A broker brings a seller an offer-to-purchase contract for the listing price of $114,500 with the stipulation that the seller must furnish a title insurance policy to prove marketable title. The seller refuses the offer. the broker:
1. can collect full commission because sellers must always provide title insurance
2. can collect one-half of the commission
3. can collect nothing
4. can collect one-half of the first month's mortgage payment
Answer: 3. can collect nothing
Which of the following statements does NOT correctly describe that Interstate Land Sales Full Disclosure Act
1. It regulates unimproved parcels sold through an interstate sale.
2. It is aimed at avoiding fraudulent marketing schemes
3. It covers subdivisions with fewer than 25 lots
4. It requires developers to file reports with HUD prior to offering unimproved lots to interstate commerce by telephone.
Answer: 3. It covers subdivisions with fewer than 25 lots
Which of the following may NOT be depreciated
1. A motel
3. An office building
4. An apartment building
Answer: 2. Land
If a lender charges a borrower two points on a $60,000 loan, what will be the service charge for points?
4. None of the above
Answer: 2. $1,200
A man bought undeveloped land and divided it into smaller lots for sale. The man would be classified as a(n)
Answer: 4. subdivider
Two women bought a building and took title as joint tenants. One of the owners died testate. The remaining owner now ownes the building:
1. as a joint tenant with rights of survivorship
2. in severalty
3. In absolute ownership udner the law of descent
4. subject to the terms of the decesed
Answer: 2. in severalty
Brokers owe their primary responsibility to which of the following
1. The principal
2. The lender
3. The public
4. The real estate commission
The GRM is used in the:
1. Market / Data approach
2. Income approach for office buildings
3. Cost approach
4. Income approach for single-family homes.
Answer: 2. Income approach for office buildings
1. May recieve a commission directly from a principal
2. Can carry out activies in his or her own name
3. Is responsible primarily to the broker under whom she or he is licensed
4. May place a blind ad
Answer: 3. Is responsible primarily to the broker under whom she or he is licensed
A seller listed her home with a broker. Shortly there after, the seller telephoned the broker and withdrew the exclusive-right-to-sell listing. A week later she sold the home to her neighbor for a higher price than the price on the listing. In this situation, which of the following is true
1. the owner has the right to terminate the listing at any time without being liable for damages
2. Under an exclusive right to sell listing, the borker is not entitled to damages
3. the broker is not entitled to a commission because the seller obtained a better price than she would have recieved through the broker's efforts
4. If the owner withdrew the listing after the broker spent money on it, the owner might be liable to the broker for damages.
Answer: 4. If the owner withdrew the listing after the broker spent money on it, the owner might be liable to the broker for damages.
A broker has received several offers for a property he has listed. The broker must present each offer to the seller:
1. Promptly upon receipt
3. As soon as the seller has decided on any previous offers
4. Prior to the seller's deciding on any previous offers
Answer: 1. Promptly upon receipt
What is the first step an appraiser would take to arrive at an estimated value using the income approach?
1. Determine annual potential gross income.
2. Determine operating expenses
3. Determine effective gross income
4. Determine Gross Income
Answer: 1. Determine annual potential gross income.
Broker Mike is going to contact customer Paul who would like to see one of Mike's listings. Mike should make his agency disclosure:
1. Prior to meeting with Paul
2. Prior to discussing Paul's finanical qualification and type of house desired
3. Prior to actually showing the listed property
4. Prior to writing an offer to purchase
Answer: 2. Prior to discussing Paul's finanical qualification and type of house desired
Joe holds a life estate in a house. Joe's life estate is
1. An estate of inheritance
2. an example of a future interest
3. limited to the owner of the life estate
4. a non-freehold estate
Answer: 3. limited to the owner of the life estate. A life estate is a freehold estate that terminates upon the death of the owner of the life estate
A promisory note is not
1. A negotiable instrument
2. evidence of debt
3. a document in which the debtor agrees to repay the stated loan
4. evidence of title
Answer: 4. evidence of title
Which of the following contacts generally is prohibited or discouraged in many states:
2. Land Contract
3. Open Listings
4. Net Listings
Answer: 4. Net Listings
A broker's license can be revoked if he or she
1. advertised property for sale without including the name of the salesperson in the ad
2. Negotiates a comission based on what the broker says is the rate set by the local Board of Realtors
3. Pays a commission that exceeds the customary rate
4. advertises free market analysis as a means of obtaining listings.
Answer: 2. Negotiates a comission based on what the broker says is the rate set by the local Board of Realtors
Limitations on ownership under Allodial system include:
1. Police Powers - state can legislate use to protect public health & safety
2. Eminent domain - govt can aquire land for public use while paying just compensation through process of condemnation.
3. Escheat - reversion of real estate to the state after a statutory time period has elapsed, when owner dies and leaves no heirs or no will disposing of the real estate or when the property is abandoned
4. Taxation - charge on real estate to raise funds to meet public needs.
Answer: All of the above
The Lessee in a leasing agreement is the:
2. Property Manager
4. Rental Agent
Answer: 1. Tenant
A mortgage on four lots with a partial release clause would be
1. a wrap around mortgage
2. a blanket mortgage
3. a package mortgage
4. an open-ended mortgage
Answer: 2. a blanket mortgage
You have entered into an option contract with an optionee who has a 30 day option. Your option could be called a (an)
1. voidable contract
2. unilateral contract
3. uneforceable contract
4. bilateral contact
Answer: 2. unilateral contract
A man and woman own their house as tenants by the entirety. Which of the following statements would NOT correctly describe the status of their ownership?
1. Each owner has the right of survivorship
2. The owners must be husband and wife
3. Either owner may convey a one-half interest in the hosue to a third party
4. Title may be conveyed only by a deed signed by both parties
Answer: 3. Either owner may convey a one-half interest in the hosue to a third party
A woman built a fence that extended beyond the boundary of her property onto her neighbor's property. This is an example of :
2. Easement by Necessity
4. Easement Appurtenant
Answer: 3. Encroachment
A builder developed a subdivision in which the demand for homes was great. He sold the last lot in his subdivision for a much higher price than that which he had sold the first lot in the area. This example illustrates the principle of:
1. Highest and Best use
4. Supply & Demand
Answer: 4. Supply & Demand
If a property is held by two or more owners as tenants in common, one owner's interests would pass on his or her death to which of the following?
1. The remaining owners
2. The heirs or whoever is designated in the decedent's will as the devisee
3. The surviving owner and / or his or her heirs
4. The state
Which of the following would be an example of voluntary alienation?
2. Eminent Domain
4. Adverse Possession
Answer: 1. Sale
Listing agreements include which of the following
1. An Open Listing only
2. An Exclusive-Right-To-Sell listing only
3. An Open Listing and and Exclusive-right-to-sell listing
4. A Contract for Deed.
A licensed real estate broker who engages the services of a licences salesperson on a basis that the borker can direct what the salesperson can do bu not how it is done has:
1. Engaged an independent contractor
2. Discriminated illegally
3. Practiced Steering
4. Established an employer-employee relationship
Answer: 1. Engaged an independent contractor
In determining the value of 20-unit apartment building, the appraiser has established the gross income from rents. After deducting the loss for vacancies and collection losses from this gross income, the appraiser would have established the
1. Net Income
2. Spendable Income
3. Gross Income
4. Effective Gross Income
Answer: 4. Effective Gross Income
A woman lists a with a broker for $50,000. A minority group member makes and offer of $45,000, but the broker does not present the offer. Which of the following is true?
