single, and resides on his 3 acre property. Why will Gerald qualify for a homestead exemption?

A.    Because he is over 50 years old

B.     Because he is single

C.     Because he lives on the property

D.    Because the property is larger than 1 acre

45 of 100 An income producing property rents for $2,790 per month and the GRM is 97. What is the estimated market value of the property?

A.    $270,630

B.     $287,370

C.     $1,004,400

D.    $301,550

46 of 100 Broker Jon is attaching a rider strip to a For Sale sign. What information is most likely on this rider strip?

A.    Jon’s license number

B.     A picture of Jon

C.     The owner’s phone number

D.    Jon’s cell phone number

47 of 100 Neal’s home has been foreclosed on and sold at a Sheriff’s sale. The sale brought in $500,000 and the total liabilities on the home were $425,000. Who receives the additional $75,000?

A.    The lender

B.     Neal

C.     The purchaser of the property

D.    The state’s Real Estate Commission or Recovery Fund

48 of 100 A(n) ________ is one that conflicts with the ordinances that were enacted after the use commenced.

A.    illegal conforming use

B.     enhanced nonconforming use

C.     escheat use

D.    legal nonconforming use

49 of 100 The size of jurisdiction’s tax base is derived by

A.    adding exemptions to market values.

B.     dividing the number of eligible properties by the total number of properties.

C.     subtracting exemptions from assessed values.

D.    multiplying the total income of the jurisdiction’s property owners by the millage rate.

50 of 100 A written pledge by a lender to lend a certain amount of money to a qualified borrower on a particular piece of real estate for a specified time under specific terms is a(n)

A.    bridge approval.

B.     delivered approval.

C.     conditional approval.

D.    permanent acceptance.

51 of 100 Under what type of contract is a seller obligated to sell, but the buyer is not obligated to buy?

A.    Bilateral

B.     Option

C.     Chance

D.    Recovery

52 of 100 Non-judicial foreclosure is required to foreclose on a

A.    Deed of Recovery.

B.     Chain Deed.

C.     Deed of Trust.

D.    Deed of Liability.

53 of 100 What is the balance on an amortized loan of $780,000 after the first payment if the interest rate is 5% with a monthly P&I payment of $3,780?

A.    $779,470

B.     $776,220

C.     $776,750

D.    $779,121

54 of 100 Homeowner Louise has been lax in protecting her property rights. According to the ___________, Louise may lose those property rights.

A.    Doctrine of De Jure

B.     Doctrine of Laches

C.     Stringent Theory

D.    Torrens Theory

55 of 100 Which of the following would be considered community property in a community property state?

A.    A car the spouses bought together after the marriage

B.     Income received from stocks owned by one spouse

C.     Property inherited by one spouse after the marriage

D.    A coin collection bought by a spouse before the marriage

56 of 100 One of the major considerations in a master plan is

A.    how to best maximize tax revenue.

B.     the effect of new development on traffic patterns and the environment.

C.     the effect on the voting boundaries of an area.

D.    the effect on the culture of an area.

57 of 100 Which clause protects a lender if he does not want the loan to be assumed by another party?

A.    Abandonment

B.     Subordination

C.     Satisfaction

D.    Alienation

58 of 100 Which of the following is a valuable skill for a property manager to have?

A.    Knowledge of building systems

B.     Knowledge of how to steer tenants into specific buildings

C.     Knowledge of appraisal

D.    Knowledge of mortgage disclosure

59 of 100 A tenant who stays beyond his lease without consent of the landlord is known as

A.    a tenant at request.

B.     a freeload tenant.

C.     a tenant at sufferance.

D.    an encroaching tenant.

60 of 100 Which principle is used with the Sales Comparison Approach to value?

A.    Substitution

B.     Anticipation

C.     Contribution

D.    Assemblage

61 of 100 A town is replacing a sidewalk that serves eight homes. The length of the sidewalk is 900 feet. Laura’s property has 60 feet of the sidewalk. If the cost of the project to be paid by a special assessment is $18,000, what will Laura’s assessment be?

A.    $775

B.     $900

C.     $1,200

D.    $2,400

62 of 100 A cooperative is

A.    a type of residential property.

B.     a type of commercial property.

C.     a hybrid between residential and recreational property.

D.    a type of institutional property.

63 of 100 Ownership of a property reverted to the grantor of the estate when its usage failed to conform to a stated condition in the grant. What type of estate existed?

A.    Fee simple defeasible

B.     Freehold estate with reversion

C.     Life estate with condition subsequent

D.    Fee simple absolute

64 of 100 “This property has the best view in the entire county.” This statement is an example of

A.    fraud.

B.     unintentional misrepresentation.

C.     puffing.

D.    a fair housing violation.

65 of 100 A property has a Gross Income Multiplier of 14, and value of $800,000. What is its annual income?

A.    $50,000

B.     $57,143

C.     $66,667

D.    $11,200,000

66 of 100 Carla has been walking across a path on John’s property for the past 22 years. John knows about this but has never given Carla permission. What might a court grant to Carla?

A.    An easement by necessity

B.     An easement by prescription

C.     An encroachment by necessity

D.    Ownership by prescription

67 of 100 Which of the following best describes the principle of conformity?

A.    The value of a home increases when the supply is short.

B.     A home maintains its highest value by being in a neighborhood with similar-type housing.

C.     A property will decrease in value if there are rumors of a zoning change.

D.    Valuewise, it is best for a neighborhood to have little demographic diversity.

68 of 100 Who can qualify for an FHA loan?

A.    Eligible veterans only, or widows of veterans who have not remarried

B.     People with a net worth over $1,000,000

C.     Anyone with qualified income

D.    Only members of protected classes

69 of 100 Francis just signed the papers on a conventional 30-year, $210,000 loan. He was wondering what type of interest will he be paying on the loan. What is the correct answer?

A.    Complex interest

B.     Simple interest

C.     Revolving interest

D.    Repetitive interest

70 of 100 Why is the condition of bearing walls more important than non-bearing walls?

A.    Bearing walls protect the home from the outdoor elements and radon gas.

B.     Bearing walls are part of the interior framework of the house.

C.     Bearing walls support the ceiling and the roof.

D.    Bearing walls are much weaker than non-bearing walls.

71 of 100 Jordan has a month-to-month lease with landlord Greg. What type of lease did Jordan sign?

A.    Estate from period-to-period

B.     Estate at sufferance

C.     Estate at will

D.    Estate at easement

72 of 100 Unlike buyer/seller agency agreements that create _________, the management agreement creates ________.

A.    general agency, special agency

B.     universal agency, special agency

C.     special agency, universal agency

D.    special agency, general agency

73 of 100 Bobbie decided to redeem her property after a tax sale. Bobbie exercised her

A.    legal right of rescission.

B.     statutory right of redemption.

C.     optional right of disclosure.

D.    required right of recourse.

74 of 100 A broker induces an owner to sell by telling him that Muslims are moving into the neighborhood. This broker is guilty of

A.    greenlining.

B.     conversion.

C.     testing.

D.    blockbusting.

75 of 100 What is another common name for the lot and block system of legal descriptions?

A.    The metes and bounds system

B.     The recorded plat method

C.     The urban survey system

D.    The triangular plat method

76 of 100 Which of these activities is appropriate to do within the first few days of obtaining a listing?

A.    Discuss modifying the listing price.

B.     Discuss the protected classes the sellers do not want to show the home to.

C.     Require the sellers to pay for a formal appraisal.

D.    Have the managing broker send a “thank you for listing” letter to the sellers.

77 of 100 Mary abandoned her property by failing to pay its property taxes, and the property reverted to the state. This is an example of

A.    condemnation.

B.     a zoning exception.

C.     escheat.

D.    eminent domain.

78 of 100 How does Planned Unit Development zoning differ from ordinary zoning?

A.    It applies only to residential and commercial properties.

B.     It is organized by HUD instead of local zoning committees.

C.     It requires developers to obtain a separate building permit for every structure.

D.    It requires that multiple tracts of land be developed according to a single design for efficient use of space.

79 of 100 Morgan owned a large condominium on the ocean. She died and no legal heirs were found. Who will receive title to the property?

A.    The state or county

B.     The previous owner of the condominium unit

C.     The Federal Government

D.    The developer of the condominium complex

80 of 100 On a $280,000 loan, the lender charges a 2 point service charge. How much does the borrower have to pay for just these two points?

A.    $28,000

B.     $560

C.     $2,800

D.    $5,600

81 of 100 Given the net income of a property, the appraiser can determine an opinion of the value for that property by

A.    multiplying by the rate of depreciation.

B.     multiplying by the rate of economic appreciation.

C.     dividing by the percent of capital gains.

D.    dividing by the rate of capitalization.

82 of 100 Which of these is a violation of Sherman Antitrust laws?

A.    Commingling

B.     Zoning

C.     Redlining

D.    Market allocation

83 of 100 Which of the following types of property sales typically requires a property condition disclosure?

A.    A transfer of an interest that is less than fee simple

B.     A foreclosure or deed-in-lieu of foreclosure

C.     A property transferred to the seller’s parent

D.    A three unit, multi-family dwelling

84 of 100 What are the primary advantages of PEX piping?

A.    PEX piping is lightweight but not flexible.

B.     PEX piping is able to withstand both high and low temperatures and it is highly resistant to chemicals.

C.     PEX piping is strong and sturdy.

D.    PEX piping is ideal for septic systems and sewer systems.

85 of 100 A buyer told broker Lena that she wants to move to a Cuban neighborhood. Then the buyer asked if Lena could show her the best home in a Cuban area. How should Lena respond to this request?

A.    Lena should comply with this request to the best of her abilities.

B.     Lena should explain to the buyer that she ethically and legally cannot recommend housing based on national origin.

C.     Lena should not answer the question unless the buyer offers to pay her more.

D.    Lena should refer the buyer to a brokerage that can legally steer buyers.

86 of 100 What is a forecast of income and expenses that can be projected over five years?

A.    Cash flow statement

B.     Stabilized budget

C.     Balance Sheet

D.    Capital budget

87 of 100 Which of the following would qualify as an example of retail property?

A.    A hospital

B.     A farm

C.     A shopping center

D.    A warehouse

88 of 100 Escrow moneys should be held in the broker’s

A.    business account.

B.     personal account.

C.     escrow account.

D.    safe.

89 of 100 A type of mortgage which allows the lender to increase the outstanding balance of a loan up to the original amount of the loan in order to advance additional funds is called an

A.    wraparound mortgage.

B.     take-out mortgage.

C.     open-end mortgage.

D.    spiral mortgage.

90 of 100 Which form does RESPA require lenders to use to detail the costs that the buyer and seller will pay at closing?

A.    Loan Estimate

B.     Truth-in-Lending Form

C.     Closing Disclosure

D.    RESPA Settlement Statement

91 of 100 Broker Austin represents a party in a transaction where there is a dispute regarding the deposited escrow money. What should Austin do?

A.    Hold the money until both parties (or their lawyers) provide a written release.

B.     Claim the escrow money for himself and move it into his personal account.

C.     Split the money evenly between the buyer and seller and let them fight it out.

D.    Immediately release the money to the party he represents.

92 of 100 The cost of doing direct mail advertising depends on

A.    the amount you have to pay the state’s Real Estate Commission for approval.

B.     the frequency of the mailings.

C.     the percent of people that reply.

D.    the date of the mailing.

93 of 100 Which of the following wills may be considered invalid?

A.    A will written by someone who is only 23

B.     A will that is not signed

C.     A will that is indicated to be a “last will and testament”

D.    A will that has been completed voluntarily

94 of 100 What type of agency cannot be revoked by the principal, nor is terminated if the principal dies?

A.    Dual agency

B.     Universal agency

C.     Agency coupled with an interest

D.    Agency coupled with fraud

95 of 100 What is the definition of “valuable consideration” in regard to contract validity?

A.    Cash or cash equivalents

B.     Tangible goods

C.     Something specifically offered in exchange for something else

D.    Something offered by only one party

96 of 100 Real estate licensees should know enough about building ordinances to be able to

A.    conduct a professional home inspection.

B.     provide solid legal advice.

C.     answer all client questions about a building’s compliance.

D.    alert clients of potential problems in a home.

97 of 100 The Quarry Mountain Subdivision requires all properties to have fences that are at least 8 feet tall surrounding each property. This is an example of

A.    a zoning restriction.

B.     an easement.

C.     escheat.

D.    a deed restriction.

98 of 100 The essential criteria for an acceptable legal description is that it

A.    only contains the mailing address.

B.     accurately locates the parcel when using Google Maps.

C.     accurately locates the parcel in the opinion of a court.

D.    includes at least 2 landmarks.

99 of 100 Licensee Alex only represents the buyer in a transaction. What is Alex called in this situation?

A.    A listing agent

B.     A dual agent

C.     A single agent

D.    A married agent

100 of 100 Earl orally agreed to a 18-month lease with landlord Blake. Is this contract enforceable?

A.    Yes, all oral leases are enforceable.

B.     No, all leases for longer than one year must be in writing to be enforceable.

C.     Yes, all leases for longer than 6 months are enforceable.

D.    No, it is not enforceable unless Earl is older than 50 years old.

Pre-License Final Exam Example (Questions ONLY, ANSWERS WILL BE REVEALED WITH PROPER SUBSCRIPTION)

Tip: to find a certain word or key term, press at the same time, the buttons:
( Ctrl and F ) on Windows computers
(Command and F ) on Mac computer
to bring up the in-page search box

1 of 100 Broker Regina commingled $5,000 of her client’s earnest money in her personal checking account. Is this illegal?
A. No, it is only illegal if the amount of commingled funds is over $10,000.
B. Yes, it is only illegal if the amount of commingled funds is over $1,000.
C. No, commingling client funds is always legal.
D. Yes, commingling client funds is always illegal.

2 of 100 ______________ dictate(s) the minimum and maximum pressures allowed for plumbing fixtures.
A. The master plan
B. The building codes
C. The elevation of the property
D. The square footage of the property

3 of 100 There is no time limit on tenant Trent’s lease. What type of lease has he entered?
A. An estate at sufferance
B. An estate of freedom
C. An estate for years
D. An estate at will

4 of 100 In Arkansas, non-resident license applicants may be licensed if they
A. comply with the Arkansas Realtor Association Code of Ethics.
B. agree to associate with an Arkansas broker.
C. agree to abide by requirements imposed by their state of residency.
D. meet the same requirements as residents or other prescribed requirements.

5 of 100 A(n) _______ is the third party with whom the agent deals when working on behalf of the principal.
A. tester
B. principal
C. customer
D. Client

?6 of 100 When a licensee quits working for a brokerage, she must
A. immediately surrender her pocket card to her principal broker.
B. surrender her license to the Commission within 7 days.
C. notify the Commission of the change.
D. file with the Commission to place the license on inactive status.

7 of 100 An escrow account ledger would contain
A. the amount of the accepted sales contract, the anticipated closing date, and the name of the transaction’s parties.
B. names of all parties to a transaction, the amount of escrow funds the sponsoring broker received, and the date the broker received the funds.
C. an amount of interest generated, the fee paid to the state’s Commission, and the personal information of the parties.
D. a picture of the check, the deposit slip, and the amount the broker commingled in his business account.

8 of 100 What is the term for the loss of value of an improvement due to functional inadequacies, often caused by age or poor design?
A. Chronological obsolescence
B. Economic obsolescence
C. Environmental obsolescence
D. Functional obsolescence

9 of 100 Licensee Hilda works for broker Sergio. Hilda has not been given the commission she earned from her last transaction due to a fraudulent seller. What should Hilda do?
A. File a suit against the seller herself.
B. Nothing, licensees have no legal recourse.
C. Inform Sergio so he can sue the seller.
D. File a suit with the state’s Recovery Fund.

10 of 100 Joe is a new broker. How often will he be required to reconcile his escrow account(s)?
A. Daily
B. Monthly
C. Quarterly
D. Yearly

11 of 100 Homeowner Nick enjoys the complete bundle of rights to his property, and there are no clouds on title. Nick has what is referred to as _____ to his property
A. legal title
B. assumed title
C. de facto title
D. equitable title

12 of 100 If an appraiser is hired to determine _______ he/she is looking for what the sales price would most likely be in an open market.
A. market value
B. assessed value
C. salvage value
D. replacement value

13 of 100 The owner of a real estate company
A. is exempt from licensure, provided the firm employs an executive broker.
B. must have a company license.
C. need not be licensed.
D. must be licensed.
?14 of 100 The absolute deadline for a written agency disclosure to a buyer is
A. upon initial contact.
B. upon first substantive contact.
C. prior to signing any transaction-related document.
D. prior to signing a lease or sale contract.

15 of 100 Seller Frank receives an offer of $800,000 on a property he listed at $900,000. How much is the offer as a percent of the listing price?
A. 90.6%
B. 86.7%
C. 88.9%
D. 85.0%

16 of 100 The end result of rescinding the contract is
A. that the contract is enforceable.
B. that the contract has been executed.
C. that the contract is null and void.
D. that the contract has been modified but is still valid.

17 of 100 A(n) ________ is the common form of express written agency agreement between a seller and a broker, authorizing the broker to find a ready, willing and able buyer for the property.
A. listing agreement
B. implied agreement
C. permanent agreement
D. estoppel agreement

18 of 100 In a _______, the tenant pays not only the rent for occupancy, but also pays maintenance and operating expenses such as taxes, insurance, utilities and repairs.
A. discounted lease
B. net lease
C. total lease
D. balloon lease

19 of 100 A decrease in the availability of money would have which of the following economic effects?
A. Interest rates would go up.
B. Interest rates would go down.
C. Interest rates would NOT be affected due to RESPA guidelines.
D. The lender would be allowed to keep less money in reserve.

20 of 100 A duplex generates $1,400 rent for each of its two units per month. The property has been recently appraised for $350,000. What is this property’s GIM?
A. 9.6
B. 4.8
C. 10.4
D. 20.83

21 of 100 The principal role of an associate broker is to
A. manage a branch office.
B. manage an office’s salespeople.
C. manage an office when the principal broker is absent.
D. offer real estate services on behalf of the company.

22 of 100 Agent Emily’s listing was sold by another agent in her brokerage. Emily is entitled to a
A. selling side commission.
B. neutral party commission.
C. equal party commission.
D. listing side commission.

23 of 100 Licensee Carol is representing seller Cameron. Carol is currently a
A. free agent.
B. dual agent.
C. listing agent.
D. recording agent.

24 of 100 Why would municipal governments be concerned if property values are falling?
A. Because the majority of their revenue comes from real estate taxes. When property values fall, revenue for municipal governments also falls.
B. Because when property values fall, people tend to ignore zoning regulations.
C. Because when property values fall, more people tend to move into the area.
D. Because the mayor will automatically be removed from office if home values fall over 10% in one year.

25 of 100 Licensee Finn reported to the lender that the sales price was $5,000 higher than it actually was as the buyer requested him to. This is an example of
A. intentional fraud.
B. unintentional fraud.
C. negligent misrepresentation.
D. legal obedience.

26 of 100 Seller Gareth is certain there are no clouds on his property’s title. What type of deed should he provide buyers to show his assurance of title?
A. Special
B. Quitclaim
C. General warranty
D. Permanent

27 of 100 A buyer asks if a property has radon gas in the basement. The agent says there is none when he knows there is a radon problem. This is an example of
A. puffing since this action is legal.
B. active fraud since this is an intentional misstatement or omission.
C. negligent misrepresentation since this is an unintentional misstatement or omission.
D. negligent misrepresentation since this is an intentional nondisclosure of a material fact.

28 of 100 Emma’s property is assessed at $650,000. Her property qualified for a $50,000 homestead tax exemption and was appraised at $800,000. What is the taxable value of Emma’s property?
A. $650,000
B. $800,000
C. $600,000
D. $750,000

29 of 100 The Real Estate Settlement Procedures Act (RESPA)
A. allows lenders to accept kickbacks that are from blood relatives.
B. encourages lenders to take kickbacks to increase yield.
C. prohibits lenders from taking kickbacks or unearned fees.
D. allows lenders to accept kickbacks that are less than $100.

30 of 100 A broker applicant had two years of experience, completed five years ago. Does this satisfy the experience requirement?
A. No, it must be within 4 years preceding application.
B. No, it must be within 3 years preceding application.
C. Yes, it completes the requirement.
D. Yes, provided the experience was acquired within Arkansas.

31 of 100 Broker Ola has twice published advertisements that have gotten her in trouble with protected classes. What should Ola do to prevent future advertising problems?
A. Write the ads from the perspective of the largest protected class.
B. Write the ads from the perspective of all protected classes.
C. Hire testers to see what they think of her ads.
D. Purchase additional errors and omissions insurance.

32 of 100 Hubert is a veteran of the First Gulf War. What could be a reason for him to seek a VA loan?
A. The VA automatically pays for half of the mortgage payment
B. It is the easiest way to obtain a loan larger than $750,000
C. The VA does not require Hubert to live on the property with a VA loan
D. Many VA loans do not require down payments

33 of 100 Which of the following statements about restrictive covenants is false?
A. They take priority over less restrictive zoning ordinances.
B. The restrictive covenants will not be enforced if they go against public law or policy.
C. Covenants may not be discriminatory by restricting ownership or use on the basis of race, religion, marital status, or gender.
D. They are permanent and unchangeable.

34 of 100 The Executive director of the Commission may investigate a license law violation
A. only upon the filing of a complaint.
B. upon completion of a hearing.
C. with or without receipt of a complaint.
D. only at the request of a member of the public.

35 of 100 Lamar sells another broker’s $800,000 listing for $785,000 at a commission rate of 6.5%. Lamar has a 40% commission split with his broker. If there is also a 50% brokerage split, what commission will Lamar receive?
A. $15,308
B. $10,205
C. $15,600
D. $10,400

36 of 100 Broker James received an order from a court of competent jurisdiction directing the disbursement of the escrow funds. What action should broker James take?
A. Broker James must disburse the escrow moneys according to the terms of the order.
B. Broker James should disburse 90% of the money and keep the remaining 10% as a service fee.
C. Broker James must send all the money to the state’s Real Estate Commission.
D. Broker Jones must give the money to just the party he represents.

37 of 100 Tenant Kelly has the right to use landlord Bob’s property according to his lease. Does Kelly have an interest in the property?
A. No, because Kelly does not own the property.
B. Yes, because Kelly can use the property.
C. No, unless Kelly has a life estate.
D. No, unless Kelly has lived there for more than a year.

38 of 100 Which of the following is a discriminatory activity?
A. Telling a prospective buyer or tenant that a property is not for sale or rent when it is
B. Showing only properties that are within a buyer’s financial range
C. Showing properties currently in the process of “filtering down”
D. Describing a property the same way with all buyers

39 of 100 Which document guarantees a person’s right to own land in the United States?
A. The U.S. Constitution
B. The Declaration of Independence
C. The Alloidal Treaty
D. The Monroe Doctrine

40 of 100 In showing properties for sale, which of the following is a recommended course of action?
A. Allow the seller’s pets to roam around and interact with guests.
B. Agents should tell the next door neighbors to stay home.
C. Before the open house, the agent should open the drapes on all windows to let in the natural light.
D. Make sure the home looks “lived in” by having possessions visible to the public.

41 of 100 Salesperson Sarah is about to show some buyers a property for the first time. What should Sarah have the sellers do if possible?
A. Assist Sarah with the showing
B. Leave the property
C. Have the sellers invite over friends to make the house seem more lively
D. Cook for the buyers

42 of 100 What phrase emphasizes the requirement that events related to the contract must be performed on time?
A. Delivery is of importance
B. Freedom of will
C. Time is of the essence
D. Contingencies of magnitude

43 of 100 Seller Charles has a brother who is claiming an ownership interest in Charles’s property. This dispute could lead to what is called
A. a duplicate title.
B. a quitclaimed title.
C. a clouded title.
D. a marketable title.

44 of 100 What type of properties tend to have the shortest leasing terms?
A. Industrial properties
B. Cooperatives
C. Hotel rooms
D. Agricultural properties

45 of 100 Goodsprings has a tax base of $90,000,000 and a budget of $1,100,000. What is the tax rate in terms of mills?
A. 12.2 mills
B. 1.2 mills
C. 8.2 mills
D. 2.1 mills

46 of 100 Which of the following is part of a septic system?
A. Slug field
B. Floating slab
C. Distribution box
D. Recovery tub

47 of 100 Broker Janet just finished a direct e-mailing campaign. How should Janet follow-up on direct e-mail advertising?
A. Completely change her message each time regardless of the results
B. Call the people she mailed, even if they are on the Do-Not-Call List.
C. Track and repeat those campaigns that show results.
D. Repeat the same mailing, until she gets results.

48 of 100 Buyer Tal is regretting the full price offer he just made on a home. Can he still revoke the offer?
A. No, because it was a full price offer.
B. Yes, he can revoke the offer assuming the seller has not already accepted it.
C. Yes, he can revoke an offer even after a seller has accepted it and delivered notice of acceptance.
D. No, he must wait to hear if the seller accepted the offer.

49 of 100 Some taxing bodies recognize that local assessments can lead to unfairly high or low values for properties in certain areas. Therefore the jurisdiction may establish _________ to level out the unevenness of valuations.
A. diversity factors
B. testing factors
C. equalization factors
D. redistribution factors

50 of 100 Which of the following rights is included in a fee simple absolute estate?
A. Right to conduct any and all activities without restriction
B. Right to encroach on neighboring properties
C. Right to grant an easement
D. Right to not pay property taxes

51 of 100 In a comparative market analysis, the subject property has 2 bedrooms, 2 baths, a 1/2 acre lot and a swimming pool. A $115,000 comparable has 2 bedrooms, 1 bathroom, no pool, a 1/2 acre lot, and a screened porch. The appraiser adjusts by $9,000 for the bath, $11,000 for the pool, and $5,800 for the porch. What is the indicated value of the subject?
A. $100,800
B. $129,200
C. $118,800
D. $140,800

52 of 100 Natalie has an easement to drive across Donald’s road. Which of the following circumstances would terminate this easement?
A. Sale of Natalie’s property
B. Sale of Donald’s property
C. Revocation of the easement by Donald
D. If Donald bought Natalie’s property

53 of 100 Tallpenny Tower was built in 1985. However, the building has been constantly maintained and remodeled. In valuation terms, the building’s _________ age is greater than the building’s _________ age.
A. chronological age, effective age
B. effective age, chronological age
C. depreciated age, projected age
D. projected age, depreciated age

54 of 100 The property manager’s first responsibility is to
A. increase the vacancy rate.
B. increase the percent of minority tenants.
C. cut the maintenance budget as much as possible.
D. realize the maximum profit on the property.

55 of 100 Borrower Patti exercised her statutory right of reinstatement after her lender initiated a foreclosure suit. What must Patti’s lender do now?
A. The lender must pay all fees and renegotiate the mortgage.
B. The lender must dismiss the lien and continue the suit.
C. The lender must demand that the mortgage is paid in full within the next 60 days.
D. The lender must dismiss the suit and honor the mortgage.

56 of 100 What piece of legislation states that commercial emails must offer an opt-out option and cannot have a deceptive subject line?
A. The Do-Email Protection Act
B. The Uniform Email Law of 2009
C. The CAN-SPAM Act
D. The Freedom of Email Act

57 of 100 In Arkansas, the requirement of a criminal background check
A. is required for broker applicants only.
B. includes fingerprinting.
C. is conducted by the Department of Homeland Security.
D. authorizes the release of information to the public under the Freedom of Information Act.
58 of 100 A borrower earns $8,000/month and makes credit card and car note payments of $900. A conventional lender requires a 30% income ratio. What monthly amount for housing expenses (principle, interest, taxes, insurance) will the lender allow this person to have in order to qualify for a conventional mortgage loan?
A. $2,400
B. $900
C. $1,500
D. $1,200

59 of 100 A homeowner receives a tax bill that includes an amount for the police district, taxed at $2.50 per $1,000, and the fire protection district, taxed at $1.80 per $1,000. How much does the taxpayer have to pay for these two items if the property’s taxable value is $77,000?
A. $1,930
B. $331
C. $3,310
D. $193

60 of 100 The principle balance of a loan is $360,000. The monthly principal and interest payment will be $2,160 per month for 30 years. How much interest will be paid over the term of the loan?
A. $360,000
B. $777,600
C. $288,000
D. $417,600

30X12=360
2160X360=777,600
777,600-360,000=417,600
61 of 100 If a new manufacturing plant opens nearby and is offering a 1,000 new, high-paying jobs, the likely increase of the area’s real estate values will reflect the principle of
A. substitution.
B. progression.
C. supply and demand.
D. contribution.

62 of 100 In construction, the term “pitch” refers to
A. the type of flooring used.
B. the slope of the roof.
C. a type of frame construction.
D. the type of piping used.

63 of 100 Both the agent and seller just signed the listing agreement. What must the licensee give to the seller now?
A. A detail advertising plan
B. A copy of the signed listing agreement
C. Professional pictures of the property
D. An appraisal of the property

64 of 100 What significant piece of legislation created the Environmental Protection Agency (EPA)?
A. The Federal Nature Protection Act of 1977
B. The Clean Land Act of 1962
C. The National Environmental Policy Act of 1969
D. The Green Act of 1980

65 of 100 Licensee Katy sees a legal description that includes a subdivision plat map. This indicates the legal description method utilized is
A. the metes and bounds system.
B. the urban planning method.
C. the lot and block system.
D. the appraisal identification system.

66 of 100 Under what listing clause may the broker claim a commission if the owner sells to a person the broker introduced to the property within a certain time after the listing’s expiration?
A. An innocence clause
B. A prevention clause
C. An extension clause
D. A safety, or protection clause

67 of 100 Retailer Blake owns a commercial store front lot that he wants to sell. The lot is 1/2 acres. The agent informs Blake he can get $15 per square feet for the lot. What total price should Blake list the property for?
A. $326,700
B. $718,740
C. $359,370
D. $96,000

one acre 43,560/2=21,780 x 15= 326,700
68 of 100 Under the rectangular survey system, one section is equal to
A. 360 acres.
B. 36 acres.
C. 64 acres.
D. 640 acres.

69 of 100 A rental house has monthly gross income of $3,000. A suitable gross income multiplier derived from market data is 13. What estimated sale price (to the nearest $1,000) is indicated?
A. $360,000
B. $390,000
C. $429,000
D. $468,000

3,000 x 12 months x 13 = 468,000
70 of 100 What is the balance on an amortized loan of $110,000 after the first payment if the interest rate is 5.5% with a monthly P&I payment of $568?
A. $109,432
B. $109,496
C. $109,754
D. $109,936

Principal paid = monthly payment – (loan amount x rate /12)

568 – (110,000 x 5.5%/12) = 63.83333333

110,000 – 63.83333333 = 109,936.1667

109,936

71 of 100 Real estate salespeople are called upon to provide comparable sales to a seller who wants to list a property for sale. This is called a
A. licensee appraisal of value (LAV).
B. assessed value analysis (AVA).
C. listing price projection (LPP).
D. competitive market analysis (CMA).

72 of 100 The buyer must pay the seller $245,000 at closing. For the buyer, the amount of $245,000 is a
A. cloud.
B. debit.
C. credit.
D. receivable.

73 of 100 An inactive licensee moves to a different part of town. What is the consequence of this?
A. There is no consequence and the licensee need not do anything.
B. The move must be reported within seven days.
C. Her license becomes suspended until the Commission has received notice.
D. She is in violation of license laws.

74 of 100 Homeowner Dean owns the Northwestern ½ of the Northeastern ¼ of the Southwestern ¼ of the South western ¼ of Section 31. How many acres is that property?
A. 5 acres
B. 10 acres
C. 80 acres
D. 2.5 acres

2 x 2 x 4 x 4 x 4= 256
640/256= 2.5
75 of 100 Carrie has been growing a garden on her property. However, the garden now extends onto Amanda’s property. Carrie has created
A. an encroachment.
B. a judgment lien.
C. a special assessment lien.
D. a zoning violation.

76 of 100 Buyer Yancy offered $6,750 in earnest money with an offer that was accepted. Both Yancy and the seller want the escrow account to be interest bearing. Will this be allowed?
A. Yes, escrow accounts can be interest bearing if both parties agree.
B. Yes, escrow accounts can be interest bearing if the escrow amount is over $5,000.
C. No, escrow accounts cannot be interest bearing unless the escrow amount is over $10,000.
D. No, escrow accounts can never be interest bearing.

77 of 100 Beginning at the NW corner of the intersection of Pine & 675, thence north 950 feet, thence west 380 feet, thence south 950 feet, thence southeast 380 feet. Is this an acceptable metes and bounds description?
A. No, this is not a good legal description because it does not begin and end at the point of beginning.
B. No, legal descriptions cannot be determined in this manner.
C. No because there is no reference to the meridians or parallels.
D. Yes, this is a good legal description because it does begin and end at the point of beginning.

78 of 100 The north-south area between consecutive ______ is called a range.
A. parallels
B. metes
C. bounds
D. meridians

79 of 100 A licensee is required to continue to provide _____________ even after the agency agreement has been terminated.
A. care
B. obedience
C. compensation
D. confidentiality

80 of 100 An income property generates $9,200 per month, and is valued at $985,000. What is its gross rent multiplier?
A. 99
B. 82
C. 107
D. 274

985,000 / 9200 = 107

81 of 100 In a(n) _____, an owner sets a minimum amount that he wants to receive from the sale of the property and lets the broker have as commission any amount above the set minimum.
A. open listing
B. net listing
C. closed listing
D. return listing

82 of 100 A $400,000 loan has monthly interest-only payments of $2,600. What is the annual interest rate?
A. 6.5%
B. 7.2%
C. 7.4%
D. 7.8%

83 of 100 What is an example of an in-house sale?
A. Jan always represents buyers and Dan always represents sellers. Jan and Dan work for the competing brokerages.
B. A transaction where the closing occurs within the home being sold.
C. Kim represented the buyer and Tim represented the seller in the same transaction. Kim and Tim work for the same brokerage.
D. Kate represented the buyer and Jack represented the seller in the same transaction. Kate and Jack work for the different brokerages.

84 of 100 An agent’s duties to a principal include which of the following?
A. Obstruction of justice
B. Ineptitude
C. Disclosure or notice
D. Legal advice

85 of 100 Homeowner Abraham has a monthly PITI payment of $756. What is not covered by this payment?
A. Real estate taxes
B. Homeowner’s insurance
C. Utilities
D. Mortgage interest

86 of 100 Solve for the amount of monthly interest that is owed on an interest-only loan based on the following facts: Loan amount $115,000, annual interest rate of 7%?
A. $767
B. $671
C. $575
D. $7,475

87 of 100 Which of the following acts is a violation of the Arkansas license law?
A. An unlicensed party negotiates the price of a property.
B. A licensed party to A licensee negotiates the price of his or her own property.
C. A licensee to accepts compensation from her principal broker.
D. An unlicensed person is paid for assisting in the procurement of a buyer prospect.

88 of 100 What form should agents show sellers near the end of a listing presentation to help them become more familiar with the upcoming transaction?
A. A blank copy of a buyer’s agency agreement
B. A “Fair Housing and You” disclosure form
C. A blank copy of the purchase agreement
D. A mortgage application form

89 of 100 What is the legal avenue for an owner who wants to dispose of his or her interest against the wishes of other co-owners?
A. A foreclosure suit
B. A partition suit
C. A redistribution suit
D. A plottage suit

90 of 100 How are Commissioners put into office?
A. By appointment by the governor
B. By state election
C. By legislative appointment
D. By county election

91 of 100 Seller Deangelo agreed to mediate the radon gas problem in his basement within 31 days. It has been 31 days and he still has not addressed the issue. What is the current status of the sales contract?
A. It is not affected and is in force.
B. The buyer must now address the problem within 31 days.
C. Deangelo will now receive $5,000 less from the buyer.
D. Deangelo has defaulted on the contract.

92 of 100 Does a seller have the option to reject subagency when signing the listing agreement?
A. No, sellers must accept subagency.
B. Yes, subagency is banned in every state.
C. Yes, the seller can choose to reject or accept subagency.
D. No, unless they ask their Real Estate Commission for permission.

93 of 100 A license applicant has passed the license exam. The application process will be complete when the applicant pays
A. A license fee
B. A background check fee
C. A license fee and a Real Estate Recovery Fund fee
D. A Real Estate Recovery Fund Fee

94 of 100 Trust funds must be deposited within which time frame?
A. Immediately upon receipt by the salesperson.
B. Immediately upon receipt by the principal broker.
C. No later than 3 days following receipt by the principal broker.
D. No later than 3 days following contract execution.

95 of 100 Salesperson Steve receives an hourly wage of $14 an hour from broker Clayton. Clayton tells the IRS Steve is an independent contractor. The IRS then says Steve has failed the __________ and does not qualify as an independent contractor.
A. salary test
B. sedition test
C. seller’s test
D. safe harbor test

96 of 100 William just purchased a residential investment property for $225,000. William is 60, married, and will not occupy the property. Will this new property qualify for a homestead exemption?
A. Yes, because William bought the property for less than $500,000.
B. Yes, because William is older than 50.
C. No, only single people can qualify for homestead exemptions.
D. No, he has to reside on the property to qualify for a homestead exemption.

97 of 100 A property sells for $620,000 two years after it was purchased. If the annual appreciation rate was 4%, how much did the original buyer pay for the property (round to the nearest $1,000)?
A. $600,000
B. $566,000
C. $573,000
D. $596,000

$620,000 / 1.04 / 1.04 = $573,224.85 (round to $573,000)

98 of 100 Licensee Chad works for broker Michael. Licensee Chad has a listing agreement with seller Ray. Licensee Chad decided to transfer brokers. What will most likely happen with Chad’s listing?
A. It will stay with Michael’s brokerage.
B. It will be automatically terminated.
C. It will go with Chad.
D. It will be transfer to an unbiased brokerage.

99 of 100 Who regulates Ginnie Mae and Freddie Mac?
A. The Treasury Department
B. The Department of Housing and Urban Development (HUD)
C. The Internal Revenue Service (IRS)
D. The Securities and Exchange Commission (SEC)

100 of 100 Albert finally found a buyer for his five-plex and closing is set for August 8th. At closing, four of Albert’s tenants have already paid their $987.50 monthly rent and one of the units remains unoccupied. What will the rent proration be assuming the 365-day method and that the closing day belongs to the seller?
A. Debit the buyer $2,931, credit the seller $2,931
B. Credit the buyer $2,931, debit the seller $2,931
C. Credit the buyer $3,663, debit the seller $3,663
D. Debit the buyer $3,663, debit the seller $3,663

At closing, four of Albert’s tenants have already paid their $987.50 monthly rent and one of the units remains unoccupied.

There are 31 days in August.

The closing is set for August 8th.
31-8 = 23 days
Therefore, the rent proration will be:

Hence, Credit the buyer $2,931, debit the seller $2,931.

