Exam Manual/Cram Course Questions

In stating a seller's price and terms to a prospective buyer, the seller's broker is required by the law of agency to state ONLY those terms that are

a. included in the listing agreement

b. based on the brokers evaluation of prevailing prices and terms

c. favorable for the seller, as determined by the broker

d. attractive to buyers, as determined by the broker

a. included in the listing agreement

a lot measuring 110 feet wide by 140 feet deep has a required setback of 30 feet in front, 20 feet in the rear, and 20 feet on each side. if a builder wants to put a one-story building on the lot, the MAXIMUM square footage it can contain is

a. 3,300 sq ft

b. 3,600 sq ft

c. 6,300 sq ft

d. 6,600 sq ft

c. 6,300 sq ft

a house with a market value of $80,000 is located where property is assessed at 70% of market value. if the tax rate is $4 per $100 of assessed value, the property taxes are

a. $224

b. $960

c. $2,240

d. $3,200

c. $2,240

a broker charges a leasing fee of one-half of the first months rent and a management fee of 8% of all rents collected. the broker negotiates a two-year lease at a monthly rental of $550. which of the following amounts will the broker earn on this lease

a. $1,378

b $1,331

c. $1,287

d. $1,056

b. $1,331

a property manager works in the BEST interests of the

a. tenant

b. owner

c. agent

d. bank

b. owner

in reviewing the deed to a listed property, a licensee noted a number of limitations regarding its use. these limitations aare commonly known as:

A. Codicils

B. constraints

C. building codes

D. restricted covenants

D. Restricted covenants

the price at which a willing and informed buyer would buy and a willing and informed seller would sell is called the

a. assessed value

b. book value

c. income approach to value

d. market value

d. market value

the income approach is MOST likely to be used when determining the value of a

A. vacant residential lot

b. office building

c. single-family home

d. cooperative apartment

b. office building

the G's purchased a house from the T's. the G's agreed to the following terms: monthly payments of $650 to the T's and the balance to be paid in full after 7 years. at the time the balance is paid, the T's will give the G's a warranty deed transferring title. in this situation, what type of financing was used

a. fha loan

b. wrap around mortgage

c. package mortgage

d. contract for deed

d. contract for deed

the provision in a mortgage or deed of trust that gives the lender the right to call the entire balance due upon a default in any payment is called a:

a. acceleration clause

b. prepayment penalty clause

c. prepayment priveledge clause

d. right of redemption clause

a. acceleration clause

a broker who represents a buyer is trying to negotiate on the buyer's behalf in a potential transaction. the broker realizes that by negotiating a reduced price for the buyer, the broker's commission will also be reduced. in this situation, the broker is obligated to negotiate the BEST price for the

A. buyer and broker

b. buyer

c. seller

d. brokerage

b. buyer

K and R bought a house as tenants in common. If K dies, which of the following statements about ownership of the house is CORRECT?

a. it automatically becomes tenancy in severalty

b. it is divided, with R retaining R's original interest and the balance going to K's estate

C. R holds fee simple ownership in k's share of the property

d. R holds life estate ownership in K's share of the property

B. it is divided, with R retaining R's original interest and the balance going to K's estate

a visually-impaired person with a service animal completes an application for rental of an apartment that has a vigorously enforced "no pets" policy in the building. according to the federal fair housing act the owner MAY:

a. refuse to rent as a result of policy

b. require the person to house the animal outside

c. require the person to restore any damage that results from the animal

d. increase the customary security deposit

c. require the person to restore any damage that results from the animal

Under a sales contract, the legal remedy that may be used to force the seller to consummate the sale is called

a. adverse possession

b. foreclosure

c. specific performance

d. forcible detainer

c. specific performance

a developer who leases real property from the owner with the intent of constructing an office building has which of the following interests in the property?

a. leased fee

b. leasehold

c. sale and leaseback

d. lease option

b. leasehold

the owners of a house sign a listing agreement and later tell the licensee that the garage roof leaks. if they tell the licensee not to reveal the roof's condition to any prospective buyers the licensee MUST

a. abide by the owners request

b. advise the sellers that they must disclose the condition of the roof to prospective buyers

c. advice only those prospective buyers who ask about the roof

d. refer all prospective buyers who have questions about the roofs condition to sellers

b. advise the sellers that they must disclose the condition of the roof to prospective buyers

which type of mortgage loan has provisions for periodic changes in the amount of the payment, the interest rate, the maturity date, and the remaining balance owed?

