National #4

1. John owns the dominant estate with an easement appurtenant. John sells the property. What happens to the easement?

(b) It belongs to the buyer.
PG 113

2. A commercial tenant's lease will expire at the end of this month. He is currently in the process of removing his display cases from the shop. What is true?

(c) He can take these trade fixtures as long as he removes them prior to lease end.
PG 10

3. John, Maria and Mark are joint tenants. Mark dies. Maria sells her share to Jane. John and Jane are:

(d) tenants in common.

4. A surveyor has described a property from a point of beginning 200 feet north on Broad St. from the oak tree at the intersection of Main St. and Broad St., then 90° east for 100 ft., then 90° north for 50 ft., then 90° west for 100 ft., then 90° south for 50 feet back to the point of beginning. What type of description is this?

(b) Metes and Bounds

5. Joe received payment from his title insurance company to compensate him for a defect in his title. Subsequently he was awarded a judgment against the seller, and collected the funds from the seller, to compensate him for the same defect. The title company has claimed the right to a refund from Joe. What clause in the title policy allows the title company to make this claim?

(a) subrogation.
(b) arbitration.
(c) subordination.
(d) defeasance.

(a) subrogation.

6. A buyer who wants to be sure that he is getting good title to a property should rely on:

(a) an attorney's opinion of title.
(b) a title insurance policy.
(c) a general warranty deed.
(d) a title commitment based on the abstract of title from the title company

(c) a general warranty deed.
The general warranty deed protects you back to the sovereignty of the soil and is the best type of deed. Answers a, b and d all contain exceptions to coverage.

7. An older home has been updated for technology to eliminate what type of depreciation?

(a) physical deterioration
(b) economic obsolescence
(c) functional obsolescence
(d) external obsolescence

(c) functional obsolescence

8. A broker has listed his own property for sale. Which of the following statements is true?

(a) The broker must always disclose this dual role.
(b) The broker must disclose his ownership interest if asked.
(c) This is called dual agency.
(d) The broker cannot list his own property as it creates a conflict of interest.

(a) The broker must always disclose this dual role.

All states require disclosure of this dual role. You must reveal this information even if not asked. Dual agency is representing both sides and nothing to do with a personal interest in the property. Brokers may list their own properties if they disclose this to all parties up front.

9. A party inherits a property. He wants to sell it quickly, as he wants the cash. He contacts a broker to list the property for $300,000. The broker knows that homes in that neighborhood are selling for $325,000 and more. What should the broker do?

(a) Take a net listing on the property.
(b) Buy the property himself as an investment or to resell.
(c) Provide the seller with a CMA and encourage the seller to price it correctly.
(d) List the property for $300,000 as this is what the seller wants.

(c) Provide the seller with a CMA and encourage the seller to price it correctly.

10. A seller has received and accepted an offer on his property with a closing date of November 15th, time is of the essence. Two days before closing, the seller notifies the buyer that he will be unable to close on the required date but will be able to close 2 days later if the buyer agrees. At that point this contract is:

(a) void.
(b) valid but unenforceable.
(c) invalid.
(d) voidable at the option of the buyer.

(d) voidable at the option of the buyer.

11. When does a buyer's offer become a binding contract?

(a) When the buyer signs it.
(b) When it is delivered to the seller.
(c) When all negotiations are complete and both parties agree.
(d) When it is accepted, and the acceptance is communicated.

(d) When it is accepted, and the acceptance is communicated.

12. A property where there has been a murder is referred to as:

(a) undesirable.
(b) stigmatized.
(c) red-flagged.
(d) condemned.

(b) stigmatized.

13. Who would inspect an oil and gas lease for compliance with the law?

(a) The EPA
(b) Surveyor
(c) Inspector
(d) Engineer

(a) The EPA

14. A landlord and tenant negotiate a verbal lease agreement on the phone for an 8-month term. The tenant later decides not to move in. What term best describes the lease agreement these two parties had?

