Ct Real Estate Practice exam general

Two lots of the same size are sold on a street. The lot on the corner sells for $20,000 more than the lot in the middle of the street. Which of the following characteristics MOST likely explains the price difference?

Situs

How does a creditor who has obtained a judgment get satisfaction against a debtor who will not pay?

Writ of execution

What type of map is MOST useful for describing the terrain of a very hilly lot?

Contour map

A tenant rented an apartment, signing a 15-month lease. After the lease expired, the tenant paid 1 month's rent and got a receipt. What kind of leasehold does the tenant have?

Tenancy at will

A major difference between freehold and nonfreehold estates is that all freehold estates

are of indeterminable duration

Real property can be converted to personal property by

Severance

A lawsuit for inverse condemnation may be brought by

a homeowner

A deed restriction is applicable to the activities of

present and future owners.

If conditions for purchase are included in a deed and these conditions are violated, what is the penalty?

Return of the property to the original owner.

The terms "littoral," "riparian," and "appropriative" refer to

water rights.

Which of the following BEST illustrates the concept and intent of a buffer zone?

Garden apartments located between a single-family residential neighborhood and a shopping center.

A property owner died, having willed his real property to his two daughters. There is still a chance that they could lose the land for a variety of reasons, but it CANNOT be taken through

escheat

An environmental impact statement typically describes the effects of a proposed project on factors such as

public health and safety

All of the following are methods to calculate the reproduction or replacement cost of a building EXCEPT the

straight-line method

Which of the following approaches MOST reliably estimates the sales price of a single-family residence?

Market data

A formal appraisal will ALWAYS be REQUIRED when the

lender wants to sell the mortgage to the secondary market.

According to the principle of progression, a three-bedroom, one-story home is MOST likely to bring the highest sales price if located in a neighborhood in which

most homes are larger than the sale home.

An appraiser MUST be licensed or certified to handle Federally related work on residential property valued at more than

$250,000

A competitive market analysis is MOST often used for

setting a listing price

Which rule-of-thumb version is being offered to an investor who is told that a house renting for $900 a month should sell for about $90,000?

GRM

When a property owner uses his home as collateral for a loan and creates a lien in favor of the lender, title is held by the

mortgagor

When the sellers are lending part of the purchase price, they may secure the debt either with a deed of trust or a mortgage. For the seller, one benefit of the deed of trust is that

foreclosure is usually simpler and faster

Regulation Z requires that the borrower be fully informed of all of the following EXCEPT

the total interest

The FHA functions MOST like

an insurance company

The purpose of usury laws is to regulate

interest rates charged by lenders

Which of the following statements about discount points is FALSE?

They are computed as a percentage of the selling price

A borrower has defaulted on the mortgage. The mortgage contains an acceleration clause. This permits the lender to

demand immediate payment of the entire note

A loan which requires the borrower to pay interest only until the maturity date (or due date), and then to pay the entire principal on the maturity date, is called a

term loan

An example of a fiduciary relationship is one which exists between the listing broker and

her client

A broker has brought a ready, willing, and able buyer to a seller. In MOST listing contracts, the broker has earned his commission when

the seller accepts the offer

One common method for controlling the problems created by conflict of interest in dual representation is

allowing a broker to designate separate salespeople within the company as legal representatives of each of the clients.

The day after a broker's listing on a house expired, it was listed with another broker and offered in the MLS. Several days later, a third licensee called the first broker and asked for the key to show the home. The broker should inform the caller that

he is no longer the listing agent

When a principal authorizes an agent to perform a particular act or transaction, it is an example of a

special agency

A broker supplies the financing for a project to build condominiums with the stipulation that he has the exclusive right to sell the completed condos. Which of the following BEST describes this relationship?

Agency coupled with an interest.

A broker, acting as agent for the seller, presents an offer to buy from the broker's former college roommate. The broker knows that the buyer will increase the amount of the offer if the seller turns down the offer. When presenting the offer, the broker should

tell the seller that the buyer will pay more

During the listing presentation, the seller questions the amount of commission to be paid and is told

the amount of commission is negotiable

Which of the following events would AUTOMATICALLY cancel a listing agreement?

Property owner's death

Under the terms of their listing contract, the owners may sell their house themselves and pay no commission. If their agent sells it, a commission will be due. What kind of listing contract do the owners have?

Exclusive agency listing

A seller tells the listing agent that her home was treated for termites 10 years ago, so there are no termites now. Before listing the property, the agent should

tell the seller to disclose the termite treatment on the property disclosure.

Which of the following is the first action to take when mold problems are found?