a. fha loan

b conventional loan

c. blanket loan

d. adjustable loan

d. adjustable loan

a salesperson who completes a written listing agreement with a seller is helping to create a contractual relationship between the

a. salesperson and the seller

b. salesperson and the buyer

c. salesperson and the listing broker

d. salespersons broker and the seller

d. salespersons broker and the seller

buyers make an earnest money deposit on a property and sign a contract that is contingent on specific financing terms. if a bank commits to the financing, but the buyers change their minds and notify the seller in writing that they do not intend to buy the property, which of the following statements is correct

a. the bank may sue the buyers

b. the seller may sue the buyers for breach of contract

c. the buyers may rescind the contract only after paying the brokerage fee

d. the buyers are entitled to the return of the earnest money deposit

b. the seller may sue the buyers for breach of contract

which of the following documents is usually prepared when a real estate buyer also purchases a seller's riding lawn mower

a. an option

b. a wraparound loan

c. a conditional sales contract

d. a bill of sale

d. a bill of sale

the difference between the value of a property and the total amount of liens against it is known as

a. market value

b. equity

c. actual cash value

d. collateral

b. equity

which of the following actions is an example of blockbusting

a. telling homeowners that a neighborhood will have a new golf course

b. advertising a neighborhood party where alcohol will be served

c. making sales calls to neighbors who are on the Do Not Call list

d. stating that the presence of certain persons in a neighborhood will increase crime

d. stating that the presence of certain persons in a neighborhood will increase crime

A lender's title policy will protect the:

a. lender against default in loan payments

b. borrower against default in loan payments

c.. lender against existing, undiscovered title defects

d. borrower against unrecorded liens

c. lender against existing, undiscovered title defects

which of the following BEST describes personal property that, by its attachment to real property, is regarded as real estate

a. emblements

b. personality

c. fixtures

d. appliances

c. fixtures

which of the following credit terms may be included in an advertisement for real estate without further disclosure?

a. "8% annual percentage rate"

b. "5 years to repay"

c. "$5,000 down payment

d. "$300 monthly payment"

a. "8% annual percentage rate"

when a contract states that "time is of the essence," the contract MUST be delivered and presented

a. within 24 hours

b. within 48 hours

c. electronically

d. as soon as possible

D. ASAP

which of the following clauses in a conventional mortgage instrument entitles the lender to accelerate the loan if the loan is assumed

A. prepayment

b. right-to-sell

c. due-on-sale

d. variable interest rate

c. due-on-sale

a seller has delinquent property taxes of $572. at closing, the taxes will be a

a. debit to the seller $572

b. debit to the buyer $572

c. credit to the seller $572

d. credit to the buyer $572

a. debit to the seller $572

an apartment project with 160 units has 8 vancancies. the vacancy rate is:

a. 5%

b.8%

c 92%

d. 95%

a 5%

to be certain that a property has no encroachments, an appraiser should check a

a. survey

b. deed

c. field book

d. tax map book

a. survey

a licensee is contacted by a potential buyer interested in purchasing a commercial property as an investment. the licensee has no experience with this type of property. what SHOULD the licensee do?

a. contact an attorney to draft a specialized agency contract

b. discourage the potential buyer from purchasing a commercial property w/o seeking advise from a cpa

c. inform the potential buyer that the licensee has limited experience with this type of property.

d. assess the brokerage's current commercial property inventory and suggest possible listings to the client

c. inform the buyer that the licensee has limited experience with this type of property

what type of insurance would cover a mistake or negligence on a licensee's part that results in financial loss to a client

a. general liability insurance

b. errors and ommissions (E&O) insurance

c. hazard insurance

d. group insurance

b. errors and omissions insurance

A broker is typically considered to be which of the following types of agents

a. a special agent

b. universal agent

c. general agent

d. individual agent

a. special agent

which of the following types of legal descriptions identifies a property by outlining its boundaries in terms of a series of directions and distances from a specific point of beginning?

