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Real Estate > Exam 101 General > Flashcards

Exam 101 General Flashcards

1
Q 
If a property sold for $525,000 and an owner made a 50% profit, what did he paid for it?
A. $262,500
B. $350,000
C. $393,750
D. $787,500
A

B. $350,000

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2
Q

One common method for controlling the issues negatively created by conflict of interest in dual representation is:
A. Prohibiting dual representation altogether.
B. Allowing a broker to designate separate salespeople within the the company as legal representatives of each of the clients.
C. Requiring that disclosures of dual representation includes a strong warning to buyers that no listing broker can represent them effectively because of the broker’s prior commitment to the seller.
D. Permitting brokers, for the first time, to enter into brokerage agreements with buyers.

A

B. Allowing a broker to designate separate salespeople within the the company as legal representatives of each of the clients.

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3
Q 
A real estate salesperson, selling the listings of another brokerage firm, is directly responsible to account to:
A. His or her broker 
B. The owner
C. The listing broker
D. The multiple listings service
A

A. His or her broker

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4
Q 
Which of the following terms identifies a property owner who has entered into an agency relationship with a licensee?
A. Proxy 
B. Vendee
C. Principal
D. Fiduciary
A

C. Principal

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5
Q 
Mutual assent to a real estate contract is ordinarily indicated by:
A. Attestation
B. Offer and acceptance
C. Acknowledgement 
D. A seal
A

B. Offer and acceptance

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6
Q

Prior to checking the facts, a broker who is the seller’s agent tells a buyer that the property taxes in a particular neighborhood are among the lowest in the area. The buyer relies on the broker’s statement & 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 due to:
A: Puffing
B. Misrepresentation
C. Lack of care & diligence
D. Nothing; the property taxes are a matter of public record & it was the buyer’s responsibility to check them

A

B. Misrepresentation

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7
Q

Escheat occurs when:
A. Property is seized to satisfy a tax lien
B. Property is condemned for a necessary public use
C. A property owner dies without heirs or valid will
D. A property owner failed to perform cleanup of toxic waste

A

C. A property owner dies without heirs or valid will

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8
Q 
Which of the following would NOT be a basis for the termination of a listing?
A. Expiration of time 
B.Insanity of the agent 
C. Destruction of the property by fire 
D. Death of the listing salesperson
A

D. Death of the listing salesperson

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9
Q 
If seller B has induced buyer C, who is employed by him, to purchase property under threat of dismissal, seller B has used:
A. Undue influence
B. Fraud
C. A right of rescission
D. The statute of limitations
A

A. Undue influence

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10
Q

Prospective purchasers made an offer on a property. The seller 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 better and made an offer on it, which was accepted. Which of the following is TRUE?
A. The contract on the first house is not enforceable
B. Neither contract is binding
C. Only the first contract is valid
D. Both contracts are valid

A

D. Both contracts are valid

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11
Q 
An assessment of taxes on real property according to the value of the property is known as which of the following?
A. Appraisal
B. Ad valorem
C.Replacement cost
D. Accretion
A

B. Ad valorem

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12
Q 
An action for inverse condemnation may be brought by:
A. The county
B. The city
C. A homeowner
D. The zoning board
A

C. A homeowner

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13
Q 
An environmental statement will typically describe the effects of a proposed project varying on factors such as:
A. Public health & safety
B. Zoning 
C. Highest & best use of the land
D. Mapping requirements
A

A. Public health & safety

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14
Q 
In the records at a courthouse, a second trust deed can usually be distinguished from the first trust such as:
A. The words first or second 
B. The date on the note
C. The heading of the instruments 
D. The time & date of recording
A

D. The time & date of recording

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15
Q

Although states make laws governing water rights & the rights in land that borders water, most states generally follow one of two basic doctrines regarding water rights. Either riparian or 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?
A. Water is abundant
B. Water is scarce
C. Waterways are important to commercial traffic
D. There are sever water pollution problems

A

B. Water is scarce

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16
Q 
When one of the parties to a contract fails to perform one of it's conditions, that contract is considered:
A. Breached 
B. Void
C. Executed 
D. Cancelled
A