(a) valid but unenforceable
(b) void and unenforceable
(c) voidable and unenforceable
(d) valid and enforceable

(d) valid and enforceable

15. A senior apartment complex has more than 80% of the units occupied by someone 55 years old or older. There is a vacant apartment. Can they refuse to lease it to a single mother with a child?

(a) No.
(b) Yes.
(c) Yes, if they advertise "adults only".
(d) Yes, but only if her income is too low to meet their requirements.

(b) Yes.

16. Which of the following statements about Contract for Deed is FALSE?

(a) Contract for deed is not fully executed until the seller delivers the deed to the buyer.
(b) Legal title is transferred to the buyer when the agreement is signed.
(c) Contract for Deed is also called an installment contract.
(d) The buyer is the vendee and the seller is the vendor.

(b) Legal title is transferred to the buyer when the agreement is signed.

The title is not transferred to the buyer until the final payment has been made.

17. An agreement allowing a tenant to match or better any purchase offer the landlord receives before the property will be sold to another is called:

(a) a right of first refusal agreement.

This allows a renter to match or better any offer the landlord receives before they are evicted. There are no forms for this, and this clause must be written in by your client or an attorney.

18. Redlining is an illegal practice for:

(c) Title companies

Redlining by lenders and insurance companies is prohibited. Title companies are insurance companies under the regulation of the State Department of Insurance.

19. Which of the following is an example of illegal commingling?

(b) A broker/landlord deposits tenant security checks in an operating account.

20. Which of the following would NOT be an example of police power?

(a) Zoning
(b) Building codes
(c) Deed restrictions
(d) Regulation of coastal properties, floodplains, and wetlands

(c) Deed restrictions

21. John has waterfront property along a navigable river and the right to use that water. What kind of rights does he have?

(a) Littoral rights
(b) Prior appropriation
(c) Accession
(d) Riparian rights

(d) Riparian rights

22. The standard policy of title insurance:

(a) protects the seller.
(b) protects the buyer.
(c) protects the listing broker.
(d) protects the lender.

(b) protects the buyer.

23. What is the main disadvantage to a lender who chooses to accept deed in lieu of foreclosure?

(a) It takes longer than foreclosure.
(b) The lender must accept responsibility for subordinate liens on the property.
(c) It is more expensive for the lender than foreclosure.
(d) It is more complicated than foreclosure which results in loss of time and money for the lender.

(b) The lender must accept responsibility for subordinate liens on the property.

24. A buyer has defaulted on a sales contract. The seller has agreed to keep the earnest money deposit as compensation. What remedy has the seller agreed to?

(a) Liquidated damages
(b) Partial performance
(c) Suit for specific performance
(d) Money damages

(a) Liquidated damages

25. A license holder who advertises a listed property as having "the most beautiful view of the city" is probably:

(a) Liable for damages if sued by the buyer
(b) Guilty of fraud
(c) Guilty of misrepresentation
(d) Puffing

(d) Puffing

26. A buyer's inspection report on a property shows the presence of asbestos on the property. Which of the following statements about asbestos is FALSE?

(a) The asbestos abatement plan outlines the control of asbestos on a property.
(b) The owner of the property must remove the asbestos.
(c) Methods of abatement include encapsulation.
(d) The dust from the removal of asbestos is extremely hazardous.

(b) The owner of the property must remove the asbestos.