(ANSWERS will be revealed with proper subscription)
CA Principles Questions
Ca Principles Real Estate › FINAL TEST 1 (50-example questions)
Tip: to find a certain word or key term, press at the same time, the buttons:
( Ctrl and F ) on Windows computers
(Command and F ) on Mac computer
to bring up the in-page search box
1 of 50 – Brian and Leslie have made an offer on Rudy and Judith’s home. The first offer was rejected by the sellers. Brian and Leslie made another offer; Rudy and Judith rejected that offer. Never quitters, Brian and Leslie decided to try one last time and present their last and best offer. Rudy and Judith decide the prospective buyers are close, and make a counteroffer. What’s the situation after a counteroffer is made by the sellers?
2 of 50 – Ross, a newly licensed residential real estate appraiser, is on his way to appraise his very first piece of property. He is nervous on the way to the property and is going through the appraisal process in his head. Please help Ross put the appraisal steps in order.
3 of 50 –
4 of 50 – Which of the following is exempt from the Natural Hazards Disclosure?
5 of 50 –
6 of 50 – Lillian is buying Julia’s home in Malibu. Julia, after selling her home to Lillian, is buying Anne Marie’s condo in San Francisco. In these transactions, who is the grantor and who is the grantee?
7 of 50 – Chip is a veteran who fought in Desert Storm. He has just retired from the military. He has been told he qualifies for a property tax exemption based on his military service during wartime. Which exemption applies to Chip?
8 of 50 – This step of the general plan, sometimes known as the master plan, should encompass all aspects of the projected growth, including the social, economic, and physical features. Due to this step, while considered long-range, the plan must allow for short-range flexibility. Which step is described?
9 of 50 – Marcus wants to have the deed to his new home recorded to protect his ownership rights. In order to record the deed, it must be notarized. Marcus must go before a notary public and verify the signing of the deed. The notary then signs the deed. The verification of Marcus’ signature in the signing of the deed is known as:
10 of 50 –
11 of 50 –
12 of 50 – Brett lost his job last year. He has only been able to find temporary work and fell behind on his mortgage. His home is currently in foreclosure. He is confused as to what will happen and how the debts are paid. What is the order of payments in foreclosure?
13 of 50 – When an appraiser assumes that no one is being forced to sell at a reduced price because of an impending divorce or similar situation; and that both buyer and seller are well-informed customers, he is more than likely hired to determine:
14 of 50 –
15 of 50 – Which of the following statements referring to general taxes is true?
16 of 50 – In early common law, transfers of land were only made when:
17 of 50 – Calvin is buying his first home. He has been saving and saving for years. The home he is buying has a price of $300,000 and Calvin has a down payment of $75,000. Calvin’s loan is considered:
18 of 50 – Bob leased an apartment for three years from the Steiners. He was never late on his rent in those three years, kept the apartment immaculate, and never caused a moment of trouble. He has recently purchased his first home and moved out of the apartment. As expected, Bob gave the Steiners sixty days’ notice he would be moving and left the apartment in perfect condition. It has been 45 days since he moved out and he’s been watching for his security deposit refund to purchase a new sofa. When should he expect his security deposit refunded?
19 of 50 – Thad and Pierre made an appointment to view a condo for lease advertised in the newspaper. Thad phoned the landlord and set up a viewing for two hours later in the day. The couple thought the condo was perfect and informed the landlord they wanted to start the application process to lease the condo. The landlord then explained the condo had just been leased. The next Sunday in the classifieds, the condo was again advertised for lease. A friend of the couple phoned the landlord, pretending to be interested in the property. When asked if it had been leased, the landlord replied “No”. What is going on in this situation?
20 of 50 –
21 of 50 – Shakeel and Shaheen have sold their home, made an offer on Derek and Kamisha’s home, and the offer was accepted. All the details of the sale have been worked out, agreed upon and signatures obtained. Now, Shakeel and Shaheen must obtain a loan for the property. What is the best term to describe their position in the transaction’s timeline?
22 of 50 –
23 of 50 – Which form of payment is most common for a property manager?
24 of 50 – What is the mill rate of .017?
25 of 50 – Zoning ordinances have changed in the area adjacent to a residential neighborhood. The residents are incensed a retail shopping area is being developed one block from their subdivision. They are concerned about the traffic, noise, and what this will do to their property values. The new zoning ordinances must ensure:
26 of 50 – The Western Acres neighborhood is a highly desirable area in which homes very seldom go on the market. The Western Acres properties placed on the market sell very quickly and usually for or above asking price. Which principal of real estate applies to the homes in Western Acres?
27 of 50 – A developer wants to build a sprawling two-story office complex. The developer’s and architect’s vision is something low, modern, and new. They are planning the complex in an urban area of town, replacing ten blocks of old high-rise buildings. Unfortunately, the zoning commission’s vision does not coincide with either the developer’s or the architect’s. Which type of zoning regulation applies?
28 of 50 – In a general warranty deed, the implied promise: “If there is a defect, I promise to take care of any problems” is referred to as:
29 of 50 –
30 of 50 – Which of the following is not a goal of a real estate appraiser?
31 of 50 – Janice has given her broker an earnest money deposit check with written instructions to hold the check until the seller has accepted her offer. Her broker follows instructions and informs the seller, through a telephone conversation with the seller’s agent after the initial offer was presented, the buyer’s check is being held awaiting offer acceptance. Did Janice’s broker handle this situation correctly?
32 of 50 – Timothy has been hired by the estate of Tyler Wilbanks, who is recently deceased. Timothy has Power of Attorney and will be handling all the real estate affairs of the deceased estate. Which type of agent is Timothy?
33 of 50 – Drew is leasing his apartment from Reggie. The lease is for one year and they have agreed on all areas of the contract. The lease is in written form, and Reggie is the only party that has signed. Without Drew’s signature, is the lease now invalid?
34 of 50 – Ted and Lisa are selling their home and have signed a listing agreement. Client or customer? Steven visits Ted and Lisa’s open house, and he is interested in purchasing their home. What happens next? Is Steven a client or customer?
35 of 50 – Katie and Rich own a rental home they have put up FSBO. They’ve noticed the same woman has accompanied several potential buyers viewing the home. Katie and Rich discover she is a broker that has been “showing” the home on the sly without their permission. Instead of fighting this aggressive salesperson, the couple just go along. In which manner was agency created?
36 of 50 – In order to equalize business in their area, ABC Realty and RMH Realty have an unwritten agreement. They have agreed to split up their area with ABC taking everything north of the highway and RMH everything south. Under this agreement, the real estate agents licensed to each respective brokerage will not be competing and all will profit. Is this a violation? If it is a violation, what is it called and what is it violating?
37 of 50 –
38 of 50 – What is the major difference between an Estate for Years and an Estate from Period to Period?
39 of 50 – Which of the following is not a requirement for an FHA loan?
40 of 50 – Wallace and Melissa live in a small rural community of just over 15,000. They want to purchase a home and start a small home-based business. At the current time, they have a very limited income and need their own home. Where is the best place for Wallace and Melissa to turn for a home loan?
41 of 50 –
42 of 50 – Jack is leasing a home from Justin for a year. He has decided to lease until he gets a good feel for the area and knows where he wants to buy. In this relationship, who has the reversionary right and who has the possessory right ?
43 of 50 – Lois is selling her needlework shop to Simon. Simon is also purchasing the name of the business from Lois, all of the fixtures, and the inventory. Lois is essentially handing over the entire business, from top to bottom, to Simon, who is planning continuing what she had started. What are the essential elements of this business opportunity sale?
44 of 50 – Karen and Jay need a larger home. They have two large dogs and a baby on the way. One day in the real estate section, they see their dream home. The couple view the home that very day, make an offer and it’s accepted. There’s only one problem: They haven’t even put their home on the market. Which type of loan gives Karen and Jay their best option of paying two mortgages until their current home sells?
45 of 50 – Adeeb has listed his condo with Maria’s broker and she is his listing agent. The listing agreement is signed and the day to begin showing his property is nearing. Adeeb decides the day before the open house to raise his asking price by $20,000. Maria disagrees with the decision but goes along with Adeeb’s wishes. How must Maria take care of this contractual change in price?
46 of 50 – A Point of Beginning refers to:
47 of 50 – Shivaram and Kiran are buying a home in a new subdivision. Due to all of the subdivisions in the area, a new elementary school is being built. Additionally, a new area park is planned. Shivaram and Kiran have been informed the taxes on their new home are substantially higher than their previous property. Why?
48 of 50 – Tamara and her children live in a subdivision with a tennis court and swimming pool. Her children are thrilled to be able to use these wonderful amenities. Who actually owns the tennis court and swimming pool? Tamara and her children reside in which type of common interest development?
49 of 50 – Derek’s new office is undergoing a minor renovation and he cannot conduct business in the location for approximately six months. He decided to lease a temporary office in Samantha’s building from June 1 to December 30. Which type of lease has Derek signed?
50 of 50 – What are the parts of a mortgage loan? What purpose does each part serve?
Ca Principles Real Estate › FINAL TEST 2 (50-example questions)
1 of 50 An undeveloped acre of land sits in the middle of a secluded rural community. How many separate owners could this acre have?
2 of 50
3 of 50 Ensuring consumers are fully informed of all finance changes and aware of the true annual interest rate are requirements of which regulation?
4 of 50
5 of 50 Due to the subdividing of lots on the lake, Jim’s property is surrounded on three sides by Louise’s property. The only other boundary is the lake. Jim can only get to his home by driving up Andrea’s driveway and behind her lake home to get to his own. How was the easement in this situation created?
6 of 50 Which are the four elements required for a valid contract?
7 of 50 Tracy and Darnell are buying a home. They have a 15% down payment and have qualified for a thirty year fixed conventional rate mortgage. Will Tracy and Darnell have to pay PMI?
8 of 50 Agent Green is faced with an ethical dilemma. He was present when two brokers were having an unethical discussion that could be considered collusion. He doesn’t know if he should act as if it never happened, or report the incident to his broker. What steps should he employ when making this decision?
9 of 50 When is a real estate licensee considered a creditor?
10 of 50 Appraiser Jones appraises one-to-four unit residential properties, and non-residential properties with a transaction value up to $250,000. What is this appraiser’s level? How many hours of appraiser education were completed?
11 of 50 Molly, a successful real estate salesperson, took some time off to stay at home with her first child. Days turned into weeks, weeks into months, months into years, until Molly’s child was starting school. She decided she needed to head back to her profession and pick up where she left off. During her at-home time, Molly hadn’t kept up with any CE requirements, nor had she renewed her license after its expiration almost three years earlier. Can Molly simply pick up where she left off?
12 of 50 Which of the following listing agreements is illegal in most states?
13 of 50 The Statute of Limitations is:
14 of 50 XYZ Corporation is interested in a piece of land for development. They are selling off a bit of company stock to buy the property without any debt. Is XYZ’s sale of stock considered a form of financing?
15 of 50 Kim, Chris, and Beth are all partners in a cosmetics firm. Kim is leaving the partnership and wants to sell her shares of the business, including the property owned by the partnership, to Chris and Beth. The three partners own the property with the right of survivorship should one or more of them die. The remaining partners are not interested in buying Kim’s interests. Kim has been unable to find a buyer for her share of the partnership. She has now resorted to asking the court to either sell her shares or sell the entire property. What form of concurrent ownership applies?
16 of 50
17 of 50 Georgina sat for the examination about two weeks ago. She believes she passed with flying colors and checks her mail immediately upon arrival home for her results. Today, they arrived and, as she opened the envelope, she saw her test score. Did Georgina pass or fail?
18 of 50 Which of following are not considered trust funds?
19 of 50 Agent Sims needs one more new home sale this month to receive a bonus. She has one more that could possibly close and help her meet the goal. However, today she was informed the financing fell through for the buyer. Agent Sims has a lender friend that owes her a favor. She calls the lender, offers the friend one-quarter of her bonus if he will finance the buyers who were turned down. Which penal code section addresses this crime?
20 of 50 John and Thom are purchasing their dream home. Due to the expiration of escrow instructions, the escrow has been terminated. Have they lost the contract on the house of their dreams?
21 of 50 Dan has recently been transferred to San Diego, and only has a month to find a home, sell his condo, pack, move, close, and get to work. His agent shows him the Walsh home and it’s perfect. He offers the asking price, along with all the kitchen appliances and window treatments to remain with the property. The Walsh’s accept his offer exactly as it is written. Which contract term applies to this situation?
22 of 50 Which of the following is not a prohibited escrow-related activity?
23 of 50 Agent Peters has qualified buyers to purchase a new home. Now he needs to qualify the property they wish to buy. He understands the human qualification process. Can you help Agent Peters with steps to qualify the property?
24 of 50 Agent Simpson tells residents of a neighborhood that minorities are moving into the neighborhood, and property values are sure to plummet. Simpson goes on to say, “resale values will suffer, the neighborhood will deteriorate, and if they don’t sell their homes now, they will lose money.” What form of illegal discrimination is Agent Simpson practicing?
25 of 50
26 of 50
27 of 50
28 of 50 Ken has just passed his licensing examination. However, he has been notified the DRE will not issue a full-term license. Ken is behind on child support payments and therefore has not complied with a court order to provide these payments. Will Ken ever be able to obtain his license?
29 of 50 Which act is known as the original fair housing statute?
30 of 50 Along a non-navigable stream, does an owner own the land, the water, both, neither? What is this right?
31 of 50 Which of the following liens is both general, involuntary, and statutory? Which lien is specific, voluntary, and equitable?
32 of 50 When an owner dies without a will or heirs, what happens to the property and why?
33 of 50 Mr. Manning has owned a restaurant for forty years. He is in the process of selling his business to a group of investors who plan on revamping the restaurant and turning it into a destination. In the negotiation of the sale, Mr. Manning has stipulated he is willing to accept their offer on two conditions: There may never be any alcohol served on the property and there can never be dancing of any kind. Mr. Manning is insistent on these conditions due to his religious beliefs. If either of these activities ever takes place, Mr. Manning would have the right to take back the property. Which type of estate applies?
34 of 50 In studying for her real estate license, Elise is reading about police power. She is confused and doesn’t understand why law enforcement would have any role in real estate sales, transactions, and regulations. What does the term “police power” refer to in real estate?
35 of 50 Patrice and Cornell are completing a sales contract with Mary, their agent. The sales contract used at Mary’s brokerage is preprinted. Mary, as a senior agent, has the authority to waive one of the brokerage’s fees. The fee is explained and preprinted on the contract. Mary simply crosses it out, writes “waived,” and both parties initial. Which overrules the other? The preprinted or handwritten portions of the contract?
36 of 50
37 of 50 Judy is the listing agent for the Brandts’ home. In the inspection of their home, she discovers a few issues of concern. The basement is very damp and smells of mildew. Judy noticed what appeared to be mold on the interior walls of the lower level. She also saw what she believed to be their main line overflowing in the utility area of the basement. State the case that is responsible for broker’s conducting a diligent inspection of properties they are listing or selling.
38 of 50 Which is not a form of syndication?
39 of 50 Ben and Amanda are interested in a vacant, undeveloped lot. They are going to continue to live in their current home, pay off the lot’s loan, and then build a new home on the lot. Before closing on the purchase of the lot, they discover the zoning regulations permit nightclubs to be built in the immediate area. They specifically asked the broker about this issue and were told there was no reason to worry. What are Ben and Amanda’s options, if any?
40 of 50 Broker Burns is negotiating a first trust deed loan for buyers. The buyers have signed a contract for a fifteen-year loan. What is the maximum commission for Broker Burns?
41 of 50 Ramon did not pass his licensing examination. He didn’t think it was a possibility to fail and doesn’t know what to do to re-take the test. Ramon is not even sure he is allowed to take the examination a second time. What are Ramon’s options?
42 of 50
43 of 50 Which of the following is not an exemption to the federal fair housing laws concerning age and family status?
44 of 50 What are the types of legal life estates?
45 of 50
46 of 50 Which of the following is not a fourfold unity?
47 of 50 Which of the following statements concerning real and personal property is true?
48 of 50 Caroline has been paying her mortgage steadily for fifteen years. She has just received a notice from her lender that the loan due date is approaching and she will owe a lump sum of $11,257 to pay off her mortgage loan. Which type of promissory note has Caroline NOT been paying?
49 of 50
50 of 50
Ca Principles Real Estate › FINAL TEST 3 (100-example questions)
(correct answers are after each question)
—–
Tip: to find a certain word or key term, press at the same time, the buttons:
( Ctrl and F ) on Windows computers
(Command and F ) on Mac computer to bring up the in-page search box
1 out 100
Sacramento artist S.C. Heet has transferred a portion of her property, via a grant deed, to Cameron Dulle. However, this deed did not set forth in writing the two primary warranties Cameron should have on the property: first, that S. C. has not already transferred the title to another person; and, second, that the estate is free of any encumbrances, other than what has been disclosed to the grantor. Which of the following is true of this situation?
2 out of 100
The regulations regarding both advertising and doing real estate business over the Internet have been set forth in:
3 OUT OF 100
Any false or misleading advertising, whether on the Internet or via any other medium, can result in which of the following type of penalties?
4 OUT OF 100
5 OUT OF 100
6 OUT OF 100
Two years after Elicia Jolie moves into her first home, a cozy two-bedroom near Lake Tahoe, she decides to buy all new kitchen appliances. Her brother, Jake Jolie, is the owner of JJ’s Appliances and More, and he gets her some great deals on beautiful stainless-steel floor models. The appliances themselves are free-standing and movable, with the exception of the built-in microwave over her new stove. She has new cabinets built around the appliances to accent the new look. When it comes time for Elicia to move, which of the following will be considered her personal property, which she may move with her?
7 OUT OF 100
Under WHICH of the following circumstances could a homeowner take his microwave with him when he moves?
8 OUT OF 100
Examinees and twin brothers George and Grover Gripenstein would argue over the color of the sky on a sunny day. Surprisingly, they’ve both chosen to pursue a career in real estate and have completed their respective pre-license educational requirements. They decide to study for the exam together, but this causes more disagreements. Their current argument is over the characteristics of land. Which of the following is correct?
9 OUT OF 100
10 OUT OF 100
11 OUT OF 100
Which of the following is NOT a type of water rights?
12 OUT OF 100
Captain Canguro’s father was a teetotaler to the nth degree; so Canguro was not surprised when his father said he would sell Canguro one of the three properties he owned, provided that Canguro followed the condition set forth in the contract, stating that “no alcohol can be served on the premises at any time.” Canguro agreed with this provision and the sale was made. Which of the following statements is most accurate regarding this situation?
13 OUT OF 100
14 OUT OF 100
15 OUT OF 100
16 OUT OF 100
When Jim, Jill, and Jeri take ownership to a Bakersfield home, they hold their ownership concurrently. Jim has the greatest proportion, with 45%, while Jill holds 30% and Jeri the last 25%. They each have the right to individually possess, will, or sell their interest. This is known as:
17 OUT OF 100
When two or more people have identical interests in the whole property, with the same rights of possession and the right of survivorship this form of ownership is considered:
18 OUT OF 100
The legal process of making an instrument or legal document an official part of the records of a county, once it has been acknowledged, there by giving constructive notice of the exsistence and content of these instruments to the public, is known as:
19 out of 100
20 OUT OF 100
21 out of 100
22 OUT OF 100
23 OUT OF 100
Long Beach salesperson Eric Janey is providing sellers Julie and Zach Roberts with the necessary disclosures they must be given upon the sale of real property. Which of the following is NOT a disclosure that is given upon the sale of real property?
24 OUT OF 100
Co-authors and sisters, Mary and Perry Corrigan, have just written their fourth bestseller, even though Mary lives on the East Coast, while Perry resides in Calistoga. When the home next door to Perry is sold, Perry buys it and then gift deeds it to her sister so that they can live side-by-side for the several months of the year they spend writing together. In this situation, what consideration is necessary for this deed to be considered valid and legal?
25 OUT OF 100
26 OUT OF 100
Which of the following are not really deeds?
27 OUT OF 100
28 OUT OF 100
29 OUT OF 100
Escrow cannot be terminated in which of the following ways?
30 OUT OF 100
When grantor, Emilie Richards, delivers the deed to the Cloverdale property to the grantee, Jane Curless, she drives it over to Curless’s current residence, where they read through the grant together. There is a condition included in the grant, but it is straightforward and agreeable to both. This type of delivery is known as:
31 out of 100
Kathy Bates has just moved into a condominium complex of 60 units. The complex has a swimming pool, and a management company takes care of the upkeep of the outside of the property. The monthly cost for pool maintenance, grass cutting, tree trimming, private street maintenance, and the newly-updated clubhouse is currently $400.00 a month. Each year, the cost of such services increases, as do the costs for necessary repairs as the buildings get older. This year, new roofs are in order for all of the buildings. The condominium association, which is made up of the owners of the property, decides that, in order to cover the increase in costs, and to replace the roofs on the property, they must pass a(n):
32 OUT OF 100
33 OUT OF 100
The type of estate that has a definite beginning and ending date is known as what?
34 OUT OF 100
The right of the state to enact and enforce laws for the order, safety, health, morals, and general welfare of the public is known as:
35 OUT OF 100
36 OUT OF 100
When potential customers, Grace and Leo Adams sit down with real estate broker, Sam Slama, they tell him they’ve just begun interviewing brokers before they sign with one to help them buy their first home. He assures them he understands, and that he will answer their questions to the best of his abilities. When they ask what his commission rate is, he responds, “It’s seven percent, just like all the other guys in town, as you’ll find. We all charge the same; so it makes for a fair deal for our wonderful customers.” Leo thinks the guy sounds great, but Grace is a bit suspicious of his uber-charm. Which of the following is true of this situation?
37 OUT OF 100
38 OUT OF 100
39 OUT OF 100
40 OUT OF 100
41 OUT OF 100
42 OUT OF 100
Each of the following actions, except for one, is considered subversion. Which of these answers is not a form of subversion?
43 OUT OF 100
44 OUT OF 100
Which of the following is not considered one of the five economic characteristics of land?
45 OUT OF 100
Which of these private properties might be exempt from the governmental use of Eminent Domain?
46 OUT OF 100
47 OUT OF 100
Which of the following statements is NOT applicable to the Transfer Disclosure Statement, set forth under Civil Code Section 1102.3?
48 OUT OF 100
After receiving the seller’s transfer disclosure statement, buyer Clark Rivers is not satisfied that ALL has been revealed. He’s heard rumors that a previous tenant died of AIDS inside the very home he would like to buy. Clark demands to know if this is true, since it was not mentioned on the disclosure statement. Which of the following is the appropriate legal response the broker must give to Clark’s query?
49 OUT OF 100
50 OUT OF 100
When Chloe Armstrong pays off the 30-year conventional loan on her Oceanside home in less than 20 years, she is thrilled. However, she is not nearly as happy when she reads the fine print on the contract, which permits her lender to charge her EXTRA interest just for paying off the loan early. This is known as:
51 OUT OF 100
On Kyle Thomason’s $400,000.00 loan, the lender charges a 2-point service charge. In this situation, how much will Kyle have to pay for this service charge at closing, and how would such a charge appear on the statement?
52 OUT OF 100
Ollie and Molly Overton have just taken out a 30-year straight term loan on their new “starter home” in Bellflower. This means that:
53 OUT OF 100
When new college graduate Sami Hensen goes to visit her Great-Aunt Gertrude, she is surprised when the older relative tells her she is soon leaving on a cruise with friends. Sami cannot imagine how her great-aunt can afford such luxury, while living in a nice house in a peaceful neighborhood, and wonders if her aunt’s mental capacities are failing her. At her gentle inquiry about the costs, her Great-Aunt Gertrude laughs away her concern, telling her that she has been receiving monthly checks out of the equity she has in the home. Now Sami really thinks her old aunt is off her rocker! If Great-Aunt Gertrude is correct, which of the following statements is true of this situation?
54 out of 100
Newlyweds Andrew and Kimmie Briggs enjoy sparring over the details of life. They squabble good-naturedly over a game of Scrabble, the pronunciation of French words, and now, over the type of home loan they’re getting on their first home. They know it’s FHA, but neither is sure WHAT the FHA has to do with the loan. An FHA loan means:
55 OUT OF 100
56 out of 100
A full summary of all consecutive grants, conveyances, wills, records, and judicial proceedings affecting title to a specific parcel of real estate, together with a statement of all recorded liens and encumbrances affecting the property and their present status, but NOT including encroachments and forgeries, is known as a(n):
57 OUT OF 100
58 OUT OF 100
59 OUT OF 100
60 OUT OF 100
Credit union president Bill Bradley has just refused a loan for 25-year-old LaDawna Kingston, an African-American woman and, in his opinion, the very definition of a “religious zealot.” Bill refused the loan based on her credit rating and lack of job stability. When LaDawna learns of his refusal, she tells him she’s calling an attorney, because she’s been discriminated against. Which of the following statements is true in this situation?
61 OUT OF 100
Real estate syndication is accomplished through three phases. Which of the following answers correctly names these steps in their proper chronological order?
62 OUT OF 100
The type of company that sells securities specializing in real estate ventures, and requires a minimum of 100 investors, is known as:
63 OUT OF 100
64 OUT OF 100
One appraisal principle of value is based on the concept that the more a property or its components are in harmony with the surrounding properties or components, the greater the contributory value. In other words, the more the properties are alike, the more they retain value. This is known as:
65 OUT OF 100
Which of the following is a type of functional obsolescence?
66 OUT OF 100
For income-generating properties, a value based on the present value of the rights to future income is called the:
67 OUT OF 100
One way to figure out taxes is through the use of a mill. Which of the following is the dollar value of a mill?
68 OUT OF 100
69 OUT OF 100
Appraiser Louis finds a property located in the same neighborhood as the appraised property, and wants to use it as a comparable sale. The comparable has more bedrooms than the subject, one less bath, and one less garage. The appraiser will have to subtract the extra bedrooms from the comparable, add a bathroom to the comparable, and add a garage to make the properties equal. What type of approach to value has Louis utilized?
70 OUT OF 100
A law used to finance public services, such as waste treatment plants, parks, and schools, in newly developed areas, can result in extra-high taxes, in addition to the normal property taxes, and MUST be made known to any buyer before a purchase takes place. This law is:
71 OUT OF 100
72 OUT OF 100
73 OUT OF 100
The law that regulates the division of 2 or more lots for the purpose of selling, leasing, or financing said lots, either at that time or in the future, is the:
74 OUT OF 100
The law used by cities and counties for street improvements, in which a typical example would be that the local government hires a contractor to improve streets, and then each owner along that street is liable for paying a pro rata share of that cost, is known as:
75 OUT OF 100
Under which of the following is a subdivision defined as “a division of land into 5 or more lots for the purpose of selling, leasing, or financing, whether now or in the future”?
76 OUT OF 100
Which of the following is NOT considered one of the basic types of Common Interest Developments?
77 OUT OF 100
78 OUT OF 100
79 OUT OF 100
80 OUT OF 100
81 OUT OF 100
82 OUT OF 100
83 OUT OF 100
Modesto broker Killian Johnson has just received a money deposit and the related instructions from the buyer, Luis Alverez. Which of the following does NOT describe how Killian should handle this deposit?
84 OUT OF 100
A house sold for $265,000.00, and the total commission received by the broker was $22,525.00. What was the rate of commission?
85 OUT OF 100
86 OUT OF 100
Palo Alto buyer Mitch deposited $2,250.00 with the listing broker as earnest money. How is this earnest money going to be recorded on Mitch’s closing statement?
87 OUT OF 100
A land project is a speculative subdivision development of 50 or more vacant lots that are located:
88 OUT OF 100
89 OUT OF 100
90 OUT OF 100
Under Article 7 on “hard money loans” (cash) of $30,000.00 and over for first trust deed loans, and $20,000.00 and over for junior deeds of trust, except where the new usury laws apply, the loan broker’s commission maximum is:
91 OUT OF 100
The legal phrase that describes the right to recover money or other personal property through a judicial proceeding, including the right to recover something under a contract, such as money owed on a note, as well as the right to recover damages for a tort or private wrong, is known as:
92 OUT OF 100
Which of the following statements is NOT accurate regarding Cal-Vet loans?
93 OUT OF 100
The Federal Reserve needs to tighten the economy. Which of the following actions would NOT act to achieve this purpose?
94 OUT OF 100
95 OUT OF 100
96 OUT OF 100
97 OUT OF 100
The main purpose of the Truth in Lending Law is:
98 OUT OF 100
When Christopher cuts down a tree in his backyard and sells it as firewood, the firewood then becomes personal property. This process is known as:
99 OUT OF 100
100 OUT OF 100
–Final 1–

1) The earth’s surface, extending downward to the center of the earth and upward to infinity, including permanently-attached natural objects, is called ______.
2) Jarvis is a builder. The building codes that apply to Jarvis’s work were established at what level (or levels) of government?
3) What’s needed to protect a property buyer from financial loss if a real estate title has defects?
4) How is a standard subdivision defined?
5) Which term represents the transfer of property to another through means of eminent domain, foreclosure, or adverse possession?
6) What is the difference between a pre-qualification letter and a pre-approval letter?
7) Who typically performs a CMA or BPO?
8) Who –
9) What are municipal fees as they relate to property development?
10) What’s the name of the required clause in a deed that “grants” or “conveys”?
11) With this type of commercial lease, the tenant typically pays the taxes, insurance, and maintenance expenses.
12) Ralph leases 1,000 square feet in a large warehouse. The lease agreement requires him to pay portions of the landlord’s taxes, insurance, and maintenance, in addition to the amount he pays to lease the space. What type of lease does Ralph have?
13) How do predatory lenders take advantage of consumers?
14) Which agency enforces federal fair housing laws?
15) Jake is unhappy that his lease was extended automatically. What lease provision should Jake review closely to ensure it is enforceable?
16) Which of the following is true about VA loans?
17) A seller you’re working with still owes $50,000 on his mortgage but wants to net $20,000 after the mortgage and 7% commission are paid. What is the minimum for which the house must sell?
18) Which of the following statements is true about zoning?
19) What is one reason that carbon monoxide could be called a “sneaky” toxin?
20) What is inverse condemnation?
21) You demonstrate the fiduciary duty of accounting by ____________.
22) For how long is a tentative map’s approval good before an extension must be requested?
23) Which of the following provides everything a lender needs to know in order to value the property used as collateral for a loan?
24) Emblements are considered to be ______.
25) What’s income received before any operating expenses are deducted?
26) What must happen if two or more people own a piece of property and one wants to sell?
27) Which mortgage market comprises lending institutions that lend directly to the consumer?
28) Who typically prepares a CMA or a BPO?
29) Which term refers to the ordinances/regulations that protect the community and control property development within subdivisions?
30) Which of the following best describes market price?
31) Which of these statements is correct when it comes to interpreting contracts?
32) What’s a certified opinion or estimate of value of a particular property as of a particular date?
33) Which of these statements about the enforceability of leases is true?
34) An ______ minor is considered to be a legally competent party who is able to enter into a contract.
35) The amount of money that a seller will make on a transaction after closing expenses and brokerage fees are paid is called ______.
36) What’s the amount a lender charges a borrower for using the lender’s money?
37) Which of the following must be disclosed in a subdivision’s public report, according to the Subdivided Lands Law?
38) What’s the best definition of a cooperating agent?
39) As an agent, you owe fiduciary duties to your client. Among these are loyalty, reasonable skill and care, confidentiality, accounting, and disclosure. What fiduciary duty is missing from this list?
40) A buyer with a 15-year, $250,000 loan at a 5.5% interest rate has a monthly principal and interest payment totaling $2,042.71. If $1,145.83 is interest, how much is applied to principal?
41) What’s used to calculate the housing debt-to-income ratio and total debt-to-income ratio?
42) The Consumer Credit Protection Act, which includes the Truth in Lending Act, is often referred to as _________________.
43) Which –
44) Which one of the following terms refers to a tract of land divided into lots or plots and used for building purposes?
45) Which term describes the act of transferring possession of the rental property from the landlord to the tenant?
46) Complete this formula: Net to seller = ______ x (100% – commission rate)
47) In most transactions involving a buyer or seller, real estate agents have limited authority to act on behalf of their clients. Therefore, which type of agency relationship are they in?
48) Easements are a type of encumbrance that can affect a property. Which of the following is true about easements?
49) What’s a real estate licensee’s responsibility regarding radon?
50) What is the instrument called that’s generally used to convey property?
51) What does a chain of title document establish?
52) What is eminent domain?
53) What are the two categories of comparison when evaluating comparables to a subject property in the market comparison approach?
54) Net to seller equals the ______ multiplied by the percent to seller.
55) An acre of land costs $15,000. Jerry would like to purchase four acres. How much will this cost?
56) Which one of these describes a deed?
57) Which of the following is used to protect the buyer from title defects after closing?
58) What does PITI stand for?
59) What’s a brownfield?
60) Who generally writes a broker’s price opinion?
61) The business under which real estate activities are performed is called ______.
62) What is the type of possession in which a tenant stays after the right to possess has terminated?
63) Who is responsible for supervising and retaining the licenses of the salespersons they employ?
64) Property ownership for an indeterminable length of time is an example of what form of estate?
65) Where can you find out what’s not covered by a title insurance policy?
66) How long is a public report valid before it must be renewed?
67) What are three methods of handling purchasers’ deposit money that are acceptable under current law?
68) What is the purpose of a deed?
69) In order to assist your clients with environmental issues, what must you do?
70) What is it called when a person who has possession of a property through a life estate abuses the property or allows it to deteriorate?
71) What exactly is a deed?
72) Which fiduciary duty goes beyond closing?
73) Jerome, a real estate licensee, works independently instead of under a sponsoring broker. This means that he is licensed as ________.
74) A month-to-month lease agreement is considered to be this type of leasehold estate, in which the interest is automatically renewed at the end of each period specified in the lease.
75) What is the term used for the ability to pay off liens against a property up until a foreclosure sale is held?
76) Ca-
77) Carl is interested in purchasing a lot that is 200 feet wide by 600 feet long. The seller has it priced at $800 per acre. How much would this lot cost?
78) The ease with which the property can be conveyed to another describes which factor that influences value?
79) Which term describes the action taken to force a sale of real property encumbered by a lien?
80) A tenant just paid a $6,000 security deposit to rent a furnished home. If the security deposit is equal to the maximum allowed, how much is the rent?
81) In what type of lease does the landlord pay taxes, maintenance, and insurance?
82) What happens when the terms of a lease require the tenant to waive a non-waivable right?
83) One of a seller’s agent’s duties is to ______.
84) A(n) ______ is an example of a limited agent.
85) What is a judicial foreclosure?
86) What is a capitalization rate?
87) When an appraiser relies on comparable properties to estimate the adjusted market price of a property, the appraiser is using the _______ approach.
88) You’re representing Janice in the purchase of a home. Under which of the following instances would it be unacceptable to disclose confidential information?
89) The seller said he never received the buyers’ earnest money deposit. How can the buyers prove they deposited earnest money on time?
90) Every foundation in direct contact with the ground should have which two features?
91) 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?
92) Personal interest most often conflicts with what fiduciary duty?
93) Pedro –
94) Which of these is a colorless, odorless, radioactive gas that is released when uranium decays?
95) What’s the purpose of zoning?
96) First-time homebuyers can access an additional amount up to $________ of their Roth IRA accounts over and above withdrawals equal to their contributions.
97) Robert purchased a new home and obtained financing through First Lending Bank, a regional bank located in his city. First Lending originated the loan, but before Robert’s first mortgage payment was due, it sold the loan to CitiMortgage. As a loan originator, what market is First Lending operating in?
98) The Unruh Civil Rights Act requires: “Full and equal accommodations, advantages, facilities, privileges or services in ___ business establishments.”
99) Which of the following is an example of a metes and bounds description?
100) What effect will a property’s utility have on the value if it’s currently uninhabitable?
–part2 final—