A. Breached

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17
Q 
At a July 17th closing, with all adjustments paid through the day of closing, in a statutory year where the current county assessment is $2,250.00, the buyer portion would be paid in arrears. Represented  as A:
A. Credit buyer $1,231.25
B. Credit buyer $1,225.00
C. Debit buyer $1,231.25
D. Debit buyer $1,225.00
A

A. Credit buyer $1,231.25

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18
Q 
A qualified fee simple estate may be:
A. In perpetuity 
B. Reclaimed in grantor's name
C. Transferred by a bill of sale 
D. Interpreted as a gross easement
A

B. Reclaimed in grantor’s name

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19
Q

Antitrust laws prohibit competing agents from all of the following except?
A. Boycotting other brokers in the marketplace
B. Dividing the market to restrict competition
C. Agreeing to set sales commissions & management rates
D. Receiving compensation from both the buyer and seller

A

D. Receiving compensation from both the buyer and seller

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20
Q

A violation of Federal Fair Housing laws may be heard by an administrative laws judge within the department of housing & Urban Development HUD or by a federal district court judge in Federal court. The advantage of a federal court heraring to the complaining party is?
A. The case will be more thoroughly reviewed
B. There is no dollar limit on damages paid
C. Only a district court judge can order that the property sold to the complaining party
D. Only a district court judge can order jail for the guilty plea

A

B. There is no dollar limit on damages paid

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21
Q 
A life estate may not be:
A. Passed by a will
B. Mortgaged
C. Sold
D. Leased
A

A. Passed by a will

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22
Q 
A Farmer in Colorado owns some property which is legally described as the S 1/2 of NE 1/4 of SW 1/4 of section 16. How many acres are included in this parcel?
A. 20
B. 40
C. 80
D. 60
A

A. 20

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23
Q

When is flood insurance necessary in order to obtain a loan?
A. When the property is located in flood hazard zone
B. If lender learns the property securing an existing loan has been categorized as being located in flood hazard
C. When ther is no hazard insurance. If the property is covered by hazard insurance, flood hazards is also covered
D. Never, flood insurance is optional and requiring special insurance in certain areas called redlining

A

A. When the property is located in flood hazard zone

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24
Q 
A lender will approve an 80% loan to value loan on a property that is appraised for $72,250 and sells for $73,500. How much may the purchaser borrow?
A. $57,800
B. $58,400
C. $58,800
D. None of the above
A

A. $57,800

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25
Q

A buys a house with an $80,000 first loan and a $5,000 second loan which were recorded by the lenders. A $10,000 judgment lien is later recorded by someone buyer owned money to prior to buying the home. Which lien has priority?
A. The $80,000 first
B. The $5,000 second
C. The $10,000 judgment lien
D. The $10,000 judgment shares priority with the first

A

A. The $80,000 first

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26
Q 
What type of lease is best for a commercial tanant during an inflationary period?
A. A gross lease
B. A percentage lease 
C. An index lease
D. A net lease
A

A. A gross lease

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27
Q 
Which lien has first priority?
A. Mechanic's lien
B. Mortgage lien
C. Property tax lien
D. Federal income tax lien
A

C. Property tax lien

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28
Q 
A couple is moving to a new city. They have chosen to rent temporary before buying a house to see which part of the city they would like to live in. What type of lease would better suit the couples needs?
A. Lease option
B. Rental lease
C. Month to month
D. Lease purchase
A

C. Month to month

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29
Q 
Under an installment Land contract, who retains ownership of the property?
A. Vendor
B. Vendee
C. Grantor
D. Grantee
A

A. Vendor

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30
Q

When does the law of Descent come into play?
A. When a person dies testate
B. When a person dies without having heirs
C. When a person dies intestate with heirs
D. When a person makes a living trust

A

C. When a person dies intestate with heirs

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31
Q

The Equal Credit Opportunity Act addresses all of the following with the exception of:
A. Discrimination in lending
B. Written statements of credit denial
C. Acceptable factors for borrower analysis
D. Standardization of interest rates