1. She is a victim under the Federal Fair Housing Act of 1968
2. The fact that the offer was not presented is a violation of RESPA
3. The offer was so low that there was no need to present it to the seller
4. An offer does not always have to be presented to the seller
Generally, title insurance coverage extends to
1. Defects known to the buyer
2. liens listed on the policy
3. defects listed in the policy
4. defects not found in the public documents
Answer: 4. defects not found in the public documents
Joe was appraising a three-bedroom house. Joe had a comparable with four bedrooms that sold for $160,000. Joe makes an adjustment of $5,000 to the comparable for the difference in the number of bedrooms. The adjusted sales price of the comparable will be
4. None of the above.
Answer: 1. $155,000
You look at four similar houses for sale in the same area and choose the house for the lowest asking price. You probably are basing your decision on the principle of
1. Highest and best use
Answer: 2. Substitution
In appraising a special-purpose building such as a post office, the most reliable approach to an indication of its value would generally be the:
1. cost approach
2. market/data approach
3. income approach
4. sales comparison approach
Answer: 1. cost approach
An investor leases a 20 unit apartment building for a net monthly rental of $5
000. If this figure represents a 7.5% return on investment
what is the orignal cost of the building
4. None of the above
Answer: 3. Multiply monthly rental by 12 to get rental income. Then divid rental income by the ROI. 5000 * 12 / .075 = $800000
Which of the following statements about FHA Mortgage is FALSE?
1. FHA Mortgages require a larger down payment than VA mortgages
2. There is no prepayment penalty
3. FHA mortgages are assumable with qualification
4. FHA mortgages are not assumable
Answer: 4. FHA mortgages are not assumable
The responsiblities of a broker in an ageny relationship include
1. Managing the property
2. Providing financing
3. accountability for funds received
4. accepting an offer for the seller
Answer: 4. accepting an offer for the seller
Which of the following types of financing would be the most appropriate for a young veteran who has just used most of his savings to complete his degree in engineering and hnow would like to buy a house for his family
2. Installment contract
3. VA Mortgage
4. FHA Mortgage
Which of the following reflects the stages through which a neighborhood passes?
1. Growth, decline, stability, and revitalization
2. Growth, stability, decline, and revitalization
3. Decline, growth, stability, and revitalization
4. Decline, growth, revitalization, and stability
Answer: 2. Growth, stability, decline, and revitalization
A lease provides a minimum rent of X per month plus Y% of annual gross income over $100,000. If the tenant did $Z in business last year
what total rent was paid?
Answer: ((Z-100 000) * Y%) + (X *12)
Which of the following is a violation of the broker's fiduciary relationship with a seller?
1. The broker charges no commission
2. The broker charges a 40% commission
3. The broker tells a prospective buyer the lowest price the seller will accept
4. The broker tells a prospective buyer the highest price the seller will accept.
Answer: 3. The broker tells a prospective buyer the lowest price the seller will accept
Alice and Brenda have entered into a binding offer to purchase. Brenda will buy Alice's house. Which of the following correctly describes the status of the transaction:
1. Alice will have equitable title until closing
2. Brenda will have legal title when the offer to purchase becomes binding on both parties
3. Alice will have legal title until the offer becomes binding, at which time Alice will hold equitable title
4. Alice will hold legal title until closing and Brenda will hold equitable title until closing
Answer: 4. Alice will hold legal title until closing and Brenda will hold equitable title until closing
Which Type of Listing(s) may not be listed on MLS
A. Open Listing - any number of brokers, seller can sell and not pay comission
B. Exclusive Agency - one broker, seller can sell and not pay commission
C. Exclusive Right to Sell - One Broker, seller can NOT sell and not pay commission.
D. Net Listing - Not legal in Texas - Lowest price established, everything above that price goes to broker
Answer: A, B, & D
A family buys a 40 year old house, and the broker tells them a the garage was built 30 years ago. Because the buildings are located on a "postage-stamp-sized" lot, the family hires a surveyor who tells them the garage extends six inches onto the neighbor's lot. Because the husband has taken a real estate course, he realizes that this might be prescriptive easement and is similar to:
1. A dominant easement
2. A license
3. A Servient Easement
4. Adverse Possession
Answer: 4. Adverse Possession
A broker employs several salespeople at her office. Early one day one member of the sales staff submits a written offer with an earnest money deposit on a house listed with the broker. Later the same day another salesperson submits a higher written offer on the same property, also including an earnest money deposit. The broker, in accordance with the policy of her office, does not submit a second offer unless the first has been presented and rejected by the seller. In this case the seller accepts the first offer, so the seller is not informed of the second officer. In this situation, the broker's actions are:
1. permissible, provide the comision is split between the two salespeople.
2. permissible, if such arrangement is written into the salesperson's employment contracts
3. Not permissible, because the broker must submit all offers to the seller.
4. Not permissible, because the broker must notify the second buyer of the existance of the first offer.
Answer: 3. Not permissible, because the broker must submit all offers to the seller.
Which fo the following correctly discribes an open listing
1. Seller by employ any number of brokers
2. Only one broker is authorized to act as agent for the seller
3. The broker is entitled to a commission regardless of who sells the property
4. The Broker's commission is based on the excess over the sales price stated on the listing.
Answer: 1. Seller by employ any number of brokers
Under judicial foreclosure, the
1. mortgage generally must include a power-of-sale clause
2. court may award title to the lender
3. lender sues the borrower in court and obtains a judgement and court order to sell
4. lender may sell the property without obtaining a judgement.
Answer: 3. lender sues the borrower in court and obtains a judgement and court order to sell
A farmer purchased land with no access to a street or public way. After an unsuccessful attempt to gain access through negotiation he was able to gain access through an:
1. Easement Appurtenant
2. Easement in Gross
3. Easement by Necessity
4. Easement by Prescription
Answer: 3. Easement by Necessity
Who are the parties involved in a warranty deed
4. Grantor & grantee
A salesperson can advertise a property for sale without including her broker's name if she
1. is advertising her own listing
2. includes her name in the ad.
3. Pays for the ad.
4. She can not. You can not run a blind ad in Texas
Answer: 4. She can not. You can not run a blind ad in Texas
Which of the following is NOT a requirement of establishing independent contract status for a salesperson:
1. The individual must have a current license
2. Ninety percent or more of income must come from production
3. The individual's income must be based on the number of hours worked
4. The individual must not be included in company hospitalization and retirement programs.
Answer: 3. The individual's income must be based on the number of hours worked
Depreciation generally applies to
1. the building only
2. the land only
3. both the land and the building
4. the net income of the building.
