Exam 1: Definitions Exam 9

Question 1

Which notice is of importance in filing a mechanic's lien?
A)
Notice of Completion
B)
All of these
C)
Notice of Nonresponsibility
D)
Notice of Cessation of Labor

Answer 1

All of these

Question 2

"Et al" means
A)
and wife.
B)
and others.
C)
the end.
D)
without recourse.

Answer 2

and others.

Question 3

Rescind most nearly means
A)
annul.
B)
rewrite.
C)
reject.
D)
terminate.

Answer 3

annul.

Question 4

A landlord and tenant mutually agree to terminate a lease. This is often referred to as
A)
release.
B)
rescission.
C)
abandonment.
D)
surrender.

Answer 4

surrender.

Question 5

An owner of a small investment company advertised and sold properties for a commission. In his advertisements he did not indicate that he was a licensee, and in fact, he was not. He also made false statements in his advertising. Since he failed to disclose material facts, who would prosecute this person?
A)
Local law agencies
B)
District attorney
C)
Real estate commissioner
D)
Attorney general

Answer 5

Local law agencies

Question 6

The amount an appraiser charges for an appraisal is established by the
A)
agreement between the appraiser and the client.
B)
real estate commissioner.
C)
Office of Real Estate Appraisers.
D)
Federal Housing Authority.

Answer 6

agreement between the appraiser and the client.

Question 7

A commercial acre is BEST defined as
A)
an acre zoned for commercial purposes.
B)
an acre after deductions for streets and alleys.
C)
any parcel of 43,560 square feet.
D)
any acre located outside of "R" zoning

Answer 7

an acre after deductions for streets and alleys.

Question 8

An investor purchased an apartment building with a very small down payment and was able to secure financing for the balance. A year later, he sold the property for profit with no increase in his investment. This is an example of
A)
appreciation.
B)
leverage.
C)
inflation.
D)
debt reduction.

Answer 8

leverage

Question 9

The federal Fair Housing Law was enacted for the purpose of
A)
equal but separate housing within the states.
B)
providing fair housing opportunity for all persons throughout the United States.
C)
elimination of prejudice throughout the United States.
D)
providing fair housing for minority groups.

Answer 9

providing fair housing opportunity for all persons throughout the United States.

Question 10

The BEST definition of capitalization is
A)
the result of dividing net income by a percentage rate of return to determine value.
B)
the relationship between value and net worth.
C)
the minimum rate of return on an investment.
D)
the highest rate of return on an investment.

Answer 10

the result of dividing net income by a percentage rate of return to determine value.

Question 11

What essential element is necessary between a broker and a principal when dealing with the title, right, or interest in real property?
A)
The rights of commission between the parties are established
B)
Broker has the right to accept a deposit
C)
Broker has the right to draw up a purchase offer
D)
Written contract of employment

Answer 11

Written contract of employment

Question 12

The date of priority of a mechanic's lien on any construction project is the date of
A)
acceptance by owner.
B)
completion of construction.
C)
occupation by owner.
D)
commencement of construction

Answer 12

commencement of construction.

Question 13

The effective delivery of a deed under law is dependent upon
A)
intention of grantor.
B)
grantee having knowledge of its existence.
C)
acknowledgment by the grantor.
D)
recordation.

Answer 13

intention of grantor.

Question 14

All of these are necessary for the creation of an agency agreement EXCEPT
A)
fiduciary relationship.
B)
consideration.
C)
competency of the seller.
D)
mutual agreement of the parties.

Answer 14

consideration

Question 15

What is the BEST definition of company dollar with regard to a real estate office?  
A)
Office expenses
B)
Gross income minus operating expenses
C)
Gross income minus commissions
D)
Cost to set up the business for a specific length of time

Answer 15

Gross income minus commissions

Question 16

A real estate licensee went into a neighborhood and attempted to solicit a listing by stating to the property owner that "non-whites" would be moving into the neighborhood and that property values would thereby go down. Such conduct would be considered all of these things EXCEPT
A)
panic selling.
B)
blockbusting.
C)
illegal conduct.
D)
legal but unethical.

Answer 16

legal but unethical.

Question 17

e capitalization rate in the valuation of income property would LEAST likely provide for
A)
return of investment.
B)
depreciation.
C)
return on investment.
D)
taxes.

Answer 17

taxes

Question 18

A contract signed under duress would be
A)
void.
B)
illegal.
C)
unenforceable.
D)
voidable.

Answer 18

voidable

Question 19

Truth-in-Lending regulations with regard to real estate advertising would apply to all of the following EXCEPT
A)
a homeowner who is advertising his own home for purchase subject to the existing mortgage.
B)
a financing institution advertising to promote consumer credit.
C)
a homeowner advertising that his loan is capable of being assumed under certain terms.
D)
a broker advertising a piece of property with an APR.

Answer 19

a homeowner who is advertising his own home for purchase subject to the existing mortgage.