A

D. Standardization of interest rates

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32
Q 
RESPA requires disclosure of:
A. Legal fees 
B. Broker commissions 
C. Loan payoffs
D. Prepayment penalties on loan to be paid off
A

D. Prepayment penalties on loan to be paid off

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33
Q 
An agency relationship between a propery owner and a property manger is typically created through?
A. A mangement agreement
B. Payment of management fee
C. An exclusive agency agreement 
D. An independent contractor agreement
A

A. A mangement agreement

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34
Q 
What is the value of a property where the gross rent multiplier is 170 and the annual rent is $12,000?
A. $175,000
B. $170,000
C. $174,000
D. $175,000
A

B. $170,000

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35
Q

A major reasson for buying and owning a condominium as opposed to detached single-family is that?
A. A condominium tends to be more affordable
B. A condominium requires maintenace
C. A condominium is easier to sell
D. Condominium ownership has superior tax advantages

A

A. A condominium tends to be more affordable

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36
Q 
A buyer made an offer on a property that was listed at $350,000. She wanted to put down $35,000 and make payments to the seller to retain the title  until the principle was paid off. The seller accepted, the buyer became a?
A. Grantor 
B. Grantee
C. Vendor
D. Vendee
A

D. Vendee

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37
Q

The real estate broker who is listing a house for sale should verify?
A. Whether radon is present
B. The number of square feet in the building
C. That the electrical wiring is up to code
D. How much the seller originally paid for the property

A

B. The number of square feet in the building

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38
Q 
In calculating tax relating to the taxpayers primary dwelling, he/she may deduct:
A. Property taxes paid 
B. Mortgage principal repayments 
C. Improvements
D. Depreciation
A

A. Property taxes paid

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39
Q

A salesperson lists a property with a state contract that allows dual agency. The sales person is considered?
A. An independent contractor to the broker and the agent to the principal
B. An agent to the buyer and an agent to the seller
C. A subagent to the broker and an agent to the principal
D. An agent to the broker and a agent to the principal

A

B. An agent to the buyer and an agent to the seller

40
Q 
If a building is owned, free and clear that is worth $115,000 and you want an annual return of 12%, What net operating income is needeed each month?
A. $1,150
B. $9,583
C. $13,800
D. None of the above
A

A. $1,150

41
Q

A prospective buyer wrote a contract to purchase property. The owner responded with a counteroffer. While the buyer was reviewing the counteroffer, the owner received a better offer. The owner can accept the second offer if?
A. It satisfies or exceeds all terms included in the counteroffer
B. The owner has not been informed of purchasers acceptance
C. The owner gives the first buyer notice that another offer was received and an opportunity to revise the bid
D. The first buyer is informed, in writing, of the owner’s intent to accept another offer

A

B. The owner has not been informed of purchasers acceptance

42
Q

The differences between a cooperative and a condominium owner is that a condominium owner may:
A. Own and finance their property
B. Never own common interest assets
C. Have a proprietary lease
D. Always determine who their neighbors are

A

A. Own and finance their property

43
Q 
A corporation wishes to purchase an entire property as sole owner. It would purchase as an/a:
A. Owner in severalty 
B. Owner in entirety 
C. Life tenant 
D. Owner in equity
A

A. Owner in severalty

44
Q

The Buyer is assuming a loan presently on the property in the amount of $110,000. What is the adjustment at closing?
A. Credit buyer $110,000; Debit the seller $110,000
B. Credit seller $110,000; Debit buyer $110,000
C. Credit buyer $110,000; No adjustments to seller
D. Credit seller $110,000; No adjustments to buyer

A

A. Credit buyer $110,000; Debit the seller $110,000

45
Q

A seller informs the listing broker that her home was treated for termites 10 years ago, so there are no termites now. Before listing the property the agent should?
A. Tell the seller not to discolse; because statute of limitations has run out
B. Tell the seller to disclose the termite treatment on the property disclosure
C. Talk to the neighbor to see if there are termites in the neighborhood
D. Talk to the planning and zoning department for local termite eradication ordinance