101) What’s a feasibility study?
102) James is obtaining an 80/20 loan. What does 80/20 signify?
103) Co-ownership without inheritance rights is what kind of real property ownership?
104) Jenny and her friend Kali went out to lunch. Afterward, they paid the bill. Their agreement to pay for the food they were served is what type of contract?
105) 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 ______.
106) What responsibility do licensees have regarding household lead hazards?
107) Which –
108) Which term is used to describe a correction to a contract that contains a mistake?
109) ______ may only be used to help determine an appropriate list price for a property or to help a buyer determine fair market value.
110) Which of the following is an example of a voluntary lien?
111) Which of the following activities requires licensure beyond a real estate salesperson or broker license?
112) Which of these is a horizontal wood-framing member used in floor and ceiling framing?
113) 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?
114) Which of the following is an example of single agency?
115) Gross rent multiplier (GRM) and gross income multiplier (GIM) are used to ______.
116) What actions must you take to renew a real estate license that has been expired for two years?
117) Kim and Kip are a married couple who own community property. What happens when they divorce?
118) What’s a finder?
119) To determine the net operating income of a property, subtract the total operating expenses from the ______.
120) What are the four external forces that may affect value?
121) After a general plan is developed and the planning commission makes its recommendation, what is the next step in the adoption process?
122) When a real estate salesperson or broker license is issued, how long is it valid?
123) What hazardous material might be found in vinyl flooring, insulation, and roof shingles of older homes?
124) You represent a seller as a single agent. What’s it called when you’re simultaneously working for the buyer’s best interests in the transaction without the seller’s knowledge?
125) According to the Statute of Frauds, in order to be legally enforceable, a contract must be in writing, name the contracting parties, identify the subject matter of the contract, and ______.
126) What will a typical condominium legal description reference?
127) Katrina’s business card has the REALTOR® logo on it because Katrina respects the National Association of REALTORS®, although she’s not yet a member. This is ______.
128) In which of the following situations would an agent be representing a customer in a real estate purchase?
129) The requirement that a portion of the purchase money mortgage be repaid when each lot is sold is called ____________.
130) In which type of lease does the tenant pay some or all expenses separately?
131) What practice did the Fair Housing Act of 1968 attempt to eliminate?
132) The requirement of a developer to use their own funds as down payment on a project is called ______________.
133) What does the rectangular survey system use as the basis for legal descriptions?
134) Before a blueprint and building specifications will receive a building permit, which party must stamp the blueprint?
135) In the conveyance of real property after death, what takes precedent over any terms specified in the deceased person’s will?
136) A plan adopted by every city or county in the state outlining the development of the area is called a ______, also known as a master plan.
137) If you take gross income and deduct operating expenses, what do you get?
138) A landlord who wishes to enter an occupied rental unit for a legal reason may need to provide reasonable ______.
139) What’s the National Flood Insurance Program?
140) Joe signed a listing agreement with Marisa. A week later, Marisa’s co-worker, Tina, showed Joe a property that he’s interested in buying once his home sells. A week after that, Ross submitted an offer on Joe’s property on behalf of his buyer client. Who is Joe’s agent?
141) Which of the following statements is true regarding assignments and subleasing?
142) Which of the following best describes a property’s assessed value?
143) Supply and demand determine the competitive environment. Which of the following is a true statement?
144) Supply and demand determine competition within a market. Which of the following is a true statement?
145) Which of these statements about landlord liability is true?
146) Which type of lease escalation ties lease payments to a market indicator?
147) Why is debt reduction recommended when preparing to obtain financing?
148) Tenants in the military who are facing eviction may be eligible for a stay of eviction if they meet which of these criteria?
149) Gerald creates a trust to convey his property to his heirs. His friend, Nancy, is placed in charge of making sure the terms of the trust are carried out. In this example, Nancy is the ______.
150) What is a survey?
151) Which type of deed offers the strongest and broadest form of guarantee and protection of title to the grantee?
152) Jillian has a loan-to-value ratio of 90/100. This means __________.
153) Octogenarians Gertie and Frank met in Sunset Living, a skilled nursing center for people with advanced Alzheimer’s disease, where they’re both residents. They fell in love and get hitched, signing a marriage certificate. This is an example of ______ contract.
154) Ca-
155) What happens when a married or otherwise legally joined couple who owns a property as tenancy by the entirety dissolves their union?
156) If a tenant replaces a kitchen faucet, can the tenant take the new faucet when vacating?
157) Which of these is a written description of a blueprint?
158) What type of tenant uses a percentage lease most often?
159) What –
160) Carla creates a trust to convey her assets to her children. Her brother, Alvin, is placed in charge of making sure the terms of the trust are carried out. In this example, Carla is the ______.
161) How many feet are in three yards?
162) What duties does a buyer agent have to the seller?
163) With which type of commercial lease does the tenant pay some or all of the expenses?
164) What is a non-judicial foreclosure?
165) Which lien can be filed after other liens but still take priority over them?
166) Which –
167) What’s the definition of a “proportionate share” escalation clause in a lease agreement?
168) Which –
169) When would a subdivision developer have to disclose that the property being sold has not been examined by the BRE in a disclaimer on all of their marketing and sales contracts?
170) What’s the primary purpose of bulk zoning?
171) Sisters Sheila and Vickie entered into a contract together to buy a vacation property. The sisters get into a dispute, and Vickie no longer wants any part of the deal. Sheila is in agreement with this idea, and talks her younger brother Joe into replacing Vickie on the contract. Sheila, Joe, Vickie and the seller agree to the substitution. Of what is this an example?
172) Which of the following is true about the DFEH authority in the event of a complaint against a licensee?
Extra random (started with cali principles-6/23) —
(ANSWERS will be revealed with proper subscription)
1) When does the licensee’s duty of confidentiality to the client end?
2) Drake has a new listing, and he signs a sub-agency agreement with Erika. Erika has a buyer customer, Trinity, who wants to see the listing and eventually buys it. What’s true about the agency relationship in this situation?
3) Serena’s customer, Ben, has some defects in his property’s title. He asks her to please keep this information to herself. What’s Serena obligated to do in this situation?
4) Which laws prevent real estate licensees from setting a standard rate for commissions or compensation?
5) Eric is making an offer on his dream home. He is ready to write the earnest money check. To whom should he make the check out?
6) Fraud is always _______.
7) Buyer brokerage relationships ______.
8) What’s the overhang on a roof called?
9) Aside from price, which of the following is a legitimate reason to counter an offer?
10) Which type of buyer usually has a fixed income and is looking for a home with little to no maintenance?
11) What type of listing agreement provides the most protection for the listing agent’s commission?
12) What do you call the person who or entity that oversees trust or escrow money?
13) Tom is comparing heating systems. He’s looking at an 80,000 BTU system with an AFUE of 85%. Which of the following statements about these measures is true?
14) Which of the following bears the weight of the building?
15) Homeowners can take several actions related to pest infestations, but ______ should be left to professionals.
16) Which of the following would be considered a substantive communication about a property?
17) Which of the following items go into the seller’s credit column and the buyer’s debit column?
18) What electrical component is usually placed in the garage or basement for ease of access?
19) Which of these is a colorless, odorless, radioactive gas that is released when uranium decays?
20) What not a good idea to post photos of your clients’ expensive belongings in place?
21) Who must provide a copy of the seller instructions if a cooperating broker requests it?
22) Your Aunt Peggy works in another county and is thinking of buying a townhome. She’s working with the seller’s agent but isn’t under an agency agreement. What should you tell her about this situation?
23) When a prospective homebuyer isn’t represented, what doesn’t she have?
24) Which of these is a problem with a property that would have a negative impact on the property value or pose an unreasonable risk on the people who will reside in it?
25) Which type of contract is not based not on words, but is based on the parties’ actions or behaviors?
26) To prepare for financing, buyers should ______.
27) Before a blueprint and building specifications will receive a building permit, the blueprint must be stamped by __________.
28) Which of these must be obtained before a developer can begin construction?
29) Mixing escrow funds with personal funds is illegal and is called _______.
30) Who determines the earnest money amount?
31) Francois wants his transaction broker, Shelly, to refuse to show her other customers and clients the property he wants to buy. What should Shelly say to Francois about his request?
32) Which of the following statements best illustrates how the National Electrical Code is enforced?
33) When using the farming approach, diversity is a key factor when identifying a neighborhood. Which statement best describes diversity?
34) What’s your relationship with a buyer who’s not a client but is a customer?
35) Which party is usually responsible for appraisal and credit report fees?
36) In a transaction broker situation, the transaction broker represents _____.
37) Calculate the total debt ratio based on the following information, assuming the lender does not consider any debt with 10 or fewer payments remaining: $1,500 condo payment; $100 monthly association fees; $150 monthly student loan payment; $300 car payment (with only four payments remaining); and a monthly gross income of $5,000.
38) Which of the following would be considered a first practical opportunity for communication about a property?
39) You are not expected to be an expert at investigating or inspecting environmental issues if it is outside your area of expertise. Encourage your clients to seek professional property inspection services to determine material _______ facts.
40) Daria is representing Max, a seller. Unbeknownst to either of them, Max’s home has a serious foundation issue that is only detectable by a trained professional. This type of problem is considered a(n) ______.
41) Which of the following expenses is typically the buyer’s responsibility?
42) Jarvis is a builder. The building codes that apply to Jarvis’s work were established at what level (or levels) of government?
43) Harmful gases resulting from waste incineration are disposed of in a special process. Where are they stored once processed?
44) The seller pays for which of the following closing expenses?
45) Which fees are negotiated between the seller and the broker, and can be either a lump sum or a percentage of the listing amount?
46) As a transaction broker, you are responsible for representing _______.
47) When a loan pre-approval is provided to a buyer, what does it mean?
48) You’re working with buyers who have found their dream home, but it’s almost more than they can afford. When the appraisal comes in, it’s higher than the agreed-upon sales price. Now what?
49) What type of window consists of one or more panes that either move up and down or side to side in tracks?
50) The _______ of a property assumes normal market conditions, a willing buyer and seller, and an arm’s length transaction.
51) Licensee Brooke receives a $1,000 bonus from the seller when she encourages her buyer client to purchase the seller’s property. She doesn’t let her client know about the bonus. Has Brooke committed a violation, and, if so, what violation has she committed?
52) You represent the Taylors, who have minor children and are looking to buy a home. They ask you whether there are registered sex offenders in the area. How should you respond?
53) Which party to the transaction pays earnest money to solidify his or her commitment to completing a real estate transaction?
54) What’s the difference between direct capitalization and yield capitalization when appraising income property?
55) Llorona is working with her transaction broker, Jorge, to list her home for sale. She asks Jorge for advice on setting the listing price for her property. What is Jorge legally allowed to tell Llorona?
56) Which of the following appears on the closing statement?
57) Which of the following statements is true regarding earnest money in Kansas?
58) States where the burden to determine a property’s condition rests on the buyer are considered _______ states.
59) When preparing a market analysis, or CMA, what’s the maximum number of adjustments you can make to the subject property?
60) Bob wants an open listing agreement. Why might this not be in Bob’s best interest?
61) Andy is interested in buying a home, but his credit score isn’t the greatest. Which of the following is a way he could improve it?
62) Private sewage disposal systems, such as septic systems, are governed by the _______.
63) Marnie decided the listing she was representing would be perfect for her family. She had her brother buy it, and after closing, he sold it to her. What is this an example of?
64) Freida is planning the plumbing system for her new building project. She wants the least expensive and easiest-to-install material for all her supply lines. She’s highly sensitive to chemical smells and hopes to avoid the use of chemicals to install the pipes. What’s her best choice in piping materials?
65) What is an escalator offer?
66) A title representative offers to pay you a referral fee for sending more clients to her. Would accepting this fee be a violation?
67) Anthony meets up with his buddy, Ted, a licensee for a brokerage in Shreveport, to discuss the possibility of Anthony getting licensed. Why does his friend tell Anthony it’s so important to get E&O coverage?
68) Cameron had a listing agreement with a client named Ben. Ben got mad at Cameron and said he was terminating the agreement. Can Ben do this?
69) Sometimes when a buyer can’t qualify for a loan, the property seller drops the price and accepts a second mortgage without disclosing it to the original lender. This is a form of mortgage fraud known as ______.
70) From whom or what entity do licensees receive compensation for brokerage services once a transaction is closed?
71) From a real estate professional’s point of view, what’s the purpose of qualifying buyers?
72) What’s the best way to respond when your buyer’s offer is accepted verbally?
73) A broker’s price opinion is generally written by ______.
74) When drafting a sales contract, how should a licensee handle areas that don’t pertain to the current transaction?
75) Last week, The Rialdis’ listing agreement ended after months on the market and not even a single offer to show for it. Today, they received a call from Mindy, a real estate professional who would like to relist the property and has some new ideas for getting it sold. What approach is Mindy using to find listings?
76) Keeping an area dry and keeping the air circulating can ______.
77) In order to avoid wire fraud, always contact the closing officer in order to ______.
78) Karissa is financing her home through a lender and is offering no money as a down payment. What type of loan is she most likely using?
79) When a listing agreement is signed, the two parties who enter into the agreement together are ______.
80) Properly pricing a property that is entering the market will ______.
81) Marissa, a buyer, asks you what she can do to prepare to buy. What should you tell her?
82) A licensee may accept compensation from ______.
83) If buyers see evidence of a pest infestation, they should always inquire with the seller to see if there is ______ on the property.
84) Rick represents Jules, a seller, who wants to know if he has to disclose his leaking roof to buyers. Rick says yes, since the problem constitutes _______.
85) When an investor receives title to a property—often by using a straw buyer—doesn’t make the mortgage payments, and rents out the home until foreclosure occurs, the investor is committing a type of mortgage fraud known as ______.
86) Licensees must always be paid by their brokers, unless ________.
87) Fiona and her husband, Ed, have just entered into their first-ever agency agreement with their new agent, Ken. The couple is a little nervous, but they like the idea that they have something in writing that explains both their agent’s responsibilities and what they’re expected to do as part of the relationship agreement. Life is good. What type of agency exists between Ken and his clients?
88) Wayne conveys a property to Robbie until Robbie’s death, when the property is conveyed to Tiffany. What is this scenario an example of?
89) Which type of mortgage has a payment that adjusts (usually upward) based on a predetermined schedule and amount?
90) What occurs when one or both parties don’t meet all terms of the contract?
91) When a buyer and seller enter into an agreement to transfer ownership of property, what type of contract will be used to complete the transaction?
92) A borrower makes the same monthly mortgage payment for the entire term of the loan. At the end of the loan period, all of the interest and principal is paid off. This is known as a ______ loan.
93) Sheila and Vickie are sisters who enter into a contract to buy a vacation property. The sisters get into a dispute, and Vickie no longer wants any part of the deal. However, Sheila talks her younger brother Joe into replacing Vickie on the contract. Vickie agrees to the substitution. This is an example of ________.
94) Buyer Josephine had just signed a contract on a house when she discovered that seller’s agent Franklin knew that this house was 3500 square feet, but he listed it at 3900 square feet. Which essential contract element has been compromised?
95) An acre of land costs $15,000. Jerry would like to purchase four acres. How much will this cost?
96) Janice’s life tenant, Jacob, is currently living on her property. Once Jacob dies, Janice has made arrangements that the property will go to the School for the Gifted. What interest does the School for the Gifted currently have?
97) ______ is the legal concept of property ownership.
98) Burt is an unrepresented buyer of Sima’s home. Sima’s listing agent is Aubrey. Who’s the client in this transaction?
99) Assume you’re entering into an agreement with a client to help him look for a property to call his own. What type of contract will you use to identify your agency relationship’s terms?
100) A(n) ________ is a set of guidelines for ethical conduct.
101) Shawn has agreed to pay $275,000 for his new home, with a $30,000 earnest money deposit. His bank is loaning him 80% of the appraised value of $350,000. In addition, the settlement costs he’s required to pay amount to 6% of the purchase price. If you wanted to calculate how much additional money Shawn needs to bring to closing, which of these would be a good place to start?
102) Which of the following is an example of a limited agent?
103) Who’s responsible for conducting the closing meeting?
104) What’s a brownfield?
105) Which of the following actions does the secondary mortgage market commonly take?
106) What is the legal effect on the purchase agreement if an attached contingency is rejected or not met?
107) What type of agency exists because of the actions and behavior of the parties?
108) As part of the license application, prospective appraisers must submit ________.
109) Along with your two siblings, you have a one-third interest in your childhood home. You’ve all decided to put the house on the market and you’ll serve as the listing agent. What must you disclose to parties to the sale?
110) A subdivision that includes space for offices, shopping centers, movie theaters, and apartment buildings is an example of a _________________.
111) Shawn specializes in the sale of retail stores and shopping centers. What types of properties are these?
112) Which of the following items go into the seller’s credit column and the buyer’s debit column?
113) Which of the following are addressed by the Subdivided Land Act?
114) Which term refers to the ordinances/regulations that protect the community and control property development within subdivisions?
115) Which of the following statements about restrictive covenants is true?
116) Donna rents an apartment in a building that’s being converted to condominiums. By law, the owner of the building must give Donna ________.
117) Marvin purchased the right to use a resort unit for two weeks every year, although he doesn’t own the property itself. What kind of timeshare is this?
118) Which option best defines voluntary alienation?
119) In how many states is undisclosed dual agency legal?
120) What is a lifetime cap, as it relates to an adjustable rate mortgage?
121) Which document is provided to borrowers no fewer than three days prior to closing and provides details about the costs of the transaction?
122) What is typically used to prove there are no encroachments on the property?
123) Which of the following is a right included with real property?
124) Sue, the seller, and Carl, the buyer, are preparing to close on their transaction. Who is responsible for reviewing the settlement statement before closing?
125) How do predatory lenders take advantage of consumers?
126) Dominique purchased a timeshare that conveys the right to occupy the property for two weeks each year, continuing for 20 years. However, the timeshare does not convey ownership. This is an example of a ______ timeshare.
127) Only brokers may do which of the following?
128) Which essential element of a deed contains the words, “does hereby bargain, grant, deed, and convey?”
129) What does procuring cause refer to?
130) If Elizabeth is a property manager, she is acting as what of type of agent?
131) Which of these describes a deed?
132) What happens to a joint tenant’s share of property when the joint tenant dies?
133) Which of the following statements about covenants is true?
134) Which of the following opinions can a real estate licensee provide?
135) A dwelling is in untenantable if it substantially lacks
136) Transfer of all of a tenant’s rights under a lease is
137) If a landlord wants to increase the rent on a unit that is regulated by the Tenant Protection Act of 2019, what’s the maximum allowed as an annual increase?
138) Malcolm loves his apartment, even though he’s rarely there. His job in international development has him on the road for months at a time. He doesn’t have to worry about missing out on his lease renewal though, because he has a(n) _____________
139) Eric’s residential tenant hasn’t paid rent for more than three months, and so Eric went to court to start eviction proceedings. He’s now been granted the right to remove the tenant. This is a(n) _________________ eviction.
140) A security deposit on furnished residential property can be no more than?
141) A retail business has a percentage lease based on 5% of gross income of up to $25,000 per month and 2 1/2% of gross income above that amount. The minimum to be paid is $1,000 per month. For a month in which the business has a gross income of $47,000, what will be the rent payment?
142) The owner of 417 Main, an office building, receives a guaranteed monthly income from her tenants and pays no expenses. She has
143) Which of these landlords had filed an unlawful detainer suit?
144) A landlord has a right of entry
145) Buyer Penelope adores the house at 212 Maple Street, but two weeks after making her offer, she’s discovered it’s got some issues that weren’t identified on the state-required seller disclosure form. She still wants to buy the house. Since the seller appears to have lied on the disclosure form, what can Penelope do?
146) Jose, who is 16, entered into a contract to sell a condo he owned. Because Jose is a minor, ______.
147) Which of these is a system that many states use to determine lien priority?
148) What’s the definition of a land contract?
149) Where is a complaint against a licensee filed?
150) Which of the following is true about condominium ownership?
151) What’s a subordination agreement?
152) Which act gives companies the right to sue a competitor for making deceptive ad claims?
153) What’s a benchmark?
154) You have clients who are interested in purchasing a property in a floodplain. As their agent, what do you want to ensure they are aware of?
155) What type of ground lease allows a tenant to buy out the lease?
156) Lenders will require which type of fund for taxes and insurance?
157) In order for you to earn compensation for brokerage activities, you must be employed as the agent of the client. How is this employment accomplished?
158) A broker’s price opinion is generally written by ______.
159) In states without full disclosure requirements, whose responsibility is it to review disclosures, ask questions, and obtain a home inspection?
160) A good way for real estate licensees to prevent problems at the closing is to ____________.
161) Whose responsibility is it to keep track of all buyer contingency deadlines and ensure they’re not missed?
162) Which term refers to a permitted deviation from current zoning restrictions that allows an owner to use land for a purpose that’s otherwise prohibited, and requires the owner to prove the zoning creates an unnecessary hardship?
163) Assigning a lower-density use zone to an area that previously allowed higher density and that may reduce property values is known as ______.
164) Mortgage lenders will ___________
165) The location of wetlands and springs at a development site is part of ______.
166) Which loan type is a fixed-rate mortgage where the monthly payments increase over time, according to a set schedule?
167) What’s a foreclosure?
168) _______ can be defined as everything that’s not real property.
169) Which of the following items must be included in the security instrument used for a real estate transaction?
170) Which of the following statements best describes a mortgage broker?
171) Appraiser Niles uses ______ to determine a range of values based on comparing a subject property to comparable sales. He makes sure to use some comparables that lack features of his subject property, and others that have even more desirable features, to balance out the comparison.
172) At what point in a residential transaction must a seller’s agent deliver a completed Residential Real Property Disclosure Report to a buyer?
173) Which of the following is a residential dwelling with attached walls, where the owner also typically owns the land on which the home sits?
174) A ______ is the expected rate of return on an investment.
175) Carolyn is representing John in the sale of his home. Which listing agreement clause gives her additional authority and obligates her to distribute the listing to other brokers?
176) _______ are artificial attachments to land that include items such as fencing, buildings, and walkways.
177) Violators of the Sherman Antitrust Act may be subject to fines. For what amount may corporations and individuals be liable?
178) You helped Frasier buy his penthouse condo. He’s just received the keys and you two have said your goodbyes after closing, and you’re heading back to the office to close out the transaction file. Which of your fiduciary duties continue?
179) Loyalty doesn’t survive agency termination, because you may end up representing the opposite side in a future transaction. But confidentiality and accounting survive agency termination.
180) When licensee Linda asks potential seller clients about their reasons for selling, what’s her purpose?
181) In the conveyance of real property after death, what trumps any terms specified in the deceased person’s will?
182) Which agency duties survive termination of an agreement?
183) With regard to contingencies, what responsibility does licensee Wanda have when representing buyers?
184) With which approach to value does the appraiser analyze a property’s ability to earn future income?
185) Which federal lending act was introduced to combat lending discrimination in low- and moderate-income neighborhoods?
186) How large is an acre?
187) Federal fair housing laws prohibit ______.
188) In a life estate, all of the following apply during the term except ______.
189) Zoning regulations must be aligned with an area’s ______.
190) The courts use three primary tests to determine whether something is personal property or real property. What are the names of the three tests?
191) Why is it important for a buyer to know if an underground storage tank is present on a property?
192) Tim, a new buyer client, is pre-approved for a mortgage loan of as much as $250,000. This information can help to _______.
193) It’s not a good idea to post photos of your clients’ expensive belongings. Why is that?
194) Broker Alex learns that his friend Joann is frustrated with the broker who listed her home. Alex encourages her to break her existing agency agreement and sign with him instead. This violation is an example of ______.
195) Which document provides an estimate of the costs a buyer is likely to pay at settlement?
196) Bob and Mary are financing $80,500 for a new home. Their lender will approve an interest rate of 6.5% if Bob and Mary pay three-and-a-half discount points at closing. How much is this?
197) What’s the purpose of a short sale?
198) Wyatt is selling his home to Kirk, and promises in writing to have a licensed professional repair the home’s leaky roof. After closing, Kirk, who financed the purchase, discovers that Wyatt patched the roof poorly and it leaks whenever it rains heavily. Under the Illinois statute of limitations, if Kirk wishes to sue Wyatt, he must do so within ________ of the contract breach.
199) The Lanham Act gives companies the right to ______.
200) d. +Sue competitors that are using deceptive claims in ads
201) The power of the state to claim property when the owner dies without a will and without locatable heirs or creditors is also known as ______.
202) Agents owe fiduciary duties to their clients. Among these are loyalty, reasonable skill and care, confidentiality, accounting, and disclosure. Which fiduciary duty is missing from this list?
203) George just applied for a conventional loan on a cottage he wants to buy. What percentage of the loan can he expect to submit as a down payment?
204) Which of the following best describes what an appraisal is?
205) Which of these is a recommended best practice after any discussion between a licensee and a client or other party involved in a transaction?
206) How do licensees use the funnel?
207) The funnel is a useful way to determine how your lead generation activities result in a calculated amount of income.
208) Your clients, the Meltons, found their dream home, which they will be financing with ABC Lending. What should they include with their offer?
209) In which of the following situations is it legal to receive compensation?
210) Dominic’s seller clients want him to lower his commission rate. What’s the best way for him to reply?
211) Whose consent and agreement are required to conduct a short sale?
212) Bart and Claire are under contract for Claire to buy Bart’s house, but her financing fell through. They decide to cancel the contract just as if it never happened. Which termination method does this describe?
213) Which of these photo descriptions may be a potential MLS violation?
214) The ______ provides buyers with an approximation of the costs they’re likely to pay at settlement.
215) Which of the following activities occurs before closing?
216) The buyer will need to obtain an insurance binder prior to closing, while the other activities listed here occur during closing.
217) _________ occurs when the parties meet all terms of the contract.
218) Under what circumstances may a seller legally terminate an exclusive right-to-sell listing agreement before its listing term has passed?
219) When an ______ is added to a sales contract, it changes the original terms of the contract.
220) For a deed to be valid, which two elements are required?
221) Agreeing to a specific price, price range, or minimum or maximum charges among competing firms is an example of which type of antitrust violation?
222) After signing a purchase contract, buyer Pam and seller Waylon both realize that the address for Pam’s newly-purchased home reads “344 Beverly Way” instead of the correct address: “334 Beverly Way.” Which of the following is true about this situation?
223) What’s the difference between an exclusive right-to-sell and an exclusive agency agreement?
224) Sanjiv recently signed a brokerage agreement with a landlord client. To be considered a valid contract in Illinois, the agreement must have either a provision for the client’s right to terminate annually with a 30-day written notice or ______________________.
225) Jamilynn violated antitrust law by engaging in price fixing. Which of these actions did she most likely perform?
226) What are the three most common forms of legal descriptions?
227) What type of loan may be used if the buyer is obtaining seller financing?
228) Nina signed an exclusive buyer agency agreement with Ken, her client. Ken buys a property from another agent. What might happen?
229) The zoning ordinances changed 10 years after Stan built his home, and it was grandfathered into the current zoning through nonconforming use. Now Stan is selling the home. Which of the following is true regarding the new owners’ responsibilities to comply with zoning regulations?
230) This statement is part of a promissory note attached to a security instrument: “I have the right to make payments of Principal at any time before they are due.” What’s the name of the clause where this statement is included?
231) If a buyer you represent waives the inspection, what should you do?
232) b. +Get the waiver in writing
233) Blake recently negotiated a net lease for space in an office building he owns. Under a net lease, the tenant pays ________.
234) With a net lease, the tenant pays a portion of the property operating expenses, typically the utilities.
235) Which laws does the Office of Fair Housing and Equal Opportunity uphold?
236) What was the estimated cost of improvements?
237) Which of the following measurement systems is mostly used in states that were part of the original 13 colonies?
238) You have found the perfect home for Lucy and she is ready to make an offer. The home was built in 1938. Who is responsible for scheduling paying for the home’s lead inspection?
239) Which of the following is a true statement about options and option fees?
240) The state claimed Sophia’s home under eminent domain. It appraised her property and offered to pay Sophia the appraised value for the home. What’s this process called?
241) ______ is when one party didn’t meet the terms of the contract in the specified timeframe, and is now being required to do exactly what was agreed to in the contract.
242) Jay’s new loan to purchase a property includes the seller’s existing mortgage. What type of loan is this?
243) What are PCBs?
244) Which term is used to define a search of public records going back at least 60 years to establish a property’s title history?
245) Which of the following describes the appropriate capital gains exclusion for a taxpayer’s primary residence?
246) When is a transfer tax payable?
247) A buyer can submit the earnest money deposit in the form of __________.
248) Licensees’ ethical duties to the public include not naming false consideration, _________________________, and completing paperwork accurately.
249) The cost approach to finding an appraised value measures ______.
250) Wendell is a first-time home buyer who needs to take out a loan to help finance his purchase. What is the first thing Wendell must do once the seller has accepted his offer and the contract has been finalized?
251) What is the highest penalty an unlicensed individual practicing real estate may be fined for more than two offenses?
252) Which of the following is an example of a development cost?
253) Which of the following items is something a lender is prohibited from doing if the lender wants to write qualified mortgages?
254) The question, “What’s the purpose of this appraisal?” can be answered by which step of the appraisal process?
255) A valid deed must contain all of the essential elements, and ______.
256) In order for an owner-occupant of a building with rental units to reject applicants based on sex, marital status, gender identity, and/or sexual orientation, they must not own more than how many rental units in a building?
257) How do discrimination testers work?
258) The VA guarantees _____ of the home loan amount.
259) Investors in commercial real estate often give up _________ when they purchase a new property.
260) A limited liability company combines some advantages of
261) There are many versions of property management agreements, although all management agreements should include
262) Soundproofing and decorative material, shingles and siding made before 1970 contain what hazardous material?
263) The listing agreement is a legally binding contract between __________________.
264) Rick, a builder, is getting a loan in which two properties are used for collateral. This is an example of a _______ loan.
265) Which one of the following is a buyer required to disclose in the Purchaser’s Representations section of the Regional Sales Contract?
266) What is a land contract?
267) What must occur to effect a transfer of title?
268) It’s very important that a buyer obtain a/an _________that shows that he has obtained homeowners fire and hazard insurance.
269) What is the depreciation schedule for a residential income-producing property?
270) Radon has natural origins and is a colorless, odorless, radioactive gas that’s released when ___________ decays.
271) A buyer can submit the earnest money deposit in the form of a check or __________
272) How many approaches do appraisers use when estimating a property’s value?
273) What regulation or regulatory authority identifies sites that have hazardous substances, and requires clean-up by the responsible parties?
274) What is a gaseous compound used in refrigeration cleaning solvents, Styrofoam, and aerosol propellants?
275) The definition, “The earth’s surface extending downward to the center and upward to infinity and including permanently attached natural objects,” describes ____________.
276) When possible, comparable sales from ______ should be used.
277) In relation to appraisals, what is a “federally related transaction”?
278) Which type of REIT receives most of its revenue from rental of its properties?
279) The income approach to appraisal is based on which value principle?
280) Ownership in a planned unit development consists of ______.
281) Land, plus all things permanently attached to it naturally or artificially, is ______.
282) John is an investor who wants to find out how much his money could’ve earned if he’d put it into a different investment, which is known as the ______.
283) Archie wants to buy Claire’s membership share in a cooperative. Assuming he has submitted his application, which of the following statements is true?
284) Which of the following establishes requirements for property appraisals in order to protect home buyers who use a conventional loan?
285) A property is uninhabitable in its current state. What effect will its utility have on the value?
286) Lucille is estimating the property’s loss in value for both curable and incurable items of depreciation. Which method is Lucille using to measure depreciation?
287) If an adjustment is needed for sales or financing concessions, when should an appraiser make this adjustment?
288) Which part of the cost approach equation is considered the most difficult part to estimate accurately?
289) Where in the Uniform Residential Appraisal Report would you find the number of total rooms, bedrooms, and bathrooms?
290) Property that is free-standing and not attached to real estate is called ______.
291) Which of the following is the presentation of the appraiser’s solution to the appraisal problem for a commercial property?
292) Real estate, plus all of the interests, benefits, and rights included in ownership, is also known as ______.
293) Which approach to finding value would licensed appraiser Christina probably weigh most heavily when appraising a three-unit rental property?
294) What’s the name of a process that estimates future income and then applies a discount rate in order to provide an investment’s present value?
295) You’re touring your new seller clients’ property. While you visually assess the property and measure rooms, what else should you do?
296) Why should a listing agent include a seller net sheet with a comparative market analysis?
297) Which of the following will an appraiser do first when using the sales comparison approach?
298) What type of information might an appraiser find at the local chamber of commerce?
299) Your client has an income-producing property that generates $30,000 per year. The property is valued at $400,000. What is your client’s capitalization rate?
300) Building codes, zoning laws, and environmental legislation can all influence the value of real property. How do appraisers refer to this type of value influencer?
301) When the building value is known, but the land value is unknown, the ______ technique can be used.
302) What’s the name for a capitalization method which converts a single year’s expected income into a market value?
303) A capitalization rate takes an investment’s ability to produce income and converts it into ______.
304) Which factor that influences value addresses the ease with which the property can be conveyed to another?
305) What type of capitalization helps to determine the expected return on investment the property is capable of producing in a single year?
306) The income approach to value relies on _______ when valuing single-family and two- to four-unit properties.
307) What’s an appraisal?
308) Real property rights include the right ______.
309) Which of the following best describes how an appraiser reconciles the adjusted sales prices of the comparable properties to indicate the value of the subject property?
310) Who is responsible for developing the Uniform Standards of Professional Appraisal Practice (USPAP) that licensed appraisers must follow?
311) By comparing the number of houses sold to the number of houses listed for sale in a recent time period, appraisers can determine what trend?
312) An appraiser is working to find the market rent for a 10-unit apartment building. In order to compare the subject property to similar properties, she will ______.
313) Which of the following will an appraiser use to determine potential gross income for an income property appraisal?
314) ____________ is when one party didn’t meet the terms of the contract in the specified time frame and is now being required to do exactly what was agreed to in the contract.
315) What’s the purpose of a home inspection?
316) Rick, a builder, is using two properties as collateral for a loan. This is an example of a (n) ________ loan.
317) An acre is equal to _________.
318) Niko has decided to move somewhere else when his lease ends on April 30. This would be considered termination through _________.
319) Which liens take priority over other liens?
320) Real property ownership has significant tax advantages. Which of the following is an advantage?
321) If licensees are asked to discriminate, what must they do?
322) What is self-dealing?
323) Why was the Civil Rights Act of 1866 monumental among fair housing and anti-discrimination laws?
324) The ________ protects consumers from unwanted email solicitations.
325) Given all of the laws prohibiting discrimination in housing, why does it still occur?
326) How does the income from property taxes benefit the community?
327) Which of the following is a benefit of the MLS from a broker’s standpoint?
328) Jamal is a real estate licensee. What’s his responsibility regarding household lead hazards?
329) What’s the depreciation schedule for a residential income-producing property?
330) Which of these items should real estate professionals help first-time buyers with recent credit issues understand?
331) Switches that are warm to the touch, damagd panels, and lights that dim or flicker when other appliances are in use can be signs of a (n) _________ problem.
332) With local land use, the stress placed on the community’s infrastructure is an example of __________.
333) What protects the buyer before the sale and can reimburse the buyer after the sale if a title issue arises?
334) If Mega Corporation owns real property, chances are it owns it in _________.
335) What instruments are commonly used to secure the purchase of real property?
336) Jimmy always has a face-to-face meeting before he works with any buyer. What might be a good reason for this?
337) What’s a survey?
338) _________ pay earnest money to solidify their commitment to completing a real estate transaction.
339) A defect on a title that can be monetary or physical is called an _______.
340) Sampson is acting as a buyer agent. What duties does he owe the seller in the transaction?
341) When does the sales contract become a legally binding document?
342) What’s a licensee’s responsibility regarding household lead hazards?
343) What’s the purpose of testing with regards to fair housing?
344) Local real estate developments, such as a new subdivision, will likely impact _______ the most.
345) When banks have lots of funds available for lending, what tends to happen to interest rates?
346) If Rina wants to pay off her mortgage early, what might she consider before doing so?
347) Fiona signed an agreement to either buy or not buy Nick’s vacant lot for $310,000 by a specific date. What’s this agreement called?
348) Edgar’s in the process of selling his home as a short sale. What’s a short sale?
349) You represent a buyer of a $1 million property. The seller’s agent, through the seller, offers a 2.5% cooperative agent commission. Who’s your client?
350) If a rectangular building were 40 feet by 20 feet, the area would be _________.
351) ________ may be found in paint in homes built before 1978.
352) Real estate, plus all of the interest, benefits, and rights included in ownership is also known as ________.
353) Which entity ensures that contractors perform their work according to code by inspecting their job sites?
354) How do you decide whom you represent in a transaction?
355) Which mortgage market is comprised of lending institutions that lend directly to the consumer?
356) What happens when a married couple who owns a property as tenants by the entirety divorce?
357) In caveat emptor states, whose responsibility is it to review disclosures, ask questions, and obtain a home inspection?
358) Who is responsible for ordering an appraisal, completing the loan application, ordering a home inspection, and obtaining homeowners insurance before closing?
359) Which type of antitrust violation involves two or more businesses conspiring against another business?
360) What instrument is generally used to convey property?
361) As a security precaution, when posting on social media, what should you do?
362) When a buyer hands over an earnest money check to you as the buyer’s agent, what’s your responsibility?
363) When assigning a contract, the assignor should also check to be sure that language regarding ________ is part of the purchase contract.
364) In full seller disclosure states, whose responsibility is it to notify the seller of the seller’s duty to disclose all known material defects?
365) Ken, Dale, and James are brothers who own more than 100 acres as tenants in common. The relationship between Ken and James disintegrated, and so James initiated a lawsuit. The end result is that the court gave each brother a designated set of acres to own. What was granted by the court?
366) Eva, Stella, and Lynn own a vacation home two blocks from the beach. Sadly, Stella passed away this winter, and so when summer arrives Eva and Lynn will be sharing the home with Stella’s nephew Drew, to whom Stella willed her share of the property. What type of ownership is this?
367) One way to demonstrate reasonable skill and care is by acting within the scope of your duties. When working an open house for one of her listings, Keira meets a young couple. They’re not looking to purchase anything right now, but are trying to get a sense for how much house their money will buy in different areas of town. Keira tells them about a few listings she knows about and the listing prices compared to house size and amenities. They also ask about financing a new home, the best way to save money for a down payment when they have other debt, and how much they should save. She tells them that in order to receive the best terms, they should have about 20% of the sale price saved for a down payment and that other debt will factor into the ability to obtain financing, so they should pay off anything they can. She also tells them that fixed-rate mortgages are better than adjustable-rate mortgages.
368) Was Keira’s discussion with the couple within the scope of her expertise?

369) A friend of Keira’s represents sellers of a two-bedroom bungalow that would be perfect for Keira’s buyer client. She shows the buyer the property, but doesn’t tell them she knows the seller’s agent.

370) Keira has a buyer looking at condos downtown, but she shows him a condo in the same price range slightly farther away from his desired area so he can see the difference in what his money will buy.
371) Which of the following statements about the fiduciary duty of confidentiality is true?
372) Which of the following is an example of the duty of loyalty?
373) Which of the following statements best describes a listing that terminates by performance?
374) Which act prevents the fraudulent sale of property sight unseen through the regulation of land sales across state lines?
375) The statute of frauds states that if a contract transferring ownership of real property is not in writing it is __________.
376) What is the key difference between assignment and novation of a contract?
377) When property changes hands, the deed is recorded. There’s a fee for recording. What is the benefit to the grantee of having the deed recorded?
378) How long after a notice of cessation or completion is filed can a contractor file a mechanics lien?
379) Frank has waited 30 days after notifying a client that the project he finished remains unpaid. The client has not filed a notice of completion or cessation with the county clerk. How long does Frank have left to file a mechanic’s lien?
380) What is the six-month rule for homestead exemptions?
381) Kris made an offer on Lincoln’s townhouse. However, Kris offered no earnest money. If Lincoln accepted her offer, would it be binding?
382) Which type of lien affects real and personal property?
383) What law governs the rules and regulations that tenants and landlords must adhere to in counties with 75,000 residents or more?
384) Which document is used to protect the buyer from title defects after closing?
385) In a typical real estate transaction, who is the seller?
386) A property manager is a ______ agent for the owner, and as such is authorized to perform all of the duties related to the property on the owner’s behalf.
387) Which scam, as described by the FBI, involves an appraiser working secretly with a borrower and providing a fraudulent appraisal report to the lender?
388) Which act encourages fair, truthful, non-deceptive, and evidence-supported claims in advertising?
389) Your assistant, Brady, often answers client questions about offers and negotiation. What do we know about Brady?
390) Sandra enters into a contract to sell her home to Paul. Under the statute of frauds, in order to be legally enforceable, the written contract must name the contracting parties, identify the subject matter of the contract, and ______.
391) A complaint was filed against Regina, a real estate licensee. At the TREC hearing, her license was revoked. How many commission members must have agreed with that decision?
392) Which of the following is true about title to a property?
393) The price for which an owner offers to sell a property is called the ______.
394) Per the TAR Purchase and Sale Agreement, when does the sales contract become a binding agreement?
395) In real estate contracts, which are required: legal descriptions or street addresses?
396) If a licensee is serving as a facilitator, rather than representing a buyer or seller, this must be disclosed to whom?
397) A consumer has just sued TREC for its role as an administering authority of license law. What will the likely outcome be?
398) What’s the maximum the Real Estate Education and Recovery fund will pay out on behalf of a single licensee, regardless of the number of awards or transactions involved?
399) Lacey is preparing an offer for her buyer clients, and it’s time to enter the amount of earnest money they’re going to offer. Which of the following statements is true regarding what earnest money the buyers should offer?
400) Which of these is an example of illegal market allocation?
401) A month-to-month lease agreement is considered to be this type of leasehold estate, in which the total duration is unknown.
402) What may be found in paint in homes built before 1978?
403) A property appraised for $257,000 and the buyer paid $249,000. Which value will a lender use when determining the loan-to-value ratio?
404) Per the EPA, what must be conducted before a project may be approved for development?
405) What’s the purpose of the Interstate Land Sales Full Disclosure Act?
406) As required by the statute of frauds, every deed must have which of the following?
407) Which of the following is an adverse material fact?
408) What must a license applicant demonstrate to minimize the chance of license denial?
409) Errors and omissions insurance covers _______ who are sued by consumers for inadvertent mistakes in a real estate transaction.
410) At its most basic level, which type of antitrust violation is a conspiracy between business competitors to set their prices to buy or sell goods or services at a certain price point?
411) In what type of market might an agent ask the multiple buyers who have submitted offers to submit their highest and best?
412) Which choice correctly identifies the seven protected classes according to the Fair Housing Act?
413) Your clients, the Jamesons, are selling their lakefront property. They receive an offer, and the buyer has included a pre-approval letter. The Jamesons balk, saying, “We want a pre-qualification letter, or we’re not selling.” What do you tell them?
414) Which one of the following statements regarding depreciation schedules is true?
415) Which entity guarantees loans?
416) Based on the duty of reasonable skill and care, if clients ask agents for advice in areas outside of an agent’s scope of expertise, what should agents do?
417) When finding listings, which statement describes the farming approach?
418) Mary, who’s suffering from Alzheimer’s disease, signs a contract to buy Edgar’s home. Before the deal closes, it’s determined that Mary lacks legal capacity to enter into a contract. Which party is permitted to void the contract?
419) Historically, what do property values tend to do over long periods of time?
420) Which type of estate conveys possession and control, but not title?
421) Broker Regina tells her client that a property is zoned as residential, even though she’s pretty sure it’s zoned commercial. This violation is an example of _________.
422) Uh-oh. You failed to present an offer on behalf of your client in a timely manner. As a result, the seller accepted a lower offer from another buyer. For which of the following could your buyer sue you?
423) What’s a covenant between a lessor and lessee?
424) ______ is when the buyer and seller settle all terms of their agreement.
425) What type of real estate market occurs when both supply and demand are low?
426) Once signed, the listing agreement is a legally binding contract between _______.
427) Proposed zoning ordinances must undergo tests to determine their validity. These tests include which of the following?
428) Which type of buyer tends to know little about the homebuying process and has limited funds?
429) In a deed, this person is referred to as “the party of the first part.”
430) When preparing the sales contract, when is it acceptable for a licensee who is not an attorney to offer legal advice to the client?
431) Loans available through the Farm Service Agency have which of the following characteristics?
432) Which type of property manager works mostly with real estate developers and investors?
433) How can a licensee earn commission from a seller who has not listed the property through an agent?
434) The owner-manager relationship is based on the property manager performing particular duties. This would include ______.
435) What would the monthly rate be if annual taxes are $890? Round to the nearest cent.
436) Before closing, who is generally responsible for obtaining an appraisal, completing the loan application, ordering a home inspection, and securing homeowner’s insurance?
437) Co-ownership with inheritance rights is what kind of real property ownership?
438) To what properties does the Tennessee Residential Property Disclosure Act apply?
439) Jorge is a dual agent. He owes his clients all of the following fiduciary duties except ______.
440) The Title and Conveyance paragraph of the TAR Purchase and Sale Agreement stipulates that the seller is conveying the property to the buyer with ________________.
441) An affiliate broker may perform brokerage duties under what circumstances?
442) What is a primary factor a lender reviews when determining if a borrower is a good credit risk?
443) Under which of the following conditions is it unacceptable to disclose confidential information?
444) What type of real estate market occurs when supply is high and demand is low?
445) Brenda, a new licensee, wants to impress her buyer clients, the Changs, who are practically royalty in China, their country of origin. Her responsibility is to _________.
446) Kevin, a real estate licensee, works independently instead of under a sponsoring broker. This means that he is licensed as ________.
447) Your clients, the Samsons, ask you to provide them with an appraisal in order to determine a list price for their property. Since you’re not an appraiser, what should you do?
448) Which of the following is a violation of federal fair housing law?
449) When a higher-quality property is adjacent to a lower-quality property, it can increase the lower-quality property’s value. What economic principle is this?
450) The Emery family, along with 20 other families, purchased a timeshare estate that will enable them to share a condominium in a resort community. A timeshare estate involves a ______ type of ownership.
451) Which of these pieces of legislation work together to prevent discriminatory lending practices?
452) Which of the following scenarios is an example of group boycotting?
453) Caveat emptor means ________.
454) Michael doesn’t have a real estate license, but he helps his friend, Nancy, sell her home. What can Michael legally receive as compensation?
455) Which type of real estate license requires successful completion of a 90-hour course and passing the licensing exam before a license is issued?
456) Brendon is obtaining a loan to buy a home. When reviewing his loan documents, he sees one called a note and one called a mortgage. What is the role of the note?
457) How many approaches to value do appraisers generally use?
458) Mark works at Farm and Country Bank, and has arranged an agricultural loan for Josh, a local organic farmer. Josh didn’t meet the bank’s normal underwriting standards, but Mark made the loan because he was able to arrange for a guarantee from ______.
459) When a developer selling timeshare units receives earnest money deposits or down payments, what is the developer required to do with that money?
460) Which type of events are generally on a title insurance policy’s schedule of exceptions?
461) Annie and George have been saving and are finally ready to purchase their first home for their family (including their two toddlers). They want to make an offer on a sweet little bungalow in a quiet Richmond neighborhood. If the sellers are represented by a real estate licensee, which situation would be a violation of fair housing laws?
462) Who is responsible for testing private wells for water safety?
463) Which of these statements about cooperating with other licensees is true?
464) Who is responsible for testing community wells?
a. +The local health department
465) The ______makes it illegal to send unsolicited commercial solicitations via fax without the recipient’s permission or an established relationship.
466) What is a general lien?
467) Under standard lease provisions, a demising clause would contain ______.
468) A requirement for legal competence
469) Which of the following statements describes laws and ethics?
470) How many hours of continuing education must first-year salespersons take?
471) Activities that restrain trade and reduce competition and choices for consumers are considered to be what kind of violations?
472) When prospecting and soliciting for new business, licensees should be familiar with what federal acts?
473) Real property ownership may have significant tax advantages. Which of the following is a potential advantage?
474) Your neighbor Mort wants to buy an investment property but he’s a busy man and asks you to act as his attorney in fact as well as his buyer’s agent. What should you tell Mort?
475) What’s an MLS?
476) Carson is purchasing a $600,000 property by obtaining an 80/20 loan. How much is Carson financing?
477) Why does HUD test for housing discrimination?
478) Which of the following options describes a method by which a licensee can determine an appropriate listing price range?
479) The secondary market is comprised of _________________________.
480) Which of these is NOT a form of ownership for real estate?
481) What is the purpose of the Common Interest Communities Law?
482) What are two types of evictions?
483) Federal and state fair housing laws are designed to _______:
484) If you’re in a caveat emptor state, which statement about property condition disclosures is true?
485) In caveat emptor states, while sellers can’t lie outright or actively conceal a problem—and must honestly answer prospective buyers’ questions when asked—they aren’t obligated to point out the home’s flaws or defects to buyers.
486) What can a wet environment with little air circulation do?
487) When does the purchase agreement become a legally binding contract?
488) Joe and Emma Parsons begin informally working with their neighbor Kyle, who’s a real estate licensee, to find a bigger house. The parties have not signed any agreements or discussed the arrangements. This is an example of a(n) ______ agency agreement.
489) A broker’s price opinion is generally written by whom?
490) Licensee Kyle has had a few casual meetings with a potential client, Mary. Mary told Kyle the type of home and area she’s interested in, and Kyle mentioned a few homes he thinks Mary might be interested in. Although Kyle hasn’t said he will continue to look for homes for Mary, Mary believes he’ll do just that. Which of the following statements about this situation is correct?
491) Which document spells out for buyers all settlement costs in a federally related residential real estate transaction?
492) Google and “if this, then that” alerts can assist you with which of the following?
493) The number of properties available describes this factor that influences value.
494) Which of these items should real estate professionals help first-time buyers and buyers who have experienced recent credit issues to understand?
495) Jill needs to pay the web developer who created a new website for her brokerage, but her checking account is low, so she floats herself a loan from earnest money kept in the brokerage’s escrow account and deposits it in her account for a few days before paying the developer. Which answer correctly identifies the violation(s) Jill has committed?
496) Which of these situations would result in the earnest money being disbursed to the seller?
497) Your client, Bruno, is an investor. He is in the process of selling a fourplex and mentions to you that he hates the idea of the capital gains tax he’ll be subject to. What should you tell him?
498) Mary is preparing a purchase offer for her buyer client. It’s a pretty standard offer: a little less than list price, with the seller paying a little toward the buyer’s closing costs. Mary fills in the blanks on a standard form used in her brokerage firm based on the current situation. Is this okay?
499) Cracks, holes, or rotten areas on a soffit are common ______ issues.
500) A licensee says, “This is a dream home with the best views in town.” This is an example of _______.
501) Plat of Block 28, Woodmen Heights Tract, recorded in Map Book 27, page 68, at the Eldor County Records Office is an example of which essential element of a deed?
502) Which of the following best describes the fiduciary duty of confidentiality?
503) ______ is a process in which an appraiser determines a probable range of values for a property by comparing a group of comparable sales to the subject. The appraiser attempts to include both superior and inferior units of comparison, such as age, transaction price, etc.
504) Cultivated crops are considered personal property even though they’re part of the soil, and they’re known as _______.
505) Which statement best describes a trade fixture?
506) A landlord discovers that his married tenants are expecting their first child. He wouldn’t have rented to the couple had he known they were going to have children, so he serves them with an eviction notice and tells them they must be out in 30 days. The landlord is guilty of ______.
507) What types of monies received from income-producing properties should be deposited into an escrow account?
508) Which option best describes a delivery and acceptance of a deed as required?
509) What’s the purpose of a POA’s restrictive covenants?
510) What is the term used to describe submerged land below the mean water mark?
511) In which of these situations does the disclosure for unrepresented parties need to be provided?
512) An organization with many investors who jointly participate in a real estate investment and must adhere to the rules and regulations of the Securities and Exchange Commission is a ______.
513) Which term describes the process of real property becoming personal property by detaching it from the land?
514) What’s the purpose of testing with regard to fair housing?
515) A borrower has a 30-year, $500,000 loan with an interest rate of 6.25%. His monthly principal and interest payment is $3,078.59. How many payments will he make over the course of the loan?
516) All of the homes on Elm Street are currently on septic systems. However, the county plans to extend the sewer lines to Elm Street within the next two years. What’s the biggest reason why it’s important for your buyers to know this?
517) Which statement about lead-related health problems is true?
518) John’s property is shaped like a triangle. The street side is 185 feet, and from the street to the longest point of the triangle is 225 feet. How do you calculate the square footage of John’s property?
519) Using the capitalization formula, what is the value if the net operating income is $20,000 and the rate of capitalization is 10%?
520) A fire destroyed Meredith’s house. Meredith contacted her insurance company, and she was shocked to learn her insurance policy didn’t fully cover what she paid for the property. How does the insurance company determine the replacement value of her home?
521) A quitclaim deed does which of these?
522) In many cases, property managers must get explicit permission in order to disburse funds from a trust account. What is one common way to do so without this explicit permission?
523) Johannes must obtain a permit for a construction project that is located right next to a wetlands. Which federal law or regulation requires him to get the permit?
524) When a licensee is working with a property located near a Superfund site, what does that mean?
525) Which of these situations represents the illegal practice of redlining?
526) Jeanetta leases an apartment from Quad City Leasing. Jeanetta has filed a complaint with the state real estate licensing division stating that Marissa, Quad City’s property manager, breached her fiduciary duty of loyalty to Jeanetta. Which of these statements about this situation is true?