Question 20

How much can a lender legally charge a borrower for the preparation of the Closing Disclosure form?
A)
$25
B)
1%
C)
½ of 1%
D)
Nothing

Answer 20

Nothing

Question 21

What is the minimum number of days in advance that radio and television advertising, contract forms, letters or cards, and other material used in obtaining advance fee agreements must be submitted to the commissioner for approval?
A)
10 days
B)
7 days
C)
14 days
D)
5 days

Answer 21

10 days

Question 22

A broker negotiated a loan for a client. The beneficiary did not specifically instruct the broker to record. The broker is obligated to record
A)
within 10 days of the date funds are disbursed.
B)
immediately after funds are disbursed.
C)
before funds are disbursed.
D)
at same time funds are disbursed.

Answer 22

before funds are disbursed.

Question 23

In real estate the word tenancy means
A)
a mode of holding ownership by a tenant or title holder.
B)
a tenacious person.
C)
two or more people joined in an enterprise.
D)
a device.

Answer 23

a mode of holding ownership by a tenant or title holder.

Question 24

An agent may collect a commission for a negotiated sale after the term of the listing contract expired if
A)
there is an alienation clause.
B)
the agent sues the principal for liquidated damages.
C)
the contract contains a protection period clause.
D)
the agent signs a release clause.

Answer 24

the contract contains a protection period clause.

Question 25

A real estate broker cannot accept a listing from a minor appointing the broker as his or her agent because A) the broker would breach his fiduciary relationship by misrepresenting a minor who is incapable of making adult decisions. B) a minor has the right to disaffirm the listing contract during his minority. C) a minor is legally incapable of appointing an agent. D) a minor does not have capacity to enter into contracts.

Answer 25

a minor is legally incapable of appointing an agent.

Question 26

The Jacksons bought a residence with a first trust deed loan from a savings and loan. The Londons bought a residence with a first trust deed loan from a bank. The Londons refinanced, obtaining a first trust deed loan from a savings and loan, to get money for a business opportunity. Which statement is correct? A) The Jacksons do not have the right of rescission, the Londons do. B) Both have the right of rescission. C) The Londons do not have the right of rescission, the Jacksons do. D) Neither has the right of rescission.

Answer 26

Neither has the right of rescission.

Question 27

In real estate financing, lenders will sometimes refer to "nominal rate" when granting a loan. This means A) the rate of interest specified in the promissory note. B) points will be required, as the rate required by the lender would exceed the legal rate of interest. C) the maximum rate of interest allowed by law is obtainable on financing a property. D) that the rate of interest in the final granting of the loan will be greater than the commitment.

Answer 27

the rate of interest specified in the promissory note.

Question 28

All of the following are advantages of FHA financing EXCEPT A) building standards are improved. B) the loan amount is appropriate for the borrower's income. C) low mortgage insurance costs protect the borrower. D) short-term financing is eliminated.

Answer 28

low mortgage insurance costs protect the borrower.

Question 29

All of these people can sue for specific performance EXCEPT A) an attorney-in-fact acting for the principal. B) a broker acting as the agent for the principal. C) the purchaser of a residential property. D) the seller of a large tract of land.

Answer 29

a broker acting as the agent for the principal.

Question 30

``` In accordance with the Real Estate Settlement Procedures Act, the lender must supply the borrower with a Uniform Settlement Statement A) 10 days after loan commitment. B) 3 days prior to settlement. C) 1 day prior to settlement. D) at or before closing. ```

Answer 30

at or before closing.

Question 31

``` If you, as a broker, are the buyer's agent, you will want others to know A) after the offer is accepted. B) before the close of escrow. C) after you get your commission. D) as soon as possible. ```

Answer 31

as soon as possible.

Question 32

``` An executory contract is a A) contract with an executor of an estate. B) contract that is yet to be performed by one or both parties. C) contract that has been fully performed. D) written contract that cannot be altered by oral agreement. ```

Answer 32

contract that is yet to be performed by one or both parties.

Question 33

``` The lien of a recorded deed of trust is removed from the records A) by recordation of a grant deed. B) when a reconveyance deed is recorded. C) by posting of a surety bond. D) when final payment has been made by the trustor. ```

Answer 33

when a reconveyance deed is recorded.

Question 34

A broker obtained a $1,000 deposit check from a buyer with an offer to purchase and deposited it in a trust account. The owner rejected the offer and the broker immediately drew a check on the trust account to return the deposit to the buyer. If the buyer's check were to be returned later marked "Insufficient Funds" A) there was no shortage in the trust account as the buyer's check did not clear. B) this is not a violation as there were sufficient funds in trust account to cover the withdrawal. C) this was in violation of real estate law as a broker cannot refund the buyer's deposit until the buyer's check has cleared. D) there was a $1,000 shortage in the trust account.

Answer 34

there was a $1,000 shortage in the trust account.

Question 35

``` The gross multiplier is LEAST likely to be used in the appraisal of A) apartment buildings. B) vacant land. C) a residence. D) commercial property. ```

Answer 35

vacant land.