real estate practice test

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

Special agency

Which of these federal laws regulates the advertisement of a lenders credit terms (rates, payment, etc.)?

Regulation z

When a listing broker is preparing an offer to purchase for a buyer customer, contingencies involving inspections or approval by a third party should…

Be stated as briefly as possible

A real estate sales person is representing only the buyer in a transaction. Which of the following actions would be a violation of the salespersons agency duties to the client?

Disclosing the maximum price the buyer is wiling to pay

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

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

Tell the seller to disclose the termite treatment on the property disclosure

The FHA functions most like…

An insurance company

A gross lease can be best defined as one where the tenant pays, as a part of the rent,

No operating expenses of the leased space

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

The civil rights act of 1866 prohibits any type of discrimination based on…

Race

An environmental impact statement (EIS) …

Projects the impact on the environment of a proposed project

Under the common law of agency , licensees owe the broker with whom they are associated all of the following duties except

Indemnification

If the terms of a contract indicate that party A will be obliged to perform her part of the contract only if party B chooses to take a certain action, then the contract is a…

Unilateral contract in which only party A has made a party promise to perform

An exception to title insurance coverage is…

Defects that clearly appear in the title search

A broker, acting as agent for the seller, presents an offer to buy from the brokers 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

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

A commerical property lost value because a recently constructed highway moved traffic from the property. This is an example of…

Economic or external obsolescence

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

Without checking the facts, a broker who is the sellers agent tells a user that the property taxes in a particular neighborhood are among the lowest in the area. The buyer relies on he brokers 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

A mentally disabled person who has been declared incompetent by a judge wishes to enter into a contract. Under what conditions can such a person do so?

The person appointed by the court to act for the disabled person must contract on his or her behalf

A deed restriction is applicable to the activities of…

All owners, present and future

When the sellers are lending part of the purchase price, they may secure the debit 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

When a home is purchased using ARM, the monthly loan payment on the mortgage will…

Vary over the life of the loan depending on fluctuations in the interest rate to which the loan is referenced

A prospective buyer made an offer to purchase a property, the owner responded with a counter offer. 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

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 dos the tenant have?

Tenancy at will

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

GRM

Prospective buyers made an offer on a property. The seller did NOT accept but made a counter offer. 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 enter and made an offer on it, which was accepted. Which of the following is true?

Both contracts are valid

In most states foreclosed property is sole through…

Public auction

A exclusive right to sell listing obtained by a broker associate belongs to…

Employing broker only

Federal truth-in-lending laws are also known as….

Regulation z

A seller mentions to his agent that the previous owner of his property may have dumper hazardous waste on the site. Under the comprehensive environmental response, compensation, and liability act (CERCLA), who is liable for damages from the dumping prior to the sale of the property?

Seller

A charge of violation of federal fair hosing 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

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

Are of indeterminable duration

A salesperson qualified a minority couple with two children and defined their price range as between $110,000 and $120,000 for the three bedroom house they wanted. They asked to look at two listings in a non minority neighborhood. The salesperson did not show them the properties because they were priced under $90,000 and had only two small bedrooms. Did the salesperson act appropriately and why or why not?

No, because it is appropriate to show any property for which the buyer is qualified

A minority couple come to a salesperson looking for a house. The salesperson has some properties for which the couple qualify but avoids showing or mentioning these listings. Instead, the salesperson shows only properties in low-priced and integrated neighborhoods. This practice is known as…

Steering

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

An option contract

A licensee has an agency representation agreement with a buyer. When showing another company’s listing, what obligation does the licensee have to the seller and the listing broker at the other company?

Disclose the agency relationship when arranging the showing and disclose material information about the buyer if presenting an offer

A realty firm has just entered into an agreement to represent a home builder in the sale of a new subdivision. The firm has located several potential buyers and five homes have been sold to purchasers that the firms agents have contacted. The realty firm has an agency relationship with…

The builder

Which one of the following statements best describes the risk taken by NOT recording a deed?

A subsequent purchasers recorded deed could take precedence over any unrecorded instrument

A company agrees to lease a property to be used as a gambling casino. State laws prohibit gambling. This particular contract would be legally defined as…

Void

The sellers want to accept a purchase offer, but only if the price is raised by $5,000. What should they give the prospective buyer?

Counteroffer

Even after an offer has been accepted and is binding, the buyer and seller may still choose to sign mutual release papers rather than proceed to closing. Which of the following circumstances would not give either party a justifiable reason to insist on a mutual release?

The buyer finds a better property for better terms

Antitrust laws prohibit competing brokers from all of the following except…

Receiving compensation from both the buyer and the seller

A broker represents a group of investors who purchase single family residences when they can be found at very low prices.their offers are typically made with $500 deposits and cash closings within 7 days of acceptance of the offers. When the last property closed, the investors suggested the broker keep the deposit money to be used for their next purchase, as yet not identified. What must the broker do with these deposit funds?

Return them to the purchasers

Even with title insurance, the policy holder may still suffer losses arising from…

Land use change due to zoning ordinances

An escheat occurs when…

A property owner dies without heirs or a valid will

Salesperson Susan was at the local coffee shop with some agents from other offices. The subject of commissions came up, and agents began to compare their commission rates. Susan should…

Advise her friends that this could constitute a violation of the Sherman antitrust act

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

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 competitive market analysis is most often used for…

Setting a listing price

If leased premises become unusable for the purpose stated in the lease, the tenant may have the right to abandon the premises. This action is called…

Constructive eviction

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 legal easement can be created by any of the following except…

Merger of the titles

Under the federal fair housing law, which of the following is considered discriminatory advertising

Catholics preferred

Alex, 14, and Kent, 17, inherited a piece of property. The next year, Kent deeded the whole property to Alex, who immediately put it on the market. An adult buyer made a written offer which was accepted by Alex. Which of the following is true?