527) Property managers owe fiduciary duties to their clients (the landlord) and the community as a whole, not to individual residents.
528) In which of these situations would the property most likely be conveyed with a trustee’s deed?
529) states that use a deed of trust as security for a mortgage, the trustee conveys foreclosed property with a trustee’s deed.
530) Luci’s client Kaden wants to purchase a new construction property, and he wants to get as much house as he can afford. Which of the following does Luci need to advise Kaden about regarding interest rates when purchasing a newly built home?
531) Jerrica is set to close on the property she’s buying on Friday. Because of other delays in the closing date, Jerrica’s interest rate as of the day of closing will increase by 1/4 of a percent. What impact does this have on the closing?
532) Mike’s been friends with Tim since college. They often work together: Mike flips houses and Tim’s an appraiser that he uses frequently. It works out great for both friends and Mike definitely gets a better appraised value on the flips Tim handles. For every appraisal Tim handles for him, Mike gives him a $100 gift card. In what illegal practice does it sound like they’re engaging?
533) For conventional loans in which the loan-to-value ratio is in excess of of a certain percentage, lenders generally require private mortgage insurance. What’s this percentage?
534) Loans above 80% don’t conform to Fannie Mae/Freddie Mac guidelines, so a lender may require PMI to offset the risk.
535) Corinne is 68 years old and employed full time. She’s of Spanish descent, is raising her 12-year-old grandson, and lives with her partner, Katherine. She requires an accessible apartment because she uses a wheelchair. Under which of the following federally protected classes might Corinne be protected if she faces housing discrimination?
536) Federal fair housing laws don’t name age, employment status, or sexual identity as protected classes. Corinne would be protected if she experienced housing discrimination based on her national origin, sex, disability, or familial status.
537) Savvy’s buyer client made an offer on a property but is having second thoughts. Savvy tells her client that she’ll ask the seller’s agent for an extension on the inspection period “to gather more bids,” and use that time to look at other properties to avoid losing out on the current property. Savvy’s client found a property she liked better, so they made an offer. The offer was accepted, so Savvy contacted the first property’s agent to terminate that offer. Is this wrong?
538) In pricing a property, what might expired listings tell the real estate professional?
539) How are principal meridians and baselines used in the rectangular government survey system?
540) A buyer is purchasing a property for $400,000. His loan-to-value ratio is 80%. The lender also charges a 1% loan origination fee. How much is the loan origination fee?
541) An 80% LTVR means the buyer is financing 80% of the purchase price. This equates to $320,000, and 1% of this amount is $3,200.
542) Margo’s accountant tells her that she’s eligible to deduct the property taxes she paid last year. Select the statement about this deduction that’s true.
543) Katherine is purchasing a second home as an investment/vacation property. She has a large down payment, and the seller is financing the rest of the purchase. Which of these statements is true?
544) In a seller-financed transaction, the Closing Disclosure and Loan Estimate aren’t required. Some other form of statement may be prepared to show the buyer and the seller their respective closing figures.
545) The purchase price of the home Leroy is buying is $300,000. He’s putting $100,000 down and is paying three discount points. How much will this cost?
546) What title guarantees will Jody have if her property is deeded to her after a foreclosure?
547) Which of these statements about statutory duties and fiduciary duties is true?
548) The two real estate firms in one small town, Vineyard Realty and Homestead Homes, agree to charge the same commission rate to avoid the possibility of clients selecting a firm based simply on price. What specific federal legislation prohibits this?
549) Which of these examples describes a prepayment penalty?
550) An abandoned or otherwise unused commercial or industrial site with suspected contaminants is known as what?
551) year! Kim is taking a leave of absence from her job to accompany Marta. They don’t want their home in a gated community to sit empty, so they’d like to rent it out for the year. What might prohibit them from doing so?
552) County or state laws likely wouldn’t address homeowners’ ability to lease an owned piece of property, but HOA regulations might.
553) What’s the primary difference between an ordinary and a pur autre vie life estate?
554) Elaine owns a home on a flag lot behind James. Her easement for a common driveway runs through James’s property. What kind of ownership rights does Elaine have of the driveway that runs through James’s property?
555) Jerry and Simon signed a contract so that Jerry could purchase all of Simon’s restaurant equipment for one price after Simon closes his restaurant next month. The contract contains a provision that states Jerry has one year from the purchase date to file a suit relative to the purchase. After the year is up, Jerry forfeits the right. What kind of contract clause is this?
556) Dave’s company just did some renovation work on a free-standing hobby store in order to ensure that it’s ADA compliant. As Dave is doing the final walk-through, he notes that the aisles are now wider, the restrooms each have an accessible stall, and the water fountain near the restrooms is lower and has more clearance. But he notices that one critical renovation hasn’t been made. Which of these is key for ADA compliance?
557) Pay phones aren’t required, nor are accessible cash registers. But ramps for wheelchair access to the store are key!
558) How many acres are in a parcel described as, “The E 1/2 SE 1/4 NE 1/4 Section 3, Township 4 North, Range 2 East of the 6th PM”?
559) If the private individual owner doesn’t own more than three single-family homes at one time, which exemption from the Fair Housing Act could apply?
560) Celia was obtaining a conventional loan, and she put $50,000 down as a down payment. Why might her lender also require her to obtain private mortgage insurance?
561) Roland’s farm land is assessed at 1.5 million dollars and the improvements for $500,000. At a tax rate of 4 mills, how much are Rolan’s monthly taxes?
562) Which of these areas would be included in the livable area calculation?
563) In a residential real estate sale involving a federally related loan, what entity is required to provide Real Estate Settlement Procedures Act disclosures to the consumer?
564) Shalonda is looking to purchase a home for $325,000 using a conventional loan. She has $49,000 to place as a down payment on the house. Which of the following statements is true?
565) Seller Jamison is closing on his property with buyer Conrad. Jamison paid the current year’s property taxes already. Is this a prepaid or accrued expense, and how will it be represented on the settlement statement?
566) These taxes have already been paid, so they are a prepaid item. They’ll appear as a buyer debit and seller credit at closing.
567) If there’s no state or local building code to cover a specific situation, what code must the builder abide by?
568) A closing agent has several duties to perform both before and after the closing. Which of the following is a task the closing agent must complete after the closing?
569) A brokerage firm that hires licensees as employees instead of as independent contractors must ______.
570) Stu is buying Freddie’s property. What must occur for the transfer of title to take place?
571) What’s the penalty for violating federal do not call rules?
572) Which of the following is an example of commingling?
573) Your clients are purchasing a $160,000 home. If they have a down payment of 25% and the bank charges two points at closing, how much are they paying in points?
574) Christine listed her house with you. Tailleur represents the buyer, Rebecca, and the seller’s mother, Freida, is paying your commission. Which of these factors determines how legal agency is determined in this situation?
575) LaTonya’s aunt left her a bungalow on the outskirts of the city. For many years, it was the place for family holiday gatherings, and LaTonya’s sister was even married there. That’s why her family is so upset to learn that she plans to sell the bungalow as soon as she gets it cleaned out. Which real property right allows her to sell the property?
576) The right of disposition includes the right to determine how, when, and if the property is to be sold or transferred to another owner.
577) Which of the following would be a description used for real property and a fixture?
578) Your client Faye is buying a condo downtown for $565,000 and financing 60% of the purchase. Her lender is charging a one-point loan origination fee and two discount points. Can you help Faye calculate the dollar amount for points she’s going to pay on her loan?
579) Jansen and his listing agent just left the closing on Jansen’s house. What kind of notice does Jansen, his agent, the buyer, and the buyer’s agent have regarding the sale of Jansen’s house?
580) Dale and Barbara, your buyer clients, aren’t thrilled about the current interest rates on home loans. They opt to pay two discount points to their lender to bring down their monthly payment. They’re financing $235,000 on their new $400,000 home, so how much can they expect to pay for points at closing?
581) Why are lenders required to provide the Loan Estimate and Closing Disclosure forms to loan applicants and borrowers?
582) While walking around the exterior of a rural home she’s inspecting, Juanita noticed a metal vent pipe sticking out of the ground 25 feet from the house. She documents this because it may be a sign of what potential environmental hazard?
583) What factors directly affect an adjustable rate mortgage?
584) Sondra thinks the new business contract she signed with her business partner is valid. Both parties are legally competent, the contract has a legal purpose, an offer was made and accepted, and a fee has been negotiated and documented. Which essential element of a valid contract has Sondra not yet considered?
585) The only element Sondra hasn’t considered is whether the consent to enter into the contract was voluntarily given. Only real estate contracts have to be in writing, and parties are legally competent to enter into contracts from the age of 18.
586) Danette hasn’t paid the first quarter water bill on her property. It was due on April 1. She’s closing with the buyer, Jason, on April 1. What type of expense is this and how will it appear on the settlement statement?
587) Shira bought a condominium in a planned unit development. The development has a small playground, tennis and basketball courts, and a putting green. Who owns these recreational facilities?
588) Joe gave land to a school, but still wanted to have some control over its use, so a deed was prepared that gave the school title as long as the land is used for educational purposes. What type of interest does the school have?
589) Ashton, an appraiser, is estimating value using the sales comparison approach. He applies more weight to two comparables over several others he used. What process is he utilizing?
590) Through a correlation process, the most weight may be given to one or two comparables, or equal weight may be given to all. The term reconciliation is often synonymous with correlation.
591) Casey signed a contract form offering a purchase price of $309,000 on a home, and gave his agent a $5,000 earnest money deposit. The owner is out of town and her agent can’t reach her. At this point what does Casey have?
592) Sandra is purchasing a home for $200,000 and provides a $3,000 earnest money check to the seller. Her closing costs and down payment total $7,000. Assuming that Sandra is financing the purchase, how much should she bring to the closing?
593) Sandra brings to closing the total amount of her down payment and closing costs ($7,000), less the earnest money provided when the contract was signed ($3,000), or $4,000.
594) Alexandra sells her house to Clark for $178,000. They negotiate to split the transfer tax, which has a rate of $0.33 per $100. What do they each pay to cover the transfer tax?
595) Joan is representing the buyer, Carlton, and Reggie is representing the sellers, Zeb and Teresa Martin. Carlton’s Great Aunt Matilda has agreed to pay any portion of Joan’s commission the sellers don’t cover. Teresa’s father, Teddy, has agreed to pay half of the sales commission that will be owed to the listing agent. Which of these statements is true?
596) What’s a typical prepaid item that will go into a seller’s credit column and a buyer’s debit column on a closing statement?
597) Related to the legal test of a fixture, in the acronym MARIA, what do the two As stand for?
598) Which of these is NOT one of the ways in which an agency relationship may be terminated without penalty for either the agent or the principal?
599) Which statement best describes an adjustable rate mortgage?
600) Helen is purchasing a home for $150,000 and provides a $2,500 earnest money check to the seller, which will be applied to her down payment. She’s financing the transaction, and her closing costs and down payment total $4,800. How much should Helen bring to the closing?
601) Which task is NOT the responsibility of an escrow officer?
602) Which of these is NOT a likely features of a bridge loan?
603) Following all of the client’s lawful instructions describes which fiduciary duty?
604) Georgina is an escrow agent who’s holding funds for several transactions. Which of these statements about how she’ll disburse these funds is true?
605) A prospective buyer is curious why a previous owner is selling such a perfect home. The licensee knows that the previous owner recently died due to complications from AIDS. How should the licensee respond to the prospective buyer’s inquiry?
606) Broker Sam has extended an offer to licensee Jane, who has accepted the offer. Jane will work as an independent contractor for Sam. Based on this, which of the following statements is true?
607) You’re showing your buyers a house that clearly has a second-story addition. What important thing do you need to find out from the sellers?
608) Shemar owns a starter home a few miles outside of the city center, and he wants to deed it to his grandson, Tyler. According to the paperwork Shemar had drawn up, Tyler will own the property as long as he continues to pay the property taxes on time. After the second missed property tax payment, ownership would revert to Shemar. What did Shemar place on the deed?
609) Gus has applied for a home equity line of credit from his federally insured bank so that he can make some renovations to his kitchen. The same bank is his lender for his home mortgage. Will this loan be subject to Real Estate Settlement Procedures Act requirements?
610) Chip is a residential and commercial agent. His friend asks him to list his cattle ranch for sale, but Chip’s never listed an agricultural property before. How should Chip handle this listing so he can still work for his friend but also not work outside his area of expertise?
611) Chip could turn down the listing or refer the listing to a more experienced agent. If he wants to work the listing for his friend, he should disclose his lack of experience to the client and ask permission to partner with an ag expert at his firm.
612) Tiers in the rectangular government survey system are formed by ______.
613) SARA is an amendment to which environmental act?
614) Rhonda purchased an existing pet store in her neighborhood, and she’s so excited! Her animal-loving aunt is thrilled for Rhonda but disappointed that she won’t be able to visit the store in her wheelchair, as the aisles are narrow and there isn’t enough room to move around. What is true about Rhonda’s responsibilities to her aunt and other people with disabilities?
615) Related to reasonable accommodation of being allowed to have an assistance animal, which statement is true?
616) Henry submits an offer on a condo and includes an earnest money check for 10% of his offer, which the seller accepts. Later on at closing, he brings a cashier’s check for $34,450 (comprising the remaining half of his 20% down payment and $7,950 in closing costs). What’s the condo’s purchase price in whole dollars?
617) Subtract the closing costs from cashier’s check amount ($34,450 – $7,950=$26,500) for half of down payment. The total DP was double this ($53,000). Next, divide $53,000 by 20% (to find purchase price ($53,000 ÷ .2=$265,000). Purchase price is $265,000.
618) What’s the estimated value by cost approach for a property if the site value is $25,000, the new cost of improvements is $100,000, and the total depreciation estimate is $15,000?
619) An appraiser used the cost approach to estimate a property’s value at $220,000. The site value was $50,000, and the total depreciation estimate was $4,000. What was the estimated cost of improvements?
620) Dean’s new business venture is a software services firm where IT professionals handle programming and customer service tasks for a number of business clients. His employees all work at tables in an open office space. Dean most likely has a _______ lease for the office space.
621) The best way to start comparative market analysis data collection is to use properties that sold when?
622) Why is proof of ownership required when transferring real property?
623) Tom and Martha live in a neighborhood where lawn ornaments are prohibited. They want to put up a nativity scene at Christmas and argue that the covenant doesn’t apply to temporary decorations but only to permanent ones. Their homeowners association disagrees. Which entity enforces subdivision covenants?
624) At what point must a listing agent disclose material facts to all parties involved in the transaction?
625) Which of these situations might be addressed by limitations or a subject to clause in the deed Jane is using to convey property to Moira?
626) Most often, what’s the first course of action for disputed home warranty claims?
627) Gabe’s home has an assessed value of $172,000, and his tax rate is .55%. What are the annual taxes?
628) First you have to convert the percentage to a decimal. .55% = .0055, so multiply the assessed value by the tax rate to calculate annual taxes: $172,000 × .0055% = $946.
629) Which of the following is an acceptable ad based on Regulation Z?
630) Citytown officials know that they have an abandoned factory site that has been identified for cleanup under CERCLA. When city officials tried to trace the ownership of the property, they found several shell corporations but can’t determine which individual or corporate entity actually owns the property. What is a likely outcome of this situation?
631) Quentin brought an application before city council to build a shopping mall on 17 acres south of town that currently don’t have a zoning designation. The council referred him to the planning commission, which will review the application in light of the city’s ________.
632) Since the parcel isn’t currently zoned, zoning should be established in alignment with an area’s comprehensive plan.
633) Belinda is a licensee whose client asked her to draft an addendum containing complicated terms that even Belinda doesn’t fully understand. Belinda should ______.
634) Which act sets guidelines for public and common use areas at housing developments?
635) Sebastien’s four-story home includes a 400-square-foot unfinished bonus room on the top floor, an upper level with 850 square feet, a main level with 1,450 square feet (which includes a garage that’s 500 square feet), and a finished basement that’s 900 square feet. The MLS system in Sebastien’s area includes below-grade square footage. What square footage will be reported on his MLS listing?
636) Sebastien should exclude the unfinished bonus room and the garage and add the remaining area (850 + (1,450 – 500) + 900).
637) Your buyer, Billy, wants to make an offer on the craftsman house he saw today, but he wants the sellers to start the paperwork for a tax reassessment before closing. This isn’t part of the standard sales contract in your area. What will you use to accomplish this request?
638) Joaquin sold his house for $327,600. He bought it several years ago for $139,900 with a $100,000 loan. The loan balance when he sold it was $73,400. What was Joaquin’s equity?
639) Kelly is closing on the house she’s purchasing on Wednesday. Which of these statements is true?
640) Gerald practices real estate in a state that recognizes sub-agency. Which of the following statements is true of Gerald’s authority to appoint a sub-agent?
641) Any delegation of a licensee’s agency-related tasks must be made in writing, and must be approved by the principal.
642) How many acres are in a parcel described as, “The S 1/2 NW 1/4 Section 3, Township 4N, Range 2W of the 6th PM”?
643) If a community isn’t growing in an orderly fashion, which local land use group is likely at fault?
644) Tracy is looking in the MLS and sees a listing marked “REO.” Which of these statements regarding REOs is correct?
645) Failed foreclosure sales and deed in lieu of foreclosure actions result in lenders taking title to properties they previously had mortgage loans on. These properties are called real estate owned, or REOs.
646) Melisa’s mother gave her house to Melisa, along with a signed copy of the deed granting ownership to Melisa. Years later, Melisa decides to downsize by selling the property. The title company shows that the property is still in Melisa’s mother’s name. What does Melisa have to do to clear this up?
647) What’s a good policy that a buyer’s agent should employ regarding contingencies?
648) Alice owned a double lot on the waterfront. She sold the lot to Ronesha and included a deed restriction prohibiting construction of any building taller than one story. Ronesha wants a three-story house. What should she do?
649) What type of arrangement allows the buyer to retain title to the property, but places a security interest in the property on behalf of the seller?
650) Tristan’s offer has been signed by all parties and delivered back to the seller. This means that ______ has occurred.
a. +Binding acceptance
651) Compared to conventional loans, what are typical characteristics of construction loans?
652) An __ contract or agreement is one that exists based not on words, but on the parties’ actions or behaviors.
653) __ consist of agreements in which the terms are stated by the parties. The terms may be stated orally or in writing. But the contract as a whole must reflect the intention of the parties.
654) The Equal Credit Opportunity Act is designed to prevent discrimination in ______.
655) __ asks the court to force the opposing party into a contract that binds them to actually perform the contract at issue, rather than award damages for breach of contract. In real estate litigation, a buyer can force a reluctant seller to live up to the purchase and sale agreement.
656) __ are typically voluntary liens. Voluntary liens are placed on the subject property with the consent of the owner. This is usually done through the loan documents (mortgage and promissory note).
657) When a loan is recasted, what does it essentially become?
658) Which of the following may be used to defer paying taxes when there is an almost immediate repurchase of what’s called a “like-kind” property?
659) What is a clear zone?
660) When it comes to advertising in real estate, a __ is an established zone created to prevent safety hazards and unsightly advertising.
661) ______ is a leasehold estate of definite duration that terminates automatically and is inheritable.
662) Sandra enters a contract to sell her home to Paul. Under the statute of frauds, the written contract must name the contracting parties, identify the subject matter of the contract, and ______.
663) What is a capital gain?
664) For an investor, purchase price plus closing expenses is known as ___________________.
665) Your client, Lee, a foreign investor, is selling his property and learns a 15% withholding of the sales price will be imposed. Why is this?
666) The requirement is two of the last five years, and the exclusion is up to $250,000 for single taxpayers and __ for couples filing jointly.
667) The __ is a person who applies for a mortgage and makes a home purchase on behalf of another. The actual buyer may be someone with bad credit who is unable to qualify for a mortgage themselves, or a scam artist looking to profit by manipulating the mortgage and real estate transaction process.
668) A __ typically has no right of survivorship. This means that if A and B are tenants in common of Blackacre, and A dies, A’s share does not to go B. Rather, A’s share goes to the party selected in A’s will.
669) Kevin, your buyer client, signed a contract to buy Lydia’s home. The contract states that “time is of the essence.” You correctly advise Kevin that this means ______.
670) Ensuring land is put to the use for which it is best suited while also protecting livability of a community and property values is achieved through ______.
671) The local planning and zoning commission is reviewing multiple applications at this week’s meeting. Which of the following new developments is likely to be reviewed relative to a mixed-use zoning ordinance?
672) A __ lease is usually for a large open space that may have few amenities.
673) A __ is the “embryo stage” of a land purchasing process that analyzes and determines if the property is practical for the planned use of the land. This task can also include reviewing all aspects of the property from both a financial and environmental perspective as well.
674) A __ is a legal proceeding that asks the court to remove any claims, or “clouds,” against the title so that it can be conveyed.
675) Terry has a costume shop in a commercial building. He has a one-year lease that automatically renews for another year unless either Terry or the landlord terminates. What type of leasehold estate is this?
676) __ does impact property values and may be perceived as infringing on personal rights; therefore, public opinion is sought before zoning changes are made.
677) In an amortized mortgage, the monthly payment is the same each month. While the portion used to pay interest decreases over time, the portion used to repay principal ______________.
678) Edgar is in the process of selling his home in a short sale. What’s a short sale?
679) ______ is allowed to perform appraisals on any type of real estate.
680) Frank took out a mortgage from First National Bank in order to purchase a new home. In a lien theory state, who or what retains the title to the property?
681) Which type of property management situation requires a license?
682) According to the Telephone Consumer Protection Act guidelines, who or which entity may call a person listed on the Do Not Call Registry?
683) With an interest-only payment plan, ______.
684) Which term involving trespassing is used when someone other than the owner claims title to real property?
685) Which of the following is true about pocket listings?
686) What type of contract is one in which the terms of the agreement and consideration to be exchanged are defined in words, whether verbally or in writing?
687) A landlord locks a tenant out and requires the tenant to pay past-due rent before regaining access to the unit. This is considered ______.
688) Which activity requires a license?
689) In addition to residential and commercial real estate sales, King County Realty has an active residential property management department. The firm rarely holds earnest money on sales transactions, so it has a single trust account for earnest money and security deposits. The firm ______.
690) How do you decide which party you represent in a transaction?
691) What is a margin, as it relates to an adjustable rate mortgage?
692) Your client, Brian, is an investor who likes to put as little cash down on his investments as possible. Brian believes in the power of ______.
693) In order to be enforceable, what does the statute of frauds require a real estate contract to be?
694) What is usury?
695) Stanley is having second thoughts about taking his neighbor to court over a written agreement they have concerning who pays the rent on a storage unit that they share, because it’s used to store stolen merchandise. Stanley doesn’t think the contract will stand up in court. What type of contract does Stanley have?
696) What brokerage activities can Austin perform if his license is inactive?
697) Seller Darlene wants to know when she’ll be paid the full amount of the purchase price for her property. What should you say?
698) Three friends entered into a contract to buy a vacation property. The friends got into a dispute, resulting in one of them wanting out of the deal. The remaining two friends didn’t want to lose the deal, but couldn’t afford it on their own. They talked a fourth friend into replacing the person who backed out of the contract. The seller agreed to the substitution, and they moved forward with the purchase. What does this describe?
699) Cheryl wants new carpeting for her rectangular living room. Her living room is 18 feet by 12 feet. How much carpeting does she need?
700) What’s alienation with regard to real estate?
701) One regulatory requirement says that a broker has a specified amount of time to provide copies of transaction documents to a managing or designated broker. How long is this window of time?
702) Carlos, a property manager at Your Best Bet Property Management Company, manages multiple properties for their owners. Which of the following statements is true?
703) When you refuse to screen prospective buyers based on their ethnicity, your client, Matt, “fires” you as his agent, and you agree to his decision to part ways. Do you still owe this guy any fiduciary duties?
704) Liz listed her property with an agreement end date of May 31. The property went under contract on May 12, and the buyer’s earnest money was deposited on May 13. Based on the home inspection results, the buyer legally terminated the contract on May 20. When did the listing agreement between Liz and the listing broker officially terminate?
705) Curtis is having second thoughts about taking his partner to court over a written agreement they have concerning the purchase of a rental property. Curtis doesn’t think the contract will stand up in court because the partner is only 17 years old. What type of contract does Curtis have?
706) The appraiser applies a capitalization rate to an income comparison of similar properties with which of the four methods used to measure depreciation?
707) Janice’s life tenant, Jacob, is currently living on her property. Once Jacob dies, Janice has arranged for the property to be given to the School for the Gifted. What interest does the School for the Gifted currently have?
708) James creates a trust to hold a piece of real estate he owns. He directs a corporate fiduciary to hold title to the real estate and provides instructions for the management, control, and disposition of the real estate upon his death. Given that the trust only holds real estate, James likely set up a(n) ______ trust.
709) Which entity is responsible for deciding the general layout of a specific municipality —a city, town, or village—and mapping the zones and the uses allowed within each zone?
710) What’s the purpose of a brief adjudicative hearing?
711) What is the purpose of an operating budget?
712) Janie’s got an open house scheduled for Sunday, but lets her friend in on Saturday to preview it. It’s love at first sight! With the owner out of town, Janie decides to cancel the open house so there won’t be any other offers. Her friend makes an offer and it’s accepted on Monday. What fiduciary duty or duties has Janie breached?
713) During the closing, whose job is it to deliver the title commitment after ensuring the title is marketable and without defect?
714) Isabella is thinking about buying a one-bedroom residence in a cooperative. A residence in a cooperative, unlike a condominium, is considered ______.
715) What is the term for paying off a loan over time?
716) Maria’s neighbor is building a shed in his backyard that appears to be about a foot over the property line into her yard. What term describes the placement of the shed on Maria’s property?
717) The Jeffersons would like to sell their home. However, they had their home painted last year and never paid the contractor. The contractor has placed what type of lien on the home?
718) Which of these is an example of a lot and block description?
719) Which term refers to the division of community land into designated districts on a map that includes a text description defining the uses permitted under each classification?
720) What’s a vendee’s lien?
721) The Consumer Financial Protection Bureau ______.
722) The government’s power to take private land for public use is called ______.
723) A tenant is entering into a 12-month agreement with an owner of an upscale apartment complex to rent an apartment. What type of contract will be used to identify the rental arrangement’s terms?
724) Dual agent Barbara Park can only disclose Seller Carrie’s reason for moving if:
725) Which term is used when someone claims someone else’s property by using it for an extended period of time?
726) Which of the following is a residential dwelling with shared walls where the owner also typically owns the land on which the home sits?
727) The ______ provides administration and enforcement of federal fair housing laws.
728) You’ve signed a listing agreement with a client. Which of the following activities will you address next in order to complete the sales process for your listing?
729) Which liens take priority over all other liens?
730) What form should be provided to borrowers no fewer than three days prior to closing?
731) Which of the following statements about agents and the duty of obedience is true?
732) What does REO stand for?
733) What does the rectangular government survey system use as the basis for legal descriptions?
734) Randi is a licensee who would like to update her advertising. What must she be sure to include on any advertising listed with her or any other brokerage?
735) Seller Randy signed a listing agreement with Barbara, who worked very hard to find him a buyer. Randy’s cousin decided to purchase the house during the listing period. Is Barbara owed a commission?
736) Mario doesn’t want to include a religious preference in his listing ad, so which of the following phrases should he use?
737) Homeowners can take several actions related to pest infestations, but which of the following actions should be left to licensed pest management professionals?
738) Which of these transactions would require the Missouri licensee to provide written disclosure of his or her interest?
739) Which of the following is true about an attorney’s opinion of title?
740) What’s designed to protect buyers from financial loss if the title to the property they buy has defects?
741) When considering buying property subject to an existing lease, it’s critical to understand the lease terms, including the lease duration, rent amount, renewal/purchase options, and the __________________.
742) Which of these may be covered by a builder-backed home warranty?
743) Jasper has a new listing, and he appoints Esther as his sub-agent. Esther brings Julie, a buyer customer, to the transaction, and Julie buys Jasper’s listing. What’s true about the agency relationships in this situation?
744) Heath leases space in a commercial building for his sporting goods store, and the building owner insisted on having Heath sign a percentage lease. Under the terms of a percentage lease, Heath must pay ________.
745) With which type of government power can a lien be placed on a property, giving the government a claim to the property?
746) The Johnsons are shopping for a mortgage loan and are attracted to the below-market interest rate offered for the first year of an adjustable rate mortgage. What’s this type of rate called?
747) At a business meeting among heads of the top brokerages in town, the keynote speaker discussed a minimum listing fee. What’s this is an example of?
748) The tax associated with property taxes is relatively stable and a high revenue generator because ______.
749) A fee a lender charges for processing a loan is called _______.
750) The Knolls are purchasing a property and are concerned about the title. They want to have a title search performed. Who can perform a title search?
751) What type of emails are prohibited by the CAN-SPAM Act?
752) Clara signs a net lease for office space. Under a net lease, she’ll be responsible for ________.
753) Charles is selling his home to Sheila. Charles has an existing loan that he will continue to make payments on. Charles is also extending credit to Sheila for the balance of the purchase price. Sheila will make monthly payments to Charles. What type of financing is used in this transaction?
754) Which of the following equals one furlong?
755) Which of the following is considered an act of discrimination under federal fair housing laws?
756) Compared to working without a buyer agency agreement, a buyer who works under a buyer agency ?
757) Switches that are warm to the touch, damaged panels, and lights that dim or flicker when other appliances are in use can be signs of a(n) ______ problem.
758) What is the purpose of the Consent for Dual Agency form?
759) What types of leases must be recorded?
760) Which of these is an example of a rectangular survey system description?
761) Jorge is a dual agent in a single-license dual agency situation. He owes his clients all of the following fiduciary duties EXCEPT ___________.
762) Shelly buys Mark’s house, which is still in an option period with Monique. Monique decides to exercise her option after Shelly moves in. What will happen?
763) Your client exchanged one property for a similar property and did not have to pay capital gains taxes that year. How did he do this?
764) Soundproofing and decorative material, shingles, and siding may contain what hazardous material?
765) Jay’s new loan to purchase a property includes the seller’s existing mortgage. This type of loan is called a ______ loan.
766) What is one drawback of a real property transfer?
767) When assigning a contract, the assignor should ensure that ______ is not prohibited in the purchase contract.
768) You’re trying to impress your neighbors, who are considering selling their house. You’d like to get the listing. They ask you about a listing your firm has that’s been on the market forever. Why isn’t it selling, they want to know? You answer:
769) Which of the following occurs when a property owner dies without having a will in place, and no heirs or creditors can be found?
770) To effect a transfer of title by deed, _________________ must occur.
771) When operating under a power of attorney concerning the transfer of real property, who may sign in place of the principal?
772) Carla Ricardo asks the landlord if she could be let her out of her lease early. The landlord agrees to let her out of her lease, no strings attached. Carla and her landlord have decided to terminate the contract through _________________.
773) Single agency is _______.
774) Which of the following closing activities occurs on the day of closing?
775) In relation to appraisals, what’s a “federally related transaction”?
776) First-time homebuyers can access up to $________ of their Roth IRA accounts, penalty-free, under certain conditions.
777) Which of the following is the best definition of a covenant between a lessor and lessee?
778) Which of the following is a material fact that must be disclosed to prospective buyers?
779) The National Fair Housing Alliance believes in promoting the message that __________ neighborhoods are stronger neighborhoods.
780) Which of the following can indicate drainage problems?
781) Which of the following are landlords required by law to ensure?
782) A deed must be ______________ before it can be recorded.
783) What type of agency exists because a written or oral agreement is in place?
784) Which act introduced the “innocent landowner” defense that states that a landowner isn’t responsible for clean-up of contamination that occurred prior to their ownership, provided they have not tried to cover up the contamination and can prove due diligence in investigating the property when it was purchased?
785) Which of the following terms best describes real property?
786) In the sales comparison approach, the appropriateness of the various comparable sales in relationship to the subject is considered in a process known as ______, where certain factors may be given more weight.
787) What is the definition of a testator?
788) You are meeting with prospective clients in person for the first time. What are you required by law to explain to them?
789) Which of the following is true?
790) What type of tenancy can be automatically created if a tenant under a lease stays beyond the lease’s terms, and the landlord continues to accept rent from that tenant?
791) What might the financial implications be if a buyer needed to use individual retirement account funds toward a down payment?
792) Kip is a sub-agent working with a buyer customer, Charlie, for Sheila’s listing of May’s property. To whom does Kip owe his loyalty?
793) When a lower-quality property is adjacent to a higher-quality property, it can diminish the value of the higher-quality property. What economic principle is this?
794) At what point in a residential transaction must a seller’s agent deliver a completed Residential Real Property Disclosure Report to a buyer?
795) Which portion of a mortgage payment is the financial institution’s charge for the use of its money?
796) What’s it called when a person who has possession of a property through a life estate abuses the property or allows it to deteriorate?
797) Which ownership type involves one person owning the property?
798) Which of the following is designed to protect buyers from financial loss if the title to the property they buy has defects?
799) When people are treated differently because they were born in another country or are from a specific part of the world, this is discrimination based on _______.
800) You’re obligated to preserve all the confidential information you receive from a seller client. This obligation ______.
801) REEB automatically suspended the licensee’s real estate license when the board found the licensee guilty of which of these offenses?
802) Which one of the following elements of a deed signify the grantor’s intention to transfer title to the grantee?
803) The transfer tax rate is $0.37 per $100. A property that sold for $300,000 would have a ______ transfer tax.
804) How does discrimination still occur, even though it’s illegal?
805) As a property manager, Darby expects to _______.
806) Which type of estate conveys all rights of ownership?
807) Alexandra is perusing her closing statement, particularly those amounts that are a benefit to her. What’s the term for these items?
808) You’ve signed a listing agreement with a client. Which of the following activities will you address next in order to complete the sales process for your listing?
809) Which stage of the property ownership life cycle can be affected by income tax issues?
810) How can an agent offer dual agency legally?
811) Which type of contract involves an exchange of consideration between two parties?
812) A clause that allows the parties to agree that they won’t litigate if there are any contract disputes is a/n _________.
813) Conrad and Evan have been renting their house in Green Bay for several years. The end of their current lease is approaching, and the couple wants to continue renting the home. Which of the following is true of the lease arrangement they will enter into with their landlord?
814) What is the definition of a tax lien?
815) What figure results when you subtract the buyer credits from the buyer debits on the closing statement?
816) Roger just discovered that his loan includes a hidden balloon payment, so now he must ________.
817) Mario does not want to include a religious preference in his listing ad, so he decides to use which of the following phrases?
818) Juniper is buying a newly constructed home with a fireplace and garage. A _______ is required, per state laws.
819) Seller Julius knows he has asbestos in his insulation, and he wants to remove it before listing his house. What’s Julius’s best option for removal?
820) A listing agreement describes how compensation the seller’s agent earns will be shared with the licensee who brings the buyer. This is known as the _______.
821) Fred wants to make sure that his home is radon free. He wants to check all likely access points, including which of the following?
822) Ralph has a right of first refusal agreement on his neighbor’s property. When the property goes up for sale, how will Ralph exercise his right?
823) Which of the following is an example of a deed restriction?
824) A property manager is authorized to perform all of the duties related to the property on whose behalf?
825) uyer Yun-Wah is purchasing a property for $400,000. His loan-to-value ratio is 80%. The lender also charges a one-point loan origination fee. How much will his loan origination fee be?
826) What’s the area of a rectangular building that’s 40 feet by 20 feet?
827) Karen wants to sell her lakeside vacation home. Upon visiting for the first time in six months, she discovers it flooded during the rainy season. She should have the property checked for _______.
828) Al is a real estate licensee. Assuming that none of the following people are his clients but are parties to a potential transaction, to whom must he provide an agency disclosure form?
829) REALTOR® Jim wants to become a social media influencer to get his name out there as an exceptional real estate professional. Why might this be a good idea?
830) What is it called when a seller removes an item or fixture from a property (so that it becomes personal property instead of real property) before an agreement of sale has been signed or after negotiations have commenced?
831) Which of the following is something the seller is required to disclose to a buyer in a transaction?
832) Which of the following is a duty that licensees owe to ALL parties in a transaction?
833) Which of the following is a reason that wetlands are protected?
834) What’s an encumbrance?
835) Felicity doesn’t mind if her listing firm represents potential buyers of her home, but she would prefer that her listing agent only represent her in the transaction. What type of agency relationship should she select in her residential listing contract?
836) Vanessa has just returned $200 to a former tenant whose security deposit was $800. What else, if anything, must she do?
837) In terms of encumbrances, what’s a license?
838) Shelly is a landlord and places an advertisement for her apartment complex saying, “Bienvenido! These Spanish-style apartments are perfect for the Spaniard in you.” Is this a fair housing violation?
839) What’s the term for an addition to a sales agreement form that can be added before it is signed without changing any of the other terms that have already been agreed upon?
840) Ella, a listing agent, accidentally discriminated on the basis of familial status by using which statement in her advertisement?
841) Which of these is a requirement when licensees present a party’s written proposal to their client?
842) Which of these statements regarding the purpose of real estate governance is the most accurate?
843) Lease types, space planning, area design, and building layout are especially important for a property manager who’s working with a ______.
844) What responsibilities does a real estate professional have regarding property taxes?
845) Licensees conduct CMAs to determine ______.
846) Listing agent Paula receives three offers for the property overnight and finds them in her inbox first thing in the morning. How should she handle them?
847) A home sells for $225,000. Per the listing agreement, the total commission is 7% of the sales price. The listing brokerage will split the full commission with the buyer’s broker 50/50. Kiko the seller’s listing agent has a 70/30 split arrangement with her brokerage, with Kiko receiving the “70”. After sharing the commission with the buyer’s broker and her commission split with her brokerage, how much will Kiko receive?
848) Determine which of the following statements is TRUE when an as-is clause is used.
849) What do buyers provide to the seller as an indication that they are serious and intend to go through with the purchase?
850) To avoid discriminating against those with disabilities in her advertisements, June, a listing agent, should use which of the following phrases?
851) Lenders require that borrowers purchase and maintain adequate _____, which is usually bundled into their monthly PITI payment.
852) Where is an appropriate place for a broker to place client trust funds?
853) You should make sure that any property management agreement you sign has _______ that outlines why and when you have the right to terminate a contract with an owner.
854) REEB has received information that leads the board to believe that a broker has pursued a continuing course of mortgage fraud. Which of these statements about the board’s authority is true?
855) The potential for health hazards related to ______ must be disclosed when selling or renting homes built before 1978.
856) Which law requires the EPA to establish air quality standards?
857) In which type of contract does only one of the parties offer consideration?
858) Which of the following is a private agreement that impacts the use of the land?
859) John is a qualified third party conducting a standard review of a property. John is conducting a(n) ______.
860) Lester, a confirmed bachelor, decided to celebrate the fact that he just made the final payment on his home in Oshkosh. He invited several friends over for a “burn the mortgage” party. How does Lester own his home now?
861) Jerome is buying Joanne’s bungalow in Kenosha. Both parties decided they would prefer a title agent hold the earnest money prior to closing. In what type of account is the earnest likely to be deposited?
862) 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?
863) Wanda wants to use some copyrighted material on her website. The law _______.
864) Which of the following describes a timeshare?
865) When can real estate agents give legal advice to a buyer about backing out of a contract?
866) Raj wants to protect some of the equity in his home in case of bankruptcy or foreclosure. He should file a(n) _____.
867) A claim of misrepresentation can stand up in court if it includes ________ elements.
868) The ______ form is used to form the type of contract that only binds the seller, who must not sell the property to anyone else during the specified time period. The buyer, on the other hand, isn’t bound by the contract.
869) Hilary just learned that some of the repairs the seller was going to make on the house she is buying in the Milwaukee suburbs will not be completed before closing. Rather than delaying the closing, what can Hilary and the buyer do?
870) Levinia is preparing a sales contract for her clients Rose and Lily. When is it acceptable for her to offer them legal advice?
871) What’s the term for paying off a loan over time?
872) What occurs when a tenant moves out because an issue with the unit makes the unit uninhabitable, such as a lack of heat in the winter?
873) What’s true of a contract amendment once it’s signed by both parties to the transaction?
874) What term is used to describe the illegal use of escrow funds, such as earnest money?
875) Serena works in the property management department of a large apartment complex. For which of the following tasks would she be required to hold a real estate license?
876) When preparing a property for showing, which of the following is true?
877) Sam the appraiser is most likely to use the cost approach for which of the following properties?
878) Why might a buyer want to assume a loan?
879) Leading up to closing, who should ensure that all deadlines are being met, all contingencies are cleared, and all paperwork is fully executed and delivered?
880) Which of the following responsibilities does the commercial property manager have that the residential property manager doesn’t have?
881) Which mortgage market is made up of lending institutions that lend directly to the consumer?
882) Which IRS forms are independent contractors and employees required to complete?
883) Lacey is preparing an offer for her buyer clients, and it’s time to fill in the amount of earnest money they’re going to offer. Which of the following statements is true regarding what earnest money the buyers should offer?
884) Jamie enters an agreement to buy Yolanda’s home. Per the agreement, Jamie promises to provide a $5,000 earnest money deposit, whereas Yolanda promises to sell her home to Jamie. These promises represent forms of ________, which are required to make the contract valid.
885) As supply increases, price ______.
886) Which of these statements about licensee cooperation is true?
887) Which term describes a contract in which the parties have met all agreement terms?
888) Which type of REIT receives most of its revenue from rental of their properties?
889) Government tax assessment offices determine the _________________ by comparing similar properties in a geographic area.
890) Dawn and John own a home together, but they’re getting a divorce. They agree that John will keep the house and assume the loan they signed together. Will the alienation clause in their security document prevent the assumption?
891) The process the government uses to take someone’s property is called __________.
892) The designated broker for Jennifer’s firm left the firm without warning. Can Jennifer and her fellow licensees continue to provide brokerage services?
893) Abe signs a contract to buy Penelope’s home. The deal eventually closes, but Penelope fails to hand over the home’s keys to Abe. A week passes, and Abe files a lawsuit in an attempt to force Penelope to give him the keys. This is an example of ________.
894) Archie wants to buy Claire’s membership share in a cooperative. Which of the following statements is true?
895) A line of credit that’s based on a percentage of the equity a person has in a property and which can be drawn upon for a number of years is known as a ______.
896) Which of the following statements about the duties that seller and buyer clients owe to their agents is true?
897) Janie’s got an open house on Sunday but lets her friend in on Saturday to preview it. It’s love at first sight! With the owner out of town, Janie decides to cancel the open house so there won’t be any other offers. Her friend makes an offer and it’s accepted on Monday. What fiduciary duty or duties has Janie breached?
898) What must you disclose to be in full compliance with an agent’s fiduciary duty to disclose?
899) How should you respond to a buyer who says the following? “I know that you technically can’t show me just the white neighborhoods, but I’m paying for your help. My time is valuable, and I don’t want to waste it going to showings in neighborhoods I don’t want to see. If you won’t screen properties for me the way I want you to, I’ll find someone else who will.”
900) When preparing the sales contract, when is it acceptable for a licensee to offer legal advice to the client?
901) Which option is a right guaranteed under the Privacy Act of 1974?
902) After selling your first house, you decide to cash the commission check yourself, and then give a bonus to your licensed assistant. What type of violation have you committed?
903) What’s the purpose of police power?
904) Trinity is 18 and wants to be a managing broker in Washington. She has completed the required 90 hours of coursework. What else might prevent her from taking the managing broker’s licensing exam?
905) Place the stages of the loan approval process in the correct order.
906) What’s the term for a contract for which one or more terms have yet to be completed?
907) The DOL director received a complaint against broker Carl Savage and has decided to investigate. What’s the next step in the process?
908) You prepared a comparative market analysis and have a plan for educating the seller about the value you can provide. Which stage of the residential sales process are you in?
909) What’s a legal description?
910) Jacob and Cynthia are purchasing a house from Carlos. They want to be protected from having to purchase the house if they find substantial property condition defects. What can they do with the contract to protect themselves?
911) Which of the following is an example of the duty of obedience?
912) Prior to closing on the property, Monica substituted her daughter’s name, Melanie, as the buyer. Although Melanie is now listed as the buyer, Monica isn’t released from her contractual obligations. This is an example of ______.
913) According to the Federal Communications Commission, who or which entity may call a person listed on the national Do Not Call Registry?
914) Why would a retail tenant be willing to sign a lease in which a percentage of sales proceeds are paid to the landlord?
915) What type of agency exists when a buyer’s broker is the listing agent for the same property?
916) Which term refers to a tract of land divided into lots or plots and used for building purposes?
917) How are independent contractors compensated and their income reported?
918) Which of the following statements is true about a licensee’s duties to a landlord the licensee represents?
919) A property owner’s right to access ponds, lakes, oceans, and other closed bodies of water bordering the owner’s land is called ______ rights.
920) Melissa, a new broker, is excited to meet with her first seller. She knows she needs some sort of form to outline her agreement with the seller. What should she do?
921) Renatta is under contract to sell her home to Marcus. Marcus has a financing contingency, and he finds that he’s unable to get financing for the home. He terminates the contract under this contingency. Renatta’s brokerage firm is holding the earnest money. What is their responsibility regarding disbursement of those funds?
922) You represent Cynthia and Ronald, who signed a contract to buy Margie’s home. The contract included the phrase, “time is of the essence.” You explain to Cynthia and Ronald that this phrase means ______.
923) The installment land contract is what type of financing?
924) A real estate licensee can provide which of the following opinions?
925) The secondary mortgage market is comprised of _________________________.
926) Which document is provided to borrowers no fewer than three days prior to closing and provides disclosures about the costs of the transaction?
927) Which document given before closing provides an estimate of the costs a buyer is likely to pay at settlement?
928) If a lead-based paint risk assessment or inspection reveals hazards on the property and the seller refuses to fix the problem, what options does the buyer have?
929) How much notice must a tenant give if they want to terminate their lease?
930) Elisa and Simone signed an agreement to list Simone’s house for sale. After the contract was signed, Simone lost her job, and her father, George, offered to help Simone out by paying Elisa’s commission. The buyer’s agent, Carl, also reduced his commission by a quarter of one percent to help Simone out. Who is Elisa’s client?
931) Renae showed a property to a Shannon, a buyer client, then to another client later that week. The second client made an offer and the seller accepted. The next day, Shannon called Renae to make an offer on the property and was angry that Renae showed it to another buyer. Did Shannon have a case?
932) How does the building department ensure that a builder who has obtained a permit builds according to code?
933) When must informed consent for dual agency be obtained?
934) When a local planning board is reviewing density, it would consider ______.
935) What regulation or regulatory authority identifies sites that have hazardous substances, and requires the responsible parties to clean them up?
936) Agatha helped her client Rufus complete the form that documents Rufus’s purchase offer to the seller for the property he’d like to buy. What is this form?
937) Which of the following is an example of positive misrepresentation?
938) What type of violation are you committing when you fail to include a material fact or make false or misleading advertising statements?
939) Although Kirk has been paying rent toward his ground lease for more than 17 years, he will never be able to buy the lease from the landowner. What type of ground lease does Kirk have?
940) Dan is buying Chuck’s property, which is listed with Nevin’s brokerage. Who are the parties to the exclusive right-to-sell listing agreement?
941) Which formula calculates net to seller?
942) Which of the following terms best describes an item that is both a fixture and real property?
943) To indicate that they understand and consent to the terms that appear on each page of the sales contract, what are the seller and buyer required to do?
944) A negotiable instrument must contain an order to pay or a ________.
945) Offers become binding contracts when they’re ______.
946) Cari is preparing an operating budget, and it shows a net loss. What should she do?
947) What is tortious interference?
948) Which of the following statements is true regarding conventional loans?
949) Genevieve is a licensee interested in purchasing a new home. She found the perfect place, which happens to be listed by the brokerage where she’s affiliated. What must she do if she intends to purchase the property?
950) What pricing strategy could work well in any market, primarily by generating buyer interest?
951) Why is it important for a company to revisit its objectives periodically?
952) A(n) _______ is an independent contractor who’s an employee by statute for certain employment tax purposes. An example is a food delivery driver who’s paid on commission.
953) A ____________________ is a worker who’s classified by the common understanding of the profession. An example would be a food server.
954) Georgette is meeting with her buyer clients to fill out the purchase and sale agreement. Which of the following must be true?
955) You’re writing an offer for your buyer client in a cold market. What would be a good negotiation strategy?
956) What’s it called when a real estate company establishes policies and procedures designed to keep confidential information secure, particularly regarding in-house transactions?
957) The buyer and seller are prorating property taxes. Step one is to calculate the daily rate. Next, the number of_________ is multiplied by the daily rate to get the prorated amount.
958) When evaluating the income listed on a loan application, what will the lender consider?
959) Not wanting to cause the sellers or mortgage lenders unnecessary concern, Gwen, the buyer’s agent, wasn’t exactly forthcoming about a slight change in her client’s financial status that her client had shared with her in confidence. Which fiduciary duty to the customer is Gwen violating?
960) What determines how frequently an interest rate adjusts in an adjustable rate mortgage?
961) Which of the following is an example of what would be included in a mission statement?
962) You’ve just accepted a new listing. Why would you want to view the details of past listings for this property?
963) Liam is buying Abigail’s home. Per their agreement, Liam promises to buy the home for $325,000, and Abigail promises to sell her home to Liam. These promises represent forms of ______, which are required to make the contract valid.
964) Jacob and Alexa have decided that they’ve had enough of city life and it’s time to move to the county. Which of the following should be included in the listing agreement they sign with Carla?
965) When preparing a purchase agreement, when is it appropriate for a licensee to offer legal advice to the client?
966) What’s the best way to describe your sphere of influence?
967) Terry just passed her licensing exam, and she’s been working with a broker for the last two months. So far, though, she doesn’t have any clients. How can she spend her time most productively?
968) Which of these is the best definition of a property’s market value?
969) Which entity guarantees government loans?
970) Of the benefits of seller agency, which is the most important to convey to a seller?
971) When you interview with a broker, which of the following goals should your questions help you confirm?
972) You have a duty of honesty and fairness to customers. You have a duty of obedience to your clients. What happens if a client asks you NOT to be honest about a material fact related to the property?
973) What’s a residential marketing plan?
974) Jan is a listing agent assisting the Chesters with the sale of their home. What is one of Jan’s duties?
975) When performing a market analysis, you’ll want to evaluate the number of houses on the market in a given price range and region. What is this data point called?
976) In Janie’s comparative market analysis, comparable A has an adjusted price of $118,000, comparable B has an adjusted price of $112,500, and comparable C has an adjusted price of $121,300. What would be a good way to use this data?
977) What is the purpose of the seller net sheet?
978) Stella is looking for a good broker with whom to affiliate. She begins her search by identifying brokerages located in a particular area. Which of these would be most important in terms of location?
979) Which of the following statements about using real estate assistants is true?
980) Minimizing risk in part means avoiding public networks, unsecure sites, and ______ sites.
981) Which of the following is the best piece of advice you would give to a licensee for avoiding legal concerns over any contract?
982) If you’re alone at an open house, what should you never post online?
983) Broker Janelle is deciding on an office location for her new firm. The main purpose of the office will be to meet with customers and clients. Where can she find data about where her prospective clients are located to help her decide on an office location?
984) Matt is representing the Tyler family in the sale of their house. What should he tell them about the property disclosure form?
985) What are vacancy rates, new building permits, inventory rates, and sales volume?
986) Clayton is your seller client, and you’ve provided him with an appropriate list price range for his house. He’s now found another house he’d like to purchase, but he needs to sell his current house before he can make an offer. Should his desire for another property impact pricing strategy?
987) Jose, a listing agent wants to write an ad for his new listing. Which of the following phrases is acceptable under fair housing guidelines?
988) Benji is a buyer’s agent, and he’ll receive a split of the commission paid from the sale of Harriet’s listing. The property sold for $425,000. The total commission paid from the sale is 6%, split evenly between the buyer and seller brokerages. Benji has an agreement with his broker that he earns 80% of the commission received. How much will Benji be paid from this sale?
989) To meet legal and ethical standards, all transactional records that you keep should be complete and ________.
990) Built-to-Last Construction, Inc., entered into a contract to build a new home for Jane and Dick Monahan. The contract specified that the home must be completed by June 1. Built-to-Last Construction finished the home on May 28. What’s this an example of?
991) Calculate the housing ratio based on the following information: $1,500 condo payment; $100 association fees per month; $150 monthly student loan payment; $300 car payment (with only four payments remaining); and a gross monthly income of $5,000.
992) Which of the following options describes a method by which a person with a real estate license can determine an appropriate listing price range?
993) In an analysis of comparables, property A is next door to the subject property and had six adjustments. Property B is three blocks away and had three adjustments. Property C is six blocks away and had two adjustments. Property D is one block away and had eight adjustments. Which comparable should carry the most weight in determining a list price range?
994) Your client, Arliss Xavier, insists on finding a buyer who is willing to pay top dollar for her property. You, on the other hand, would like to get the property sold so you can get your commission. What should you do?
995) Camille makes it a point to check the MLS for seller clients’ properties’ former MLS listings. What information will she find there?
996) Can Jeremy, a licensee, receive a referral fee for sending his buyer client to Ajax Title?
997) Marcus is representing a seller client. Which of the following is a true statement?
998) Last week, The Rialdis’ listing agreement ended after months on the market, with not even a single offer to show for it. Today, they received a call from Mindy, a real estate professional who would like to relist the property and has some new ideas for getting it sold. What approach is Mindy using to find listings?
999) What’s the purpose of the loan application?
1000) Because of the lack of control over the individual by the employing party, which of the following persons is not classified as an employee?
1001) From a seller’s perspective, what’s one reason to use the MLS to promote a property?
1002) REALTOR® Randy has a seller client who’s proving difficult to work with, and Randy knows he won’t appreciate the advice Randy needs to give him: The market has cooled and the listing price they agreed to should be lowered. He puts off contacting his client, hoping someone will make an offer in the meantime. Is Randy acting according to the NAR Code of Ethics?
1003) Sylvia, who’s suffering from early onset Alzheimer’s, signs a contract to buy Theodore’s home. Before the deal closes, it’s determined that Sylvia lacks legal capacity to enter into a contract. Which party or parties is permitted to void the contract?
1004) Why is it important to try to view the world from your client’s perspective?
1005) While reviewing her purchase contract, Jeanette’s client asked, “What does this inspection contingency do?” How should Jeanette frame her response?