Answer: 1. the building only
The person conducting the closing must report details on closing to the IRS on
1. IRS form 1099
2. IRS form 1099 S
3. IRS form 1099 MISC
4. IRS form 1099 R
Answer: 2. IRS form 1099 S
The Comprehensive Environmental Response Compensation and Liability Act was amended in
Answer: 3. 1986
Which of the following are NOT an essential element of a contract
1. Intent of the Parties
2. Legality of the Object
3. Offer and acceptance
4. Competent Parties
Answer: 1. Intent of the Parties
What is Allodial Interests in Real Estate
Answer: System of inidividual ownership with free and clear title.
The charactoristics required for a property to have value include all of the following EXCEPT:
1. Effective Demand
Answer: 3. Depreciation
Two brothers may take title to income property in unequal shares under which of the following?
2. Tenants by the entirety
3. Joint Tenants
4. Tenants In Common
Answer: 4. Tenants In Common
X and Y own adjoining parcels of real estate. X had granted Y an easement over his property for ingress and egress. If Y decided to sell his land to Z, which of the following would be true?
1. The status of the dominant and servient tenements will not change
2. The easement will be terminated for Y no longer is the owner of the property
3. X may sell the easement to the new owner
4. To be valid, the deed of conveyance of Y to Z must specifically mention the easement.
Answer: 1. The status of the dominant and servient tenements will not change
R sold his house; it included a water softener, which he had bought the previous year. R's water softener would be classified as
3. A Trade Fixture
4. a Fixture
Answer: 4. a Fixture
If an offer to purchase is received under certain terms and the seller makes a counteroffer, what is the prospective purchaser's legal position?
1. They are bound by the original offer
2. They must accept the counteroffer
3. The are relieved of the original offer
4. They must split the difference with the seller
A mortgage that covers more than one piece of real property is a
1. Junior Mortgage
2. Blanket Mortgage
3. Package Mortgage
4. Open-Ended Mortgage
Answer: 2. Blanket Mortgage
A property exists with a particular use prior to a zoning ordinance which restricts that use in the future, thus allowing the property to be grandfathered in. This is an example of:
1. Conforming Use
2. Non-Conforming Use
Answer: 2. Non-Conforming Use
A graduated-payment mortgage
1. contains an interest-rate provision realted to a selected index
2. is granted for a term of 3 to 5 years and is secured by a long-term mortgage of up to 30 years
3. allows a buyer to purchase a home with initial monthly payments lower than the level payment, amoritorized mortgage
4. allows the mortgagor to borrow additional money during the term of the loan, up to the original amount of the mortgage.
Answer: 3. allows a buyer to purchase a home with initial monthly payments lower than the level payment, amoritorized mortgage
A broker recently has listed a home under the exclusive-right-to-sell listing contract. The broker generally will earn his commission when
1. he submits an offer to purchase to the seller
2. the seller signs an offer to purchase
3. he finds a buyer "ready, willing, and able" to buy the terms of the listing
4. the closing has taken place.
Answer: 3. he finds a buyer "ready, willing, and able" to buy the terms of the listing
An owner listed her home for $98,000 and the broker told the prospective buyer to submit a low offer because the seller was desperate. The buyer offered $96,000 and the seller accepted. In this situation :
1. The broker was unethical, but because no one was hurt, the broker's conduct is not improper.
2. The broker violated the agency relationship.
3. The broker's action was proper in obtaining a quick offer.
4. Any broker is authorized to encourage bidders.
Answer: 2. The broker violated the agency relationship.
10 -1 A Contract in qhich the intentions of the parites are shown by their actions is
1. An expressed contract
2. An Implied contract
3. An Executory Contract
4. A Bilateral Contract.
Answer: 2. An Implied contract
All of the following are participants in the secondary mortgage market except:
Answer: 3. FDIC
Amy gave an option on her property for 90 days to Bob and received a cash consideration of $100. Bob later sold the option to Paul for a valuable consideration. Before the expiration of the option, Amy decides not to sell. Which of the following is correct:
1. The option is void, for an option can not be assigned
2. The option is not binding on Amy for $100 is not sufficient consideration
3. Paul would have a good chance in court to compel Amy to sell to him if he exercises his option within the time period
4. Amy can refuse to sell, for the consideration paid to Bob was not in cash.
Answer: 3. Paul would have a good chance in court to compel Amy to sell to him if he exercises his option within the time period
A principal factor for which adjustments must be made in using the market / data approach is:
2. The Date of Sale
3. The Amount of Real Estate Taxes
4. The cost of replacement
Answer: 2. The Date of Sale
A woman bought a house at exactly the appraised value. She negotiated a loan through a savings & loan association at 75% of the appraised value. The interest rate was 9%. The first month's interest was $405. What was the approximate selling price of the property.
4. None of the above
Answer: 3. $405 * .09 = $54000. Then divid $54000 by .75 to get the value of the house $72 000
The requirement that a lender give each loan applicant a copy of Settlement Costs and You is created under
1. Federal Home Loan Mortgage Corporation (Freddie Mac)
2. Federal Housing Administration
4. Regulation Z
Answer: 3. RESPA
A grandmother owned a life estate measured by her own life in residence. She leased the property for five years using a standard lease contract. Shortly thereafter, she died. The lease was:
Answer: 1. Valid only as long as she was alive 2. valid for five years 3. invalid because she, as an owner of a life estate, cannot lease property 4. valid for up to one year after her death.
Which of the following is NOT charactoristic of the Federal Housing Administration (FHA) loan except
1. A mortgage insurance premium is charged
2. The lender is insured against loss
3. The maximum mortgage debt is determined by a formula
4. The FHA provides the money for the loan.
Answer: 4. The FHA provides the money for the loan.
In the income apprach to appraisal , if the net income was $42,000 and the capitalization rate was 12 percent, to find the value of the property the appraiser would
1. Multiply the income by the capitalization rate
2. Multiply the capitalization rate by the net income
3. Divide the net income by the capitalization rate.
4. Divide the capitaliation rate by the net income
Answer: 3. Divide the net income by the capitalization rate.
11-1. The deed that provides the buyer the greatest protection
1. bargain and sale deed
2. Warranty Deed
3. Quitclaim Deed
4. Specialty Warranty Deed
Answer: 2. Warranty Deed
Which of the following factors would be considered in the market/data approach for value?
1. Conditions under which property was sold
2. Annual gross income
3. Replacment cost
4. Original Cost
Answer: 1. Conditions under which property was sold
The need for a loan closing to be preparied on a Uniform Settlement Statement is required of
1. Regulation Z
2. The Federal Fair Housing Laws
3. Government National Mortgage Association (Ginnie Mae)
Answer: 4. RESPA
A husband and wife own property as tenants in the entireties. The husband dies and in his will names their son as inheritor of the property. Which of the following statements is correct?