27. A buyer has a signed sales contract and has not yet gone to closing. His interest in the property is called:

(a) equitable title
(b) a statutory estate
(c) a defeasible fee
(d) conditional fee simple

(a) equitable title

28. A sales agent has just attended a seminar on the benefits of using social media in marketing her client's properties. She is very excited to begin to use all the wonderful ideas that were presented. In order to advertise her client's properties on social media she will need:

(a) Written permission from the owner
(b) Access to the property owner's Facebook page
(c) Access to the owner's Twitter account
(d) Verbal permission from the owner

(a) Written permission from the owner

29. Electronic signatures are the equivalent of handwritten signatures:

(a) If the listing agent is willing to use them
(b) Never
(c) If both the buyer and seller agree to their use
(d) If both the listing broker and selling broker agree to their use

(c) If both the buyer and seller agree to their use

30. Mary, an unlicensed individual, owns a three-family property. She lives in one unit and rents out the other two. She chooses to discriminate when selecting her tenants. If the services of a broker are not involved and she does not discriminate in her advertising, she can discriminate for any reason except:

(a) Age
(b) Color/Race
(c) Religion
(d) Sex

(b) Color/Race

31. A physically handicapped tenant has modified an apartment to meet his needs at his own expense. His lease is about to expire, and he plans to move. The landlord wants the apartment restored to its original condition. What is true?

(a) The tenant has no responsibility to restore the apartment
(b) The tenant must restore the apartment at the landlord's expense
(c) The tenant must restore the apartment at his own expense
(d) The tenant only must restore structural changes that might impair the rights of other tenants

(c) The tenant must restore the apartment at his own expense

32. John owns a residential rental property. He has leased an apartment to a visually impaired tenant who has a guide dog. John's usual lease agreement has a "no pets policy" clause. What is true in this situation?

(a) John does not have to allow the tenant to keep the guide dog in the apartment
(b) John must allow the tenant to keep the dog if the tenant provides a court order to that effect
(c) John must allow the tenant to keep the guide dog
(d) John must allow the tenant to keep the guide dog if the tenant can provide written proof that he needs the dog

(c) John must allow the tenant to keep the guide dog

33. A sales license holder has advertised a property. Her ad states that the property is in a family- oriented neighborhood and can be purchased for $1,100 a month. What is wrong with this advertisement?

(a) It violates Federal Fair Housing laws
(b) It violates Federal Fair Housing laws and Truth in Lending
(c) It violates Truth in Lending and the Equal Credit Opportunity Act
(d) It violates the Equal Credit Opportunity Act and the Consumer Credit Protection Act

(b) It violates Federal Fair Housing laws and Truth in Lending

34. In what document would you find the loan amount and the borrower's promise to pay?

(a) The Deed of Trust
(b) The lien
(c) The mortgage
(d) The note

(d) The note

The note is the instrument for the debt and the personal promise to pay that debt. The Deed of Trust, or mortgage, is the borrower's pledge or real property as security for the note. The lien is created by recording the mortgage.

35. Which of the following statements about VA loans is false?

(a) Certain surviving spouses of veterans are eligible for these loans TRUE
(b) Parents of veterans are eligible for VA loans FALSE
(c) A non-veteran can assume an existing VA loan TRUE
(d) To qualify, a veteran must have 181 days of active duty and be honorably discharged TRUE

(b) Parents of veterans are eligible for VA loans

Parents and siblings of veterans are not eligible for VA loans. Certain surviving spouses can qualify for a VA loan. You do not have to be a veteran to assume a VA loan. A veteran must have served 181 days of active duty and have been honorably discharged to be eligible for a VA loan.

36. Constructive eviction is a result of:

(a) actions of the tenants
(b) pest infestation
(c) the presence of noisy neighbors
(d) actions or inactions of the landlord

(d) actions or inactions of the landlord

37. A buyer has had inspections on a property and is not pleased with some of the information. He has terminated his contract to buy. His right to do so suggests that his contract had:

(a) a due diligence clause
(b) a substitution clause
(c) a default clause
(d) an alienation clause

(a) a due diligence clause

38. A listing agent will always:

(a) give advice and opinions to the buyer and the seller
(b) give full disclosure of all facts to both parties
(c) treat both parties with honesty and fairness
(d) support and defend the needs of the customer

(c) treat both parties with honesty and fairness

39. A property is advertised as "For Sale by Owner." The seller owns 2 homes. The seller receives several offers and chooses the buyer based on the buyer's national origin. Neither party is represented by a broker. Which of the following is true about violation of the Fair Housing laws?