1006) Edmond, a broker, signs a listing agreement with Julia, who’s selling her home. Julia insists that the agreement state that only Christians will be allowed to buy her home. For what reason would this agreement be considered void?
1007) The formula for net to seller is sales price x (100% – _______).
1008) Besides building seller rapport, what’s a key purpose of touring a subject property?
1009) Which of the following phrases should Monica include in her new listing ad if she wants to be careful to avoid including a religious preference?
1010) What value principle assumes that if an identical property were sold recently, its sales price should be a good indicator of the value of the subject property?
1011) Which term means a calculated percentage used to determine who owes how much of a given expense over a certain period of time?
1012) Traci is hosting an open house for her seller, Alex. Rashid, a potential buyer, stops by, loves the home, and starts talking with Traci about buying the property. Rashid isn’t working with a broker. How does Traci avoid an undisclosed, unintentional dual agency situation?
1013) In accordance with RESPA prohibitions, rebates may only be offered by licensees to transaction parties, if _____.
1014) Lorena is getting ready to post information about her new listing on social media. Which of the following should she do?
1015) One type of seller financing is a(n) ______.
1016) In most states, tenancy in common is the assumed form of property ownership unless otherwise noted in a contract. Which of the following statements about tenancy in common is also true?
1017) Which of the following is a legitimate business deduction for income tax purposes for a real estate licensee?
1018) Which of the following statements applies to both employees and independent contractors?
1019) What’s the acronym for the legislation that eliminates illegal referral fees among settlement service providers?
1020) If an appraisal contingency is in place, what happens when a property appraises lower than the agreed-upon sales price?
1021) What measurement indicates how many properties are selling in a given area?
1022) Per the Real Estate Settlement Procedures Act (RESPA), licensees may not receive or give referral fees or finder fees (or anything of value) from/to whom?
1023) Where are the top two places you should spend your marketing dollars?
1024) When does express agency exist?
1025) The Real Estate Settlement Procedures Act is a consumer protection statute that ______.
1026) What’s a cooperating broker?
1027) You’re the agent for a 2,500-square-foot property that has four bedrooms, two baths, and a full basement. Your first comparable is a 2,400-square-foot home with three bedrooms, one-and-a-half baths, and no basement that’s listed for $239,000. You adjust the price by $2,500 for the lack of a bedroom, $3,000 for the missing half bath, and $5,000 for the reduced square footage. What is the adjusted price of the comparable property?
1028) Although open houses don’t usually result in the sale of the home, they’re still important. Why?
1029) How does a budget compare to a forecast?
1030) What is another name for a land contract?
1031) Which of the following is a map of a proposed subdivision development that must be approved by the planning commission, before development may begin?
1032) What’s the most common way that buyers’ brokers protect their compensation?
1033) Who’s ultimately responsible for determining the role a licensee is expected to play in any transaction?
1034) Why do licensees help buyers estimate closing costs?
1035) A $400,000 property depreciated in value by 2%. What’s its new value?
1036) To determine the indicated market value of a subject property, which of the following data would be correct to use?
1037) Which buyer negotiation strategy is unlikely to work in a hot market?
1038) It’s not a good idea to post photos of your clients’ expensive belongings. Why is that?
1039) As supply increases, what happens to price?
1040) Denise is a real estate licensee performing a market analysis. She uses the rule of three, which means that she selects three comparables that ______.
1041) What’s your responsibility regarding contingencies when representing a buyer?
1042) Which one of the following best describes the fiduciary duty of confidentiality?
1043) Which of the following are common with hot markets?
1044) Three friends entered into a contract to buy a vacation property. The friends got into a dispute, resulting in one of them wanting out of the deal. The remaining two friends didn’t want to lose the deal, but couldn’t afford it on their own. They talked a fourth friend into replacing the person who backed out of the contract. The seller agreed to the substitution, and they moved forward with the purchase. What does this describe?
1045) What does the Rule of Three say about comparables when preparing a CMA?
1046) As demand increases, what happens to price?
1047) What element of the listing presentation outlines the various ways a licensee will advertise and boost awareness of a seller’s property to potential buyers?
1048) How does the seller agency relationship benefit the seller?
1049) What is closing?
1050) Prior to closing on the property, Monica substituted her daughter’s name, Melanie, as the buyer. Although Melanie is now listed as the buyer, Monica isn’t released from her contractual obligations. What is this scenario an example of?
1051) Which type of worker is defined in statute under tax law as an independent contractor and not an employee, examples of which include direct sellers, licensed real estate agents, and certain companion sitters?
1052) Matt and Elaine are brokers who plan to go into business together, and they’re working on a business plan to present to prospective lenders. Which section will provide a synopsis of the plan?
1053) Jillian just received a trio from a title company. It contains a property profile, deed, and ______.
1054) If a seller receives a full-price offer, which of the following is a true statement?
1055) You represent Cynthia and Ronald, who signed a contract to buy Margie’s home. The contract included the phrase “time is of the essence.” How do you explain to Cynthia and Ronald what this phrase means?
1056) After adjusting sales prices of comparables for a market analysis, which comparable carries the most weight in determining a list price range?
1057) Kathy is preparing a market analysis for her clients, the Winstons. Why might she include a seller net sheet?
1058) The Nguyens must get top dollar. Competitive properties are priced at $250,000 and $255,000. What’s a good pricing strategy?
1059) The _______ orders the title search in an escrow closing.
1060) What’s the purpose of the buyer pre-qualification letter?
1061) Mona is a licensee who strives to be professional in all of her actions, so how does she keep her business account?
1062) Which of the following is a true statement regarding short sales?
1063) Mary is preparing a purchase offer for her buyer client. It’s a fairly standard offer: a little less than list price, with the seller paying a little toward the buyer’s closing costs. Mary fills in the blanks on a standard form used in her brokerage firm based on the current situation. Is this okay?
1064) What is the purpose of a pre-closing checklist?
1065) After signing a purchase contract, buyer Pam and seller Waylon both realize that the address for Pam’s newly-purchased home reads “344 Beverly Way” instead of the correct address: “334 Beverly Way.” Which of the following is true about this situation?
1066) When Shelby had lunch with an old high school friend, he mentioned his new career as a real estate licensee. They spent a few minutes discussing the real estate market, and Shelby’s friend promised to call when he and his wife started looking for a home to buy. Then they continued reminiscing about old times. Is the cost of the meal now an allow
1067) James’s brokerage, Urban Roots, will specialize in urban living spaces. During the situational analysis, he found that the population his brokerage will serve prefers to meet with sales agents virtually. Part of the brokerage’s mission statement is: “Help our customers to find the perfect urban living space in a way that suits their busy lifestyles.” Which of the following should be included in Urban Roots’ plan to address this?
1068) Henrietta makes an offer for $250,000 on Ollie’s bungalow. Ollie has until June 21 to respond to her offer. Before Ollie responds, Henrietta finds a house she likes better, and she withdraws her offer to Ollie. Which of the following is true of this situation?
1069) Which of the following hardware and software configurations is best suited for a brokerage office that will primarily serve as a meeting place for virtual sales professionals?
1070) You’re working with sellers who need to maximize their proceeds. Competitive properties are priced at $370,000 and $375,000. What’s a good pricing strategy?
1071) Nancy is thinking about paying off her mortgage loan early. She looked at the loan contract and found that her lender charges a pre-payment fee based on a percentage of interest paid within six months. The lender charges 80% of six months’ interest. Nancy’s mortgage has $50,000 remaining, and she pays 6% interest. How much would she owe in penalty fees?
1072) An example of confidential information is ______.
1073) Which of the following best describes the purpose of the Truth in Lending Act?
1074) Adam owes $125,000 on his home. It’s currently worth $340,000. How much equity does Adam have in his home?
1075) As a security precaution when posting information for a listing, which of the following should you do?
1076) One reality of real estate is that you’ll often need to ______ in order to make a sale.
1077) In the income capitalization approach to appraisal, NOI is found by ______.
1078) What is a reason a homeowner may seek a short sale?
1079) Peter is a broker with a listing agreement with the sellers, the Averys. Under the terms of the listing agreement, Peter will earn his commission whether he, the Averys, or another brokerage finds a buyer for the property. What type of listing agreement did the Averys sign?
1080) Why is it important to include active comparable listings in a market analysis?
1081) What, when signed by all parties to a sales contract, changes the original terms of the contract ?
1082) After the open house has ended, it’s best to _______.
1083) Your sellers, the McIntoshes, ask you about the MLS and why they should market their house on it. Which of the following would you tell them?
1084) Two types of prorations are _______.
1085) Bart is an independent contractor. Which of these does his managing broker have the right to do?
1086) Abe signs a contract to buy Penelope’s home. The deal eventually closes, but Penelope fails to hand over the home’s keys to Abe. A week passes, and Abe files a lawsuit in an attempt to force Penelope to give him the keys. Of what is this an example?
1087) When interest rates are lowered, real estate purchases become more ______ for buyers.
1088) When looking for a broker with whom to affiliate, an important consideration is to find out if the broker is ___________ .
1089) Under which of the following circumstances might you be advised to refuse to write a listing contract with sellers?
1090) Buyer Josephine had just signed a contract on a house when she discovered that seller’s agent Franklin knew that this house was 3500 square feet, but he listed it at 3900 square feet. Which essential contract element has been compromised?
1091) What is usually the first place serious buyers look for homes for sale?
1092) Risks to computer systems can be reduced by avoiding public networks, ______ sites, and suspicious sites.
1093) Which of the following is an action that real estate licensees may take without practicing law illegally?
1094) The multiple listing service is a go-to resource for data when researching a subject property. What information will you find there?
1095) 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 ______.
1096) A listing agent’s primary duty to a seller is to ______.
1097) What does a credit score tell a lender?
1098) Which of these is a factor in calculating a consumer’s credit score?
1099) Ginger, a licensee, tours a home that’s packed with clutter. She should ______.
1100) Real property ownersip has significant tax advantages. Which of the following is an advantage?
1101) Ways to minimize computer risks include avoiding public networks, unsecure sites, and ______ sites.
1102) Which of the following describes a sale subject to a mortgage?
1103) Homes built before 1978 may have what environmental hazard in their paint?
1104) Why would a buyer want to know whether any additions or alterations were made to a property?
1105) When a client understands what dual agency is and agrees in writing to allow a firm to act as a dual agent for them in a real estate transaction, this is known as ______.
1106) What is one drawback of sub-agency from a seller’s standpoint?
1107) In a real estate transaction, who may a licensee represent?
1108) Members of the Real Estate Commission serve _________-year terms.
1109) If a consumer wants to file a deceptive ad complaint, which entity should be contacted?
1110) Species habitat, beauty, erosion control, and pollution treatment are all reasons why wetlands are ___________.
1111) Kerry is a real estate licensee who has committed an ethical violation. Which of the following is a true statement about her potential penalties?
1112) One of Mrs. Wilson’s tenants is leaving in a few months. She hates to see this particular tenant go because he has been an ideal tenant—always paying his rent on time, keeping his place clean, and never a complaint. Unlike so many of her other tenants, this tenant deserves to get back his security deposit. By law, when must Mrs. Wilson return the deposit to her tenant?
1113) If a licensee is convicted of a controlled substance offense, what can the Real Estate Commission do?
1114) A buyer asked Clifton why she would benefit from signing an agency agreement with him. Clifton answered: ______
1115) At a business meeting attended by the heads of the top brokerages in town, the keynote speaker discussed a minimum listing fee. This is an example of ______.
1116) What type of agency relationship exists if an agent from ABC Realty represents a buyer and the seller is affiliated with Net Realty?
1117) Article 3 of the Code of Ethics requires NAR brokers to cooperate except
1118) Which term describes the addition of alluvion land to a property through the natural process of accretion?
1119) Which of the following are examples of Single Agency?
1120) Under what name must sole proprietors conduct business?
1121) Glenda is engaged as seller’s agent. Gary, the seller, hasn’t consent to dual agency. A prospective buyer would like Glenda’s assistance in drafting an offer to present to Gary. Can Glenda do this?
1122) The lender, the loan applicant, and the _____________ all complete part of the request forms for verification of deposit forms.
1123) April is having a limited coverage searched performed on her condo. When is a limited coverage search used?
1124) Which Law does the Office of Fair Housing and Equal Opportunity Uphold?
1125) According to the NAR code of Ethics and Standards of Practice Preamble, “REALTORS should recognize that the interests of the nation and its citizens require the ____________.”
1126) Ownership is a right in the bundle of rights. Which of the following is considered a form of ownership?
1127) Which of the following financing types involves the sale of personal property with the real property?
1128) In a transfer of ownership in real property, who conveys the title?
1129) At what level or levels does antitrust oversight exist?
1130) Stephanie’s primary residence is in SC, has a fair market value of $225,000, and is in an area with a millage rate of .325. Stephanie qualifies for the state homestead exemption. What could she expect to pay in property taxes?
1131) Sally is a licensee working under a written brokerage agreement with buyer Barney. Although she’s assisting him in the transaction, he’s her customer (not her client), and she doesn’t owe him any fiduciary duties. Based on this, you know that Sally’s acting as a __________.
1132) What’s a subordination agreement?
1133) Which of the following describes the appropriate capital gain exclusion for a taxpayer’s primary residence?
Ca “Real Estate Practice” Questions with correct answers
(ANSWERS will be revealed with proper subscription)—–
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Ca: Real Estate Practice – Sample of Final Course Exam with answers
1- The amount that a seller takes away from a sale is termed:
2- Which of the following best describes prospecting?
3- A property manager can refuse to rent to applicant Mike for any of the following reasons except which?
4. Which law extended discrimination to include handicap and familial status?
5. Sharon and Steve have just taken a second mortgage on their home. Which is a true statement?
6-
7- In the initial meetings with the prospects, the agent should do all of the following except which?
8- When considering making a loan to a borrower, which of the following factors would probably exert the least amount of influence on the lender?
9-
10- Which of the following prospecting techniques do you have to use carefully because it has tended to upset people in recent years?
11- Broker Jill has an agreement with seller Alice that says Jill will receive compensation if anyone except Alice sells Alice’s home, what kind of agreement is this?
12- The second installment of property taxes comes due on:
13- Seller Jim tells his agent Branda that he does not want his home marketed to families with children. Brenda refuses. Which statement is true?
14- Value includes which of the following aspects?
15- Karen and Al obtained a 30-year fixed-rate, fully amortized loan when they purchased their home. Which statement is true?
16- Dave and Nadine have decided that they want to become property investors. What is most likely their main motivation for investing?
17- The general law of agency applies to
18- In a transaction that involves the purchase of a business, what document functions in the same way as the deed in a personal real estate transaction?
19- Which of the following is not an advantage of hosting an open house?
20- Which of the following would not be an essential component when researching the purchase of an apartment building?
21- Which form of advertising is considered the most cost-effective method for selling a home?
22- Jane sold her personal home for $148,000. Two months later she purchased and moved into a new home that cost $145,000. The adjusted cost basis of the first home was $140,000. For purposes of federal income tax, which statement is true?
23- Jonestown Community Bank refuses to lend money to potential homeowners trying to purchase property in the predominantly Asian neighborhood on the west end of town. This practice is:
24- When talking to his investment clients, Broker Adam often to tax shelters. This term typically refers to
25- According to the law governing mortgage loan brokers, what is the maximum commission Broker Claire can charge for securing a $50,000 first mortgage for a period of 2 years?
26- Which is true about listings?
27- Mr. and Mrs. Haley are purchasing beachfront property in an upscale development. The home comes equipped with all furnishings. The Haleys want to get a mortgage that will cover the purchase price plus all the furnishings. What kind of mortgage are they looking for?
28- Abby applies for a federally-related loan to purchase a home. The lender must furnish a copy of the CFPB booklet to Abby no later than the third business day from which date?
29- Which of the following is not a good direct mail technique?
30- Being prepared to handle incoming phone calls means all of the following except which?
31- Patrick has a written independent contractor agreement with his broker Tami. Last year, about 25% of his income came from sales commissions. The other 75% came from an hourly wage paid by Tami. For income tax purposes, the IRS would probably classify Patrick as:
32- Broker Alice has a listing agreement with Jack. If Broker Tom procures a buyer for Jack, Tom will get the commission and Alice will not. What kind of listing agreement does Alice have with Jack?
33- Which statement is true about a loan that has a negative amortization?
34- Sarah is an employee and Ken is an independent contractor at Kerns Realty. Which of the following statements is true?
35- Who benefits from Private Mortgage Insurance?
36- Broker Eric secures a loan for buyer Paul. The fees that Eric charges Paul for making the loan could be any but which of the following amounts?
37- When dealing with the sale of a business, which is not a true statement?
38- When using the straight-line method of depreciation, each year of economic age is given a rate that
39- When doing a competitive market analysis, an agent looks at all but which of the following factors?
40- Which of the following phrases should Salesperson Brenda avoid when writing an advertisement for one of her listings?
41- Agricultural land includes all of the following EXCEPT which?
42- Alice is planning her career and setting her goals. Which of the following would be considered an intermediate goal?
43- The Equal Credit Opportunity Act (ECOA) requires lenders to:
44- Jim owns a gift shop in a commercial building. He pays rent for occupancy, plus maintenance and operating expenses. What kind of lease does Jim have?
45- Kirk wants to get an FHA loan. Which of the following is Kirk himself not likely to do during the application process?
46- A life insurance company would most likely invest in all but which of the following properties?
47- Which of the following duties is not a permitted activity for an unlicensed personal assistant?
48- The public report that a developer must provide when offering subdivided lands for sale is provided by which agency?
49- Agent Dan tells his buyers that the seller will leave the washer and dryer if the buyers make an offer now. What kind of closing technique is Jim using?
50- Harry has some buyers that he believes are ready to make an offer. He says to them, “Would you prefer to take possession on September 1 or October 1?” What kind of closing technique is Harry using?
51- Which statement is true about a homeowner’s exemption?
52- Which statement is true about a listing contract?
53- Greg sold an apartment building he owned for 20 years. He paid $100,000 for it, and made $300,000 worth of improvements. His depreciation was $2,500 per year. He sold the building for $1,000,000 and paid $60,000 in commission to the broker. What is Greg’s capital gain on the apartment?
54- Jim and Jane are buying a home for $120,000. They have $20,000 for a down payment and assumed the seller’s mortgage of $75,000. Jim and Jane financed the remaining $25,000 through the seller. What kind of a mortgage do they have?
55- Greg is approved for a Cal-Vet loan. Who will pay the points?
56- Which is not a true statement about the Agency Disclosure?
57- Under federal income tax law, the “basis” for a personal residence is which of the following:
58- Mortgage lenders are prohibited from discriminating in giving credit to prospective borrowers based on race, color, religion, national origin, sex, marital status, age or dependency on public assistance under which law or regulation?
59- Which of the following is a seller’s request that an agent cannot honor?
60- Seller Tom has an agreement with Broker Bill, Broker Jim and Broker Joe. Whoever brings the buyer will get the commission. What kind of agreement is this?
61- Bill and Sue secured a mortgage loan that is tied to an index which fluctuates over the life of the loan. What kind of loan do they have?
62- When agent Hal shows a home he should never:
63- Jenny’s home appraised for $550,000. Her asking price was $560,000 and the property sold for $575,000. What will the new owners pay in property taxes?
64- Which of the following is not a form of personal advertising?
65- Which of the following items is usually not prorated at closing?
66- When doing a listing presentation which of the following items would you not describe to the owners as being a benefit of listing with an agent?
67- Hannah is a real estate assistant. Her broker has asked her to be available for tasks in the field rather than in the office. What would we call Hannah?
68- Greg and Joyce have an adjustable rate mortgage on their home. What is the key feature of this type of loan?
69- According to ECOA, lenders cannot discriminate against potential borrowers on the basis of all but which of the following?
70- Which of these items would be a credit to the buyer on the settlement statement?
71- When agent Jane meets with her sellers to offer suggestions, she most likely would not give them:
72- According to RESPA, a buyer or seller cannot legally be charged at closing for which of the following items?
73- Which of these is not a buying signal?
74- Which statement is not true about an agency relationship?
75- All but which of the following is NOT an AIDA feature?
76- Mark believes he has been discriminated against during his home search. How long does he have to file a complaint with the Department of Housing and Urban Development?
77- Which of the following Internet pages might not be of particular interest to buyers?
78- Nancy bought her home last year for $425,000. Her property taxes would be assessed at:
79- Tom and Mary want to purchase their first home. Which of the following would be the least likely place for them to obtain a loan?
80- Which of the following is an example of commingling?
81- Jake has decided to specialize in working with clients who purchase schools. What property type will he be dealing with?
82- What is the minimum period of time over which the owner of an apartment building can depreciate the improvements?
83- Matt is computing the adjusted cost basis of his apartment building for income tax purposes. Which of the following items can Matt not add to the original cost when doing the computation?
84- Four years ago, Sam purchased a vacant lot for $10,000. He just sold it for $13,000. During the time Sam owned the property he paid $350 per year in taxes, $150 per year on maintenance like grass cutting and $90 per year on miscellaneous expenses. How much did Sam gain or lose on the sale?
85- Which paragraph of the purchase agreement states that the balance of the purchase price will be deposited into escrow prior to closing?
86- Which of the following is not considered a benefit of investing in real estate?
87- What information can you gather from the newspaper to help develop a Prospecting Plan?
88- Sally and Dan must pay 2 points on their new $65,000 loan. What will they have to pay at closing for the points?
89- Who selects the escrow company?
90- Marsha has been keeping track of the effectiveness of her advertising campaigns. She is probably using all but which of the following tools?
91- This paragraph of the purchase agreements informs the seller of the buyer’s right to inspect the property and can cancel or request maintenance based on findings.
92- Which of the following situations is not exempt from the seller disclosure requirement?
93- Jim has created a nice property flier for the James’ home. Jim should not use this flier as a:
94- Seller’s agent Pam was unaware of the fact that the heating system of a home she had listed was defective. She sold the property and several months later the buyer sued Pam for not disclosing the problem. Which statement is true ?
95- Who is liable for the withholding on the sale of a property owned by a foreigner?
96- Which statement is not true about a listing contract?
97- Buyer Randy makes an offer to purchase one of Broker Tom’s listings on June 15. Randy gives Tom an earnest money check for $1,000 and asks Tom to hold it until June 30, regardless of the date the seller accepts the offer. What should Tom do?
98- Grant moves into his new office space while he awaits the completion of the negotiations of the lease terms. During this interim period, grant makes monthly rent payments and the owner accepts them. How would Grant’s lease at this time be classified?
99- All exclusive listing agreements must have
100- What does the Real Estate Disclosure Law refer to?
101- Which type of loan typically carries the most loan points?
102- What is the minimum period of time over which the owner of a commercial building can depreciate the improvements?
103- Kirk and Sandy obtained a wraparound mortgage. Which of these statements is true about the wraparound mortgage?
104- Lorna and Hal have obtained a growing equity mortgage for their new home. What does that mean?
105- Agent Alice has received an offer that she believes is not in the sellers’ best interest. What should Alice do?
106- If broker Tim advertises a property for sale that he doesn’t intend to sell so that he can attract potential buyers, Tim is practicing:
–00CeshopPractice00FINAL1
1) Net operating income ‒ debt services = ______
2) What responsibilities does a real estate professional have regarding property taxes?
3) Which of these is the better debt service ratio?
4) As a licensee representing investor clients, your marketing strategy should be determined by ______.
5) Which IRS forms are independent contractors and employees required to complete?
6) Recording a document makes it a matter of ______.
7) Whose responsibility is it to keep track of all buyer contingency deadlines and ensure they’re not missed?
8) Ca –
9) You haven’t been paid your commission on a transaction that closed nine months ago. The commission was paid to your broker, but you haven’t received your compensation. What remedy is available?
10) What is a real estate investment trust (REIT)?
11) Bert is an investor who doesn’t actually buy properties. Rather, he finds deals and “assigns” them to others for a fee. Bert is obviously ______.
12) A ______ is a worker who’s classified by the common understanding of the profession. An example would be a food server.
13) What’s the term for an addition to a sales agreement form that can be added before it is signed without changing any of the other terms that have already been agreed upon?
14) What should you do if your buyer client, Steve, says he doesn’t want to have a professional inspection?
15) A set of guidelines for the ethical conduct of real estate licensees is called a ______.
16) Danielle is a new licensee. She is also newly engaged with a two carat diamond ring and diamond tennis bracelet she can’t wait to show off to clients. Her sponsoring broker, Tom, has provided her with a list of things she should avoid in social media postings. The list includes wearing expensive jewelry in photos she posts of herself on social media. Why is that?
17) During the closing, whose job is it to deliver the title commitment after ensuring the title is marketable and without defect?
18) Which photograph of a home for sale should not be published for public viewing?
19) Why is it so important to be able to properly identify trust funds?
20) Which of the following best defines a stigmatized property?
21) Advance –
22) Gross potential rental income ‒ vacancies and credit loss = ______
23) How does the income from property taxes benefit the community?
24) Which of the following describes how a property manager would calculate anticipated annual rental income for a budget?
25) Who is responsible for ordering an appraisal, completing the loan application, ordering a home inspection, and obtaining homeowners insurance before closing?
26) The _____________ section of the purchase agreement you reviewed is not for the buyer to fill out. It is where the seller indicates whether the offer is accepted or countered.
27) Who –
28) The Philberts just bought a home for its market value of $340,000. How will Proposition 13 affect their property taxes?
29) What minority group is expected to significantly improve homeownership rates in the next decade?
30) Which form is used to report a real estate transaction to the Internal Revenue Service?
31) _______ includes a review of the demographic, geographic, and governmental environment in which a rental property is located.
32) “Safety first” means that it becomes second nature to consider the ______ before doing anything—even marketing yourself.
33) What type of client should you ask about experience, strategies, and their team?
34) What information can potential criminals use to find you or know when you are home?
35) When you create fictitious scenarios of danger and determine strategies to get out, talk your way out, or fight back for each one, you are ________.
36) Cash flow / initial cash investment = ______
37) In order to protect your personal safety, which of the following should you avoid posting on social media?
38) The portion of the property management plan that discusses the property’s current condition and recommendations to stall or reverse obsolescence is called the _______.
39) For safety reasons, you should not allow strangers to see ______.
40) It is a bad idea to include information about your loved ones and pets in your personal marketing because it is a safety risk to ______.
41) Which term is used for the individual who conducts the closing?
42) Which of the following is true about personal safety in the office?
43) When showing a home, which of the following is something you should do?
44) When –
45) Which of the following is a good example of how to identify your clients?
46) How can mobile applications assist you with personal safety?
47) Property owners must account for the costs of maintaining and running a property, which are called ______.
48) When a buyer and a seller agree upon a price, they are determining the ______________.
49) Performing an Internet search on your name can help you to do what?
50) Why is it so important to be able to identify non-trust funds?
51) The price an owner offers to sell a property for is called the __________.
52) Investors are generally interested in the _________________.
53) Under what circumstances would a residential transaction require the seller to provide a prospective buyer with a Residential Earthquake Hazards Report?
54) Which of the following real estate transactions requires use of the Real Estate Transfer Disclosure Statement?
55) Which of these situations do licensees commonly encounter when working with sellers?
56) When must two licensees, each representing different parties in a transaction, have a dual agency disclosure signed?
57) Who should take responsibility for completing the seller’s information section of the Real Estate Transfer Disclosure Statement?
58) When it comes to investment risk, usually the ______ the risk, the greater the potential return.
59) In the Offer section of the sample purchase agreement, the amount the buyer is offering is referred to as the ______________________.
60) Which option defines a probate sale?
61) If you’re not using columnar records, what are the minimum requirements for recordkeeping related to trust funds?
62) Residential property that is owner-occupied qualifies for an exemption of how much?
63) Of the following, which duty may an escrow agent perform?
64) A property has an annual before-tax cash flow of $100,000 and income taxes of $12,000. The investor has $2 million invested in this property. What is the investor’s cash-on-cash return?
65) Amy is explaining the “broker and seller’s duties” section of a listing agreement to a new client. Which of these would be an accurate statement to make?
66) Vacancy decontrol means that when a tenant moves out, the owner may ______.
67) How does home ownership contribute to stronger communities?
68) When marketing a property for an investor, your marketing strategy will largely depend on property type and ______.

(ANSWERS will be revealed with proper subscription)
69) –00cceshopp00final2—
70) Chance and Lucky have an option agreement between them in which no consideration is provided. Is this enforceable?
71) A buyer defaults on the purchase of a $500,000 single dwelling residential property after putting down a $25,000 deposit. What is the maximum amount of liquidated damages that may be awarded to the seller?
72) You’re working with a real estate investor. Why might you ask the following question: What’s your end goal?
73) You’re working with an investor who wants you to find properties in disrepair so he can quickly make repairs and sell the property for a profit. This is ______.
74) Ca –
75) What’s the definition of a closing in its simplest form?
76) Why would parties use an escrow company to assist in a transfer of real property?
77) The inspection turned up some repair issues that the seller is unwilling to make, and the buyer is unwilling to take on. The buyer wants to cancel. What portion of the sample purchase agreement you reviewed gives the buyer this right?
78) Which –
79) Household income, race, and ______ are the primary predictors of homeownership.
80) XYZ Realty was fined after being found guilty of violating antitrust law. Which of these activities performed by the firm is the likely violation?
81) Which type of buyer tends to rely on knowledge from previous homebuying experiences, and is often looking for a better location or a home with more space?
82) Which of the following statements is true of real estate commissions and fees?
83) Roberta is an investor who likes to invest for appreciation potential and tax write-offs. What’s her investment strategy?
84) Which of the following would federal fair housing laws prohibit?
85) By what yardstick does the property manager set rental rates in order to yield a good return for the property owner?
86) What is a real estate mortgage investment conduit (REMIC)?
87) Who has an obligation to record on the TDS material facts discovered as part of a required visual inspection?
88) What is self dealing?
89) Alexander just listed his first condo. Last week, he helped a client close on a duplex, and the week before that, he sold a nice ranch to a retired couple. Of the six primary categories of real estate, what type of properties does Alexander handle?
90) What would you likely find on a rent roll?
91) Why is it important for the licensee to be able to distinguish between trust funds and non-trust funds?
92) At a business meeting attended by the heads of the top brokerages in town, the keynote speaker discussed a minimum listing fee. Of what is this an example?
93) Ca-
94) When a business that held a seller’s permit is being sold, who may be held responsible for any outstanding use tax at the time of sale?
95) If you want to capitalize on the time value of money concept, you should ______.
96) Something that can cause a snag at the closing itself is ____________.
97) Your buyer clients have found their dream home, which they will be financing with ABC Lending. What should they include with their offer?
98) What does an and/or assigns clause allow a buyer to do?
99) Let’s say you have an investor with an NOI of $40,000 and a debt service of $30,000. What is your investor’s debt service ratio?
100) Under what circumstances would undisclosed dual agency be appropriate?
101) Ca –
102) Investor Shawn likes to get properties for far below asking price. What might he offer the seller to sweeten the deal?
103) Which of the following statements is true regarding the booklet Residential Environmental Hazards: A Guide for Homeowners, Buyers, Landlords, and Tenants?
104) Jarod, your investor client, offers to purchase a property as-is, and even though you cautioned him against it, he’s also waived the inspection. Why would he do this?
105) What is the simplest disposition of an outstanding property tax obligation?
106) What’s –
107) Which of these sentences accurately describes the purpose of the Exclusive Residential Listing Agreement?
108) Which of these statements best describes one of the purposes of including a section about the “entire agreement” in the residential listing agreement?
109) Maria received a call from an unrepresented buyer regarding her new listing. At what point must she have the buyer sign an agency disclosure?
110) Carolyn represents John in the sale of his home. Which listing agreement clause would authorize and obligate her to distribute the listing to other brokers?
111) One quick and dirty investment formula figures that operating expenses are generally ______ percent of rental income.
112) May a buyer’s agent change the cooperative agent fee in an offer to a seller?
113) Barb deposited her client’s down payment funds into her broker’s business account, intending to remove it the next day and deposit it into the client’s trust account. This is an example of ______.
114) How should the parties to a contract meet their timing obligations?
115) Rachel has met a prospective investor client, Jill. She asks Jill, “Who’s on your team?” Why might she ask that question?
116) The buyer has backed out of the transaction and the seller instructs escrow to disburse earnest money to the seller. Under what circumstances may escrow do this?
117) You represent a seller who has provided advance consent to dual agency. A buyer you show the property to decides to write an offer, and asks you to write the offer. You say, “Fine, but in order to do that, you will need to sign permission for dual agency. Here is the form. Sign here.” The buyer signs, and you proceed. Did you miss any steps?
118) Norris is marketing a commercial space to investors. He’ll want to provide this information, especially ______.
119) Which type of development centers around proximity to public transportation?
120) Who can obtain a copy of a CLUE report for a given property?
121) What is pyramiding?
122) What type of arrangement is it when a building owner sells the building then leases the space from that buyer?
123) When prospecting and soliciting for new business, licensees should be familiar with which federal acts?
124) What is the primary reason for reconciling accounting records?
125) What is a benefit assessment?
126) Chastity specializes in working with investors. Why might she attend a tax foreclosure auctions?