1. The son and his mother own the property as tenants in common
2. The son owns the property in severalty
3. The son and his mother own the property as joint tenants
4. The son has no interest in the property
Answer: 4. The son has no interest in the property
A broker has earned a commission on the sale of her listing by another broker. The listing broker may pay part of her commission to
1. The selling broker
2. The selling salesperson
3. the out-of-state salesperson who referred to the seller to her
4. the buyer's attorney
Answer: 1. The selling broker
A Broker listied at small house for $86,000 obtaining an executed sales contract on it within six weeks at $85, 000. The broker learned there was an exisiting $75,000 first mortgage and a $5,000 second mortgage on the property. The broker knew the real estate could be refinanced on a new $70,000 first-mortgage loan. The holder of the second mortgage told the broker he was willing to discount this $5000 note selling it for $4,500. The buyer has $20,000 in cash and qualifies for a new $70,000 mortgage. The broker should.
1. Say nothing to the seller about refinancing and allow the transaction to close
2. Tell the seller the second mortgage can be paide off at a $500 discount
3. Tell the holder of the second mortgage the property is sold and therefore he or she should demand the full $5000.
4. Buy the second mortgage himself at the $500 discount.
Answer: 2. The broker must act in the seller's best interest.
Pledging property as security for a loan without losing possession of it is
1. Subordination Agreement
3. An Impound Account
4. Seller Financing
Answer: 2. Hypothecation
An appraiser is estimating the value of a building that has a net income of $5,000 per quarter and a capitalization rate of 8%. What is the value of this property:
Answer: 3. $250,000
A broker has just received an earnest money payment on an offer to purchase. The broker must place the earnest money in his:
1. Trust Acount
2. Business Account
3. Personal Checking Account
4. Savings Account
Answer: 1. Trust Acount
Specific leins would NOT include which of the following?
1. Mortgage Leins
3. Real Estate Taxes
4. Mechanic's Liens
Answer: 2. Judgements
Included among the features of taking title to real property as tenants in common is that:
1. Ownership interest must be equal
2. Each co-owner's interest may be conveyed separately
3. A co-owner cannot will his interest in property
4. The last survivor owns the property in severalty.
Answer: 2. Each co-owner's interest may be conveyed separately
You purchased an apartment building for $600,000 nearly 6 years ago. The building accounts for 80 percent fo the property value. The building's economic life is estimated to be 60 years. The total depreciation of the property would be
Answer: 2. $48,000 $600,000 x .80 = $480,000 value of building $480,000 / 60 years = $8,000 annual depreciation $8,000 x 6 years = $48,000
Granting a conventional loan requires that the borrower provide the lender with which of the following:
1. Sales contract and hypothication instrument
2. Mortgage and Promisory Note
3. Deed of Trust and sales contract
4. Mortgage and letter of intent.
Answer: 2. Mortgage and Promisory Note
Which of the following is NOT charactoristic of a DVA loan?
1. The loan is not guaranteed
2. Only an eligible vet or eligible dependents of vets, as well as reservists and the National Guard members who have served for six years may qualify for the loan
3. The loan is insured
4. Little or no down payment is required.
Answer: 3. The loan is insured
Joe purchased an office building with an effective gross income of $208,000 and expenses of $74,000. What capitalization rate was used by Joe to arrive at a value of $1,579,470.
2. 8.5 %
3. 9.5 %
Answer: 2. 8.5 % $208,000 effective gross income - $74,000 expenses = $134,000. $134,000 / $1,576,470= .085 = 8.5
A homeowner employed a contractor to build a swimming pool on this property. Upon completion of the swimming pool, the contractor filed a lien to receive payment of the contract fee. Such filing could be considered any of the following EXCEPT
1. A Specific Lien
2. An Encumbrance
3. A General Lien
4. A Mechanic's Lien
Answer: 3. A General Lien
Gross rent multipliers are generally used in appraising
2. Shopping centers
3. Signal Family Homes
Answer: 3. Signal Family Homes
A special agent is best described as someone who
1. Has power of attorney
2. Has authority to sell a property
3. Has authority to represent a principal in a specific transaction
4. Has authority to represent a principal in all matters concerning an area of the principal's interest.
Answer: 3. Has authority to represent a principal in a specific transaction
Answer: A Physical _1.Immoble _2. Indestructable _3. Unique or nonhomogeneous B. Economic _1. Scarcity _2. Improvements _3. Permanence of investment _4. Area preference or Situs C. Legal Descriptions _1. Metes & bounds (point A to point B to Point C to Point D) _2. Rectagular or Government Survey _3. Subdivision Plots _4. Street Address. Too inaccurate for legal description
In the government survey method
1. Base lines run east & west
2. Principal meridians run east and west
3. Base lines run north & south
4. a township countains 26 sections
Answer: 1. Base lines run east & west
Which of the following does NOT correctly describe the status of agency disclosure?
1. Disclosure is required in some states
2. Disclosure is required at the first meaningful contact with the buyer
3. Disclosure is required at the first meaningful contact with the seller
4. Disclosure is required in every state.
Answer: 1. Disclosure is required in some states
A sales person obtains a writtn offer to purchase a home that she has listed for sale. The seller accepts the offer, and the sales person proptly telephonse the purchaser to notify him of the acceptance. Because the purchaser lives in a nearby town, the salesperson informs him that she will deliver a copy of hte contract in three days. The salesperson has an enforceable contract when
1. the sller signs the acceptance
2. the offer to purchase is presented to the seller
3. The acceptance is telephoned to the salesperson representing the buyer
4. A copy of the contact is deliverd to the purchaser in three days.
Answer: 4. A copy of the contact is deliverd to the purchaser in three days.
The appraiser profession is regulated at the national level by
2. The FDIC
3. The national real estate commission
4. The Appraisal Foundation
Answer: 4. The Appraisal Foundation
Contract for sale of real estat must be in writing to be enforceable according to the
1. Statute of Limitations
2. Parol Evidence Rule
3. Statue of Frauds
4. Real Estate Commission
Answer: 3. Statue of Frauds
Outmoded plumbing fixtures are an example of :
1. Curable Physical deterioration
2. Curable Functional Obsolescence
3. Incurable Physical Deterioration
4. Curable Economic Obsolescence
Answer: 2. Curable Functional Obsolescence
A deed must be signed by the
Answer: 1. Grantor
The county zoo holds title to its land with the condition that if it charges admission fees, the title will revert to the original grantor of the estate. This is an example of a
1. Fee Simple Estate
2. Defeasible Fee Estate
3. Legal Life Estate
4. Conventional Life Estate
Answer: 2. Defeasible Fee Estate
The term BOOT is related to:
1. appreciation in the value of an investment
2. cash flow generated by income property
4. an exchange
Answer: 4. an exchange
The listing broker owes fiduciary duty to the:
4. Buyer's Attorney
Answer: 3. Seller
A broker lists a home for $80,000. The broker brings an offer to the seller for $78,000 which is rejected by the seller. The broker obtains another offer for $80,000 for the seller. Before he can deliver the offer, however, the offeror withdraws it by calling the seller's home. There is:
1. An implied contract
2. a unilateral contract
3. an executory contract
4. no contract
Answer: 4. no contract
A Salesperson sells a property listed by her broker. The salesperson may accept her share of the commission from:
1. The seller
2. The Broker
3. The Buyer
4. The Buyer's Attorney
Answer: 2. The Broker
NOTE: Types of Buyer Agency
Answer: 1. Exclusive Right Agreements - Buyer must compensate his agent whenever purchasing within period described 2. Exclusive Agreement - Buyer's agetn is assured of buyer loyalty relative to other agents. If buyer buys without another agent or the designated agent then buyer pays no commission 3. Open Agreement - The buyer can work with more than one agent at the same time but owe compensation only if the buyer uses the services of the buyer's broker
A contact that has no legal effect because it does not contain all essential requirements of a contact is:
Answer: 3. Void
In the govenment survey system of land description, townships are measured and numbered from east to west along a
2. base line
3. principal meridian
Answer: 2. Base line
10-1. A Cotnact in which the intentions of the parties are shown by their actions
1. an expressed contact
2. an implied contract
3. an executory contract
4. a bilater contact
Answer: 2. an implied contract
You have entered into a lease that requires you to pay all or part of the landlord's operating expenses. You have signed a(n).