Identify and remedy the cause of the problems

Without checking the facts, a broker who is the seller's agent tells a buyer that the property taxes in a particular neighborhood are among the lowest in the area. The buyer relies on the broker's statement and makes an offer on a house in the neighborhood. Before closing, it is determined that the taxes are actually among the highest in the area. The buyer could seek to rescind the contract on the basis of

misrepresentation

The real estate broker who is listing a house for sale should personally verify

the number of square feet in the building

At the time of listing, the seller tells the listing agent they are moving because the neighbor has loud parties every weekend. The agent should

tell potential buyers about the parties

The Department of Housing and Urban Development estimates that most private homes built before 1978 contain potentially dangerous levels of lead. Because of this, some Federal agencies, such as FHA

require the buyer to acknowledge disclosure of the presence of any known lead paint

A buyer was negotiating the purchase of a house for himself. During a conversation with the seller, the seller agreed to include all kitchen appliances in the sale, and this fact was included in the sales contract. In this situation, if the seller takes the appliances with him, what recourse does the buyer have?

The buyer may sue the seller for specific performance

The document used in a real estate sale that establishes the legal rights of the buyer and seller is the

purchase contract

While an agent is showing a listed property, the seller and the buyer enter into an oral agreement for the purchase of the home. If a dispute over the terms arises later, the agreement may be unenforceable because

the agreement does not comply with the Statute of Frauds

A written agreement in which a purchaser agrees to buy and a seller agrees to sell is called

a contract

The purpose of requiring an earnest money deposit in a real estate sales contract is to

provide evidence of the buyer's intention to carry out the contract

Prospective buyers made an offer on a property. The seller did NOT accept, but made a counteroffer. The prospective buyers signed the counteroffer and the real estate agent delivered their acceptance to the seller. In the interim, the same buyers had found another house that they liked better and made an offer on it, which was accepted. Which of the following is TRUE?

Both contracts are valid

A prospective buyer made an offer to purchase a property. The owner responded with a counteroffer. While the buyer was reviewing the counteroffer, the owner received a better offer. The owner can accept the second offer if

the owner withdraws the counteroffer before it is accepted

The real estate contract for a specific property for use as an unlicensed whiskey sales operation was forced to terminate. The termination was the result of

impossibility of performance.

A contract has been drawn which obliges the sellers to convey title to their land to the buyers if the buyers come up with $22,000 on or before December 31st. This is called

an option contract

A couple signed a lease on an apartment for a period of 1 year. The lease does NOT contain an automatic renewal clause. The couple plans to move out at the end of the lease rather than renew it. How much notice MUST they give to comply with the lease term?

No notice is required.

For Federal income tax purposes, which of the following are costs of homeownership that may be deducted from gross income?

Mortgage loan interest, local property taxes, mortgage loan origination fees

A judgment has been properly recorded. Any subsequent purchasers, whether they have actually examined the record or not, have been given

constructive notice

At the closing on June 15, the buyer is assuming a mortgage presently on the property, on which the monthly interest charge is currently $600. The seller has made the payment due on June 1. Assuming a VA mortgage, what is the adjustment made at closing?

Debit seller $300; credit buyer $300.

Under a land contract for deed, who retains fee ownership of the property?

Vendor

The buyer is assuming a mortgage presently on the property in the amount of $110,000. What is the adjustment made at closing?

Credit buyer $110,000; debit seller $110,000

The escrow officer or closing agent MUST give information regarding the sales price and seller's social security number to

IRS

A managing broker can be held responsible for

all real estate activities of salespersons

According to the Truth-in-Lending Act, if any "trigger terms" are used in an ad, all of the following disclosures MUST appear in the ad EXCEPT the

prepayment penalties and rebates

The statement "this property has the most beautiful views in the neighborhood" is an example of

puffing

A charge of violation of Federal Fair Housing laws can be heard by an administrative law judge within the Department of Housing and Urban Development (HUD) or by a Federal district court judge in Federal court. The advantage of a Federal court hearing to the complaining party is that

there is no dollar limit on damages paid

When is racial discrimination in the rental of rooms or apartments permitted?

Under no circumstances.

An equal housing opportunity notice MUST be

displayed in the brokerage office.

The buyer wants to make the purchase offer contingent on a complex mortgage arrangement. The buyer's agent who is drawing up the contract should

suggest the buyer ask a lawyer to furnish the wording

Antitrust laws prohibit competing brokers from all of the following EXCEPT

receiving compensation from both the buyer and the seller

An agent shows a home to a couple and mentions that it has a lovely fireplace in the living room. After buying the home, the buyers and agent discover that the brick fireplace is just a decorative fireplace and is not "wood burning." Which of the following would BEST protect the agent from financial loss?