a. rectangular

b. lot and block

c. metes and bounds

d. geodetic

c. metes and bounds

the donation of private land for public use is called

a. accretion

b. dedication

c. assignment

d. condemnation

b. dedication

when a private property is abandoned, the state MAY acquire title to that property under the right of

a. escheat

b. eminent domain

c. police power

d. taxation

a. escheat

a lease that provides for periodic increases of rent at regular intervals is called a

a. graduated lease

b. percentage lease

c. yearly lease

d. long-term lease

a. graduated lease

a listing salesperson MUST disclose what info to potential buyers

a. any zoning changes made after the property was listed

b. any ethnic diversity in the neighborhood

c. the financial status of the seller

d. the amount the seller originally paid for the property

a. any zoning changes made after the property was listed

the taxes on a property are based on an assessment ratio of 50% of a market value of $174,000. the tax rate is $4.75 per $100. the amount of the semi- annual tax payment is

a. $1,033

b. $2,066

c. $4,132

d. $8,265

b. $2,066

on tuesday, buyers make an offer to purchase a house for $250,000 and include a provision to buy the dining room furniture. the offer expires at 5 pm on sunday. on thursday the sellers reply in writing that they will accept the offer but they will not include the dining room furniture . while the buyers are considering the counteroffer on friday, the sellers change their minds and decide to accept the original offer including the furniture, in writing. what is the current obligation to the buyers

a. personal property cannot be included in the purchase and sale agreement

b. an amendment to the contract is required to make it enforceable

c. they are legally obligated to withdraw their offer

d. they are not legally obligated to purchase the house

D. they are not legally obligated to purchase the house

a minority couple asks a licensee to show them a listed house. what is the licensee guilty of if the licensee suggests that they look at houses in areas with larger minority populations than that of the listed house

a. blockbusting

b. panic peddling

c. steering

d. redlining

c. steering

federal law requires a written disclosure to be provided to purchasers for which of the following environmental hazards?

a. lead-based paint

b. formaldehyde

c. asbestos

d. radon

a. lead-based paint

which of the following forms of ownership may be mortgaged, taxed, sold, or otherwise transferred in ownership, separately and independently of all other units in a structure?

a. time share

b. cooperative

c. condo

d. limited partership

c. condo

a broker lists a property. the broker advertises and shows the property several times, but after each showing, the owners call the broker with a list of unreasonable restrictions they want placed on the showing of the property. the broker decides not to continue the listing. in this situation the broker:

a. must sue the owners to obtain a release from the listing contract

b. must give the owners 30 days advance written notice to cancel the listing contract

c. may not cancel the listing contract

d. may rescind the listing contract w/o obtaining permission from owners

d. may rescind the listing contract w/o permission from owner

potential buyers tell their licensee that they are worried about the presence of radon gas in a home they are considering buying. what SHOULD the salesperson say?

a. "if youre worried, i recommend making an offer less than the listed price"

b. "i asked the sellers, they said there is no problem"

c. "i suggest that a radon inspection to be performed"

d. "radon has not been proven to be harmful"

c. "i suggest a radon inspection"

failure of homeowners to pay for labor and materials to repair their home may result in a:

a. bankers lien

b. mechanics lien

c. assessment lien

d. construction lien

b. mechanics lien

a licensee places earnest money deposits into an operating account. this is an example of

a. a properly managed escrow account

b. commingling of funds

c. conversion of funds

d. an advanced commision payment

b. commingling

a verbal sales contract that involves the sale of real estate may:

a. not be enforceable in a court action

b. not be subject to RESPA

c. be a common method of consummating a sale

d. be assignable to a third party

a. not be enforceable in a court action

when using the cost approach to determine the value of a residential dwelling, an appraiser should:

a. adjust the price if economic changes occur between the dates of sale of comparable properties and the appraisal date

b. use comparable property locations when estimating value

c. determine replacement value less depreciation

d. determine potential net operating income

c. determine replacement value less depreciation

a broker lists a seller's property. an unrepresented buyer submits an offer to purchase the seller's house and tells the broker that they will pay more than the offer price if the seller requests it. in this situation, the broker is:

A. not obligated to convey the info to the seller b/c to do so would violate the broker's relationship w/ the buyer

b. not obligated to convey the info to the seller b/c the buyer is not bound by this verbal rep

c. obligated to withdraw from transaction because of conflicting obligations to both parties

d. obligated to convey the info to seller

d. obligated to give info to seller

the presence of gov-reg wetlands on a building lot

a. adds to the value of the lot

b. lowers property taxes

c. renders the lot useless

d. is a material fact

d. is a material fact

before advertising a property through social media, a licensee MUST obtain written authorization from the

a. real estate companys IT team

b. social media comp.

c. state real estate commish

d. seller

d. seller

due to the homeowner's disability exemption, property taxes of $4,000 are reduced to $3,000 in a transaction. however, the listing licensee fails to disclose to the buyer the difference in the amount of property taxes to be paid by the buyer. failing to disclose this material fact is an example of

a. exemption

b. misrep

c. misappropriation

d. mutual regression

b. misrepresentation

if a prospective buyer is concerned about the electric service on a property, the buyer's licensee SHOULD:

a. recommend a home warranty for the electric appliances

b. advise the buyer to hire inspectors to examine the property after closing

c. recommend that the buyer insert an inspection contingency in the purchase agreement

d. inspect the fuse box personally

c. recommend that the buyer insert an inspection contingency in the purchase agreement

as defined in a real estate contract, the due diligence period allows which of the following parties to go thoroughly investigate a property?

a. broker

b. lender

c. buyer

d. seller

c. buyer

In order for a property manager to determine net operating income on a property, which of the following fees is subtracted from the effective gross income?

a. debt service

b. advances to owners

c. operating expenses

d. reserve for replacements

c. operating expenses

the brokerage fee charged by a listing broker is determined by the:

a. local ordinance

b. local real estate board

c. multiple listing service

d. broker and the principal

d. broker and the principle

If the value of a property is affected by negative forces outside the property which are beyond the control of the owner, this is referred to as:

a. physical deterioration

b. accrued depreciation

c. functional obsolescence

d. economic obsolescence

d. economic obsolescence

according to the federal fair housing act, which of the following individuals is permitted to reside in housing with a familial status exemption

a. a 50 y/o employed nurse

b. a 53 y/o retired construction worker

c. a 54 y/o retired teacher

d. a 63 y/o employed postal worker

d. a 63 y/o employed postal worker

if the purchase price on a condo is $60,000, the amount being mortgaged is $55,200 and there are 2.5 points on the mortgage, which of the following percentages is the loan-to-value ratio on the following transaction?

a. 92%

b. 90%

c. 85%

d. 82%

a. 92%

when a prospective buyer asks about a property's location in regard to a flood zone, the licensee SHOULD direct the buyer to:

a. calculate the average cost of flood insurance in the area

b. obtain an up-to-date flood map from FEMA

c. determine how far the property is from a flood plain

d. locate the property on a flood map

b. obtain an up-to-date flood map from FEMA

a broker lists a property, and the seller does not want the broker to show it to anyone with children because the seller's neighbor does not like them. the broker SHOULD

a. include the seller's wish in the MLS listing remarks

b. verbally disclose it to all agents or potential buyers

c. instruct the seller regarding fair housing and possibly decline the listing

d. ask the seller to wait for an offer and then inquire about family status of potential buyers

c. instruct seller regarding fair housing and possibly decline listing

an agreement between what two parties determines the amount of earnest money during a real estate transaction

a. the buyer and the seller

b. the buyers broker and the sellers broker

c. the buyers broker and the buyer

d. the sellers broker and the seller

a. the buyer and the seller

if buyers purchased a home with a secured loan for 100%, what kind of loan did they use?

a. VA- guaranteed

b. FHA-insured

C. conventional

d. wraparound

a. VA-gauranteed

a contract calls for the buyer to pay $65,000 for a house and 1 acre of land, plus $5,000 for each additional acre of land, subject to a survey. if the survey reveals a total land area of 4.3 acres, the total amount to be paid for the house and land is:

a. $70,000

b. $80,000

c. $81,000

d. $86,000

c $81,000

a veteran is entitled to which of the following benefits upon repayment of the full loan balance of a VA mortgage?