1. Index Lease
2. Gross Lease
3. Net Lease
4. Graduated Lease.
Answer: 3. Net Lease
Which of the following laws require that appraisals performed as part of a federally related transaction must comply with federal standards and be performed by a state-certified or state-licensed appraiser?
1. Financial Institutions Reform, Recovery, and Enforcement (FIRREA)
2. Regulation Z
4. Statute of Frauds
Answer: 1. Financial Institutions Reform, Recovery, and Enforcement (FIRREA)
A person agrees to buy the seller's land for $30,000. The buyer deposits the purchase price with a third party and the seller deposits the deed with the third party. The third party is instructed to record the deed when the seller delivers good title to the land. The third party is to pay the seller $30000 less agreed tax proration when the buyer has good title. This procedure is called
1. provisional sale
2. sale upon condition
3. power of attorney
Which of the following might NOT legally terminate a listing with a broker
1. Bankruptcy of the client
2. Insanity of the broker
3. Inability of the broker to find a buyer within a reasonable amount of time
4. An economic depression
Answer: 4. An economic depression
An office building recently sold for $600,000, with a monthly rental income of $5,000. The GIM for the property was
4. None of the above
Answer: 3. 10 $5,000 monthly rental income x 12 months = $60,000 annual gross income. Selling price of $600,000 / Gross annual rental income= $600,000 / $60,000 = 10-GIM
Which of the following is NOT charactoristic of a conventional loan?
1. It is neither insured nor guaranteed by a public agency
2. Security rests on the borrower's ability to pay and the collateral pledged
3. It is never insured by private agency
4. The ratio of the loan to the value of the property usually does not excced 80 percent without private mortgage insurance.
Answer: 3. It is never insured by private agency
Section 1301 of the IRS code allows real estate investors to do which of the following when making a property exchange
1. Avoid the capital-gains tax only if the exchange is of like kind
2. Phase out the capital-gains tax
3. Defer the capital-gains tax
4. Avoid the capital-gains tax even if the exchange is NOT of like kind
Answer: 3. Defer the capital-gains tax
On the FHA loan, the buyer would NOT be required to
1. Provide mortgage insurance to protect lender
2. Meet FHA credit standards
3. Find an approved lender willing to make the loan
4. Make a 20 percent down payment on the loan.
Answer: 4. Make a 20 percent down payment on the loan.
The Term Situs refers to
2. Area Preference
Answer: 2. Area Preference
You purchase the right to live in an apartment in a resort for the 32nd complete week of each calendar year for the next 30 years. The type of interest you have called a(n)
1. joint tenancy
2. time-share investment
3. tenancy in common
4. estate for years.
Answer: 2. time-share investment
You are a broker who has listed a home for a neighbor. Which of the following terms describe your relationship with the seller?
1. You are a subagent of the seller
2. The seller is your client
3. The seller is your customer
4. The seller is your agent.
Answer: 2. The seller is your client
Adam agrees to buy Bob's real estate for $123,000. Adam signs a sales contract and deposits $12,300 earnest money with Bob's broker, Charley. Bob is unable to show good title, and Adam demands the return of the earnest money from Charley, as provided in the contract. What should Charley do?
1. Deduct the commission and return balance to Adam
2. Deduct the commission and pay the balance to Bob
3. Return the entire amount of earnest money to Adam
4. Pay the entire amount to Bob to dispose of as Bob sees fit.
Answer: 3. Return the entire amount of earnest money to Adam
Procuring cause would not be required for a broker to recieve a commission in a(n)
1. Open Listing
2. Exclusive-right-to-sell listing
3. Net Listing
4. Exclusive Agency listing.
Answer: 2. Exclusive-right-to-sell listing
Funds for DVA loans usually are provided by
2. The Secondary Mortgage Market
3. Freddie Mac
4. Approval Lenders
Answer: 4. Approval Lenders
Which of the following is FALSE concerning a real estate broker?
1. All offers must be presented by the brokers to the principal
2. Brokers may place blind ads
3. A fixed place of business must be maintained by the broker
4. The broker's commission usually is specified in the listing agreement.
Answer: 2. Brokers may place blind ads
Which of the following is an example of locational obsolescence?
1. Termite Damage
2. Negligent Care of Property
3. A zoning ordinance allowing a decrease in the minimum lot size
4. Poor architectural design
Answer: 3. A zoning ordinance allowing a decrease in the minimum lot size
A plumber sells his home, in which he has installed washerless faucets. After the contract has been executed, he decides to replace the faucets with standard faucets. Which of the following is true?
1. The plumber may remove the faucets at anytime.
2. Standard faucets are a good replacement
3. The plumber can be held liable for removing the faucets because they are fixtures that were in place before the contact was signed.
4. The question should be decided by the broker who took the listing.
Answer: 3. The plumber can be held liable for removing the faucets because they are fixtures that were in place before the contact was signed.
Which of the following is FALSE concerning a real estate salesperson?
1. The salesperson is responsible to the broker under whom she or he is licensed
2. All of a salesperson's activities must be carried out in the name of the broker
3. The salesperson must work under the broker as an independent contractor.
4. A Salesperson is compensated on the basis of an agreement between herself and himself and the broker.
Answer: 3. The salesperson must work under the broker as an independent contractor.
If the house you are appraising has central air conditioning valued at $2,500 and your compairable does not, you will adjust the sales price of the comparable by:
1. - $2,500
2. + $2,500
4. None of the above
Answer: 2. + $2,500
Which of the following forms of ownership may only be held by a wife and husband?
1. Tenacy in Common
2. Tenancy by the entirety
3. Tenancy at will
4. Joint Tenacy
Answer: 2. Tenancy by the entirety
Which of the following is a failure to perform or fulfill a contract
4. Breach of Contract
Which of the following is a capitalization rate
1. A factor used to estimate a property's value from its annual net income
2. percentage of gross annual investment
3. Income from an investment property
4. The amortization of an investment
You order dinner in a restaurant. You are required to pay for the dinner by what kind of contract:
Answer: 4. Implied
The tandem plan involes
1. the VA and FHA
2. Fannie Mae & Freddie Mae
3. Fannie Mae & Ginney Mae
4. Ginnie Mae & Freddie Mac
Answer: 3. Fannie Mae & Ginney Mae
Standing timber is legally considered to be
3. real properties
4. personal properties
Answer: 3. real properties
An owner gives an exclusive right-to-sell listing to a broker for a six month period. During the period of the contract, the owner also gives an open listing to another broker who produces a buyer. what is the owner's liability for payment of the commission?