(ANSWERS will be revealed with proper subscription)
–Random-part2-practice—
1) Erica presented an offer to her seller client, and after a bit of negotiating with the buyer and buyer’s agent, the offer was accepted. Which one of these activities will Erica be taking care of at this point in the sales process?
2) The duty of honesty to your customer trumps your duty of confidentiality to your client.
3) Your buyer clients Jen and Tony really like the patio set and bedroom furniture in the house you’ve just shown them. Because the market is hot, what would you advise they do?
4) The maximum annual tax on real property Proposition 13 sets is capped at 1% of the property’s market value each year.
5) A property’s base value can increase by as much as 2% each year under Proposition 13.
6) An addition, such as a garage, will result in a change in the base year for the entire property.
7) It’s possible for a property to have two different base value years.
8) Prohibits monopolies and actions that cause an unreasonable restraint of trade
9) They’re guilty, so what do we need to prove? It’s all a matter of per se. What does per se mean?
10) How is procuring cause related to a protection clause?
11) What’s an REO property?
12) What should you make sure your clients understand about the scope of the preliminary title report?
13) Protects the buyer’s earnest money in the event the buyer is unable to obtain financing.
14) If the property does not appraise at or more than the sales price, the buyer can terminate.
15) The buyer has made the offer to purchase based on the buyer’s current property selling.
16) With an appraisal contingency, the buyer can use the fact that the property hasn’t appraised to terminate and receive a refund of the earnest money.
17) Sellers are often reluctant to accept offers contingent on the sale of another property, and when they do, they usually reserve the right to market and show the property to other buyers.
18) In an offer that’s contingent on the sale of the buyer’s current home, even if their home doesn’t sell by the agreed-upon deadline, the buyer has the option to remove the contingency and proceed with the sale.
19) Can you define an option contract?
20) At what point does an option contract become binding for both parties?
21) Who can enforce an option contract—the optionee or the optionor?
22) The option agreement is designed to be used with a purchase agreement or a lease agreement.
23) What document should detail the typical reports a property manager needs to provide for a property owner?
24) Which of these refers to the agreed-upon price between a buyer and a seller?
25) The maximum amount of income a property can generate from all sources when fully occupied and when rents are fully collected
26) Income received when tenants pay for some or all of the property’s operating expenses
27) Actual gross potential income is offset by this, which occurs when units are not rented or tenants do not pay their full obligation
28) What information is a property owner likely to gather from the effective gross income?
29) The Business and Professions Code requires that transactional records be kept for how long?
30) Janice wants to sell her townhome, and her neighbor is considering purchasing it from her. While she’s waiting to find out if her neighbor is serious, she wants to market it and receive the best representation possible. What type of listing agreement will save Janice the cost of a commission if her neighbor does ultimately decide to buy Janice’s townhome?
31) A good question to ask an investor to determine the type of services they may want from you is:
32) Sometimes, the __________ of the property can have the burden of being responsible for paying sales tax.
33) It’s the licensee’s responsibility to know how and when taxes and real estate ___________.
34) An agent stating that property is “guaranteed to increase in value over the next five years” is an example of ___________.
35) Also included in Prop 13 is a maximum ______ % annual inflation factor, based on the Consumer Price Index (CPI).
36) Just because several brokerages have the same commission rates, it doesn’t mean a price fixing violation is occurring. What must exist for a violation to occur?
37) What responsibilities do licensees have regarding contingencies in a real estate transaction?
38) Although an independent contractor, this worker is defined as an employee by statute for certain employment tax purposes. An example would be a food delivery driver who is paid on commission.
39) Having information about clients you’re meeting allows them to be identified and tracked down in case something goes wrong. This is why you should do what?
40) When might an additional provision be needed in an agreement of sale?
41) In an option contract, prior to the optionee exercising the option to buy, which parties are bound to carry out their contractual obligations?
42) When is the mortgage loan commitment or title insurance contract signed?
43) Which of the following actions occurs prior to a closing?
44) Whose responsibility is it to determine instructions?
45) How do you find the Return on Investment (ROI) ?
46) According –
47) What is a convertible mortgage?
48) What does an equity Real Estate Investment Trust invest in?
49) What is basis?
50) Which of the following is an unauthorized practice of law?
51) Which of the following types of training/course might be one that the Missouri Real Estate Commission would consider for a core course requirement to fulfill the CE requirements for real estate licensees?
52) How often must a Maryland licensee check the license status of a general contractor if recommending the service provider to a potential buyer?
53) During a residential transaction, when must an Illinois seller’s agent deliver a completed Residential Real Property Disclosure Report to a buyer?
54) n accordance with the Illinois Real Estate License Act, sponsoring brokers must keep copies of all disclosures on file for ____________________.
55) Charlie, who owns and leases out a commercial building, pays taxes, maintenance, and insurance on the building. What type of lease agreement does Charlie have with his tenants?
56) Which of the following is one benefit to business owners for leasing instead of buying real estate for their business?
57) Damien was representing a commercial property owner. Which one of the following duties can the owner expect Damien to perform on the property owner’s behalf?
58) Farm families financing the purchase of properties in rural areas may be able to obtain financing through this government agency if they meet certain criteria, such as income requirements.
59) what’s one benefit of a rural development loan?
60) What entity services rural development loans?
61) what attracts borrowers to adjustable rate mortgages?
62) Manuel is selling his home to Selena. He has an existing loan that he’ll continue to make payments on, and he’s extending credit to Selena for the balance of the purchase price. She will make monthly payments to him. What type of financing are the parties using in this transaction?
63) After switching careers, Alice just graduated from culinary school and is looking to purchase a house. Until she gets her feet wet with her new job, she knows the cost of living with her mortgage is going to be tight. Which mortgage might help her manage her expenses each month?
64) What type of arrangement allows the buyer to retain title to the property but places a security interest in the property on behalf of the seller?
65) Walt and Ginger were informed by their landlord that their option to purchase the bungalow they’re renting has just been terminated. Which of the following things that can occur is likely to terminate an option to purchase?
66) Margaret isn’t ready to buy Jill’s property, but she pays Jill a fee that guarantees she’ll be notified if another buyer appears. If another buyer does make an offer, Margaret has the opportunity to purchase at the price and terms of the offer. Margaret has a(n) ______ on Jill’s property.
67) Edna leased her house to Joan with a right of first refusal. Edna’s cousin, who knows that she needs liquid assets, just offered her $250,000 for the house. What does Joan have to do if she wants to buy the house?
68) the ueta makes it legal and binding for contracts to be
69) Both parties have to sign the agreement in order to demonstrate that ________.
70) You’re talking to a co-worker at lunch and she mentions she has a box of baby clothes her kids have outgrown that she needs to get rid of. You have a baby on the way, so you offer to pay her $25, and she agrees to bring the box to work the next day and give it to you. Which of the following is true in this situation?
71) Your neighbor hires a middle school student to mow his lawn every two weeks. He draws up a written contract in which he clearly outlines the student’s mowing responsibilities and the payment the student will receive in return. Which of the following is true in this situation?
72) Which clause in a contract states that one or more parties won’t be held liable if there are losses or expenses related to the contract?
73) Sylvia, who’s 15 years old, and her neighbor Marge, who’s 24, agree that Sylvia will babysit Marge’s toddler for the summer for $10 an hour. What type of contract is this?
74) Kenneth entered into a contract to sell his home to Valerie, who put down a $5,000 earnest money deposit. At the last minute, Valerie backed out of the deal and Kenneth kept the earnest deposit. This is an example of ______.
75) What happens to the company license if the qualifying broker dies or becomes incapacitated?
76) Julie is working with buyer clients and has prepared an estimated closing statement. Which of the following statements is true?
77) Buyer Susie’s a little nervous about the $20,000 earnest money check she just deposited with the title company. When should she expect to see this money applied toward her purchase of the property?
78) Which of these is a recommended strategy for a real estate professional who wants to avoid being asked to violate fair housing laws?
79) Renae moved to the U.S. from Nigeria and became a citizen. Which act specifically provides Renae with the right to buy, sell, convey, inherit, and possess property?
80) Ramon and Bill are victims of fair housing discrimination. Which of the following must have occurred if their landlord violated specific terms of the Fair Housing Act?
81) Cambridge Apartments provides an open parking lot for its residents. There is adequate parking, and all spaces are available on a “first-come, first-served” basis. Alton has MS and uses a motorized wheelchair. Must Cambridge reserve a parking place specifically for Alton if he requests?
82) Which statement related to reasonable accommodation for an assistance animal is true?
83) What must occur to effect a transfer of title?
84) A real estate licensee must conduct marketing campaigns in a way that ______.
85) The property management _______ provides detailed information about the rental property, such as market analysis, competitive analysis, and property analysis.
86) Rick is representing Jules, a seller, who wants to know if he has to disclose his leaking roof to buyers. Rick says yes, since the problem constitutes _______.
87) The purpose of the Truth in Lending Act (TILA) is to ______.
88) Adella received money for her down payment in the form of a tax credit on her federal tax return. This tax credit is known as a __________________________.
89) Subdivision regulations imposed by developers in an effort to maintain control of the development of the subdivision are an example of ______.
90) Deed restrictions imposed by a developer who wants to maintain specific standards in a subdivision under development are often called _______.
91) Personal property includes which of the following?
92) Ron’s company leased a building so that they could build an escape room experience. After operating for two years, their attendance (and thus their profits) started to drop significantly, so they decided it was time to close the location. When they started taking down the installation, they realized that some of the structures they built will damage the walls if they try to remove them. Which of these is true about these trade fixtures?
93) Agent Terry meets a potential seller, Cate, who’s unhappy with her agent. “Break your contract with your agent,” Terry says, “and I’ll work hard for you.” Less than a week after Cate breaks with her agent and signs with Terry, he puts her house on the MLS and puts a for sale sign on her property with her permission. The two of them arrange an open house. Did Terry break any rules?
94) Jerrold reviews the floor plan of the Knoxville house he’s going to sell. It’s 3,800 square feet. In his advertising, he bumps that number up to 4,000 square feet to better justify its asking price. What has Jerrold done?
95) Patty is writing an online ad for several condos she’s selling. “More than 3,000 square feet!” she writes. She’s pretty sure that this is the average size of the condos. She included her brokerage firm and her license status on the advertisement, as well. How did Patty do?
96) What information does the Loan Estimate NOT provide to buyers under required disclosures law?
97) Sam’s kids talked him into putting up the basketball hoop that their grandparents got them for Christmas. On a quiet Saturday afternoon, Sam is busy nailing the backboard to the front of their garage facing the street when one of the officers of the homeowners association walks by. “I’m so sorry,” she says, “but you’ll have to take that down. Basketball hoops in direct view of the street are prohibited.” What is in place in Sam’s subdivision that would prohibit this?
98) Which department typically decides which development projects require a permit or approval?
99) What classification of water rights includes the two smaller sub-classifications of navigable and non-navigable waterways?
100) Bonnie is calculating the square footage of a listing. The upper level of the home is 450 square feet. The main floor is 1,200 square feet, including an unfinished laundry area that’s 225 square feet. The 1,200-square-foot basement is finished. Bonnie’s MLS system disregards below-grade square footage. What square footage will Bonnie mention in her MLS listing and marketing materials?
101) Your 15-year-old son just signed a contract joining a health club, which costs $50 a month. Is this contract valid?
102) Steve is preparing a market analysis for the Joneses and has selected three comparable properties. What’s the maximum number of adjustments Steve should make to the Joneses’ property?
103) Which statement regarding fee simple defeasible estates is true?
104) Which of these is an example of antitrust violations common to real estate?
105) In marketing her new listing, Alice asks the photographer to “touch-up” the photos of the house so that the old roof and siding look as though they are new. Which statement about this is true?
106) Trinity has applied for a home equity line of credit to perform some upgrades on her home. Within what timeframe must her lender provide the Closing Disclosure?
107) Trina is a licensee at Midtown Homes. Which of these factors indicates that she’s classified as an employee?
108) Jordan works as a property manager for several residential property owners. When she receives security deposits from tenants, how long does she have to deposit them into an escrow account?
109) A mortgage is a legally binding document that creates a lien on a piece of property and gives the lender the right to foreclose on the property if the borrower defaults. Who or what entity is considered the mortgagee?
110) How are fines assessed for violations of the CAN-SPAM Act?
111) When is a cease and desist order effective?
112) In contract law, undue influence differs from duress in that duress includes ______.
113) Nellie and Victor own a suburban ranch home and fell behind on paying their property taxes when Victor lost his job last year. Victor is working again, but they still haven’t saved enough to pay their back taxes. They’re worried that the county may begin foreclosure proceedings. What type of lien is this?
114) Why did the implementation of TRID impact closing dates?
115) Your neighbors build a high-quality addition to their home, increasing its value compared to your own home’s value. Because of this, you notice a bump in your property value. Which economic principle is at work here?
116) What’s the relationship between TILA, RESPA, and TRID?
117) Sandra and Dwight are neighbors who share a common driveway, but the driveway is on Dwight’s property. What kind of ownership rights does Dwight have of the driveway?
118) Which of the following is most likely to have an extremely negative effect on the time and cost of a development project?
119) Agency may be legally terminated in which of the following ways?
120) Chris is in the process of purchasing a property with 20 acres of farmland in a rural area of the state. Assuming his income meets the criteria of the program, what type of loan may Chris find the most desirable?
121) Monica received a promotion at work that requires her to relocate. Because of the timing of her promotion, she’ll need to buy a new house in her new city before her current one is sold. So, she won’t have any equity from her current home to make a down payment on the new house. What loan option would allow her to make the purchase before selling the old house?
122) The Amarals are purchasing the house of their dreams and have plans to stay in it for at least the next three decades while they pay back their conventional 30-year loan. Their primary focus, over the life of the loan, is to reduce their payments as much as possible. What is something that could help them achieve this?
123) How might the lengthy purchase process for a short sale or foreclosure impact a buyer’s financing?
124) How many parties does a deed of trust involve?
125) Philip owns land in a state where growing marijuana is illegal. He wants to set up a small marijuana growing operation and export to states where marijuana has been legalized. He asks his attorney about the possibility. “No,” his attorney explains. “It’s not possible. Although you own the property outright, the right of ______ only allows you to manage the property in ways that are legal in this jurisdiction.
126) Which one of the following could be a clue that a property was formerly a waste disposal site?
127) What’s another term for deed in lieu of foreclosure?
128) A License holder may have more than one claim against hom. However, payments made from the Real Estate Education, Research, and Recovery Fund on behalf of the license holder must not exceed what amount?
129) Amy plans to open a brokerage. What might make her select a franchise?
130) What’s one of the main differences between a traditional mortgage loan and an interim loan?
131) Which section of the Exclusive Buyer Brokerage Agreement allows for an addendum to cover any special situations not outlines in the agreement?
132) Jeremy has just finished completing his loan application and has gathered supporting documentation needed to determine whether the application will be approved. Which of these titles best describe who Jeremy is?
133) A contract in which only one party is bound is __________________.
134) Bernie works for Quckwell Lending and accesses several lenders to find a loan product that works best for his clients. What is Bernie?
135) Which title search method only goes back as far as when the last title search performed, and assumes the last search was done accurately, legally, and that any issues were resolved?
136) Which of these would be considered a special circumstance that may require prior approval from a third party before a listing agreement can go into effect?
137) What is the assessed value of a property with a fair market value of $249,500?
138) Rhonda is interested in putting money toward a timeshare estate, which would allow her to use a condominium for two weeks each year. Timeshare estates _____________.
139) What doe each component of the 80/10/10 ratio represent in a split-or piggyback-loan?
140) As a(n) ___________ property manager, you spend most of your time on maintenance, landscaping, security issues, and enforcing HOA regulations.
141) When is transfer tax payable?
142) As a licensee, what should you do as soon as it’s known that closing will be delayed?
143) What does the claims for loss statement in a title policy say?
144) How can lapsed homeowners insurance lead to default of the mortgage loan?
145) Kristin wants to buy her listing. What must she do to be on the up and up?
146) What type of zoning is used to separate one type of property of another use?
147) Which of the following options describes a method by which licensee can determine an appropriate listing price range?
148) Rachel and Nick are selling their home. Before the property is sold, a title search is conducted to determine if there are any _________________.
149) Fiona signed an agreement to either buy or not buy Nick’s vacant lost for $310,000 by a specific date. What’s the agreement called?
150) A complaint was filed against Bard, a licensee. A hearing was help, and GREC issued a/an _______________________, which resulted in a small fine and the requirement for Barb to take some additional education.
151) What actions are taken to account for the release of gases produced by decomposing trash in a decommissioned landfill?
152) What’s a computerized loan origination system?
153) When assessing a contract, the assignor ensure that __________ is not prohibited in the purchase contract.
154) Marcy listed her property with Jennings Homes in March. The market is slow, and Marcy’s property isn’t in great condition, though she’s sure she can get top dollar for it because of its location. Her agent encourages her to either reduce the price or fix the property up, but she refuses. Both Marcy and her agent are frustrated. What’s the best options for both of them?
155) Milton, a broker, agrees to sell his sister’s house. She needs to receive at least $200,000 and offers Milton a deal: If he sells the house for $205,000, he can keep anything over $205,000. So he lists the house at $220,000-he wants to make some money, too. If it sells at this price, he gets $15,000. What type of agreement is this?
156) What’s a listing agent’s primary duty to a seller?
157) Monica, who’s selling her home to Ethan, promises in writing to have a licensed professional repair the home’s leaky roof. After closing, Ethan discovers that the roof was poorly patched by the homeowner and leaks whenever it rains heavily. Under the statute of limitations, of Ethan wishes to sue Monica, he must do so within _____ of the contract breach.
158) Which type of estate is a life estate?
159) What occurs when a landlord has a tenant removed from the premise through a suit for possession?
160) Stanley is having second thoughts about taking her neighbor to court over a written agreement they have concerning who pays the rent on a storage unit that they share, because it’s used to store stolen merchandise. Stanley doesn’t think they contract will stand up in court. What type of contract does Stanley have?
161) What’s the difference between an exclusive right-to-sell and exclusive agency agreement?
162) What’s the legal process used to determine a will’s validity and to ensure that the will accurately reflects the deceased person’s wishes?
163) When Polly the puppy escaped her fenced-in yard, her owner, Jane, posted a reward for her safe return. What type of contract was Jane creating?
164) One of the risks of buying a condominium is that _________________.
165) Which of the following agencies is responsible for regulating the Equal Credit Opportunity Act?
166) Whose responsibility is it to notify GREC of a licensee’s transfer?
167) Cecil is a licensee who wants to purchase a home listed by the brokerage where he;s affiliated. What must he do?
168) Jillian has a loan-to-value ratio of 90/10. This means __________.
169) What effect will a property utility have on the value if it’s currently uninhabitable?
170) What’s the Mortgage Electronic Registration Systems, Inc (MERS)?
171) Which of the following is the probable sales price of a property if the property were sold under normal market conditions?
172) What’s a lease?
173) What is the purpose of a lender’s title policy?
174) You make an investment with other real estate investors. Because of the profit-oriented nature, and the fact that the profit depends solely on the management effort of others, this is likely what?
175) A VA Loan…..
176) _________________ occurs when the parties meet all terms of the contract
177) For what reason do borrowers commonly seek the assistance of individual private lenders?
178) ______________________ are artificial attachments to land that include items such as fencing, buildings, and walkways
179) Which of the following best describe what Ginnie Mae does in the secondary mortgage market?
180) How long can a broker wait after non-payment of a commission to record a lien against a commercial property?
181) SRT Mortgage has a borrower who has fallen behind on her mortgage. Rather than go through a foreclosure, the borrower is attempting to sell the property. An offer come in for less than the borrower’s loan balance and closing costs, but for more than what the lender feels it’d get at a foreclosure sale, so it approves the purchase. What is this an example of?
182) What are the rights and privilege’s granted with a fee simple estate commonly called?
183) When evaluating the income listen on a loan application, what will the lender consider?
184) Which of the following options can a real estate licensee provide?
185) Bianca wants to buy a cooperative, but she’s unsure that she can afford it. With a cooperative, her share of mortgage interest and real estate taxes will be
186) If a property owner owns more than 10 units, security deposits must be kept
187) What is one reason that carbon monoxide could be called a sneaky toxin?
188) Local real estate developments, such as a new subdivision, will likely impact ______ the most.
189) A duplex produces a monthly gross rental income of $1,800. The GRM an appraiser extracts from the local market is 125. Calculate the property’s estimated value.
190) Real estate, plus all of the interest, benefits, and rights included in ownership, is also known as ______.
191) What’s typically used to prove there are no encroachments on the property?
192) When people are treated differently because they have an accent, were born in another country, or are married to someone from a specific part of the world, this falls under discrimination based on ______.
193) Real property rights include ______.
194) What does the income approach to value rely on when valuing single-family and two- to four-unit properties?
195) A wet environment with little air circulation can ______.
196) An ______ is an addition to an existing sales contract and can be added without changing other terms already agreed upon in the contract.
197) Agatha has helped her client, Rufus, complete the ______, which documents Rufus’s purchase offer to the seller for the property he is interested in buying.
198) Amy has entered into a specialty contract (also known as a contract under seal) with another party. In Maryland, if Amy discovers that there has been a contract breach, how long does she have to sue the other party?
199) Which of the following provides everything a lender wants to know to value the property as collateral for a loan?
200) Jenny and her friend, Kali, go out to lunch. Afterward, they pay the bill. Their agreement to pay for the food they were served is what type of contract?
201) For income-producing properties, how is rent prorated at closing?
202) Janine wants to meet with her potential buyer clients face-to-face in her office. What’s her reason for doing this?
203) Which term refers to a permitted deviation from land use for a purpose that, under the current zoning restrictions, is prohibited and causes the property owner unnecessary hardship?
204) What’s the term used in real estate to describe when personal property is attached to real property, thereby making it a fixture?
205) Which of the following will appear on the closing statement?
206) Down the Road Brokerage has an in-house transaction situation and has appointed one of its licensees to represent the buyer client and one to represent the seller client. The two licensees are acting as what type of agents?
207) Archie signs a contract to buy Pam’s home. The deal eventually closes, but Pam fails to hand over the home’s keys to Archie. A week passes, and Archie files a lawsuit in an attempt to force Pam to give him the keys. This is an example of ________.
208) A licensee stating, “This is a dream home with the best views in town,” is an example of ______.
209) Federal and state fair housing laws prohibit activities that are ___________________.
210) What happens when a married couple who own a property as tenants by the entirety divorce?
211) The mishandling of escrow funds can result in _____________________.
212) Five siblings enter into a contract to buy a vacation property. The siblings get into a dispute, resulting in two of them backing out of the deal. This leads to a termination of the original contract. Three of the siblings then enter into a new contract to buy the property. This is an example of ________.
213) Manny has a client who wants to purchase a commercial building. Manny doesn’t have any experience negotiating commercial purchases. Which action should Manny take to demonstrate his good faith and most ethical behavior toward his client?
214) Which of the following is true about market allocation?
215) A buyer representation agreement is similar to which document used when representing a seller?
216) What’s a promissory note?
217) Which agency enforces fair housing laws?
218) Which of these items go in the seller’s credit column and the buyer’s debit column?
219) When must the consent for dual agency be reaffirmed by the parties to the transaction?
220) Which of the following is true about depreciation schedules?
221) Regardless of whether a seller elects to complete the property condition disclosure or disclaimer, what must the seller disclose?
222) What’s the amount a lender charges for the use of its money?
223) Joe and Emma Parsons begin informally working with their neighbor, Kyle, a real estate licensee, to find a bigger house. The parties have not signed any agreements or discussed the arrangements. This is an example of a (n) __________ agency agreement.
224) What type of listing agreement offers the most protection to the broker?
225) Can a seller withdraw a listing before the broker spends time and money?
226) The seller cannot cancel a listing with a broker once the broker has…..
227) In addition to showing the property, locating a buyer/tenant, communicating terms, promoting features and terms, and assisting in negotiations, what other responsibility does a listing agent have once the listing agreement has been signed?
228) The listing agent must ________________________ of items in the listing agreement
229) If a listing agent fails to verify that the parties who have signed the listing agreement are the actual persons who hold the title to the property, he/she may increase……
230) Who enforces the National Do Not Call Registry?
231) Are brokerage companies required to have a Do Not Call policy (even if they do not engage in cold calling)
232) How often must a brokerage company update their Do Not Call list?
233) What is the penalty for calling someone on the Do Not Call Registry?
234) Which of the following would NOT terminate a listing?
235) When a property is sold by a licensee other than the listing broker, who would the seller pay the commission to in an exclusive right to sell listing?
236) The difference between an exclusive agency and an exclusive right to sell listing is
237) What is the primary purpose of a listing agreement?
238) What is the key job of the agent?
239) Which of the following is not in violation of the CAN-SPAM Act?
240) How frequently must companies access and update the Do-Not-Call Registry?
241) The CAN-SPAM Act is federal regulation governing
242) Which of the following are the marketing responsibilities of the seller?
243) An arrangement in which brokers pool their listings and all commissions are then divided between the listing broker and the selling broker is called what?
244) What is an “extender clause”?
245) Which of the following is a feature of an open listing?
246) The failure to perform provisions of a contract without a legal excuse is known as what?
247) An agency could be terminated by all EXCEPT which of these circumstances?

248) How long does a buyer have to cancel a contract if they decide not to complete the purchase of a timeshare?
249) Where is a complaint against a licensee filed?
250) Which of the following is a difference between a limited service agent and an independent contractor?
251) Two designated agents, Mitch and Mickey, represent the buyer and seller in a single transaction, respectively. What else do you know about the agency situation?
252) What type of agency exists when a buyer’s agent is also the listing agent for the same property?
253) Rick, a builder, is using two properties as collateral for a loan. This is an example of a(n) ______ loan.
254) A duplex produces a month gross rental income of $1,800. The GRM an appraiser extracts from the local market is 125. Calculate the property’s estimated value.
255) Fiona and her husband, Ed, have just entered their first-ever agency agreement with their new agent, Ken. The couple is a little nervous, but they like the idea that they have something in writing that explains both their agent’s responsibilities and what they’re expected to do as part of the relationship agreement. Life is good. What type of agency exists between Ken and his clients.
256) Under which type of buyer agency agreement does a buyer receive the most representation from a single agent?
257) Which of these items go into the seller’s credit column and the buyers debit column?
258) Which of the following financing types involved the sale of personal property with the real property?
259) Gertie and Frank both have alzheimer’s disease. They fall in love in a disabled home and get married by signing a marriage certificate. This is an example of a _________ contract.
260) You have found the perfect home for Lucy and she is ready to make an offer. The Home was built in 1938. Who is responsible for scheduling & paying for the home’s lead inspection?
261) With which type of commercial lease does the tenant pay some or all expenses?
262) What type of listing agreement will offer most service by their listing agent and still give them this option?
263) In which of the following situations can an agent represent a customer in a real estate purchase?
264) The cost approach to finding an appraised value measures _________.
265) The earth’s surface, extending downward to the center of the earth and upward to infinity, including permanently-attatched natural objects is called ________.
266) Ownership is a right in the bundle of rights. Which of the following is considered a from of ownership?
267) Which of these may be covered by a builder-backed home warranty?
268) Jay’s new loan to purchase a property includes the sellers existing mortgage. This type of loan is called a _______ loan.
269) Lacey is preparing a sales contract for her buyer clients, and it’s time to fill in the amount of earnest money they’re going to offer. Which of the following statements is true regarding who determines the earnest money amount?
270) Cracks, holes, or rotten areas on a soffit are common _________ issues.
271) The Equal Credit Opportunity Act (ECOA) is also known as ________.
272) What’s a land contract?
273) Which of the following is true about VA loans?
274) Kris has made an offer on Lincolin’s townhome. However, she’s offered no earnest money. If lincoln accepts her offer, is it binding?
275) Sheila and Vickie are sisters who enter into a contract to buy a vacation property. The sisters get into a dispute, and Vickie no longer wants any part of the deal. However, Sheila talks her younger brother Joe into replacing Vickie on the contract. Vickie agrees to the substitution. This is an example of __________.
276) The landlord generally pays taxes, maintenance, and insurance with which type of lease?
277) For an antitrust violation to occur, which element must be present?
278) Substitution of an original party to a contract with a new party, or substitution of an original contract with a new contract.
279) What is the ratio of annual before-tax cash flow to the amount of cash a consumer has invested called?
280) If there are questions regarding the exact property description, which of the following is recommended?
281) Jasper has a new listing, and he appoints Esther as his sub-agent. Esther brings Julie, a buyer customer, to the transaction, and Julie buys Jasper’s listing. What’s true about the agency relationships in this situation?
282) Which of the following is true regarding an appraiser’s three approaches to value?
283) Kat is an investor and uses an FHA loan to purchase a duplex. She never occupies the property but instead rents it out. This is ______.
284) Which of the following is a contract between a seller and a buyer to transfer title to real property?
285) Which municipal agency grants special use permits?
286) How is general property tax calculated?
287) Tax assessors determine property values for each property within the assessor’s taxing unit. Which of the following is a taxing unit?
288) Your investor client has asked you to place a low-ball offer on his behalf. How might you convince a seller to accept?
289) Compared to working without a buyer agency agreement, a buyer who works under a buyer agency ____________.
290) Which of these is a written description of a blueprint?
291) Investors come in all shapes and sizes. Some may only be looking for someone to find them deals. Others may want someone to show properties and submit offers. What question should you ask to determine what type of investor you’re working with?
292) You’re working with buyers who have found their dream home, but it’s almost more than they can afford. When the appraisal comes in, it’s lower than the agreed-upon sales price. Now what?
293) Let’s say you have an investor with an NOI (net operating income) of $40,000 and a debt service of $30,000. What is your investor’s debt service ratio?
294) Why is a building’s “envelope” an important consideration in energy efficiency?
295) Regulating and protecting places and objects that have special character, historical, and aesthetic interest, is the responsibility of which municipal agency?
296) If the builder or owner of a new condominium building wants to change the price of all of the units, or all the two-bedroom units, what must the builder/owner do?
297) Which of the following is not an encumbrance, but a temporary right to enter the land or use property belonging to another for a specific purpose?
298) Which of the following is a written outline of the sales transaction often referred to as an offer to purchase or a purchase offer?
299) Energy efficient windows, weather stripping and ___________ are areas homeowners should consider when trying to eliminate heat loss/gain.
300) Doris needs to renew her real estate license for the first time, and she’s already completed 20.5 hours of continuing education. How many additional hours of CE does she need to complete?
301) DOS Regulation 175.23 requires brokers to maintain ______ for a period of ______, including the amount of commission paid for each transaction.
302) The duty of confidentiality survives agency unless the former client is found guilty of fraud or ______.
303) A seller you’re working with still owes $50,000 on his mortgage but wants to net $20,000 after the mortgage and 7% commission are paid. What is the minimum for which the house must sell?
304) Which of the following is a percentage of market value and is the amount of property value to which the tax rate is applied?
305) 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?
306) Which document allows a prospective buyer the right to reserve a specific unit, which may or may not be under construction?
307) What is one drawback of sub-agency from a listing broker’s standpoint?
308) Ralph is a borrower obtaining an FHA loan from Happy Bank to finance his mortgage. Who is the mortgagor in this scenario?
309) PITI stands for principal, interest, taxes, and _____.
310) Which approach to value used by appraisers relies on the sales price of comparable properties to help determine the adjusted market price?
311) Some sensitive individuals can end up in the hospital because of chemicals used in carpet and other manufacturing materials used in remodeling or new construction. What’s the cause of this danger?
312) New licensee Cara wants to avoid accidentally engaging in unauthorized practice of law when she’s helping clients fill in contracts. What’s the best way for her to do this?
313) Which of the following is a true statement about cooperatives?
314) A ______ is the component of a septic system that is generally made of gravel or sand and naturally filters wastewater.
315) Janice is a listing agent assisting the Chens with the sale of their home. What is one of Janice’s duties?
316) Which of the following statements is true regarding federal fair housing law?
317) Real estate licensees currently enjoy the unique privilege of retaining their independent contractor status for IRS purposes, despite the fact that ____________.
318) For a taxpayer wanting to use a Small Claims Assessment Review (SCAR), which of the following is true?
319) Maury, a landlord, has decided to sell Elm Street Apartments. As you know, sale of the property does not affect the lease of the tenant. What are Maury’s legal obligations to the current tenants?
320) For which of the following properties is the cost approach most likely to be used?
321) Which of the following is a potential drawback to a real property exchange?
322) What generally happens when a tenant moves out of a rent-controlled apartment?
323) Chris used the VA guaranteed loan program to purchase a home five years ago. He now wants to sell that house and buy a new one. Is Chris allowed to use the VA loan program a second time?
324) If an agency policy indicates that licensees will have traditional buyer or seller agency relationships with their clients, the agency relationship is with ________.
325) What does a firewall do?
326) As an insurer’s condition for issuing an errors and omissions policy, what should brokers be prepared to do?
327) Dean is an experienced licensee whose career has focused on such things as mineral, oil, gas, and water rights, and hunting and gaming licenses. Based on this, you can deduce that Dean’s real estate niche is in which of the following?
328) Adam has been showing condos to his childhood friend Steve, even though Steve hasn’t signed an agency agreement. Unbeknownst to Adam, Steve contacted the listing agent for a condo he liked and told him he wanted to submit an offer. The listing agent wrote it up, the seller accepted the offer, and Steve became the proud owner of a new condo. Is Adam owed a commission?
329) Agent Magda’s new clients are clutter bugs. Before she photographs their home, Magda should:
330) The purpose of the employee and independent contractor agreements is to _________________.
331) The sellers in a transaction ask to have an extra week after the scheduled closing date to stay in the home. How is this handled on TAR form RF 401 Purchase and Sale Agreement?
332) The listing broker’s compensation can be either a percentage of the sales price, or what?
333) ______ occurs when the parties can’t legally or practically do what they’ve agreed upon due to circumstances beyond their control.
334) Investors call investing in this type of property “dead money.”
335) Risk is an inherent part of real estate activities. this is why________ is recommended for all licensees
336) According to the NAR Code of Ethics and Standards of Practice preamble, “REALTORS® should recognize that the interests of the nation and its citizens require the ______.”
337) An _____ ____ may be for any amount agreed to by the parties.
338) Complaint forms submitted to TREC must be filled out completely and include supporting documentation. What will happen next?
339) The legal concept of parens patriae gives which state position the authority to sue on behalf of citizens?
340) In counties governed by the Uniform Residential Landlord and Tenant Act (URLTA), which of the four types of lease termination would result in the landlord needing a court order to take action against the tenant?
341) What would make a ‘Choose Your Neighbor’ letter an allowable form of advertising a property for sale?
342) How do license laws promote professional competence?
343) Why must a seller disclose the presence of an underground storage tank?
344) All of the following would impact list price EXCEPT ________.
345) Prior to closing on the property, Monica substituted her daughter’s name, Melanie, as the buyer. Although Melanie is now listed as the buyer, Monica isn’t released from her contractual obligations. What is this scenario an example of?
346) What’s the purpose of the buyer pre-qualification letter?
347) Where can a licensee report an antitrust violation?
348) Wayne is a licensee and would like to update his advertising. What must he be sure to include on any advertising?
349) Before you sign an exclusive right to sell agreement with a seller, what must you do?
350) Alice has signed a back-up contract with Harry, the seller. Upon what does their agreement depend?
351) Using the term REALTOR® when not authorized to do so is an example of ________.
352) Which document provides details about the costs of the transaction and is provided to borrowers no fewer than three days prior to closing?
353) Kelsey and Jerrod have a housing ratio of 30% and a total debt obligation of 41%. Their credit score is 640. Do they meet the underwriting requirements for an FHA loan?
354) Bart is an independent contractor. That means that his managing broker, Lee, has the right to ______.
355) The risk identification process for a brokerage firm involves identifying what?
356) Often, errors and omissions insurance providers will require a brokerage to have ______.
357) Brian has just finished completing his loan application and has gathered supporting documentation needed to determine whether the application will be approved. Which of these parties best describes who Brian is?
358) For which of the following acts might a broker be subject to disciplinary action?
359) On Thursday, Angie decided to accept Harry’s counteroffer for the purchase of his house. She signed the counteroffer and placed it in the mail. On Friday, Harry decided that he had asked too low a price for the house, so he faxed Angie stating that the counteroffer was withdrawn. On Saturday, Harry received Angie’s acceptance in the mail. Under the mailbox rule, which of the following is true?
360) All of these are typical tasks that an unlicensed real estate assistant may do, except:
361) Which of these factors would tend to lower overall property values most in a single-family residential neighborhood?
362) One of the legal obligations of a seller’s agent is providing a copy of the seller’s transfer disclosure statement to:
363) Which –
364) Which of the following actions by a broker would be illegal under the federal Fair Housing Act?
365) Once a listing agreement has been signed:
366) A buyer makes and signs a written offer. The seller writes in one small change to the offer and signs it. This document is known as:
367) To successfully sue a seller for a commission owed, a broker who worked under a nonexclusive listing must be able to prove that she was:
368) An apartment rental application contains a question about marital status. This question is:
369) A seller has accepted another offer, but your client doesn’t want to give up. Even now, she can submit an offer to the seller, called a:
370) When an agent is preparing a competitive market analysis, the adjusted sales price of a comparable property:
371) The buyer receives the transfer disclosure statement in the mail. How many days does she have in which to rescind the purchase agreement?
372) Which of these is a fundamental difference between the natural hazard disclosure statement and the real property transfer disclosure statement?
373) A buyer submitted an offer with a deposit on a property on June 1. The offer included the condition that it must be accepted within 48 hours. The sellers were out of town, however, and could not be contacted until June 6. At that point, the sellers eagerly signed and returned the purchase agreement; but now the buyer says he does not want the property any longer and is demanding the return of his deposit. A court would rule that:
374) A listing agreement with a property description that is not a complete legal description:
375) Most listing contracts authorize a broker to:
376) Which of the following methods of advertising is legal?
377) An agent is preparing a CMA and evaluating possible comparable sales. Which of the following characteristics would most likely make a property unsuitable for use as a comparable?
378) What is the minimum time limit for employment in an exclusive listing agreement?
379) The buyer’s offer states that the deposit check will be held by the broker uncashed until the seller has accepted the offer. The broker may comply with these instructions:
380) A real estate agent who is acting as a buyer’s agent:
381) Which kind of listing agreement requires the seller to pay a commission to her broker if the property is sold, unless the seller sells the property herself?
382) A real estate salesperson is often approached by home buyers of a particular race. His usual practice is to show them homes in neighborhoods where most of the residents are the same race as the buyers. He avoids showing these buyers properties in integrated areas. This is called:
383) Broker Ray is closely acquainted with the Subdivision Heights neighborhood in his town. Over the years, Ray has made it a practice to contact homeowners in person and also to send them quarterly mailings. This method of finding listings is known as:
384) A homeowner preparing his home for sale should do all of the following, except:
385) Which –
386) In order to be enforceable, an exclusive listing must be signed by:
387) A broker, in dealing with the public, may not:
388) If a seller uses an open listing, she may employ several brokers:
389) A prospective buyer has submitted an offer to Broker Randolph that meets the asking price. As Randolph is on his way out of the office to present the offer to the seller, one of Randolph’s salespersons brings in another offer on the same property that is for $5,000 less. Randolph should:
390) Which of the following is equivalent to value in exchange?
391) Two types of value that are often contrasted are subjective value and:
392) A licensee acting as a finder (or middleman) won’t owe agency duties to either party, as long as:
393) Which of the following would be considered a design deficiency in newer, high-end construction?
394) Which of these is not a way in which an agency can be created?
395) Two properties, each worth $50,000, are combined into one larger parcel that has a value of $120,000. This increase in value is called:
396) A salesperson shows his broker an offer for one of his listings that has a good faith deposit in the form of a promissory note. The broker should tell the salesperson that:
397) An agency relationship is best created through:
398) Before making a listing presentation, an agent should:
399) The seller’s agent is most likely to be liable for damages to a buyer if she:
400) The best indication of a property’s value comes from:
401) According to the Americans With Disabilities Act:
402) After several months of trying to sell a property, the seller’s agent decided to purchase it herself. She must:
403) When does an offer to purchase become a binding contract?
404) A seller’s agent intends to give part of his commission to the buyer. The agent:
405) A listing broker presents his client with a full-price offer from a ready, willing, and able buyer. The seller refuses the offer and tells the broker it’s because the buyer is black. The buyer makes an offer on another property. Which of these steps could the broker take?
406) When performing a competitive market analysis, agents typically make numerous adjustments to the comparables’ prices. This is because:
407) Young buyers with limited funds are typically:
408) Agent Mary notices that a competitor’s listing is about to expire. She should:
409) Two brokers in a small community felt that another local broker was unethical and dishonest. They agreed not to send him any referral business, and they encouraged other area brokers to follow their lead. They could be accused of:
410) Which of the following can be affected by conditions of sale?
411) Your buyer client, Percy, needs to obtain financing to buy his dream house. What’s his first step?
412) A sloping hearth is a common _____ issue.
413) In what type of market is pricing a home below market value an especially good strategy?
414) In a real estate transaction in which you represent the seller, your duty to other parties is ______________________.
415) The Costa-Hawkins Rental Housing Act…
416) Shawna is reviewing Brian’s loan application. She needs to verify the assets he’s claimed, specifically his bank account balances. Which form should she have him complete?
417) Real property ownership may offer significant tax advantages. Which one of the following is a potential advantage?
418) What’s the primary difference between reproduction cost and replacement cost?
419) When a lender charges a borrower more than the highest allowable interest rate, it is called
420) How many days do purchasers have from the date they signed a contract to notify the seller their intent to cancel the contract?
421) Which of the following statements may be true of self-employed individuals seeking to obtain a home loan?
422) In the event a broker-in-charge becomes medically incapacitated or dies, an associated licensee may be permitted to act as the broker-in-charge for up to?
423) Katherine purchased a home in South Carolina for $415,000. What’s the county portion of the deed recording fee for this transaction?
424) Glenda is engaged as a seller’s agent. Gary, the seller, hasn’t consented to dual agency. A prospective buyer would like Glenda’s assistance in drafting an offer to present to Gary. Can Glenda do this?
425) Is there ever a situations where it is legal to receive compensation?
426) Who is the person in charge of carrying out the terms of the trust
427) The trustee is the person in charge of carrying out the terms of the trust
428) Certain properties are exempt from fair housing law requirements. Which of the following properties is NOT exempt?
429) When a property owner intentionally transfers property to another party, it’s called voluntary alienation.
430) When operating under a power of attorney concerning the transfer of real property, who may sign as the grantor?
431) What’s another term for voluntary conveyance?
432) In a real estate transaction, whom may a licensee represent?
433) Which entity has the authority to represent the state and citizens of the state in antitrust cases?
434) Percy and Maxwell have formed a team within their real estate brokerage firm. They’ve been tossing around some different names to use. Which of these would be permitted?
435) Which of the following describes commingling?
436) For a deed to be valid, which two elements are required?
437) Shelley is selling her condo in the city and moving to a house in the suburbs. Her agent gave her a list of things she must do to prepare for the sale, including completing the residential property disclosure statement. When should this statement be provided to buyers?
438) You’re working with a couple who state they definitely must sell at a price of $275,000. They’re more concerned about getting that price than the amount of commission they’ll pay, and they say you can keep any amount the sale brings in that’s more than $275,000. What type of listing is this?
439) The enforcement of antitrust laws, investigation into possible violations, and subsequent prosecution of violations are handled by the __________.
440) The lender, the loan applicant, and the _______ all complete parts of the request for verification of deposit form.
441) There are many versions of property management agreements, although all management agreements should include _______.
442) The purpose of the ______ is to promote fairness and transparency for mortgages and other financial products and services through education, enforcement, and research.
443) Which of the following, based on the abstract of title, is used to create the title commitment before title insurance is issued?
444) Which type of appraisals may only be done by certified general appraisers?
445) What type of agreement opens the door to possible dual agency situations, since it creates an agency relationship between a buyer and all affiliates of a brokerage?
446) Which of the following is true regarding the definition of agency?
447) Jared, a seller, has found his own buyer and wants to terminate his exclusive right-to-sell listing agreement with Sue, his listing broker. Can he do so without penalty?
448) Kristin has been unable to make her mortgage payments. Her property went to auction, but the lender didn’t accept the high bid. What stage of the foreclosure process is this property now in?
449) Which of the following is the most common type of buyer representation agreement?
450) You’ve just signed a listing with a new seller client. What’s true about electronic delivery of written notice or contract forms to your seller?
451) Your buyers love the 1891 Victorian they have under contract, but they want to get both the water and the paint tested as soon as possible. What are they testing for in both water and paint?
452) Which of these is a NOT a reason why agency disclosure is mandated?
453) After a life estate holder dies and ownership rights have either reverted to the original owner or have been transferred to a remainderman, with what type of estate is the property held?
454) What’s the relationship between the Loan Estimate and the Closing Disclosure?
455) Which of the following is a legitimate and legal way that an exclusive right-to-sell listing agreement may terminate without the seller owing a commission?
456) Which group ensures that community growth is controlled and orderly?
457) Derrick was thrilled to find out that the land he purchased includes several small caves. He’s been spelunking for about three years and looks forward to exploring the caves on weekends. Which real property right allows him to do so?
458) When assigning a contract, what should the assignor ensure is permitted in the purchase contract?
459) Remembering the acronym PITI can help borrowers recall what makes up their __________
460) Which type of buyer tends to look for a home with less space, with a similar or better. quality of living?
461) Stan wants Vince to list his house. What does Stan need to do to have Vince represent him in all marketing and negotiation tasks?
462) In a deed, this person is referred to as “the party of the second part.”
463) A VA loan __________.
464) What’s used to calculate the housing debt-to-income ratio and total-debt-to-income ratio?
465) Broker Alex learns that his friend Joann is frustrated with the broker who listed her home. Alex encourages Joann to break her existing agency agreement and sign with him instead. This violation is an example of ____________.
466) An organization with many investors who jointly participate in a real estate investment and must adhere to the rules and regulations of the Securities and Exchange Commission is a _____________.
467) A seller would like to be represented by you, and only you. What type of agency do you recommend?
468) Sherman owes $225,000 on his home. It’s currently worth $240,000. How much equity does Sherman have in his home?
469) Roger just discovered that his loan includes a hidden balloon payment, so now he must ___________.
470) If the monthly property tax rate is $74.15 and the closing is on April 30, what will the seller owe at closing? Assume a statutory calendar and that the seller hasn’t made any payments. Round to the nearest cent.
471) Which document given before closing provides an estimate of the costs a buyer is likely to pay at a settlement?
472) The earth’s surface, extending downward to the center of the earth and upward to infinity, including permanently-attached natural objects, is called ____________.
473) You’re obligated to preserve all the confidential information you receive from a seller client. This obligation ___________
474) What is the definition of an appraisal?
475) Jasmine has signed a lease that details what she can and can’t do on the property. If she wants to refer back to her lease, where would she look for this information?
476) Mary Lou owns property in a rural part of the state. She was recently approached by a representative of a company that would like to drill for oil on a piece of her property. What type of lease is the representative likely discussing with Mary Lou?
477) Which of the following property managers must have a license?
478) Your clients, Charles and Jane Bingley, are first time homebuyers who don’t have a 20% down payment. What would be the best thing for you to tell them?
479) A period of stagnation in real estate when no one is buying and no one is selling is known as ______________.
480) Your assistant, Brady, often answers clients questions about offers and negotiation. What do we know about Brady?
481) What are the two categories of comparison when evaluating comparable to a subject property in the market comparison approach?
482) A home sells for $225,000. Per the listing agreement, the total commission is 7% of the sales price. After half of that goes to the buyer’s agent’s managing broker Devin, the other half of it goes to Sheila, the buyer’s agent. But the seller’s agent, Kiko, also has an agreement with her brokerage for a 70/30 split, with the “70” going to her. How much is Kiko’s commission?
483) Which clause is used in a security instrument to protect the original note holder if the security instrument is sold and the borrower subsequently defaults?
484) Which of the following options describes a method by which a licensee can determine an appropriate listing price rage?
485) What’s the purpose of the Intestate Land Sales Full Disclosure Act?
486) When preparing the sales contract, when is it acceptable for a licensee who is not an attorney to offer legal advice to the client?
487) A(n) __________ is a set of guidelines for ethical conduct
488) Barney defaulted on his mortgage, and his lender is preparing to foreclose. Which type of foreclosure is typically used when a mortgage is used as the security instrument?
489) Homeowners can take several actions related to pest infestations, but which of the following actions should bereft to licensed pest management professionals?
490) Lease types, space planning, area design, and building layout are especially important for a property manager who’s working with a __________.
491) What important seller responsibility is documented in the listing agreement?
492) What regulations or regulatory authority identifies sites that have hazardous substances, and requires the responsible parties to clean them up?
493) What type of agency agreement creates a relationship between a buyer and a single licensee rather than between a buyer and a brokerage?
494) With which approach to value doe the appraiser analyze a property’s ability to earn future income?
495) Which of the following careers in real estate requires extensive experience in real estate investment and sales?
496) Switches that are warm to the touch, damaged panels, and lights that dim or flicker when other appliances are in use can be signs of what sort of problem?
497) Which statement best describes the method used to reconcile the value found for a property from the tree appraisal approaches?
498) Loans available through the Farm Service Agency have which of the following characteristics?
499) Which federal lending act was introduced to combat lending discrimination in law-and moderate-income neighborhoods?
500) Marvin purchase the right to use a resort unit for two weeks every year, although he doesn’t own the property itself. What kind of timeshare is this?
501) How is the Supreme Court case of Brown vs. Board of Education significant in the way fair housing laws are implemented today?
502) In the sales comparison approach, the appropriateness of the various comparable sales in relationship to the subject is considered in a process known as ________, where certain factors may be given more weight.
503) What’s the deprecation schedule for a residential income-producing property?
504) The _______ isn’t used in states that were part of the original 13 colonies, or in Texas, West Virginia, and Kentucky.
505) Marco is anxious to buy a home and is willing to waive the appraisal contingency. Do you still need to provide him with a Buyer’s Inspection Advisory?
506) What, according to RESPA, must the lender give to the borrower disclosing whether or not they intend to transfer the loan to another lender?
507) At which point in the process does scheduling a photographer take place?
508) Mello-Roos was enacted in 1982 to provide for non-specific _____________ improvements.
509) Why should a buyer ask the type and age of heating and cooling systems?
510) Matt’s sellers have a very valuable collection of artwork displayed in their home. It perfectly showcases various rooms in the home. What advice should Matt provide to his sellers when preparing to sell the home?
511) Which of the following is a common chimney or fireplace problem?
512) Real estate is a _____________, unlike stocks or bonds.
513) Net operating income ‒ ______________ = cash flow
514) This generation was born between the mid 1920s and mid 1940s. Only 55% of those in this generation financed their purchase, which is a far cry from today’s actions.
515) Gross potential rental income ‒ ______________ = effective gross income
516) Which of the following statements about the signed sales contract is true?
517) What’s it called when a property is owned by the bank after failing to receive an acceptable bid at foreclosure?
518) Net operating income can be found in the _____________ statement that the property manager puts together for the property owner.
519) Three categories exist for this classification of a worker, who is defined in statute under tax law as an independent contractor and not an employee: direct seller, licensed real estate agent, and a certain companion sitter. This worker’s status is ________.
520) A complaint was filed against Barb, a licensee. A hearing was held, and GREC issued a/an __________, which resulted in a small fine and the requirement for Barb to take some additional education.
521) Which of the following is the property of the broker even if secured by the licensee, as provided for in the independent contractor agreement?
522) Which of the following best describes what Ginnie Mae does in the secondary mortgage market?
523) Gia is acting as a seller agent. Which of these is a duty she must perform?
524) A home sells for $225,000. Per the listing agreement, the agent is paid 7% of the sales price, with half of that amount paid to the buyer’s agent. The seller’s agent also has an agreement with her brokerage for a 70/30 split. How much is the agent’s commission?
525) In a condominium building, what pays for the exterior maintenance, insurance and payroll for building personnel, and interior maintenance, trash pick-up, landscaping and snow removal, and building insurance?
526) What does each component of the 80/10/10 ratio represent in a split—or piggyback—loan?
527) Who’s responsible for testing private wells for water safety?
528) The exemption to the Fair Housing Act that would normally apply is moot when a real estate agent represents _______.
529) Brenda and Joe have 20% cash to put down toward the purchase of their home, and they have great credit. What might be their best option for getting a traditional mortgage loan?
530) If you engage in commingling, what have you done?
531) A buyer is purchasing a property with a fair market value of $94,675, which has an assessed value of $37,870. If the mill rate is 30, what will the buyer likely pay annually in taxes?
532) Which of these would likely be covered by a builder’s home warranty?
533) Sally prefers the predictability of a mortgage payment that doesn’t change during the repayment. Which type of loan offers this feature?
534) Ed Smith is a sole proprietor using the trade name “Ed Knows Real Estate.” Under what name may Ed legally conduct business?
535) What are the loans the Federal Home Loan Bank makes to member banks called?
536) Jemma’s name, address, and license status appear on all forms of advertising, whether she is making the advertisement herself or not. Why would her information appear on advertisements, even when she didn’t specifically place the ad?
537) Bambi is buying a property as in a land sales contract. Due to her financial interest in the property, she retains equitable title, while the seller retains _______.
538) Which of the following is true of retainer fees?
539) What’s Fannie Mae’s mission?
540) A property that’s been converted to natural gas may actually have which issue?
541) The Uniform Vendor and Purchaser Risk Act specifies the rights and duties that apply when a property is _________________.
542) Jenny and Sam are engaged to be married. Any real estate either owns at the time of marriage will remain that person’s property in severalty, while any property attained after the wedding belongs to both of them equally. This describes what type of ownership?
543) What is an acceleration clause in a mortgage?
544) When using the market comparison approach, the comparable property’s relationship to the subject property is a process known as __________.
545) Maria, a qualifying broker, established a new trust account at her firm. By law, within how many days does she have to notify the commission that she established a new trust account?
546) When reviewing her mortgage documents, Reva learns that should she miss scheduled payments, fail to pay property taxes, or allow the property to fall into disrepair, she may be in ______.
547) Rachel and Nick are selling their home. Before the property is sold, a title search is conducted to determine if there are any ______.
548) A landlord discovers that his married tenants are expecting their first child. He wouldn’t have rented to the couple had he known they were going to have children, so he serves them with an eviction notice and tells them they must be out in 30 days. The landlord is guilty of ______.
549) What’s the broadest estate a person can have in real estate?
550) When is a title search conducted?
551) If you work for a property management company that manages property for more than one owner, what must you have in order to collect rent and perform other real estate functions?
552) What is a tax levy?
553) For safety reasons, you should not allow strangers to see_____________.
554) What are the two primary differences between the security deed and the deed of trust?
555) What type of taxation does a limited liability company enjoy?
556) A contract in which only one party is bound is ______.
557) How can lapsed homeowner’s insurance lead to default of the mortgage loan?
558) Elisa and Simone signed an agreement to list Simone’s house for sale. After the contract was signed, Simone lost her job, and her father, George, offered to help Simone out by paying Elisa’s commission. The buyer’s agent, Carl, also reduced his commission by a quarter percent to help Simone out. Who is Elisa’s client?
559) Raul has his broker’s license and has been appointed by the governor to serve as a GREC member. Which of the following criteria made him eligible to be a broker member of the commission?
560) _________ is when one party didn’t meet the terms of the contract in the specified time frame, and is now being required to do exactly what was agreed to in the contract.
561) In addition to being properly executed (signed), what’s another requirement for recording a document?
562) Edwin has been a successful real estate professional for many years. After starting off listing residential and commercial properties, Edwin now lists properties that involve light and heavy manufacturing, warehousing, and distribution. Of the six categories of real estate, what types of properties does Edwin handle?
563) A buyer’s offer calls you with a great offer for your seller client. What is the best next step?
564) The ECOA Valuations Rule requires disclosure of valuation data to the buyers who pay for the appraisal. Which of the following is included in the new rule?
565) Which of the following is a non-ownership interest in land by someone other than the owner that gives that person the right to access or use the property?
566) What is the purpose of the agency disclosure?
567) What went into effect in 2009 as an addendum to carbon monoxide regulations?
568) Which of the following is true about easements appurtenant?
569) When assessing taxes, the percentage of market value (or full market value) is called
570) Your builder client, Jeffrey, is building a subdivision. HUD require his walkways to be built ___________.
571) When may informed consent for dual agency be obtained?
572) Which of the following is the term used for the authorization for how tax funds are spent and collected?
573) Phil, who is a wholesaler, is ready to sell a property. What will his sales strategy be?
574) Which agency upholds federal, state and local public health laws, regulating drinking water safety, septic system approval and certain waste water treatment approval?
575) 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?
576) What does liability insurance cover?
577) If step one for the borrower is a pre-qualification letter and step two is applying for the loan, what’s step three?
578) When a borrower first obtains a mortgage, which portion of PITI receives most of the mortgage payment?
579) Which of the following describes a claim or charge against a property by someone other than the property’s owner?
580) To have a clear idea of what you want to achieve in a transaction, what should you focus on?
581) To compute the tax rate, each taxing authority takes the total funds required for the upcoming fiscal year and ____________________.
582) CCIM, SIOR, CPM, BOMA and ISCS are accreditation programs for licensees who represent ______ investors.
583) ______ conveys the emotional content of words. Angry, disrespectful, or inappropriate words directed at you may be indicators of a threat.
584) Mary Jane owns a building in which electrical service is supplied to the entire building through a utility-owned meter, and the cost of the service is shared among the building’s tenants. What type of system does she have?
585) What’s the intent of the expense stop in a lease escalation clause?
586) Which of the following is the first wooden member of the structure from the ground up that is used as the nailing surface for the floor system?
587) Broker Alex learns that his friend Joann is frustrated with the broker who listed her home. Alex encourages Joann to break her existing agency agreement and sign with him instead. This violation is an example of ______.
588) Under what circumstances is the seller obligated to pay the listing agent a commission if the agent is working under an exclusive agency agreement?
589) Which individual takes a look at a potential borrower’s application and verifies things like their employment and financial information, then analyzes their credit report as well as the appraisal report on the property?
590) When a buyer purchases a cooperative unit to live in, what types of shares are owned?
591) The components that make up a borrower’s mortgage payment can best be remembered using which acronym?
592) Which of the following is paid in cash (or check) up-front by the buyer?
593) Who should ensure that all deadlines are met, all contingencies are cleared, and all paperwork is fully executed and delivered before closing?
594) This homeowners policy, commonly known as rental insurance, provides coverage to tenants for the loss of personal property.
595) The sponsor of a condominium project must submit the offering plan to the Attorney General for approval. The sponsor also appoints the board of mangers as well as the managing agent for the condominium owners. At what point must the sponsor relinquish control of the board of managers?
Ca“Legal Aspects of Real Estate