E & O coverage.

An owner lists her home at a 7% commission rate and wants to net $45,000 after paying the mortgage balance of $68,000 and the broker's commission. To the nearest dollar, what should the selling price be to net her $45,000?

$110,753

Two buyers bought a house with a $178,000 mortgage. The interest rate is 6 1/2% per annum payable for 30 years. To the nearest dollar, what is their monthly principal and interest payment? (BE SURE TO USE THE AMORTIZATION TABLE.)

$1,125

If a borrower can afford to make monthly principal and interest payments of $1,000 and the lender will make a 30-year loan at 8-1/2%, how large a loan (rounded to the nearest $100) can this buyer afford? (BE SURE TO USE THE AMORTIZATION TABLE.)

$130,000

On January 15, a seller paid $960 in annual property tax for the current calendar year. A buyer is purchasing the house with the closing set for March 1. What will be the seller's credit for the property taxes already paid if the buyer pays for the day of closing? Use a 360-day year and a 30-day month.

$800

The sellers have agreed to give the buyers an allowance to recarpet the living room. They will allow $22.95 per square yard for carpet plus $6.00 per square yard for pad and installation. If the living room is 21 feet x 12 feet, how much will it cost the sellers (to the nearest cent)?

$810.60

Too much leverage may result in

negative cash flow

A major reason for buying and owning a condominium rather than a detached single-family home is that

a condominium tends to be more affordable

Ownership of common stock in a corporation gives

an interest that is classified as personal property

A homeowner is willing to let his neighbor park an RV in his backyard. He does NOT want to make the permission permanent in case he dislikes others who might move next door in the future. What should he give his neighbor?

A license

When someone has living heirs but dies without leaving a will, the estate is distributed according to the

statute of descent.

Earnest money should be deposited into a trust account

in a timely manner, according to state laws

A property is encumbered by a first mortgage of $60,000 and a second mortgage of $23,500. The property has just been sold at a foreclosure auction to a speculating investor for $88,000. Assume that all costs of the foreclosure sale are included in these balances. Which of the following statements is FALSE regarding the distribution of funds?

The second mortgagee receives nothing unless he forced the foreclosure auction.

A homeowner has negotiated with a neighbor to obtain the permanent right to pass over the northern part of the neighbor's land to gain access to the river. He pays the neighbor $9,000 for the right of access and receives a deed. This is an easement

appurtenant

The main difference between tenancy in common and joint tenancy is that with tenancy in common, when a co-owner dies,

his undivided interest passes to his heirs.

Joint tenancy

right

An estate owned by two or more people whith equal and undivided possession. Both must purchase at same time, right of suvivorship possible.

Tenancy in common

Two or more owners with NO RIGHT of survivorship

Three people buy a house as tenants in common. Subsequently, two of the owners want to sell, but the third discourages each potential purchaser. The two owners who wish to sell the house can

file an action for partition against the third owner

Although states make specific laws governing water rights and the rights in land that borders water, most states generally follow one of two basic doctrines regarding water rights. In many states, the common law doctrine of riparian and littoral rights dictates that water rights are automatically conveyed with property. In others, all water rights are controlled by the state under the doctrine of

prior appropriation

Legal descriptions using the government survey system are NOT generally used in

the original 13 states

A landowner wishes to build a neighborhood grocery store on a busy street in an area zoned for residential use. Which of the following would MOST likely be used to obtain permission for this store?

Conditional use permit or zoning variance.

Building codes are

ordinances that specify construction standards

A deed restriction is applicable to the activities of

all owners, present and future

An escheat occurs when

a property owner dies without heirs or a valid will

An Environmental Impact Statement (EIS)

projects the impact on the environment of a proposed project

A couple owns an older home in a neighborhood that is becoming a commercial area. Because of the change in the use of the land, the couple can expect the value of their parcel to increase at some future time. This is an example of the principle of

anticipation

A competitive market analysis takes into consideration

square footage of the subject property

If all other factors are equal, in which location is a parking lot likely to bring the highest sales price?

Business district zoned for a six-story office building

When preparing a market data estimate of value, which of the following categories of adjustment is NOT essential?

The original cost of the building

A prospective seller asks a salesperson to recommend a listing price for a property. The salesperson should suggest

a competitive market analysis to determine the property's value

Federal Truth-in-Lending laws are also known as

Regulation Z

In helping a buyer to select a lender, if the buyer believes he has good credit and his income is documentable as a salary and by tax returns, the licensee might recommend a mortgage banker, instead of a mortgage broker, for all of the following reasons EXCEPT

more variety of loan programs available