Answer: 1. Only one commission must be paid, which both brokers share on a 50/50 basis 2. The owner is only liable to the first broker for the payment of a commission 3. The owner is liable for payment of the commission to both brokers 4. The owner is liable only to the second broker for the payment of a commission
What is the listing broker's legal responsibility to a prospective purchaser?
1. The broker must not use fraud or deceit
2. The broker must help the buyer get the lowest price possible.
3. The broker is only a middleman. Neither the buyer nor the seller can charge her or him with avoiding legal duty
4. The is none at all.
Answer: 1. The broker must not use fraud or deceit
A buyer has contracted with a seller to purchase property. The contract was ratified on January 10th. The closing was for March 31. What is the status of the contract on April 1st.
Answer: 4. Executory
Which of the following would not be classified as a latent defect
1. An unknown underground oil tank
2. Hidden structural damage
3. A large crack in the living room ceiling
4. a cracked heat exchange in the furnace
Answer: 3. A large crack in the living room ceiling
You are traveling directly from Section 6 to Section 36 of the same township. You would be traveling
Answer: 4. SouthEast
What do the following situations have in common
A. Bob's property is taken by the city and used for a new highway
B. A woman's land gradually is wearing away because of the wind
C. A develper's property is sold at a foreclosure sale:
1. They will require the use of a warranty deed to transfer the title
2. They are all examples of voluntary alienation of title
3. They are all examples of eminant domain
4. They are all examples of involuntary aleination
Answer: 4. They are all examples of involuntary aleination
Which of the following statements does NOT correctly describe a cooperative development in a development in a state that does NOT recognize the Common Interest Ownership Act
1. Title to the land and building is owned by the corporation
2. Mortgage and taxes are liens against the corporation
3. Each buyer of an apartment becomes a shareholder in the corporation
4. The owner holds a real property interest
Answer: 4. The owner holds a real property interest
A salesperson working for a broker has just written an offer to purchase on her broker's listing in which the buyer has written a check for earnest money and stated that the broker hold the funds. Which of the following statements describes how the earnest money payment should be handled?
1. The salesperson should place the earnest money and await the closing of the transaction
2. The sales person should give he earnest money check to the seller's attorney
3. The salesperson should place the earnest money check in a safe deposit box until the transaction is concluded
4. The salesperson should give the earnest money check to her broker for deposit in the broker's trust account.
Answer: 4. The salesperson should give the earnest money check to her broker for deposit in the broker's trust account.
You are a broker acting as a facilitator in the sale of a house without being an agent of either party. You are a
1. Buyer's Broker
2. Cooperating Broker
3. Listing Broker
4. Transactional Broker
Answer: 4. Transactional Broker
When a broker sold a proeprtpy the sales contract contained the following statement: "Buyer to accept property in an "as is" condition." Both the seller and the listing broker knew the plumbing was a major problem but did not tell the buyer. Would an action for damages against the borker, based on fraud be successful?
1. No. The "as is" provision in the contact is evidence of a metting of the minds.
2. No. the contact specifically stated that the property was being sold "as is"
3. Yes, the duty to disclose a material fact cannot be avoided by an "as is" provision
4. Yes. "As Is" Refers only to exterior defects
Answer: 3. Yes, the duty to disclose a material fact cannot be avoided by an "as is" provision
A real estate broker is usually
1. A Special Agent
2. A Universal Agent
3. A General Agent
4. An Ostensible Agent
Answer: 1. A Special Agent
The annual net income for an office building is $20,000. If an owner realized a 9 percent return on her investment, the value of the building would be:
Answer: 3. $222,222
The Residental Lead-based Paint Hazard Reduction Act of 1992 requires that copies of the Certification and Acknowledgement be kept for
1. One Year After Closing
2. Two years after closing
3. Three years after closing
4. Five years after closing.
Answer: 3. Three years after closing
A broker listed a beachfront home at $263000. Three weeks later
the broker got a full-price offer on the house. Stopping by the house after the sales contract was executed and in force. The broker was appalled to see a large foundation crack. Two days later the broker noticed the crack had been carefully repaired. The broker knew the seller was unaware of the crack because she had extremely poor eyesight. The broker suspected the crack had been repaired by the seller's son
a building contractor. The broker should
1. disclose the fact of the crack to the buyer
2. immediately cancel the sales contract
3. keep quiet about the crack because it has been repaired
4. confront the son-in-law with his suspicions and threaten to sue.
Charging a rate of interest in excess of the maximum rate allowed by law is
Answer: 4. Usury
How many acres in a section
The residental Lead-Based Paint Hazard Reduction Act of 1992 does not require that:
1. The seller disclosure any lead-based paint or related hazards
2. Homebuyers be given an agreed upont time period for the opportunity to conduct a lead-based paint inspection or risk assessment at their own expense.
3. a Certification and Acknowledgement of Disclosure be attached to the offer of purchase.
4. A copy of the Certification and Acknowledgement be kept by only the listing broker.
Answer: 4. A copy of the Certification and Acknowledgement be kept by only the listing broker.
A broker lists an accountants property. The broker may
1. Reject an offer for the seller's property
2. Bind the seller to a contract
3. Advertise the seller's property
4. Offer legal advice to the seller.
Answer: 3. Advertise the seller's property
A man has a claim affecting the title to another man's property. The owner has been trying to sell the property and the man with the claim is concerned about the possibility of a bonafided purchase's buying it before he obtains a judgement to protect himself during the course of the court action. To protect himself, the man with the claim should
1. File a Lis Pendens or notice of intent
2. Publish a notice in the newspaper
3. Bring a quick summary proceeding
4. Notify the owner that any attempt to sell the property will be considered a fraud
Answer: 1. File a Lis Pendens or notice of intent
In holding a deposit delivered with an offer
which of the following would be best place to put the money
provided you had not instructions to the contrary
1. In your office safe
2. In a neutral depository in the buyer's name
3. In your checking account
4. In a neutral depository
Economy obsolescenece does NOT result from:
1. Adverse zoning changes
2. A City's leading industries moving out.
3. An inharmonious land use in a neighborhood
4. Outdated kitchen
Answer: 4. Outdated kitchen
Legal Description may not be based on
1. Government Survey
2. Metes & Bounds
3. A Street Address
4. A Survey
Answer: 3. A Street Address
Which of the following types of listing agreements affords the broker the most protection?