Ca: Real Estate “Legal Aspects” – Sample of Final Course Exam with answers

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1 of 100 What accurately locates and identifies boundaries of a subject parcel to a degree acceptable by courts of law in the state where the property is located?
2 of 100 According to a CAR Residential Purchase Agreement, how long does a buyer have to complete inspections and approve all material provided by the seller in relation to the property, if not specified?
3 of 100 The Uniform Commercial Code does all of the following EXCEPT:
4 of 100 When a seller lists his or her home with a licensee and the property does not go under contract or if the client does not agree to extend the time of the listing, then the listing will:
5 of 100 What is an additional clause in a sales contract where the seller warrants that there are no undisclosed building codes or zoning violations?
6 of 100 Which part of a Loan Disclosure states what late fee the lender will charge?
7 of 100 The law enforces promises through the use of
8 of 100 What advertising phrase would be considered discriminatory based on handicap?
9 of 100 Which section in a CAR Residential Purchase Agreement shows who will pay the county transfer fees, private transfer fee, city transfer fee, and home warranty?
10 of 100 The collection of Roman law contributed the model for which type of law?
11 of 100 It is important for a licensee or a broker to remove ambiguity when a seller’s unclear decision could be discriminatory by forcing the seller to
12 of 100 What lease provision would outline the condition of the property at the time a lease is executed?
13 of 100 What Act requires that lenders keep all credit information confidential?
14 of 100 In contract law, what term means someone has broken his or her word?
15 of 100 What term describes a person, company , or entity that assigns its right to another?
16 of 100 What informs buyers and prospective tenants of registered sex offender database that can be searched to identify if any sex offenders are near property?
17 of 100 In creating a joint tenancy, there are four unities. Which of the following is NOT one of the four?
18 of 100 Effective October 2015, the two forms that are the primary closing information documents for most real estate transactions are the Loan Estimate and
19 of 100 Which section, in a CAR Counteroffer, states that a binding agreement is created when a copy of a signed acceptance is personally received by the maker of the counteroffer or the person’s authorized agent?
20 of 100 What describes when a buyer files a claim in situations where the seller has not delivered the title after all other terms of the contract have been satisfied?
21 of 100 What is known as water beneath the surface that runs in recognizable underground streams or collects in porous ground layers called aquifers?
22 of 100 If the interest-holder enjoys the right of possession of land, the party is considered to have
23 of 100 Who is generally responsible for ensuring that the Closure Disclosure is delivered to the buyer no later than three business days before consummation?
24 of 100 What type of variance permits an application to vary one or more of the dimensional or physical requirements of the acceptable zoning law, code or ordinance in connection with some proposed construction?
25 of 100 What type of an estate is one that continues for a definite fixed period of the time?
26 of 100 What do California homeowners receive to protect equity when a court forces the sale of the house to pay for a judgement?
27 of 100 If a deed is to be recorded, California requires that it be recorded in the office of the county clerk
28 of 100 In a CAR Residential Purchase Agreement, who is responsible for repairing and damages that occur as a result of inspections?
29 of 100 If a person dies with no heirs and no one qualified to receive e property, what power will state use to claim the property?
30 of 100 Which fiduciary duty requires an agent to place the client’s interests above those of all others, including his or her own?
31 of 100 What term describes the borrower in a mortgage?
32 of 100 What term describes a legal procedure of removing a tenant from a property because there is a breach of the lease or rental agreement?
33 of 100 What describes conditions that must be met in order for a contract to be enforceable?
34 of 100 What Act requires financial institution to maintain and disclose data about home purchases, home purchase pre-approvals, home improvement and refinance applications involving 1 to 4 unit multifamily dwellings?
35 of 100 How many years must a candidate serve as a real estate broker, actively engaged in the real estate business in order to be appointed as Commissioner?
36 of 100 What term describes the sudden decrease of land by flowing water or waves often caused by hurricanes and other storms?
37 of 100 When a person first meets a person, that person is called a
38 of 100 What are unsecured claims that take the place alongside the borrower’s other depts?
39 of 100 What provides legal, public, and constructive knowledge to everyone about the ownership of a property?
40 of 100 The discovery step of civil cases is where
41 of 100 If a broker is also an escrow agent in a transaction, he or she must put aside any agency relationships with the parties involved and become a
42 of 100 What is a legal instrument for the volunteer transfer of real and personal property after the owner’s death?
43 of 100 All of the following Bill of Rights protection are related to property rights EXCEPT
44 of 100 What type of residential survey, also called a drive-by survey, is designed to show the location of the house and other large structures on the property?
45 of 100 All of the following lien types are exempt from the homestead law EXCEPT
46 of 100 When a salesperson says or does something that creates agency such as giving advice to a customer, giving an opinion to a customer, or negotiating on a customer’s behalf the license has
47 of 100 What are all parties required to use, to fulfill contingency requirements, under California law?
48 of 100 California requires that deaths that occurred within the past three years be disclosed unless an occupant of the property dies with, or as a result of,
49 of 100 Within how many days of providing labor, materials, or services must preliminary notice be given when filing a mechanic’s lien?
50 of 100 If a person believes he or she has been discriminated against, within what period of time of the alleged act must a compliant be filed with HUD?
51 of 100 Joe has a lease that specifies rent and other requirements, but it does not have an expiration date or renewal cycle. What kind of leasehold estate is it?
52 of 100 The U.S. Constitution gives Congress implied power, which is the ability to
53 of 100 What term describes a temporary suspension of the development of a property?
54 of 100 The standard measure of loss of bargain damages, for a total breach, would encompass the difference between the agreed contract price and the market value of the property on the date of
55 of 100 What type of deed is tailored to the requirements of specific parties, properties, and purposes?
56 of 100 Civil law is different from criminal law in all of the following area EXCEPT
57 of 100 When a spouse dies, how does community property get divided?
58 of 100 What type of contract contains vague terms that can be interrupted and understood in more than one way?
59 of 100 What is a legally enforceable contract where an agent or owner of a property gives the exclusive right of possession for a specific amount of time in exchange for money?
60 of 100 What is Real Estate Investment Trust (REIT)?
61 of 100 What clause describes the type of estate being conveyed and reaffirms the extent of ownership that the grantor is transferring?
62 of 100 What have lenders established to protect borrowers from unlimited increases in the interest rate?
63 of 100 A licensee can provide actual factual knowledge to a customer but does not provide
64 of 100 Which of the following in NOT a specified federal court?
65 of 100 What type of property is abstract, having no physical existence in itself, other than as evidence of one’s ownership interest?
66 of 100 Who can file a discriminatory complaint?
67 of 100 What can a plaintiff file essentially telling potential buyers that the property is subject to a judgement of a pending lawsuit by putting a cloud on the title?
68 of 100 Any last minute changes to a contract that are done by hand should be initialed by
69 of 100 Who is charged with the responsibility of making sure that the owners do not use their property in a way that will harm the public?
70 of 100 What rules should you follow to decrease the possibility of lawsuits?
71 of 100 In partnership, a general partner
72 of 100 The purpose of restrictive covenents is to preserve and protect the quality of land in subdivisions and maximize
73 of 100 What is something an escrow agent should never do?
74 of 100 Arbitration is an out of court settlement procedure where
75 of 100 What describes when some expense paid at closing are divided proportionally between the buyer and the seller?
76 of 100 What type of mortgage is one that includes all the personal property and appliances that are installed on the property?
77 of 100 A buyer Representation Agreement is bilateral because it defines the obligations and responsibilities of
78 of 100 In what type of listing does an owner set a minimum amount that he or she wants to receive from the sale of the property and let the broker have a commission any amount above set minimum?
79 of 100 Which part of a Closing Disclosure details the total amount of all the payment on the loan, the dollar amount of the finance charges over the life of the loan, the amount financed, the APR and the TIP?
80 of 100 The agency relationship between the buyer, seller and broker(s) must be confirmed in writing in either the C.A.R. Standard Form AC-6 or
81 of 100 If a seller declines to show a property to a minority he or she can be sued for violating
82 of 100 Who sets the amount of rate of real estate commissions?
83 of 100 Federal law requires that information, regarding lead-based paint, be given to a buyer or tenant on home built prior to
84 of 100 What system, also called the recorded plat method, is used to describe properties in residential, commercial, and industrial subdivisions?
85 of 100 What term, in the California Civil Code addressing mobile home residency, describes the right of a homeowner to use the site within a mobile home park?
86 of 100 How much of a property exemption is a totally disabled war veteran, making over $40,000 annually and living in California , entitled to?
87 of 100 In a real estate transaction, who is the decision maker on all things?
88 of 100 What is not one of the 4 choices a buyer can make when a counteroffer is given back to him or her?
89 of 100 California courts have held that if a lease is written, then it must be signed by the
90 of 100 What is pur autre vie life estate?
91 of 100 What is a second step in a civil case in district court?
92 of 100 What is a type of company that sells securities specializing in real estate ventures, and requires a minimum of 100 investors?
93 of 100 Where must a declaration of homestead be filed?
94 of 100 What term describes the unlawful misappropriation and use of a client’s funds by a licensee?
95 of 100 What describes minerals that are deemed real property, such as gold and silver, until they are removed from the earth and become personal property?
96 of 100 Which provision in a CAR Residential Listing Agreement states that the property is offered in compliance with federal, state, and local anti-discrimination laws?
97 of 100 Which section of a CAR Residential Purchase Agreement is a provision divided into 3 sections: mediation, arbitration of disputes, and additional terms?
98 of 100 The salesperson should always think the first offer the buyer makes should be his or her
99 of 100 What describes plants or crops that are considered personal property since human intervention is necessary for planting and harvesting?
100 of 100 What type of zoning is density determined for an entire area, rather than on a lot by lot basis?
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1) What are the loans the Federal Home Loan Bank makes to member banks called?
2) After reviewing the final page of the Closing Disclosure, Gloria is concerned that she’s being charged excessive points and fees. Page five provides her options for making a credit-related complaint to the ______.
3) When figuring income taxes, licensees should figure the amount they are required to pay based on gross income minus ______.
4) Mutual savings banks are concentrated mostly in the ______ U.S.
5) What feature is a key benefit of the VA guaranteed loan for veterans?
6) Which of the following is a legitimate business deduction for income tax purposes for a real estate licensee?
7) Clark is selling his home to Myrna. Clark will retain the title to the property until Myrna has paid the loan in full. What type of financing is used in this transaction?
8) What is hypothecation?
9) Who’s required to sign a promissory note?
10) Brenda and Joe have 20% cash to put down toward the purchase of their home, and they have great credit. What might be their best option for getting a traditional mortgage loan?
11) A buyer defaulted on the mortgage and the lender is preparing to foreclose. Which type of foreclosure is typically used when a mortgage is used as the security instrument?
12) Regarding active real estate investments, which statement is true?
13) Which factor that influences value addresses the ease with which the property can be conveyed to another?
14) Jay’s new loan to purchase a property includes the seller’s existing mortgage. What type of loan is this?
15) SRT Mortgage has a borrower who has fallen behind on her mortgage. Rather than go through a foreclosure, the borrower is attempting to sell the property. An offer came in for less than the borrower’s loan balance and closing costs, but for more than what the lender feels it’d get at a foreclosure sale, so it approves the purchase. What is this an example of?
16) The borrower’s closing costs and down payment have changed from the Loan Estimate, and the seller’s credit has increased. Which section on page three of the Closing Disclosure can help borrowers identify information that has changed from the Loan Estimate?
17) With an interest-only payment plan, ______.
18) The lender, the loan applicant, and the ______ all complete parts of the request for verification of employment form.
19) Lenders require that borrowers purchase and maintain adequate _____, which is usually bundled into their monthly PITI payment.
20) What effect do high interest rates have on borrowing?
21) Which type of title search method only goes back as far as when the last title search was performed and assumes the last search was done accurately, legally, and that any issues were resolved?
22) Which entity sets conforming loan limits?
23) Which factor that influences value focuses on the number of properties available?
24) With which approach to value does the appraiser analyze a property’s ability to earn future income?
25) Which of the following types of loans issued in California may be protected from a deficiency judgment?
26) What does the cost approach to finding an appraised value measure?
27) The Kimballs and their lender have agreed to a loan modification. How is the loan modification documented?
28) Which of the following statements is true regarding conventional loans?
29) Which of the following describes the Federal Reserve’s open-market operations?
30) What’s the purpose of the loan application?
31) Ruby is selling her home. The buyer, who’s not a veteran, would like to assume Ruby’s VA loan. Is this allowed?
32) What’s the acronym for the legislation that eliminates illegal referral fees among settlement service providers?
33) Which type of loan provides short-term financing for the purpose of developing improvements on vacant land or on land that has improvements, but will soon have more?
34) Eliza wanted her financial affairs kept private after her death. How could she best do this?
35) Which of the following would disqualify someone from obtaining an MLO endorsement?
36) The total amount that’s treated as home acquisition debt for tax purposes has to be less than ______ for married couples filing jointly.
37) Why is it common for lenders to sell mortgages on the secondary market?
38) What’s the purpose of a short sale?
39) The Loan Estimate allows consumers to compare loans using both the APR and the _______.
40) Which type of property takes 27.5 years to completely depreciate?
41) Lenders require that borrowers purchase and maintain adequate _____, which is usually bundled into their monthly PITI payment.
42) A defect on a title that can be monetary or physical is called an ______.
43) An investment strategy that focuses on looking for smaller multi-family properties, fixing them up, and renting them out describes which of the following?
44) Which of the following is used to protect the buyer from title defects after closing?
45) What is the ability to pay off liens against a property until a foreclosure sale is held?
46) If a property’s value decreases over time, it has experienced ______.
47) Bambi is buying a property on an installment sales contract. Due to her financial interest in the property, she retains equitable title. What does the seller retain?
48) How does the Federal Housing Administration help prospective homeowners?
49) Which of the following outcomes is most likely if the Fed decreases reserve requirements?
50) Cash flow in a personal finance system requires personal savings goals to be funded from the personal checking account rather than the business checking account. Why?
51) Which of the following is indicative of the limited partnership method of real estate investment?
52) What type of loan may be used if the buyer is obtaining seller financing?
53) Jack and Edith purchase a home using a loan from their bank. Their mortgage creates a(n) ______ lien on the property they’ve purchased.
54) Which of the following items is something a lender is prohibited from doing if the lender wants to write qualified mortgages?
55) A buyer is shopping for a mortgage loan and are attracted to the below-market interest rate offered for the first year of an adjustable rate mortgage. What’s this type of rate called?
56) For whose estate would a living trust be most beneficial?
57) What’s NOT true about a California real estate licensee who obtains an MLO endorsement?
58) Which one of the following statements is true about the FHA Energy Efficient Mortgage program?
59) Which approach to value used by appraisers relies on the sales price of comparable properties to help determine the adjusted market price?
60) Sharon, a new real estate licensee, is tracking all of her spending for one month. What’s the likely purpose of this exercise?
61) A line of credit that’s based on a percentage of the equity a person has in a property and which can be drawn upon for a number of years is known as a ______.
62) As a new licensee, it’s easy to make an inadvertent mistake when representing a client. What type of insurance would cover you if this happened?
63) A seller you’re working with still owes $50,000 on his mortgage but wants to net $20,000 after the mortgage and 7% commission are paid. What is the minimum for which the house must sell?
64) According to the IRS, a foreclosure is viewed as a ______.
65) Which of the following are phases of the real estate cycle?
66) When evaluating the income listed on a loan application, what will the lender consider?
67) The “first in time” rule of liens refers to lien priority according to ______.
68) Kirk is buying a home using an FHA loan. Which of the following would meet the FHA requirements for Kirk’s down payment?
69) Which of the following did the Dodd-Frank Act accomplish?
70) Ruth and Paul live in a rural area where emergency services, health care, and even neighbors take time and travel to access. They know their house could use some renovation to make it safer for their kids. What government program offers loans and grants to assist people like Ruth and Paul?
71) Which of these items is required for a promissory note to be a valid instrument?
72) Dawn and John own a home together, but they’re getting a divorce. They agree that John will keep the house and assume the loan they signed together. Will the alienation clause in their security document prevent the assumption?
73) Which business structure is the simplest to form, yet involves the most liability?
74) The purpose of the ______ is to promote fairness and transparency for mortgages and other financial products and services through education, enforcement, and research.
75) What’s another term for voluntary conveyance back to the lender?
76) Can Jeremy, a licensee, receive a referral fee for sending his buyer client to Ajax Title?
77) Sheila is selling her 15-acre property. She’s willing to carry back the loan for the buyer, Persephone, and she asks her real estate agent, Nick, to arrange the financing deal. Under what California law must Nick, the arranger of credit, provide disclosures about the financing?
78) A $300,000 property depreciated in value by 3%. What’s its new value?
79) Very few foreign lenders provide loans for real estate purchases in the U.S. Countries that had banks that issued real estate loans were ______, Taiwan, and the U.K.
80) Which type of agreement is used for large commercial real estate projects?
81) Which of the following items must be included in the security instrument used for a real estate transaction?
82) The ______ balances the powers of federal agencies by requiring them to follow specific processes and procedures, such as providing for public participation in rulemaking.
83) The ______ were enacted to address the effects of the subprime mortgage crisis, spur economic activity, and increase accountability in government spending.
84) How common is judicial foreclosure?
85) Matt is a loan officer with Kentucky State Bank and has an MLO endorsement. Which act governs his MLO-related activities?
86) The Real Estate Settlement Procedures Act is a consumer protection statute that ______.
87) Shawna is reviewing Brian’s loan application. She needs to verify the assets he’s claimed, specifically his bank account balances. Which form should she have him complete?
88) Which statement is true about a purchase money mortgage?
89) Which of the following is the primary goal for a consumer when reviewing a Loan Estimate?
90) Which of these is the better debt service ratio?
91) Which of the following conditions contributed to the 2007 financial crisis?
92) Which law places certain requirements on an individual who works for a borrower, for compensation to stop or delay a foreclosure sale?
93) The California ______ requires mortgage loan originators to give clients a specific disclosure statement and includes restrictions on how much they can charge for their loan origination or loan brokering services.
94) Arthur does not have an MLO endorsement. Legally, which of these actions can he perform?
95) Per the Real Estate Settlement Procedures Act (RESPA), licensees may not receive or give referral fees or finder fees (or anything of value) from/to whom?
96) What does a lender use a credit score to determine?
97) In a hypothecation scenario, the borrower owns the property and has possession rights. What does the lender have?
98) What California legislation prohibits arbitrary discrimination by businesses that offer services to the public?
99) Which U.S. Department of Veterans Affairs program allows a veteran to refinance a conventional loan to a VA loan?
100) Which secondary market institution seeks to provide credit to rural communities?
101) (ANSWERS will be revealed with proper subscription)
102) –00CeshopFinance00FINAL2
103) What is HUD’s stated mission?
104) A property is uninhabitable in its current state. What effect will its utility have on the value?
105) The components that make up a borrower’s mortgage payment can best be remembered using which acronym?
106) Which of these is an example of usury?
107) Which of these is considered an MLO activity?
108) What is a judicial foreclosure?
109) Bank failures and the loss of depositors’ funds occurred during the Great Depression. This led to the creation of which agency?
110) Who typically performs a CMA or BPO?
111) A buyer with a $250,000 loan has a monthly principal and interest payment of $2,042.71. If $1,145.83 is interest, what is the new principal balance after the first payment is applied?
112) A borrower has a 30-year, $500,000 loan with an interest rate of 6.25%. His monthly principal and interest payment is $3,078.59. How many payments will he make over the course of the loan?
113) Which of the following best describes a property’s assessed value?
114) Which of the following factors affect an adjustable rate mortgage?
115) Which of the following is a likely effect when the discount window is open?
116) Which of the following best describes the purpose of the Truth in Lending Act?
117) Which type of loan is a temporary loan often used by buyers who have not yet closed on their prior property?
118) Which act prohibits lenders from continuing foreclosure proceedings if a borrower has an application for a loan modification or other alternative pending?
119) Why is it important to identify the values that are important to you when you’re developing a plan for your personal finances?
120) What real estate investment strategy involves an investor purchasing many properties and reselling them immediately for a small profit?
121) Why don’t mortgage brokers service loans beyond placement?
122) Which of the following statements is true about the FHA Section 251 ARM?
123) Which of these is a function of the U.S. Treasury?
124) Chris used the VA guaranteed loan program to purchase a home five years ago. He now wants to sell that house and buy a new one. Is Chris allowed to use the VA loan program a second time?
125) What does the FHLB do?
126) What is a lifetime cap, as it relates to an adjustable rate mortgage?
127) Which of these is a factor in calculating a consumer’s credit score?
128) A buyer has a 15-year, $250,000 loan with a 5.5% interest rate. How much of the monthly payment is interest?
129) What type of lien against a property will be paid first in the event of a foreclosure?
130) Which of the following items are ongoing business expenses that a licensee should expect to pay?
131) The FHA 203(b) loan is a mortgage option for homebuyers who ______.
132) Which of the following best describes what Ginnie Mae does in the secondary mortgage market?
133) Which of these describes an implicit goal of a personal financial plan?
134) Which of the following is a good description of a home equity loan?
135) Which type of business structure shelters personal assets in the event of a lawsuit against the business owner?
136) Brenda is developing her personal financial plan. One of the first things she does is to identify her personal values, which she then connects to her budget. Why?
137) Kelsey and Jerrod have a housing ratio of 30% and a total debt obligation of 41%. Their credit score is 640. Do they meet the underwriting requirements for an FHA loan?
138) Which of the following government-sponsored enterprises purchases loans from agricultural lenders and sells financial instruments backed by these loans?
139) Your client exchanged one property for a similar property and did not have to pay capital gains taxes that year. How did he do this?
140) Why would some national lenders have state-level compliance issues?
141) Which of the following financing types involves the sale of personal property with the real property?
142) Which type of loan is made from the equity in the home?
143) When you start your personal finance system, you’ll take these steps: identify current expenses, estimate income, set financial goals, ______, and set up accounts.
144) Which of these is a recommended method for a licensee to estimate ongoing business expenses?
145) The lender is required to provide the consumer with a Loan Estimate form within what time period of application for a loan?
146) This statement is part of a promissory note attached to a security instrument: “I have the right to make payments of Principal at any time before they are due.” What’s the name of the clause where this statement is included?
147) In California, what type of foreclosure process is used if the lender seeks to pursue a deficiency judgment?
148) With a no down payment VA loan, the mortgage can’t be more than the amount of the ______.
149) What is an initial cap, as it relates to an adjustable rate mortgage?
150) Which of the following statements is true about start-up costs for a licensee?
151) As a licensee, when might you seek out the help of a certified public accountant?
152) Cash flow in a good personal financial plan requires money allocated to personal financial goals to be distributed in which way?
153) Which statement is true about a package mortgage?
154) Which of the following best describes a residential mortgage loan as it relates to the MLO endorsement?
155) What does the income approach to value rely on when valuing single-family and two- to four-unit properties?
156) What’s one of the main differences between a traditional mortgage loan and an interim loan?
157) Which entity guarantees government loans?
158) Brad and Chrissie decided to make some improvements to their house, so they went to the lender they used for their first mortgage and got a home equity loan. The new loan agreement includes a cross-default clause. What does that mean?
— Extra random (FinanceClass part3) —
1) Annual MIP can be removed from an FHA loan by _____.
2) What’s an example of an inquiry a consumer initiated that may appear on a credit score?
3) What is one of the qualifying standards for a VA-guaranteed loan?
4) A buyer is purchasing a ppt for $500k. His down pymnt of $50k and is financing the rest. What’s the amount of the loan origination fee if the lender charges one-and-a-half points?
5) The fewer ppts on the market, the greater the scarcity. What’s the effect on prices?
6) A loan with borrow options that can be long term with periodic adjustments or short term with more frequent adjustments to the rate is a(n) ___ mortgage.
7) What describes a Housing Choice Vouchers?
8) Lucy is a mortgage banker. Her business is regulated by ____.
9) A loan made from a homeowner’s equity where funds are drawn over time and the bank gains corresponding ppt ownership is called a ______.
10) Which entity generally acts in the secondary market?
11) Your clients, the Nguyens, have signed a contract for deed to purchase a ppt. What rights do the Nguyens receive?
12) What’s true about buydowns with a VA loan?
13) In ’08, as a response to the ’07 financial crisis, the Federal Housing Finance Agency began acting as conservator over which institutions?
14) What’s a reason a seller might consider selling his ppt through an installment plan instead of a traditional sale?
15) What falls under the definition of ‘dwelling’ according to Senate Bill 36?
16) What does the lump sum payment at the end of an interest-only mortgage loan consist of?
17) Brenda’s go-to financial expert has no fiduciary responsibility to her. This is because she’s working with a(n) ____.
18) During which phase of the RE cycle does a RE professional have the most impact?
19) How many hours of continuing edu must a RE licensee complete each year to renew their MLO endorsement?
20) Which entity buys loans primarily through thrifts?
21) Rather than be foreclosed on, Jarod turned his deed over to his bank. This is called a _____.
22) Elijah has identified his personal values, estimated his income, and analyzed his current expenses. With this info, he’s ready to ______.
23) Carla is a licensee who uses a personal financial system that recommends that all of her commission checks be deposited into her ____ account.
24) Payment history, age of accounts, credit usage, types of accounts, and ___________ are factors considered in calculating a credit score.
25) Lic Lynn has several accounts set up as part of her personal financial plan to help her manage cash flow. She’s allocated 10% of each commission check to business expenses, 15% to taxes, 8% to her retirement fund, 12% to various savings goals, and the rest goes to her living expenses. When she received a check, how does she direct the funds?
26) You’re estimating your annual income and find that the average sale price of a home in the area you’ll be working is $300,000. You determine your expected commission is 2% and you plan to make six transactions in the year. Assume there is no broker’s split. What will your estimated income for the year be?
27) When obtaining a mortgage to purchase a home, the borrower uses the ppt as ______.
28) What describes the federal funds rate?
29) What must a prudent lender do with the info received on a loan app?
30) What is the current value of a ppt that was purchased two years ago for $260k, assuming an appreciation rate of 2%?
31) The ____ was a response to the practice of redlining and was enacted in 1977.
32) PMI may be required on conventional loans where the loan-to-value ratio is in excess of ___%
33) The funding fee on a VA loan is waived when ____.
34) The doc that describes the loan amount and the terms for repaying and is attached to a security instrument is called the ____.
35) Your client, Shelby, a veteran using a VA loan to finance his purchase, just learned that the CRV came in lower than the sales price. But no problem: Shelby’s bro is willing to loan him the difference. If the loan is approved ____.
36) What best describes the state of the market during the over-supply phase of the real estate cycle?
37) Who needs to obtain a mort loan originator endorsement and register with the Nationwide Mortgage Licensing System and Registry?
38) What would most likely be found in the “potentially negative items” section of a credit report?
39) What is the secondary mortgage market made up of?
40) Millie and Jerry are purchasing a home using their VA loan benefit. The sale price on the home they buy is $320k, with 100% financing. Assuming that Jerry has a typical level of entitlement, how much of their loan does the VA guarantee?
41) What is the economic impact of mortgage loan payments?
42) A ppt valued at $1 mill is returning a net income of $85,000. What’s its cap rate?
43) Which type of RE investment trust derives its income from the rent or sale of ppt and interest dividends?
44) Lydia put the minimum 3.5% down on her $210k home. She’ll have to pay a MIP. What type of loan does Lydia have?
45) In which phase of the RE market cycle would you expect to see ppt under valued and a large supply of homes on the market?
46) Danny and Wendy recently relocated to California. They are buying a 3 bed home in an estab neighborhood where they look forward to raising a family. Their RE agent, Brunhilda, thinks that their income, which is on the low side, and the ppt could make them eligible for ___, which would offer reduced, fixed interest rates on a loan.
47) Kristoff got a bit behind on his mort and missed several pymnts. He and his lender devised a schedule that gives Kristoff an opportunity to make up those delinquent pymnts. What is this an example of?
48) In order to analyze your spending habits, you should track ___.
49) The amount of the ___ a veteran must pay depends on factors, such as military status, down pymnt amnt, and whether the veteran’s entitlement is being used for the first time or a subsequent time.
50) The amount of the ___ a veteran must pay depends on factors, such as military status, down payment, and whether the veteran’s entitlement is being used for the first time or a subsequent time.
51) Analyzing spending habits allows you to evaluate the impact of a purchase in terms of ____.
52) Cheyenne is selling the family farm on an installment contract. What is one advantage of selling the farm this way?
53) A buyer is purchasing a pt for $400k. his lender’s loan-to-value ratio is 80%. How much is the buyer financing?
54) Several actions take place on the secondary mort market. What is a common activity?
55) A calculation that looks at all recurring (or installment) debt – such as monthly mort, car, credit, and loan pymnts – as a percentage of the borrower’s monthly gross income, is called ____.
56) When does the mort insurance requirement requirement end for a borrower with a VA loan?
57) Bobby is completing a residential loan app. On the app, he lists his liabilities. What are liabilities?
58) What type of loans issued in CA may be protected from a deficiency judgement?
59) ____ is a legal action that liquidates or restructures debt. It can have a long-lasting negative impact on the borrower’s ability to obtain financing.
60) Tyler is a developer who renovates a long-abandoned warehouse in a low-income neighborhood into a community center, complete with space for after-school programs, a daycare, and a gym. Tyler is able to complete the reno with a loan funded by a local bank. Which act req financial institutions to make credit available for this type of development?
61) An increase in ppt value is ____.
62) What is a potential concern of a buyer who’s entering into a contact for deed with a seller?
63) Which RE finance instrument includes the promise to repay and the security instrument within the same document?
64) What are ppt taxes in a mort pymnt?
65) An ARM usually offers an initial interest rate that’s ___ a fixed rate mortgage for a period of time.
66) Tina is purchasing a home that appraised for $10k more than the sales price. On which figure will the lender base the loan-to-value ratio?
67) Wendy has been approved for her first mort. The lender advertised a 4.6% interest rate. She’s nervous about the terms and fees. What info is the lender required to provide?
68) Stacey’s lengthy military service makes her uniquely eligible for a(n) ____.
69) Cassie is helping her buyer client, Gus. As they discuss preparations for closing, she cautions Gus, “make sure you review the Closing Disclosure as soon as you receive it and ____”
70) The Farm-Credit System is _____.
71) Maxine is purchasing a small craft shop, including the underlying real estate. She applies for a commercial loan from her federally insured bank to complete the purchase. Is Maxine’s transaction covered by the RESPA
72) What’s the purpose of CA’s Covered Loan Law?
73) In which phase of the RE market would you expect to see unemployment increasing, prices falling, and foreclosures on the rise?
74) For which of these properties would gross rent multiplier be calculated?
75) Because of the Mortgage Disclosure Improvement Act, the only advance fee that a creditor can charge to a consumer before providing required loan disclosures is ___.
76) Because of the Secure and Fair Enforcement for Mortgage Licensing Act, borrowers can determine if mortgage loan originator is ___.
77) The ___ account is a recommended component of a personal financial plan that should be started as early as possible and contributed to throughout your working life.
78) The two most common insolvency methods put in place when a bank fails are the purchase and assumption method and the ___ method.
79) The planned transfer of money from your business checking account to your personal checking account to your savings accounts is called ____.
80) Closing costs are itemized on page two of the Closing Disclosure and all amount are ___.
81) A borrower who has received a certificate of eligibility will qualify for a VA loan ____.
82) A borrower sued a foreclosure consultant for violating the Mortgage Foreclosure Consultant Law. The borrower may receive actual damages, legal fees, and in severe cases ____.
83) Which doc is used to estab the path and proof of ownership?
84) Your client has a VA loan and wants to refinance to a lower rate. What’s the simplest option?
85) What best describes the CA short sale addendum?
86) When you develop your financial plan, you should start by ____.
87) Your business is booming, and you’d really like someone else to maintain your financial records. The best person for this role is ___.
88) In calculating a PITI mort payment, the annual taxes and insurance are divided by ___, and added to the monthly principal and interest payment to make up the total monthly payment.
89) If the annual taxes on a ppt are $1,000, how much is paid monthly?
90) With this type of loan, personal ppt is included with the real ppt in the sale. It’s commonly seen in commercial real estate, but you may also see this in the sale of furnished condos
91) The lender, the employer, and the ___ all complete parts of the request for verification of employment form.
92) What is a potential ramification for the seller if a short sale is completed?
93) A homeowner is behind on his mortgage. He’s decided to try to sell the ppt and is working with his lender to do so. He owes $315k on his loan balance and closing closts. He has an offer for $300k, which the lender approves. What is this an example of?
94) Melanie is a buyer who has agreed to purchase Stan’s ppt using a contract for deed. Who holds legal title to the ppr during the term of the loan?
95) One alternative to foreclosure is a voluntary conveyance of ___.
96) There are a lot more sellers than buyers in the current market. How will this demand influence value?
97) Because of the funding fee required for a VA loan, a borrower with no down payment funds saved should ____.
98) Craig’s loan is secured by a mortgage. Who holds legal title when this security instrument is used?
99) What is it called when the borrower and lender work together to restructure work together to restructure the terms of a home loan?
100) Which type of real estate investment trust involves both residential and commercial ppts?
101) Which of these are essential elements of personal financial responsibility?
102) By stabilizing and improving the mortgage market, the FHA helped to build ____.
103) Albert wants to sell his house to his cousin, who’s willing to assume the loan. What clause in Albert’s mortgage requires him to obtain the lender’s permission to do this?
104) The annual MIP is recalculated each year using ___.
105) Describe an equity real estate investment trust?
106) Which of the following is a difference between mortgage brokers and mortgage bankers?
107) The lender, the loan applicant, and the _______ all complete parts of the request for verification of deposit form.
108) Which of the following statements best describes a mortgage broker?
109) What are reserve requirements?
110) Which type of lien is a specific lien?
111) How many approaches to value do appraisers generally use?
112) Which clause is used in a security instrument to protect the original note holder if the security instrument is sold and the borrower subsequently defaults?
113) Why do lenders care so much about property condition?
114) Your client, Bruno, is an investor. He is in the process of selling a fourplex and mentions to you that he hates the idea of the capital gains tax he’ll be subject to. What should you tell him?
115) What is liquidity?
116) On a VA loan, the funding fee ______.
117) What U.S. Department of Veterans Affairs program assists Native Americans in financing the purchase, construction, or improvement of homes on federal trust land?
118) What are mortgage-backed securities?
119) Kylie has a small farm where she grows vegetables and sells her produce to restaurants. She want to expand it, and needs a loan to purchase some additional acreage. What makes it unlikely that most lenders will want to offer Kylie the loan that she needs?
120) On the borrower’s Closing Disclosure, the interest rate _______.
121) What are debentures?
122) ______ is directly influenced by construction of new homes, conversion of existing properties to residences, and construction costs.
123) The Federal Housing Administration helps prospective homeowners by ______.
124) In what phase of the real estate cycle do foreclosures rise and home prices fall?
125) What information does Schedule B-2 of a title commitment provide?
126) Which of the following made mortgages attractive investments?
127) “Private companies created by the U.S. Congress to make borrowing easier and more cost effective” describes ______.
128) Which of these factors is NOT used to define money?
129) A good personal financial system requires ______ reviews of performance so that you can modify it as needed.
130) Juanita invests in mortgage-backed securities. What is the likely impact on her as an investor when mortgage interest rates rise?
131) The Federal Housing Administration, Government National Mortgage Association, and the Office of Fair Housing and Equal Opportunity all operate under ______.
132) What is a periodic cap, as it relates to an adjustable rate mortgage?
133) Which of the following statements is true about the FHA annual mortgage insurance premium?
134) What is a qualified mortgage?
135) What does Section 8 of RESPA prohibit?
136) M&R Lending has borrowers who are in default. Those borrowers have listed their house for sale and must obtain M&R’s approval before they can accept any offers. What is this an example of?
137) When does recaptured depreciation apply?
138) Which type of business structure is the simplest for an independent contractor licensee to start?
139) Beatriz is employed by Regional Bank & Trust. When working with mortgage clients, she discusses a range of products Regional Bank & Trust offers. What is Beatriz?
140) Paul uses a personal finance system that allocates a percentage of income to his monthly expenses and his savings goals. If his total monthly expenses equal $3,000 and his income one month is only $2,000, how much will he put toward a savings goal to which he’s allocated 2%?
141) Which of these jobs does the Bureau of Engraving and Printing do?
142) How are real estate investment trusts sold?
143) What program does the U.S. Department of Veterans Affairs offer to assist Native Americans in financing the purchase, construction, or improvement of homes on federal trust land?
144) Which of the following practices would be considered predatory lending?
145) What’s a certified opinion or estimate of value of a particular property as of a particular date?
146) Assisting in the purchase of repossessed homes, ensuring that all clients receive fair and equitable treatment, and recommending FHA financing to a client are all ways that a licensee makes use of ______.