(a) The seller is in violation of the Fair Housing Act.
(b) The seller is not in violation of the law because his actions do not involve a broker.
(c) The seller is guilty of a Class A Misdemeanor.
(d) The seller is guilty of a civil offense.

(b) The seller is not in violation of the law because his actions do not involve a broker.

40. A builder has a blanket loan on a parcel of land and sells a lot from the parcel. How can he deliver a deed to the buyer at closing?

(a) He pays off the cost of the lot
(b) He gets a new mortgage on the lot
(c) He refinances the existing mortgage
(d) He gets a package mortgage

(a) He pays off the cost of the lot

41. Which of the following transactions would not qualify for VA financing?

(a) Senior apartment complex
(b) Fourplex where one unit will be occupied by the owner
(c) Single family home
(d) a rural home on 10 acres

(a) Senior apartment complex

42. A seller-client is abandoned by the listing agent of his property. He is very anxious to sell and very upset by this situation. What can the client do?

(a) File for release due to abandonment
(b) Wait for the written agreement to expire
(c) Verbally terminate the contract
(d) Hire a new agent

(d) Hire a new agent

43. Which of the following would be considered an operating expense when a property manager draws up the operating budget for the owner?

(a) repainting units for new occupants
(b) depreciation
(c) mortgage loan payments
(d) building an extension on the parking garage

(a) repainting units for new occupants

44. Which of the following demonstrates the physical characteristic of indestructibility?

(a) A building has major foundation problems, but it is still standing.
(b) A property is foreclosed on for non-payment of property taxes.
(c) A house is destroyed by natural causes, but the soil remains.
(d) A house is condemned by the city.

(c) A house is destroyed by natural causes, but the soil remains.

45. 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) his opinions on the property value
(c) open for negotiation
(d) able to be determined by a visual inspection of the property

(a) included in the listing agreement.

46. Buyers have made an offer to purchase a house for $250,000 including the dining room furniture. The offer will expire at 5:00 p.m. on Sunday. On Thursday, the sellers reply in writing that they will accept the offer of $250,000 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, dining room furniture to be included, and they state so in writing. What is the current obligation of the buyers?

(a) the buyers are now under contract to buy the property but can withdraw until 5:00 p.m. on Sunday
(b) the buyers are now under contract to buy and cannot withdraw from the agreement
(c) the buyers are not legally obligated to purchase the house.
(d) the buyers have until 5:00 on Sunday to decide if they want to buy the house or not.

(c) the buyers are not legally obligated to purchase the house.

47. During a real estate transaction, who determines the amount of the earnest money?

(a) the buyer
(b) the seller
(c) the agent presenting the offer
(d) the agreement of the buyer and seller

(d) the agreement of the buyer and seller

48. Under what circumstances will a sales license holder be permitted to keep listings and sales contracts after the termination of sponsorship by a broker?

(a) as long as the sales license holder is able to move to a new broker within 48 hours
(b) as long as the sales license holder can move to a new broker immediately
(c) under no circumstances
(d) if a new sponsoring broker agrees to accept the contracts

(c) under no circumstances

49. A sales license holder moves to a new broker while one of his listings is under contract and set to close in two weeks. What is true regarding a commission when this property sale goes to closing?

(a) The license holder can choose to get his commission from whichever broker has offered a better commission split.
(b) The license holder must be paid from the original listing broker.
(c) The license holder must be paid by the new sponsoring broker.
(d) The license holder will forfeit the commission.

(b) The license holder must be paid from the original listing broker.

50. A new license holder has prepared a detailed listing presentation package to present to prospects and it always includes a CMA on the property. He has secured his first listing. After his presentation of this package and the CMA, including a range of values for the neighborhood, he has told the sellers they must list the property for $395,000. The sellers have accepted this price even though they do not agree with it. What is wrong with this scenario?