1. An open listing
2. An exclusive-agency listing
3. A net listing
4. An exclusive-right-to-sell listing
A warranty deed generally will transfer title to the grantee when it is
2. signed by the grantee
3. signed by the grantor
4. delivered and accepted
Answer: 4. delivered and accepted
Joe lived in a house with a well. The groundwater became contaminated and lessened the value of Joe's home. The loss in value would be an example of
1. Physical Deterioration
2. Environmental Obsolescence
3. Functional Obsolescence
Answer: 2. Environmental Obsolescence
A woman's two-year lease and expired when she decided to continue living in her apartment without the consent of her landlord. The woman now has a(n)
1. estate for years
2. periodic estate
3. tenancy at will
4. tenancy at sufferance
Answer: 4. tenancy at sufferance
Using borrowed money to finance an investment is known as
2. cash flowing
Answer: 3. leverage
Department of Veterans Affairs (DVA) guarantees a lender from 25 to 50 percent of the loan balance on a VA loan up to
Answer: 4. $50,750
A contractor builds an addition to a house for a contract price of $52,000 and records his mechanic's lien notice. Before making any payment, the owner has the house jacked up and put on a platform prior to moving it to another location. The contractor should :
1. Have his attorney prepare and file a covenant
2. File an encroachment notice
3. Record an attachment
4. Have his attorney prepare and record a notice of Lis Pendens.
Answer: 3. Record an attachment
A veteran buys a home with a DVA guaranteed loan. Two years later, the veteran sells the home to a buyer who, with the lender's approval, assumes the veteran's loan. In this situtation, the veteran is
1. Responsible for paying an insurance fee charged by the DVA
2. Responsible for paying the loan orgination fee.
3. No longer financially responsible if the buyer defaults six months later
4. Financial responsiblity if the buyer defaults six months later.
Answer: 4. Financial responsiblity if the buyer defaults six months later.
The process by which a mortgagor regains his or her interest in a property is called
3. A Deficiency Judgement
Answer: 1. Foreclosure
Inventory and equipment sold as part of a business would be transferred to the buyer by a
1. bargain and sale deed.
2. bill of sale
3. quitclaim deed.
4. warranty deed.
Answer: 2. bill of sale
A home is listed for $100,000 and sells for $90,000. The broker's commission is 7 percent of the selling price. The commission is:
Answer: 3. $6,300
Reserve requirements for banks are controlled by which of the following federal agencies?
3. Federal Deposit Insurance Corporation (FDIC)
4. The "Fed"
Answer: 4. The "Fed"
An owner of a condominium project does not
1. hold a fee simple title on his or her unit.
2. have an undivided proportionate interest in the common
3. have to pay mortgages, taxes and assessments that are liens against other units in the project
4. have a real property interest.
Answer: 3. have to pay mortgages, taxes and assessments that are liens against other units in the project
The difference between interest rates in financing arrangements such as a wraparound mortgage is called
Answer: 4. Arbitrage
Which of the following statements does NOT correctly describe the properly executed will
1. It takes effect only after the death of the devisee
2. It specifies who will inherit the owner's property
3. It must conform to the state statute
4. It cannot supersede state laws of dower and curtesy.
Answer: 1. It takes effect only after the death of the devisee
Which of the following is a physical charactoristic of land
3. Permanence of investment
Answer: 1. Indestructability
Both the buyer and seller agree to wiat until the broker's exclusive right to sell listing has expired, then have a third party buy the home. After a short while, the third party conveys ownership to the interested buyer who was introduced to the owner by the listing broker. In this case,
1. The broker is not entitled to a commission because the listing expired
2. If the listing broker can prove collusion, he can collect full commission
3. the broker may sue both the ubyer and the seller for commission
4. the broker is entitled to his commission because he performed the task for which he was hired.
Answer: 2. If the listing broker can prove collusion, he can collect full commission
An electrician did some rewiring in a home for which he has not yet been paid. One month after the work was completed, the electrician drove by the home to discover a For Sale sign on the property. The electrician should:
1. File a mechanic's lien
2. Offer to purchase the house
3. Obtain injunctive relief
4. Sue the listing broker
Answer: 1. File a mechanic's lien
Which of the following payment plans allows the periodic payments of interest only with the principal due as a lump sum payment at maturity
Answer: 3. Straight
A family paid $50
000 for their home five years ago making $10
000 down payment. Their monthly payment
including interest is 7 3/4%
is $286. The interest portion of their last payment is $225.27. What was the approximate loan balance before their last payment?
4. None of the above
You bought a property that measured 1/6th of a mile by 1/6th of a mile. How many acres did you buy?
1. 17.78 acres
2. 36 acres
3. 92.83 acres
4. 106.67 acres
Answer: 2. 36 acres - 6x6 =36. 640 total acres in a mile divided by 36 = 17.78
A Man who owned a single-family house had his unlicensed son-in-law do the electrical work in preparing his home for sale. The man did not disclose this to the broker at the time of executing the listing. After completion of the sale, the new owner suffered a financial loss because of the faulty electrical wiring done by the owner's son-in-law. The broker
1. could be reprimanded for not forewarning the purchaser
2. Is innocent of any wrongful act
3. will be held liable for nonetary damages suffered by the purchaser
4. Should have arranged for a proper electrical inspeciton prior to the sale.
Answer: 2. Is innocent of any wrongful act
A salesperson is working under a broker. The salesperson may
1. Work under the broker as an independent contractor
2. Place an ad without identifying the broker
3. Receive a commission directly from a seller
4. Receive a commission directly from another broker.
Answer: 1. Work under the broker as an independent contractor
You own land worth $40,000 and your building ahs a replacement cost of $160,000. What would be the value if the appraiser used a depreciation rate of 30%?
4. None of the above
Answer: 2. $152,000 $160,000 Replacement Cost x 30% Depreciation $48,000 $160,000 Replacement - $48,000 Depreciation ___________ $112,000 Value + $40,000 Added land value $152,000 Value
Which of the following statements does NOT correctly describe equitable title?
1. Upon creation of a binding offer to purchase, buyer holds equitable title
2. Equitable title converts to legal title upon delivery and acceptance of the deed.
3. It may be converted by deed.
4. It may not be conveyed by will.
Answer: 4. It may not be conveyed by will.
All of the following statements concerning real estate financing are correct EXCEPT
1. the mortgage generally is considered a lien
2. the mortgagee is the lender
3. an owner of property by whom the mortgage is executed is called a mortgagor
4. a promissory note is security for a mortgage.
Answer: 4. a promissory note is security for a mortgage. The property is the security. The note is the promise to pay.
Three women own a motel as tenants in common. One of the women decides to sell all her assets. She may legally:
1. Sell, because a tenant in common may sell her portion of assets if a majority of the co-owners also agree to sell
2. Not Sell, because a tenant is common's interests always remains encombered.
3. Sell because a tenant in common has an undivided interest in real property that is transferable
4. Not sell, because there is a right of survivorship.
Answer: 3. Sell because a tenant in common has an undivided interest in real property that is transferable
A section contains
1. 43560 square feet
2. 640 acres
3. 160 rods
4. 320 square rods
Answer: 2. 640 acres
A doctor listed his home with a broker under an exclusive-right-to-sell agreement. The listing salesperson and her broker signed the listing contract. Which of the following statements does NOT correctly describe the relationship among the parties?