147) Christopher has questions about information shown on the Loan Estimate he received from his lender. What should he do?
148) The SAFE Act is intended to help consumers select which professionals, knowing that they are honest and competent?
149) Rachel is a real estate licensee. At what point should she begin funding her tax savings account to pay her quarterly estimated tax?
150) What’s another term for voluntary conveyance?
151) Why do life insurance companies use participation financing for larger projects?
152) When you start your personal finance system, you’ll take these steps: identify current expenses, estimate income, set financial goals, ______, and set up accounts.
153) Barry, a contractor, is performing work involving an FHA 203(k) loan. When will he get paid for his work?
154) Which of these jobs does the U.S. Mint do?
155) Mindy is reviewing Becky’s loan application. She needs to verify the work and salary information. Which form should Mindy have Becky complete?
156) What instrument is used to record the conversion to an ARM from a fixed rate of interest?
157) Some foreign lenders provide loans for real estate purchases in the U.S., but not many! Countries that had banks that issued real estate loans were Canada, Taiwan, and ______.
158) The Johnsons are shopping for a mortgage loan and are attracted to the below-market interest rate offered for the first year of an adjustable rate mortgage. What’s this type of rate called?
159) Manny is obtaining a home loan. He goes to his local bank and talks with Deborah, who discusses the lending products the bank offers. What is Deborah?
160) Which of these activities has a far-reaching effect on the country’s overall economy and is the largest indicator of the country’s economic health?
161) Adrian purchased a house for $220,000, financing $200,000 using a 30-year conventional mortgage at 4% interest. His monthly principal and interest payment is $955. The annual property taxes are $1,400, and the combined annual insurance premium is $900. What’s Adrian’s PITI payment each month?
162) What federal executive-level agency works to implement goals that ensure affordable housing, protect consumers, and build inclusive communities in the U.S.?
163) Completing a residential loan application requires providing information about the borrower, the loan being applied for, and the ________.
164) On a VA loan, the ______ helps the lender determine if the value of the property makes it suitable for use as collateral on the loan.
165) Melvina has a Home Equity Conversion Mortgage. She feels secure because she knows that ______.
166) A borrower makes the same monthly mortgage payment for the entire term of the loan. At the end of the loan period, all of the interest and principal is paid off. What type of loan is this?
167) Planning, construction, buying/selling, and moving are four of the five new-home construction phases or activities that impact the economy. What’s the fifth?
168) Seller concessions on a VA loan ______.
169) The primary FHA loan program used to purchase a one- to four-family home is ______ of the National Housing Act.
170) What is HUD’s stated mission?
171) Which of these is a requirement for a property purchased using the VA guaranteed loan program?
172) The amount of the funding fee for a VA loan is calculated as ______.
173) Which are phases of the real estate cycle?
174) The U.S. Department of Veterans Affairs offers special programs, which can be used to adapt housing to accommodate the disability, to veterans or military members with permanent and total service-connected disabilities. What are these programs?
175) What’s the most likely reason borrowers would choose a private loan company?
176) Which entity guarantees loans?
177) What’s Fannie Mae’s mission?
178) The FHA sets limits on how much of a loan it will insure based on the ______.
179) With a no down payment VA loan, the mortgage can’t be more than the amount of the ______.
180) Dylan is in default on her mortgage. She decides to hand over the deed to her property rather than face foreclosure proceedings. This is an example of ______.
181) Bernie works for Quickwell Lending and accesses several lenders to find a loan product that works best for his clients. What is Bernie?
182) According to the PMI Act of 1998, at what percentage of equity position does personal mortgage insurance cancel for homeowners?
183) The Bakers are selling their home, and they’ve picked the perfect time. The market isn’t saturated with a lot of properties for sale, but there are many buyers looking to make a purchase. What type of market is this?
184) What entity oversees Fannie Mae and Freddie Mac, and regulates the Federal Home Loan Bank?
185) Which term describes the action taken to force a sale of real property encumbered by a lien?
186) Shelly received Brian’s loan application and provided him with a loan estimate. Who does Shelly most likely represent?
187) Which clause in a mortgage or deed of trust describes the borrower actions that constitute default and allow the lender to make the debt immediately due and payable?
188) Which of the following best explains the alternative foreclosure types, such as foreclosure by writ of entry?
189) ______ is directly influenced by factors such as employment levels and wages, interest rates, population changes, confidence in the market, and availability of loans.
190) How are real estate investment trusts sold?
191) Traditionally, what represents supply and demand in the real estate market?
192) Why might a lender request a property survey in addition to a title search?
193) What’s true about the funding fee on a VA loan?
194) In accordance with RESPA prohibitions, rebates may only be offered by licensees to transaction parties, if _____.
195) Which of the following helps to protect the appraisal process from outside undue influence?
196) Which of the following statements is true about the practice of seeking deficiency judgments?
197) What makes credit unions so competitive with large commercial banks?
198) What is the term used to describe a lien, encroachment, or other issue on a title?
199) Why might a buyer want to assume a loan?
200) Brendon is obtaining a loan to buy a home. When reviewing his loan documents, he sees one called a note and one called a mortgage. What is the role of the note?
201) What might happen if borrowers miss scheduled mortgage payments, fail to pay property taxes, or allow the property to fall into disrepair?
202) Which of the following statements about the secondary mortgage market is true?
203) What’s the purpose of a suit to quiet title?
204) Which of these actions represent a common interaction between the primary and secondary mortgage markets?
205) The purpose of the Truth in Lending Act (TILA) is to ______.
206) The question, “What’s the purpose of this appraisal?” can be answered by which step of the appraisal process?
207) Why don’t mortgage brokers service loans beyond placement?
208) The veteran’s certificate of eligibility describes ______.
209) The Kimballs have missed two mortgage payments and are working with their lender to modify their loan. What is the goal of a loan modification?
210) Which of the following is an example of a voluntary lien?
211) One of the ways that the FHA has stabilized and improved the mortgage market is through the introduction of ______.
212) Which institution was created by Congress as the Federal Home Loan Mortgage Corporation (FHLMC) in 1970?
213) Which of the following is a possible result of a community growing too little or not at all?
214) Which of the following statements best describes a mortgage banker?
215) For which of the following properties is the cost approach most likely to be used?
216) What is typically used to prove there are no encroachments on the property?
217) What type of agency exists because of the actions and behavior of the parties?
218) The Consumer Credit Protection Credit Act, which includes the Truth in Lending Act, is also known as _________________.
219) Patty is buying a three-bedroom mountain home. After applying for a loan, she received the Loan Estimate at least _______ business days before closing.
220) John wants to do a 1031 tax exchange with a property he just sold. How many days does he have to identify a new property for the exchange?
221) Juaquin is an appraiser. What purpose do Juaquin and other appraisers serve?
222) Conforming loan limits vary based on location and ______.
223) Which of the following is NOT part of the assumptions section of the Loan Estimate?
224) When consumers make a small down payment, borrow the remaining amount of the purchase price from a lender, and reap the rewards off of hte full investment value, they are demonstrating what concept?
225) What is the purpose of the request for verification of employment?
226) The Federal Housing Administration funds its mortgage insurance program ______.
227) With a straight mortgage, what type of payments are made up until the end of the loan term?
228) Melanie is a buyer who has agreed to purchase Stan’s property using a contract for deed. Who holds legal title to the property during the term of the loan?
229) Interest-only loans are a form of ______ buyer financing.
230) It’s possible for the adjustment period on an adjustable rate mortgage (ARM) to have ranges, such as three or ______ years apart.
231) Bindy received a loan based on the amount of equity she had in her house. She used this lump sum to fund her daughter’s college education. What type of loan did she get?
232) Which of the following best describes the state of the market during the recession phase of the real estate cycle?
233) The energy efficient mortgage program insured by the FHA requires an energy consultant to provide the lender with a report listing recommended modifications for energy efficiency, an estimate of the cost for each recommendation, and ______.
234) The FHA Energy Efficient Mortgage allows modifications such as solar panels as long as ______.
235) When the Torrens system is used to perform a title search, who acts as title guarantor in case a claim is filed?
236) Veterans who wish to use the Native American Direct Loan must ______ and their tribe must have a valid agreement with the VA to offer the program.
237) Jeremiah is preparing to begin the homebuying process. Which of these is an action he should take?
238) _______ are part of the loan-approval process and are responsible for completing a loan application and supplying supporting documentation.
239) Joe decided to borrow funds from his retirement account to fund the down payment on his new house. It’s now two years later and he lost his job. What is true about his pension plan?
240) Real estate professionals handle many documents related to real estate transactions. Which one of the items listed below is one of the most important in detecting mortgage fraud?
241) What information does Schedule B-1 of a title commitment provide?
242) Kara is a lender who is working with prospective buyer, Stan. What does Kara ask Sam to provide to show his work history and earning information?
243) Borrowers must list their assets when completing a residential loan application. What are assets?
244) Sam has a mortgage that has a static interest rate, but monthly payments that increase over time according to a set schedule. What type of mortgage does Sam have?
245) The Federal Housing Administration’s qualifying standards for a mortgage loan ______, but the mortgage insurance the FHA provides balances the risk for the lender.
246) Which of the following best describes the state of the market during the over supply phase of the real estate cycle?
247) The ______ tells the lender how much entitlement the veteran has available under the VA loan program.
248) Which party to the loan approval process is responsible for completing a loan application and supplying supporting documentation?
249) Which of the following describes amortized debt?
250) Which of the following is the best example of the economic principal of leveraging, as it applies to a real estate transaction?
251) Which of the following represents a potential concern when borrowing funds from a pension or retirement plan?
252) The characteristics of value include which of the following?
253) A mortgage banker gets paid through fees from ______ and servicing loans.
254) What is the formula for calculating the total housing ratio? / The formula for the total debt ratio is:
255) Maria is a borrower reviewing her Closing Disclosure. She notices a section under “Other Costs” with a number of fees that were not shown on her Loan Estimate, such as the commissions to the real estate brokers and the home inspection fee. Should Maria contact her lender about this issue?
256) Which of the following statements about the Torrens system is true?
257) What information does Schedule A of a title commitment provide?
258) Monty retired 10 years ago and would like to see the world, but his retirement account won’t support his desire to travel. Monty heard of a loan that would allow him to take advantage of the equity in his home by getting monthly payments from the bank by using his house as collateral. What is this type of loan called?
259) Which range of credit scores do most consumers fall into?
260) Which of the following contributed to the 2007 financial crisis?
261) Veterans who use the VA’s Specially Adapted Housing grant must ______.
262) Margo, a mother of three, is in the largest percentage of consumers with a score of _______. Margot’s tried unsuccessfully to get approved for loans, but she was issued a credit card that included many extra fees and required deposits.
263) Brandon’s home has been foreclosed on. He had an outstanding loan balance of $145,000, which he owed to his lender, XYZ Lending. There’s also a lien against the property recorded in 2014 for an unpaid student loan of $25,000, and a HELOC established in 2012 of $30,000, of which he’d used $10,000. If his foreclosure nets $150,000, how much will each creditor be paid?
264) Mike has had some financial problems and is considering borrowing from his retirement plan. Which of the following is a true statement?
265) Which of the following outcomes is most likely if the Fed increases reserve requirements?
266) Borrowers with which credit rating are considered subprime?
267) When Brenda applied to have her FHA loan refinanced under the Streamline Refinance program, one requirement of the loan was that ______.
268) The Martins are buying their first house and are a little nervous about whether they’ll be able to afford payments long term. Page four of their Closing Disclosure is of particular interest to them because it lists specific disclosures, such as escrow account information, with the purpose of ______.
269) Fannie Mae, Freddie Mac, and the Federal Home Loan Bank are examples of ______.
270) Which type of lien affects real and personal property?
271) Leading up to closing, who should ensure that all deadlines are being met, all contingencies are cleared, and all paperwork is fully executed and delivered?
272) Easements are a type of encumbrance that can affect a property. Which of the following is true about easements?
273) Eleanor is in the market for a home loan. She feels confident knowing that South Carolina’s _______ will protect her from predatory lending practices.
274) For income-producing properties, how is rent prorated at closing?
275) Co-ownership without inheritance rights is what kind of real property ownership?
276) Which act encourages fair, truthful, non-deceptive, and evidence-supported claims in advertising?
277) Jenny and her friend Kali went out to lunch. Afterward, they paid the bill. Their agreement to pay for the food they were served is what type of contract?
278) Of the following, who typically prepares the closing statement?
279) How can an investor roll over any gain realized in an investment property into another property and defer paying capital gains taxes?
280) The state claimed Sophia’s home under eminent domain. It appraised her property and offered to pay Sophia the appraised value for the home. What’s this process called?
281) The Real Estate Offer Rejection Form has been required by law in South Carolina since ________.
282) Who generally writes a broker’s price opinion?
283) In states without full disclosure requirements, whose responsibility is it to review disclosures, ask questions, and obtain a home inspection?
284) Your assistant, Brady, often answers client questions about offers and negotiation. What do we know about Brady?
285) Which document should be provided to borrowers no fewer than three days prior to closing?
286) What’s the best definition of a cooperating agent?
287) Which of the following is not a benefit of living in a PUD?
288) Which of these is an example of voluntary alienation?
289) With local land use, the stress placed on the community’s infrastructure is an example of ______.
290) Janice’s life tenant, Jacob, is currently living on her property. Once Jacob dies, Janice has arranged for the property to be given to the School for the Gifted. What interest does the School for the Gifted currently have?
291) Which of the following documents will show the buyer and seller which costs to pay at closing?
292) Jamie enters an agreement to buy Yolanda’s home. Per the agreement, Jamie promises to provide a $5,000 earnest money deposit, whereas Yolanda promises to sell her home to Jamie. These promises represent forms of ______, which is required to make the contract valid.
293) What’s a foreclosure?
294) What is the type of possession in which a tenant stays after the right to possess has terminated?
295) Darryl is an unlicensed personal assistant to Yvonne, a licensee. Yvonne is careful to direct his activities so he doesn’t do anything that would require a license. Why is she so careful about this?
296) Which of the following activities occurs before the closing meeting?
297) How do you decide which party you represent in a transaction?
298) Wayne conveys a property to Robbie until Robbie’s death, when the property is conveyed to Tiffany. What is this scenario an example of?
299) An appraiser is most likely to use the cost approach for which of the following properties?
300) Which document do property managers and the owners they represent sign to formalize the relationship?
301) This document is filed with a condominium building’s master deed and details such items as ownership meetings and common elements’ maintenance log.
302) Mark works at Farm and Country Bank, and has arranged an agricultural loan for Josh, a local organic farmer. Josh didn’t meet the bank’s normal underwriting standards, but Mark made the loan because he was able to arrange for a guarantee from ______.
303) You are calculating prorations. Which of the following items go into the seller’s credit column and the buyer’s debit column?
304) Calculate the total debt ratio based on the following information, assuming the lender does not consider any debt with 10 or fewer payments remaining: $1,500 condo payment; $100 monthly association fees; $150 monthly student loan payment; $300 car payment (with only four payments remaining); and a monthly gross income of $5,000.
305) Dual agent Barbara Park can only disclose Seller Carrie’s reason for moving if:
306) Cracks, holes, or rotten areas on a soffit are common ______ issues.
307) Frieda is practicing dual agency, and neither party seems to mind, even though she didn’t obtain informed consent. Is this legal?
308) If Mega Corporation owns real property, chances are it owns it in ______.
309) Cultivated crops are considered personal property even though they’re part of the soil, and they’re known as _______.
310) If Johnson Marketing’s capital gain on the sale of its business was $479,000, capital improvements were $227,000, and the adjusted basis in the property was $976,000, what was the sales price?
311) What is the purpose of a deed?
312) The Knolls are purchasing a property and are concerned about the title, so they want to have a title search performed. Who can perform a title search?
313) Benefits to an auction buyer or seller ______.
314) Which of the following auction properties would most likely be considered by a developer who wants to jump in and start building right away?
315) Licensee Grant is representing both the seller and the buyer in a transaction. What is the term for this type of agency?
316) ____________ have no restrictions on the types of real property they’re qualified to appraise.
317) What value principle assumes that if an identical property were sold recently, its sales price should be a good indicator of the value of the subject property?
318) Which of the following is the most thorough presentation of the appraiser’s solution to the appraisal problem?
319) Amperage is the amount of electricity flowing through a wire, and ______ is the amount of electrical pressure upon the wire.
320) Why are industrial lofts and warehouses often converted for residential or commercial uses?
321) Which of these best describes an appraiser’s typical work environment?
322) Species habitat, beauty, erosion control, and pollution treatment are all reasons that wetlands are ______.
323) Marissa, a buyer, asks you what she can do to prepare to buy. What should you tell her?
324) Under the Kentucky Property Management Agreement, how many days’ notice does an owner have to give an agent or broker regarding the contract’s early termination?
325) If an endangered species or wetlands exist on a site, which of the following is true?
326) A ___________ is qualified to appraise any one- to four-unit residential property, regardless of value or complexity, but isn’t qualified to appraise subdivisions.
327) Trent is at a(n) ______ auction, meaning that there’s a confidential minimum amount that will be accepted as the winning bid.
328) What’s a rehabilitation loan?
329) Which of the following statements about KREC’s one-time showing agreements is true?
330) What is a company checklist?
331) Denise is a real estate licensee performing a market analysis. She uses the Rule of Three. This means she selects three comparables _______.
332) Which type of depreciation is a loss in value due to defects in a structure’s design?
333) You’re obligated to preserve all the confidential information you receive from a seller client. This obligation ________.
334) The cost approach to finding an appraised value measures _______.
335) In the conveyance of real property after death, what trumps any terms specified in the deceased person’s will?
336) If there’s an overall change in market value, what type of adjustment can an appraiser use to show the overall effect of the change?
337) Suppose Aimee wants to plan ahead and take the same number of credit hours a year to meet her 48 hours of required post-licensing education during KREC’s stipulated time period for PLE. How many hours of PLE would she need to complete each year?
338) Investors looking at property in a depressed neighborhood may be anticipating the _________ phase of a real estate cycle.
339) Price levels, vacancy rates, new building permits, inventory rates, and sales volume are all _______.
340) How many anchor stores does a regional shopping center normally have?
341) The power of the state to claim property when the owner dies without a will and without locatable heirs or creditors is also known as ______.
342) What effect will a property’s utility have on the value if it’s currently uninhabitable?
343) Remembering the acronym PITI can help borrowers recall what makes up their ______.
344) Which of the following is a common problem with a foreclosure property purchase?
345) Careful handling of all funds is crucial to the success of a brokerage firm. Of special importance, however, is handling of ______.
346) The ______ model is used to value raw, vacant land when the highest and best use development divided into residential parcels.
347) Carla creates a trust to convey her assets to her children. Her brother, Alvin, is placed in charge of making sure the terms of the trust are carried out. In this example, Carla is the ________.
348) Why do appraisers gather and analyze information about a subject property’s neighborhood?
349) Legal permissibility, physical possibility, financial feasibility, and ______ are all considerations when determining highest and best use.
350) Why is poor weather or lackluster marketing a detriment to a seller on auction day?
351) The purpose of the Uniform Electronic Transaction Act (UETA) is to ____________.
352) Uh-oh. You failed to present an offer on behalf of your client in a timely manner. As a result, the seller accepted a lower offer from another buyer. You could be sued for ______.
353) Which of the following describes a legal description?
354) Annabelle loves convenience, especially when it comes to shopping. She wants to invest in a commercial property that’s about 72,000 square feet and offers a hair salon, a few small restaurants, and a dry cleaner for the people who live in the area. What type of retail space is Annabelle considering?
355) When a lender charges a borrower more than the highest allowable interest rate, it is called ______.
356) Your buyers have done all the research possible on a property and are excited that they have the winning bid on auction day. They then discover that they don’t really get the property. What’s the most likely reason?
357) What must you do to assist your clients with environmental issues?
358) What type of agency exists when a buyer’s broker is the listing agent for the same property?
359) Which type of exclusive brokerage agreement in Kentucky provides the highest service to a seller client and the most protection for the broker’s commission?
360) A residential income property has 10 units. Each apartment rents for $1,000 per month and has two bedrooms, a bathroom, a living room, and a kitchen. What’s the scheduled rent for this property on an annual per room basis?
361) An appraiser is performing an income-based appraisal on a commercial property. Which of these items would be shown as a fixed expense on the appraiser’s reconstructed operating statement?
362) In full seller disclosure states, whose responsibility is it to notify the seller of the seller’s duty to disclose all known material defects?
363) HVAC is an acronym for what?
364) Why does the sales comparison approach rely upon data from arm’s length sales?
365) Rick is obtaining a loan for a commercial property. What can he expect from the loan process?
366) Which of the following terms refers to the increase or decrease in land value that occurs when several parcels are combined into one large plot?
367) Which approach might an appraiser weigh more heavily while reconciling the appraisal value of a vacant lot?
368) Which of the following formulas is used with the index method to find the reproduction cost?
369) In a 1031 exchange, there are rules governed by Section 1031 of the Internal Revenue Code. The rules include _______________.
370) Which best describes a purchase money mortgage?
371) Britney is selling her bungalow on an installment contract. The buyer made payments dutifully for five years, but has not made any payments for more than a year. Which of the following is true?
372) Another term for a valuation is ______.
373) When using an amortization chart, you use the interest rate and the loan term to arrive at a number, such as 5.17808. Now what do you do?
374) The final page of the Closing Disclosure provides loan calculations that tell the consumer ______.
375) What’s TRID?
376) Monty retired 10 years ago and would like to see the world, but his retirement account won’t support his desire to travel. Monty heard of a loan that would allow him to take advantage of the equity in his home by getting monthly payments from the bank with his house as collateral. What is this type of loan called?
377) Which government entity oversees open market operations?
378) What percentage of homes in the U.S. are owner-occupied?
379) Qualified mortgage requirements are set by the ______.
380) John wants to do a 1031 tax exchange. He just sold his property. How many days does he have to identify a new property?
381) Which type of mortgage is seller financing in which the buyer gives a mortgage to the seller toward the purchase price, and which buyers use as down payment financing?
382) The rate at which a bank can obtain a loan from its Federal Reserve bank when using commercial paper as collateral is called ______.
383) Robin has great credit and was able to secure a loan for her oceanside dream home. Her 30-year, fixed rate loan is for an amount that’s above conventional loan limits. What type of loan does Robin have?
384) What is the benefit Ginny Mae investors have over other MBSs?
385) Loans create ________ for banks and other financiers.
386) A refinance is a ______.
387) The ______ clause allows the borrower to prepay principal on the loan at any time without penalty.
388) In which phase of the real estate market cycle would you expect to see property under valued and a large supply of homes on the market?
389) When a lender has a lien on a property, what rights does the lender hold?
390) The Mortgage Disclosure Improvement Act gives applicants a _________ to review and approve the Loan Estimate and Closing Disclosure form.
391) With this common loan type, the home is used as collateral and the loan creates a second mortgage if the first mortgage hasn’t been paid off.
392) Veterans using the ______ program aren’t required to submit a COE, get a new appraisal, or verify income.
393) Ted is in foreclosure but has some equity in his property. An investor suggests that Ted enter into a sales contract with him for a substantially higher price than the investor would actually be paying. The investor pockets the cash and allow the house to be foreclosed on. What sort of scheme is this?
394) Interest rates that are more than _____ over the current market rate are considered predatory lending.
395) Secured corporate bonds use ________ as collateral.
396) Which of the following is a true statement about deducting interest on mortgages taken out in tax years 2018 to 2025?
397) According to the National Association of REALTORS®, the majority of foreign investors in U.S. real estate are ______.
398) Under which section will you find any credits provided by the seller?
399) The section on the Loan Estimate called “Services You Cannot Shop For” includes fees for ______.
400) Which of the following is a true statement about the “hardest hit fund”?
401) Which of the following is an example of leveraging in a real estate transaction?
402) How do you determine debt coverage ratio?
403) Annual MIP can be removed from an FHA loan by ______.
404) Jody is concerned about the ______ that doesn’t allow her to start her gardening greenhouse because it sits next to a nature conservancy.
405) Rich wants to add a room to his house, so he takes out a home equity loan. This creates a/an __________ lien.
406) Kendra is purchasing a home and is ready to find a lender who will give her terms that she can afford. She has done her homework and knows that she can use ______ to compare loans and find the one that will best meet her needs.
407) Sylvia is a single mother living in a small town surrounded by ranch and farm land. She would like to buy a house there, but her income as a hair stylist makes it hard for her to qualify for a conventional loan. What government program might provide her with a direct loan to purchase a home?
408) Which of the following is an example of an inquiry initiated by a creditor that may appear on a credit report?
409) In addition to itemizing what are the borrower-paid closing costs, the prepaids section includes the __________ for each item.
410) Federal Housing Finance Agency established percentage targets and ___________ for loans made to low- to moderate-income borrowers.
411) Most adjustable rate mortgages have a feature that allows borrowers to _________ to a fixed-rate during a specific period of the mortgage.
412) What’s another name for the Homeowners Protection Act?
413) Which of these is a true statement about when a promissory note is sold?
414) An industrial development bond is a variety of _____ bond.
415) It’s possible for the adjustment period on an adjustable rate mortgage (ARM) to have ranges, such as three or ____ years apart.
416) The Federal Housing Administration’s loan program ______.
417) Which of these items did the FHA implement to stabilize and improve the mortgage market?
418) The ______ was enacted in 2010 to create stricter regulation of the financial services industry.
419) What did the National Association of REALTORS® say about foreign investment in U.S. real estate?
420) You may see a ________ named as a land contract, real estate contract, contract for sale, agreement for deed, or as articles of agreement.
421) Which of the following could be different from the amount on Loan Estimate that was initially received and can impact the monthly payment?
422) The housing ratio is the borrower’s monthly housing obligation as a percentage of ______ income.
423) Jackie is 10 days late on her loan payment. Will her lender place her loan in default?
424) The FHA offers a program for loan insurance on adjustable rate mortgages under ______ of the National Housing Act.
425) Robbie’s lender notifies him of an impending foreclosure, and is told that his property will be sold at public auction. After the auction occurs, Robbie receives a notice of eviction for which the lender had to petition a court. What does this describe?
426) What factors affect an adjustable rate mortgage?
427) What’s one reason a borrower would choose a split-or piggyback-loan option?
428) Which of these acts has special provisions for borrowers who are victims of overcharging?
429) Millie and Jerry are purchasing a home using their VA loan benefit. The sale price on the home they buy is $320,000, with 100% financing. Assuming that Jerry has a typical level of entitlement, how much of their loan does the VA guarantee?
430) The ______ sets requirements for mortgage loan originators.
431) Qualified mortgages require debt-to-income ratios of no more than ______.
432) Brenda’s go-to financial expert has no fiduciary responsibility to her. This is because she’s working with a(n) ______.
433) The Farm Credit System funds are acquired from __________.
434) The three types of finance instruments that can be used when financing a real estate purchase are the note with mortgage, note with deed of trust, and ________.
435) Nick and Nora are purchasing their first home. Like most homebuyers, they obtain a mortgage loan, using the property as ______.
436) Glenn is purchasing a home for $400,000. The property appraised at $415,000, and Glenn is financing $300,000. What’s the loan-to-value ratio?
437) Emily has great credit and was able to secure a loan for her oceanside dream home. Her 30-year, fixed-rate loan is for an amount that’s above conventional loan limits. What type of loan does Emily have?
438) Danica and Rae purchased a home using a conventional fixed-rate loan that was 90% of the purchase price, since they could only afford a 10% down payment. Their monthly payment will include ______, but only for a portion of the loan term.
439) Acme Bank, a primary lender, sells its loans on the secondary market, so it makes sure that all its loans meet ______ requirements.
440) Chuck is selling his property to Kyle. Chuck has agreed to finance the transaction for Kyle, who will make payments to Chuck while Chuck retains the legal title to the property. What’s this an example of?
441) Lydia put the minimum 3.5% down on her $210,000 home. She’ll have to pay a mortgage insurance premium (MIP). What type of loan does Lydia have?
442) The VA-guaranteed loan uses _____ to pay for the costs of the program.
443) Krista is obtaining a loan to buy a home. Her loan agreement consists of one document called a note and one called a deed of trust. What is the role of the note?
444) When Stacy’s clients ask her if she can recommend a mortgage broker, she promptly gives them the name of the best mortgage broker she knows, Gary Jones. Later, she always receives a check from Gary as payment for the referral. Would this be legal or illegal under the Real Estate Settlement Procedures Act (RESPA)?
445) The purpose of the Truth in Lending Act (TILA) is to _______.
446) Scott is a California real estate licensee with an MLO endorsement. Arthur, his assistant, does not have an MLO endorsement but he does have a real estate license. Which of these activities must Scott perform?
447) Shelly’s flower business is blooming, and it’s time for her business to grow. She plans to take out a business loan to open two more shops on the north side of town. Which lending institution would she most likely go to for the loan?
448) Lizzy rents an apartment in a building that’s being converted to condominiums. By law, the owner of the building must give Lizzy ________.
449) Which of the following provides everything a lender needs to know in order to value the property used as collateral for a loan?
450) Which of the following license holders in Pennsylvania is exempt from fulfilling the continuing education requirements as part of the license renewal process?
451) The lender will require flood insurance if the home is ______.
452) Janie’s got an open house scheduled for Sunday, but lets her friend in on Saturday to preview it. It’s love at first sight! With the owner out of town, Janie decides to cancel the open house so there won’t be any other offers. Her friend makes an offer and it’s accepted on Monday. What fiduciary duty or duties has Janie breached?
453) When a lower-quality property is adjacent to a higher-quality property, it can diminish the value of the higher-quality property. What economic principle of value is this?
454) What piece of regulation or regulatory authority requires all levels of government to perform an environmental assessment any time any action is taken that may impact the environment?
455) The State Real Estate Commission holds regular meetings and at least one public meeting a year in Pittsburgh, Philadelphia, and ______.
456) When an appraiser relies on comparable properties to estimate the adjusted market price of a property, the appraiser is using the _______ approach.
457) Thanks to this act, sites containing hazardous substances are identified, and responsible parties must clean them up.
458) Broker Hal enters into a listing agreement with seller Jane. Jane insists that the agreement state that only native-born U.S. citizens be allowed to buy the home. For what reason will this agreement be considered void?
459) Disclosing which of the following facts would be considered a fair housing violation?
460) Which of the following is a prohibited activity under Pennsylvania law?
461) What’s a covenant between a lessor and lessee?
462) In real estate contracts, which are required: legal descriptions or street addresses?
463) Which of the following is one of your duties as a listing agent?
464) Jill needs to pay the web developer who created a new website for her brokerage, but her checking account is low, so she floats herself a loan from earnest money kept in the brokerage’s escrow account and deposits it in her account for a few days before paying the developer. Which answer correctly identifies the violation(s) Jill has committed?
465) A Pennsylvania licensee who acts in the buyer’s best interest and makes a continuous good-faith effort to find a property until the buyer enters into a purchase contract is a ______.
466) Which of these trusts is created according to the terms of the will of a deceased person?
467) You represent a buyer of a $1 million property. The seller’s agent, through the seller, offers a 2.5% cooperative agent commission. Who’s your client?
468) Which of these is an example of a lot and block description?
469) Which of the following best describes the concept of appreciation?
470) How large is an acre?
471) Which of these items should real estate professionals help first-time buyers and buyers who have experienced recent credit issues to understand?
472) A period of stagnation in real estate when no one is buying and no one is selling is known as _____________________.
473) What’s the purpose of the Interstate Land Sales Full Disclosure Act?
474) Which type of Real Estate Investment Trusts derives a portion of its income from interest dividends?
475) Hugh works as a loan officer at a bank. Because of the SAFE Act, he must be registered with the
476) Which transaction must comply with Appraiser Independence Requirements?
477) A buyer has a 30-year, $750,000 loan with a 5.75% interest rate. How much of the monthly payment is interest?
478) Which statement is true regarding government loans?
479) Under the ______________ , every mortgage loan originator must be fully licensed and carry a mortgage surety bond.
480) To be eligible for an ___________________ ,an applicant must have participated in farm or ranch management for at least three years.
481) A homeowner has been paying her mortgage for several years and has built up equity. She decides to take out a home equity line of credit because she needs some cash. This credit will create A
482) Which of the following describes a Treasury note?
483) The _________________ clause allows the borrower to prepay principal on the loan at any time without penalty.
484) Which of the following describes a Treasury bill?
485) Financing for a real estate transaction can use a note with a ___________________ or a note with a deed of trust.
486) Real estate professionals keep a multitude of other professionals busy during the buying and selling process. Which of these professionals or entities are most active outside of the buying and selling process?
487) Carmen purchased a single-family residence in Monterey County for $480,000 using an FHA loan. At the same time, Yancy made an offer on a single-family residence not far away in Fresno County for $300,000, and was told he could not use an FHA loan for the purchase. Why?
488) The ______ was created in response to the practice of redlining.
489) What’s the most common indicator of illegal property flipping?
490) Which of the following items would be included in the M2 money measure?
491) Mortgage revenue bonds are a variety of what other type of bond?
492) Rather than face foreclosure, Tony decides to cut his losses. He voluntarily conveys his property to his lender. What type of foreclosure alternative is this?
493) Conventional loans that are outside Fannie Mae or Freddie Mac guidelines are said to be ______.
494) Maggie has a neighbor, Jim, who’s facing foreclosure. She likes Jim and wants to help him out, so they agree to do a subject to purchase. What does this mean?
495) Farmer Mac is a program that ____________ for agricultural property loans, rural utility loans, and certain loans guaranteed by the U. S. Department of Agriculture.

496) Life insurance companies sometimes like to insure their investment in commercial projects by insisting on an equity position. This is known as ___________ financing.
497) Completing a residential loan application requires providing information about the borrower, the property being purchased, and the ________.
498) Hugh works as a loan officer at a bank. Because of the _____________, the must be registered with the Nationwide Mortgage Licensing System.
499) Financing for a real estate transaction can use a note with a _________ or a note with a deed of trust.
500) What is a government-sponsored enterprise (GSE)?
501) Under the “Projected Payments” section of the Loan Estimate, the consumer can review ______.
502) Who is the intended consumer group for the Streamlined Modification Program (SMP)?
503) In the event of a client lawsuit against an independent contractor operating under an LLC, typically, only ______ are at risk.
504) Mary Francis is on her way home from work and stops at the grocery store. The business account she opened recently gave her an ATM card to go with it. Should she use the card to buy groceries?
505) Which of the following is the most liquid money measure?
506) Which entity sets the criteria for the conforming loan limits?
507) Which of these features is shared by the mortgage and the deed of trust?

508) In a residential real estate sale involving a federally related loan, who’s required to provide Real Estate Settlement Procedures Act disclosures to the consumer?
509) The rate at which a bank can obtain an overnight loan from another bank without providing collateral is called ______.
510) One common predatory lending practice is to charge fees for unnecessary or ____________ loan products or services.
511) Janice is planning to borrow money from her retirement savings. Which of the following is a true statement about her situation?
512) Kathy decided to borrow funds from her retirement account to fund the down payment on her new house. Which of the following is true about this loan?
513) What did a 2019 National Association of REALTORS® study say about foreign investment in U.S. real estate?
514) You are preparing a competitive market analysis on a vacant lot that you hope to list for sale. Which of the following approaches to value will be used in the development of the estimated value?
515) The period over which a property may be profitably utilized is called its:
516) Wear and tear to the load bearing members of a building would be classified as:
517) While the economy is experiencing inflation, interest rates:
518) A broker secured a buyer for his client and the seller accepted. Under which type of listing could a broker not receive a commission?
519) Mr. Seller signs an open listing on his home with five different brokers. In this case:
520) A parcel of vacant land is listed for $100,000, requiring 20% down with the seller
to carry back the balance. The broker brings in a full-price cash offer, but the owner
refuses. The broker is entitled to:
521) Under a lease, the leasehold interest lies in the:
522) Which of the following requires real estate listings to be in writing?
523) All of the following listings require that the broker be the “procuring cause” of the
sale if he/she is to be entitled to a commission, EXCEPT:
524) Payment history, age of accounts, credit usage rate, inquiries, and _______ are factors considered in calculating a credit score.
525) A RAM is a type of equity financing. What does RAM stand for?
526) Kobi, an appraiser, is appraising a single-family home used for a rental. If he wants to use the income approach, he will likely use ______.
527) Veterans using the ______ program aren’t required to submit a COE, get a new appraisal, or verify income.