(a) the result of the CMA should have been a price rather than a range
(b) there is nothing wrong with this scenario
(c) the final decision in establishing the listing price is made by the seller, not the agent.
(d) a sales license holder must use a listing presentation package prepared by the broker

(c) the final decision in establishing the listing price is made by the seller, not the agent.

51. A property owner has a property tax exemption due to a physical disability. The result is a $1500 reduction in the annual property tax bill. The listing license holder has not disclosed this exemption. This failure to disclose a material fact about the property is an example of:

(a) fraud
(b) negligent misrepresentation
(c) puffing
(d) errors and omissions insurance

(b) negligent misrepresentation

52. Who in a transaction would be the borrower?

(a) vendor
(b) vendee
(c) trustee
(d) mortgagor

(d) mortgagor

53. What type of mortgage loan allows the borrower to obtain additional funds at a later date?

(a) blanket mortgage
(b) wraparound loan
(c) open end loan
(d) subprime loan

(c) open end loan

54. In an amortized loan, which of the following describes the loan payment during the life of the loan?

(a) with every payment made, interest increases and principal decreases
(b) with every payment made, interest decreases and principal increases
(c) with every payment made, the division of principal and interest remains the same
(d) for the first year every payment is interest only

(b) with every payment made, interest decreases and principal increases

55. A property is advertised for sale on the radio. What part of the advertisement involves a trigger term?

(a) the house is in a neighborhood of beautiful homes
(b) the house is close to schools and churches
(c) easy financing is available to qualified buyers
(d) the seller offers an interest rate of only 5% on purchase mortgages

(d) the seller offers an interest rate of only 5% on purchase mortgages

56. When a lease expires what right reverts to the landlord?

(a) right of quiet enjoyment
(b) right of possession
(c) right of rescission
(d) right to sell the property

(b) right of possession

57. A tenant signs a lease agreement that calls for periodic increases of rent at predetermined intervals. The lease is referred to as:

(a) a gross lease
(b) a net lease
(c) a graduated lease
(d) a percentage lease

(c) a graduated lease

58. A homeowner will be abroad for one year and wants to lease his home for that period. He hires a broker to lease the property and specifies that he will not sign a lease where the tenants have any children or pets. What must the broker do?

a) the broker must obey the wishes of the owner/client
(b) the broker must tell the owner that the owner cannot lease under those terms as it would violate the Federal Fair Housing Act
(c) the broker must tell the owner that although he can specify "no pets", he cannot specify "no children" in order to comply with Fair Housing laws
(d) the broker must tell the owner he can only enforce those terms if the owner promises in writing to indemnify the broker in the event of a lawsuit.

(c) the broker must tell the owner that although he can specify "no pets", he cannot specify "no children" in order to comply with Fair Housing laws

59. An individual feels he has been a victim of discrimination in housing. He has several choices for remedies and resolution of this situation. Which remedy should he choose if his goal is a quick end to the discriminatory treatment and the full restoration of his rights?

(a) file a suit with the Federal Attorney General
(b) go to HUD with a complaint because HUD will try mediation
(c) file a suit with the State Attorney General in his state of residence
(d) file a suit with the real estate commission in his state of residence

(b) go to HUD with a complaint because HUD will try mediation

60. A hazardous substance that was used before 1978 and that is friable is:

(a) asbestos
(b) lead
(c) radon
(d) mold

(a) asbestos

The term friable (crumbles easily) only applies to asbestos.

61. Using the straight-line method of depreciation, what would be the value of a $250,000 property at the end of 6 years if depreciation is calculated to be 4% per year?

(a) $190,000
(b) $60,000
(c) $100,000
(d) $50,000

(a) $190,000

62. A property is listed for $186,000. It sells for $182,000. The appraised value is $188,000. Based on this information what is the market value of the property?