1. The broker has a fiduciary relatiionship with the seller
2. The salesperson has a fiduciary relationship with the broker
3. If the Salesperson dies the listing contract will be terminated
4. If the broker dies, the listing contract will be terminated
Answer: 3. If the Salesperson dies the listing contract will be terminated
A broker presents a seller with a written offer to purchase. The broker is responsible for:
1. Explaining the advances or disadvantages of the offer to the seller
2. Explaining the legal implications of accepting the offer
3. Binding the seller to an offer
4. Preparing the title search once the offer is accepted
Answer: 1. Explaining the advances or disadvantages of the offer to the seller
Which of the following would not be an advantage of investing in real estate?
1. It serves as a hedge against investment
2. It does not require active management
3. It allows for leverage
4. It produces a rate of return that exceeds the average rate of return.
Answer: 2. It does not require active management
A man signed a lease for six months. This is an example of a(n)
1. Estate for years
2. Periodic estate
3. Tenancy at will
4. Tenancy at sufference
Answer: 1. Estate for years
Which of the following does NOT apply to the definition of market value?
1. Both buyer and seller must be well informed
2. Market Value is the average price that a property will bring
3. Both buyer and seller must act without undue pressure
4. Payment must be made in cash or its equivalent.
Answer: 2. Market Value is the average price that a property will bring
An airport routing was changed, with the result that airplanes flew over a residential area. The subsequent loss in value caused by the airplane noise would be best described as:
1. Physical Depreciation
2. Funcational Obsolescence
3. Economic Obsolescence
4. Eminent Domain
Answer: 3. Economic Obsolescence
What is Feudal Interests in Land
Answer: System of land ownership where king or government held title to land and individual was merely at tenant who held rights of use and occupancy at the sufferance of the overlord
Which of the following would NOT be a party to a trust deed transaction
A land description that begins at a specific point and proceeds around the boundaries of a parcel by reference to linear measurements and directions is based on
1. Metes & Bounds
2. The rectangular Survey
3. A Subdivision Plat
4. A Survey
Answer: 1. Metes & Bounds
Which of the following statements is FALSE?
1. Fixtures that are purchased, paid for, and installed after the execution of a mortgage are subject to liens of the mortgage
2. When a landowner tears down a fence, with the intention that it be permanently removed, and piles the material on the land, such material is real property.
3. Generally, trade fixtures that were installed by the tenant are personal property
4. A hot-water heater installed on the property becomes a fixture.
Answer: 2. When a landowner tears down a fence, with the intention that it be permanently removed, and piles the material on the land, such material is real property.
You financed the purchase of a home by means of a trust deed. Until you pay off the trust deed, title will be held by the
Answer: 1. Trustee
A salesperson for a broker listed an owner's home under an exclusive-right-to-sell lsiting contract. Which of the following statements correctly describes the situation:
1. The lsitng belongs to the salesperson
2. If the principal sells his own house, he wil not have to pay commission
3. The listing belongs to the broker
4. The listing belongs to both the salesperson and the broker
Answer: 3. The listing belongs to the broker
A woman bought a house at exactly the appraised value. She negotiated a loan through a savings & loan association at X% of the appraised value. The interest rate was Y%. The first month's interest was $Z. What was the approximate selling price of the property.
Answer: $Z * Y = $LoanAmount. Then divid $LoanAmount by X to get the value of the house
The owner of a life estate in property
1. Does not pay real estate taxes
2. Is Entitled to possession of the property
3. may not receive income form the property
4. is not responsible for all repairs to the property.
Answer: 2. Is Entitled to possession of the property.
A tenant failed to remove her trade fixtures prior to the expiration of her lease, which resulted in the landlord's aquiring title to the trade fixtures. Aquiring title to the trade fixtures in this way is known as:
Answer: 1. Accession
An appriaser is using the gross-rent-multiplier (GRM) method to estimate the market value of a single-family home. The home has an annual gross income of $7,200, with quarterly expenses of $900. The recognized GRM for the neighborhood is 110. The appraiser's estimate of value is liekly to be:
4. None of the Above
Answer: 3. $66,000 $7,200 gross / 12 = $600 per month x 110 = $66,000
Which of the following statements would NOT be a material fact to be disclosed by a buyer's agent
1. Disclosure of how long the peroprty has been listed
2. Buyer's ability to make a higher offer
3. Recommend the lowest price the buyer should offer regardless of the list price
4. Disclosure of provisions of the offer to purchase which are not favorable to the buyer.
Answer: 2. Buyer's ability to make a higher offer
The law that governs documents and forms when personal property is used as security for a loan is the
1. Interstate Land Sales Full Disclosure Act
2. Horizontal Property Act
3. Real Estate Settlement Procedures Act
4. Uniform Commercial Code
Answer: 4. Uniform Commercial Code
You and your sister own a house. Your sister would like to sell her interest in the house to her cousin. You and your sister own the house under which of the following?
1. Tenancy by the entirety
2. Tenancy at will
3. Tenancy in common
4. Estate for Years
Answer: 3. Tenancy in common
When a claim is settled by a title insurance company
the company acquires all rights and claims of the insured against any person who is responsible for the loss. This is called
2. Abstract of Title
3. Certificate of Title
Legal seizure of property to be held for payment of money pending the outcome of a suit to enforce collection is
1. Lis Pendens
2. An Attachment
3. a Writ Of Execution
4. An Abstract of Judgement
Answer: 4. An Abstract of Judgement
A lease that is signed by a person who is 17 is :
Answer: 4. Voidable
A listing contract
1. Is a conveyance
2. Is a contract of employment
3. Is a unilateral contract
4. Is terminated on the death fo the listing salesperson
Answer: 2. Is a contract of employment
CERCLA became a law in
Answer: 2. 1980
A grantee has received an executged notarized deed. The grantee take possession of the property but does not record the deed. The conveyance is
2. Valid as between the parties and valid as to the subsequent recorded interests
3. Valid as between the parties and INVALID as to the subsequent recorded interests
4. Invalid as between the parties
Answer: 3. Valid as between the parties and INVALID as to the subsequent recorded interests
Closing of a transaction for a residential property is set for April 19
1996. The seller has a three year insurance policy that expires June 25
1997. The seller has prepaid a three-year premium of $555. The buyer is to take over the policy as of the date of closing. The amount credited to the buyer at closing is:
4. None of the above
Answer: The buyer is not credited at closing the buyer is debited at closing.
A broker and seller have signed an open listing contract. This agreement is an example of
1. Unilateral contact
2. an executed contract
3. a bilateral contract
4. an unenforceable contract
Answer: 1. Unilateral contact
Which of the following statements does NOT correctly describe a fiduciary?
1. A fiduciary owes loyalty to the principal
2. A fiduciary must conform to the principal's legal instructions
3. A fiduciary is an agent
4. A fiduciary is a neutral third party
Answer: 4. A fiduciary is a neutral third party
Which of the following statements does NOT correctly described the status of dual agency
1. Dual agency is legal in all states
2. Dual agency is not allowed unless all parties agree to it.
3. Disclosure of dual agency should be made when preparing an offer to purchase
4. Disclosure of dual agency should be made prior to the closing of a real estate transaction
Answer: 1. Dual agency is legal in all states
A lease provides a minimum rent of $250 per month plus 5% of annual gross income over $100
000. If the tenant did $145000 in business last year what total rent was paid?