The buyer cannot legally compel Alex to sell

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

Public health and safety

Failure of a real estate agent to comply with fair housing practices is punishable by…

License revocation and criminal prosecution

Unrepresented buyers as the licensee who listed the home whether they should order a property inspection as part of their due diligence for the purchase of the home. Which of the following would be the most appropriate way for the listing agent to respond?

If you feel it is in your best interest, please do so

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 homeowner has negotiated with a neighbor to obtain the permanent right to pass over the northern part of the neighbors 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…

Appurtenent

During he listing presentation, the seller question the amount of commission to be paid and is told…

The amount of commission is negotiable

A contract for the sal of a home has been signed by both parties. This contract will remain executory until…

The transaction has closed

To be valid every deed must…

Be executed by the grantor

A seller signs a listing agreement with a broker. The seller can cancel the listing at any time without legal liability if…

The broker violates the terms of the contract

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

A contract

Although states make specified laws governing water rights and the rights in land that borders water, most states generally follow one of two basic doctrines regarding water rights. Either riparian and littoral rights are automatically conveyed with property, or all water rights are controlled by the state under the doctrine of prior appropriation. The doctrine of prior appropriation is most likely to be followed in states where…

Water is scarce

In an exclusive right to sell listing, an owner lists the property for sale with how many brokers

One

A broker and the buyers he represents are anxiously awaiting the closing on their new home. The closing is scheduled in 4 days. The buyers inform the broker that they just received revised loan estimate and closing disclosure forms from the lender, indicating the annual percentage rate on their loan has increased by 0.3%. Based on their TILA-RESPA integrated disclosure rule, what action should the broker take in this situation?

Confirm with the sellers broker, the lender and the closing entity that the closing must be delayed to allows for a new seven day waiting period because of the interest rate revision

State laws differ on whether a buyer is entitled to know about…

A suicide that occurred in the house last year

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

$400,000

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

Constructive

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

When a salesperson, whose license has not been renewed, negotiates a sale of real property who is the commission payable to?

No one

When prospective purchasers first arrive at a brokerage office to find a house to buy, how does the brokers at require them to be treated?

As customers

Which of the following is true of salespersons real estate licenses?

They must be retained by the broker or designated manger in their office

What is the maximum amount that a claimant may receive from the guaranty fund on losses from one transaction?

$50,000

Who may be the members of the state real estate commission?

Unlicensed persons and licensed brokers and salespersons

A licensee must affirmatively disclose the fact that she holds a Maryland real estate license when…

Advertising property for sale or rent that she owns

What body sets ethical standards that must be observed by all Maryland real estate licensees?

State real estate commission

Which of the following is not the responsibility of Maryland real estate licensees?

Giving of legal advice

A licensee, who is new to the team, has discovered the other team members are recommending a popular handyman to all their clients due to the handyman’s reliability and being the spouse of the team leader. The handyman is doing all the work using an MHIC license number from a former employer. The new team member should…

Discuss these concerns with the branch manager or broker while refusing to use the handyman

What is done with earnest money deposits received by a salesperson of a brokerage firm?

They give them to their broker for deposit in the firms trust account

When a listing agent receives a full price offer from a team member and at the same time a less than full price offer through a cooperating agent, what must the listing agent do?

Submit both offers unless the seller instructs otherwise

What is the effect of a licensee present the understanding whom real estate agents represent form?

It informs prospective tenants of the various ways they can be sere by real estate brokerage firms

In dealing with licensees from a competitive firm…

You must cooperate with a licensee who has been very unpleasant and difficult to work with on previous occasions

Which statement about teams is incorrect?

Persons licensed under different brokers may be members of one team

Which of the following would indicate that a consumer is in a client relationship?

Consumer receiving magesterial guidance from a licensee

What is permitted concerning residential rental security deposits?

They may be withheld by a landlord for the actual amount used to repair damages caused by tenants

Which of the following is not something for which licenses may be suspended or revoked by the commission?

Drunken driving convictions

Which statement is true about the mandated three hour agency course for license renewal?

It must be presented by teachers identified by the commission using the approved outline

Which is true of a Maryland condominium declaration?

It must be recorded before the property can be placed under a condominium regime

Which is true of an employment agreement to list a Maryland property for sale?

It may not require notice from either the seller or the broker to activate its termination date

If a seller of a Maryland property does not disclose the existence of known deferred tap fees…

The seller could be obligated to pay the deferred water and sewer charges

Marylands requirements for a real estate brokerage office include all of the following except…

It must be a place where the firm regularly conducts insurance sales

Which of the following is true concerning the three hour continuing education course in supervision?

It must be taken by a new manger within 90 days of taking that position

Which of the following relations are not addressed in the COMAR code of ethics?

The real estate commission

Which statement about Maryland fair housing laws is true?

In a multifamily community that is advertised for, and not exclusively by, persons 62 years of age or older, sellers may ensue to sell a unit for occupancy to family with minor children

Which of the following is false regarding the term team?

A broker needs at least two licensee members, one of whom may be the firms broker

When do regulations require the commissions form understanding whom real estate agents represent to be utilized?

At the first face to face meeting with an unrepresented tenant seeking a one year lease

When preparing and presenting a competitive market analysis (CMA) the statement that begins with “this analysis is not an appraisal…” must be included…

On page 1 of the CMA