A

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

46
Q

For Federal income tax purposes, which of the following are costs of ownership that may be deducted from gross income?
A. Mortgage loan insterest, local property taxes, and mortgage loan origination fees
B. Mortgage loan interest, homeowner’s insurance premium, and local property taxes
C. Cost of essential repairs, mortgage loan origination fees, and local property tax
D. Homeowner’s insurance premium, mortgage loan origination fees, mortgage loan interest

A

A. Mortgage loan insterest, local property taxes, and mortgage loan origination fees

47
Q

Which of the following will give the taxpayer the greatest benefit?
A. A tax depreciation of $1.00 from it’s top
B. A tax credit of $1.00
C. Wages of $1.00
D. Commission of $1.00

A

B. A tax credit of $1.00

48
Q 
Taxes paid in advance are shown on the closing statement as:
A. Debit seller, credit buyer
B. Credit seller, debit broker
C. Credit buyer, debit broker
D. Debit buyer, credit seller
A

D. Debit buyer, credit seller

49
Q 
How does an owner avoid a sale in execution after a foreclosure?
A. By rescission
B. By novation
C. By equitable redemption
D. By statutory redemption
A

D. By statutory redemption

50
Q 
When someone has heirs but dies intestate, the estate is distributed according to the 
A. Statue of descent and distribution 
B. Marital property laws
C. Power of Escheat
D. Devisees
A

A. Statue of descent and distribution

51
Q

The main differences between zoning and planning as they relate to land use control, is that zoning
A. Applies only to cities, towns, and villages. While planning applies to all land
B. Is backed by police power while planinning is backed by injunctive relief
C. Is a legal implementation while planning is a process
D. Is handled by governmental agencies while planning is handled by private organizations

A

C. Is a legal implementation while planning is a process

52
Q 
Legal desciptions using the government's survey systems are not typically utilized in?
A. The original 13 states 
B. Subdivisions 
C. Quitclaim deed 
D. Morgages or deeds of trust
A

A. The original 13 states

53
Q 
An appraiser, appraising an income-generating office building, would be most concerned with:
A. Gross income
B. Net gross income
C. Effective gross income
D. Net operating income
A

D. Net operating income

54
Q

A borrower has defaulted on the loan. The mortgage contains an acceleration clause. This allows the lender to?
A. Confiscate the borrowers personal assets
B. Demand immediate payment of entire note
C. Report the borrower to the Federal Housing Administration
D. Force the borrower to leave premises

A

B. Demand immediate payment of entire note

55
Q

A characteristic of owning property by land trust, is that
A. A lower tax assessment, typically the result
B. Corporate tax rates are applied to profits
C. The identity of the legal owner is kept confidential
D. Building permits are more easily obtained

A

C. The identity of the legal owner is kept confidential

56
Q 
The higher the leverage:
A. The greater the L.T.V
B. The less the lender's risk
C. The greater the equity
D. The more of borrower's funds are utilized
A

A. The greater the L.T.V

57
Q 
Whether or not FHA loan is a qualified or unqualified assumption depends on:
A. The borrower's credit score 
B. The date of the loan
C. The individual lender requirements
D. The amount of the loan to be assumed
A

B. The date of the loan

58
Q 
A contract has been written in which obliges the sellers to transfer title to their land to the buyers, if the buyers come up with $22,000 on or before December 31st. This is called?
A. A buy sell agreement
B. An option contract 
C. An installment contract 
D. A vendor's lien interest
A

B. An option contract

59
Q 
At the time of harvest, crops that require annual planning are typically considered to be?
A. Improvements
B. Personal Property
C. Real Property
D. Appurtenances
A

B. Personal Property

60
Q 
The Name of the Colorless, odorless gas often found in residential properties that represents an environmental health hazard associated with promoting lung cancer is?
A. Radon 
B. Methamphetamines 
C. Asbestos
D. Carbon Monoxide
A

A. Radon

61
Q 
The person or party pledging real estate as security for a debt in a mortgage is called the:
A. Mortagor 
B. Mortgagee
C. Trustee
D. Beneficiary
A