(a) 186,000
(b) $182,000
(c) $188,000
(d) $184,000

(c) $188,000

63. The Exclusive Right to Sell Listing entitles the broker to:

(a) the right to sell without exclusivity
(b) the exclusive right to be the only broker to sell the listing
(c) rights to sell without the right to convey
(d) exclusive right to a commission no matter who sells the listing

(d) exclusive right to a commission no matter who sells the listing

64. A landlord and tenant sign a lease agreement and the tenant pays for the first and last month's rent. The landlord learns that the tenant is only 17 years old. Which of the following statements describes this lease?

(a) It is voidable at the option of the tenant because he is a minor.
(b) It is voidable at the option of the landlord because the tenant did not disclose his age.
(c) It is valid and binding on both parties because the tenant already paid some rent.
(d) It is void because there was no real mutual agreement.

(a) It is voidable at the option of the tenant because he is a minor.

65. An apartment complex has ample unassigned parking. They have leased a unit to a mobility impaired tenant. The tenant has requested an assigned space near to their unit. What is true?

(a) the landlord can wait up to 30 days to determine if the tenant really needs the space.
(b) the landlord can poll the other tenants to be sure they are comfortable with providing an assigned space to the special needs tenant.
(c) the landlord must provide the space
(d) the landlord does not have to provide the space.

(c) the landlord must provide the space

66. Mary, a single woman with no children, owns her own home. She dies intestate. What happens to her property?

(a) the courts will appoint an executer to settle her estate.
(b) the courts will appoint an administrator to settle her estate.
(c) the executor she chose will settle her estate.
(d) her heirs will inherit her property by devise.

(b) the courts will appoint an administrator to settle her estate.

67. What do Demand, Utility, Transferability and Scarcity represent?

(a) the elements of a contractual agreement
(b) the characteristics of an appraisal
(c) the elements of a listing
(d) the characteristics of value

(d) the characteristics of value

68. Which of the following are some of the agent's duties to his principal?

(a) care, obedience, loyalty and confidentiality
(b) loyalty, consideration, reasonable care and responsibility
(c) compensation, reimbursement and indemnification
(d) loyalty, indemnification, accounting and disclosure

(a) care, obedience, loyalty and confidentiality

69. Which clause in a mortgage requires that the loan balance be repaid if the property is sold, or changes owners?

(c) alienation clause

70. Which of the following will terminate a sales contract?

(a) death of the seller or buyer
(b) bankruptcy of the seller
(c) death of the broker
(d) death of the listing agent

(b) bankruptcy of the seller

71. What does the GIM convey or determine?

(a) Net yield
(b) Value
(c) Rent/month
(d) Operating expense

(b) Value

72. A short sale does NOT:

(a) add to the time required to close
(b) always require an appraisal by the lender
(c) hurt the seller's credit score
(d) require lender approval

(b) always require an appraisal by the lender

73. Which of the following is the best example of an emblement?

(a) Barley
(b) Sugar cane
(c) Rose bushes
(d) An elm tree

(a) Barley

74. A home is being sold for $79650. The buyer has a 6% down payment. The seller agrees to owner financing with an 83% LTV. There will be a second mortgage on the property. What will be the amount of the 2nd mortgage (rounded to the nearest dollar)?

(a) $4,779
(b) $8,762
(c) $13,541
(d) 15,930

(b) $8,762

Rationale: B is correct. The down payment of 6% + seller financing of 83% = 89% of the price. The second mortgage, therefore, will be 11% of the price. (100% - 89%). 11% x $79650 = $8762.

75. A buyer tells an agent that he wants to purchase a home in a Hispanic neighborhood. What should the agent do?

(a) Tell the buyer that he does not have access to that type of information.
(b) Tell the buyer he will check with his broker and get back to the buyer.
(c) Tell the buyer it is illegal for the agent to share information or choose a neighborhood based on national origin.
(d) Tell the buyer he will Google it and get back to the buyer.

(c) Tell the buyer it is illegal for the agent to share information or choose a neighborhood based on national origin.