a. restoration of eligibility for future use

b. refund of any discount points paid by the previous seller

c. refund of the origination fee or points

d. partial refund of all interest paid on the loan

a. restoration of eligibility for future use

an illegal lending practice whereby a bank refuses to make mortgage loans in a certain neighborhood based on the ethnic makeup of that area is known as:

a. segregation

b. bad-risk lending

c. blueblooding

d. redlining

d. redlining

under an exclusive right-to-sell listing, a licensee has the authority to take which of the following actions on behalf of a seller

a. accept any bonafide offer

b. present only those offers that meet the sellers list price

c. order any needed repairs to the prop

d. advertise the prop for sale

d, advertise the prop for saleq

the continued use of a property that was lawful at the time the use began but now is in violation of a zoning regulation is an example of

a. a variance

b. spot-zoning

c. nonconforming use

d. exclusionary zoning

c. nonconforming use

which of the following BEST describes a purpose of general liability insurance?

a. insurance that protects a licensee in the event of an on-the-job injury

b. insurance that covers a licensee and a potential buyer who suffer a car crash while viewing properties

c. insurance that protects a company's assets if someone gets injured on company property

d. insurance that pays for lost wages for licenseed who are employees

c. insurance that protects the company if someone gets injured on property

a licensee preparing a competitive market analysis has info on a comparable property that is similar in all respects to the subject property except that, while the subject property is 10 yr old and has 2 baths, the comp prop is 5 yrs old and has one bath. in this case, the licensee should adjust the

a. sale price of the com prop, down for the age and up for the number of baths

b. sale price of the comp prop, up for the age and down for the # of baths

c. value of the subject prop, up for the age and up for # of baths

d. value of the subject property, up for the age and down for the number of bath

a. sale price of the com prop, down for the age and up for the number of baths

a homeowner who plans to travel for a year asks a real estate firm to rent the house for this period and indicates a preference for a white family rather than a black family, "if at all possible" under the federal fair housing act, the broker SHOULD inform them that these instructions:

a. cannot be followed bc they violate The Act

b. will be followed only if the owner accepts responsibility in case of lawsuit

c. cannot be folowed unless the owner puts it in writing

d. will be followed bc normally the house is owner-occupid

a. cannot be followed bc it violates the Act

which of the following situations BEST demonstrates an example of an encroachment

a. a legal access road that runs across a prop from a public road to another property

b. a storage building that extends over the boundary line onto an adjacent prop

c. timber that has been cut down on the prop by a tenant to use as firewood

d. a right of way for electric and telephone lines that cross a prop.

d. a right of way for electric and telephone lines that cross a prop.

title insurance on a prop is $1,740.90. the fee for the title search is $375, the cost of preparing papers is $75, and other miscellaneous fees amount to $60.10. if the seller pays %60 of the total charge and the buyer pays the balance, to the nearest dollar, how much MORE will the seller pay than the buyer

a. $225

b. $450

c. $530

d. $900

b. $450

when a licensee lists a prop that is owned by a married couple as joint tenants, the licensee MUST ensure that the listing agreement is signed by:

a. whoever witnessed all the other signatures

b. the broker and either of the spouses

c. the broker and both of the spouses

d. only one of the spouses

c. the broker and both of the spouses

under which circumstances is a licensee permitted to use a clients money for personal use

a. with verbal permission from the broker

b. with written permission from the buyer and the seller

c. if permitted by the state real estate commission

d. under no circumstances

d. under no circumstance

a listing contract MUST contain the

a. signatures of the sellers and the buyers

b. beginning and ending dates of the contract

c. minimum price the seller will accept

d. closing date

b. beginning and ending dates of the contract

a portion of an advertisement reads: "new four-bedroom, two-bath home for sale in a family neighborhood. yours for only $1,100 per month." this advertisement violates the provisions of the

a. truth in lending and fair housing acts

b. RESPA and fair housing act

c. fair housing and americans with disabilities acts

d. fair housing and sherman antitrust acts

a. truth in lending and fair housing acts.