A. Mortagor

62
Q 
A couple signed a lease on a property for a period of 1 year. The lease does not contain an automatic renewal clause. The couple plans to move out at the end of the lease. How much notice must they give to comply with the lease term?
A. 30 Days
B. 60 Days 
C. 90 Days 
D. No notice is required
A

D. No notice is required

63
Q 
X owns a lot that fronts a lake. Y owns the lot directly behind X's lot. Y procures an easement from X to gain access to the lake. Which of the following is likely to be true?
A. The value of X's lot is increased
B. The value of Y's lot is decreased
C. The value of Y's lot is increased
D. The value of X's lot is not changed
A

C. The value of Y’s lot is increased

64
Q

Parcels A, B and C are located side by side and owned by three different individuals. A portion is worth $20,000, B is worth $27,000, and C is worth $16,000 for a total of $63,000. A developer believes that if all three can be purchased, the larger parcel would be worth $85,000. By assembling these under one owner, they would be worth $22,000 more than their individual values. This utilizes which principle value?

A. Plottage
B. Substitution
C. Contribution
D. Progression

A

A. Plottage

65
Q 
What kind of deed is used to guarantee that during the duration of the current owner, he has not jeopardized the title?
A. Corrective Deed
B. Quit Claim Deed
C. General Warranty Deed
D. Special Warranty Deed
A

D. Special Warranty Deed

66
Q 
After gathering information from various appraisal approaches, the appraiser must then:
A. Consolidate the approaches 
B. Reconcile the approaches 
C. Apply assemblage
D. Average the value
A

B. Reconcile the approaches

67
Q

In valuing a public fire station, an appraiser would place the most emphasis on the:
A. Market approach
B. Cost approach
C. Income approach
D. Market, cost and income approaches equally

A

B. Cost approach

68
Q 
The best method for appraising an older home is the:
A. Income approach
B. Cost approach
C. Market comparison approach
D. Gross rent multiplierlier method
A

C. Market comparison approach

69
Q

A managing broker may be held responsible for?
A. All actions of asscociated salespersons
B. All real estate activities of salesperson
C. Only those real estate activities the broker is aware of
D. No activities of independent contractors

A

A. All actions of asscociated salespersons

70
Q

The four characteristics of value are:
A. Transferability, cost, scarcity, utility
B. Sarcity, utility, depreciation, transferability
C. Utility, appreciation, demand, cost
D. Transferability, scarcity, demand, utility

A

D. Transferability, scarcity, demand, utility

71
Q 
Market value is most clearly related to:
A. Value in use 
B. Value in exchange
C. Value in transit
D. Value in transition
A

B. Value in exchange

72
Q

In comparing 2 properties, you find that the comparable has a fireplace worth $3,000 but dose not have carport worth $2,000 as in the subject. You would:
A. Add $3,000 to the comparable and add $2,000 to the subject
B. Subtract $3,000 from the comparable and subject $2,000 from the subject
C. Subtract only ubtract $1,000 from the comparable $1,000 from the subject property
D. Subtract $1,000 from the comparable

A

D. Subtract $1,000 from the comparable

73
Q 
Ownership in the common areas of a condominium is held by all owners as:
A. Tenants in common
B. Joint tenancy 
C. Co-op
D. Partnership
A

A. Tenants in common

74
Q

The method of depreciating investment property is to depreciate:
A. The value of the land only
B. The value of the improvement only
C. The difference between the improvement values less the cost of the land
D. The total value

A

B. The value of the improvement only

75
Q 
A $45,000 house depreciates at twice the average rate of 40 years. What is the value after one year?
A. $42,750
B. $39,000
C. $39,500
D. $36,000
A

A. $42,750

76
Q 
A $50,000 loan has eqaul interest payments and then a final payment of $50,000. This is:
A. An amortized loan 
B. A graduated loan
C. An adjustable loan
D. A term loan with a balloon payment
A

D. A term loan with a balloon payment

77
Q 
A promissory note:
A. Is redeemed at closing 
B. Is evidence of the mortgage
C. Is security for a loan
D. Is an instrument of debt
A

D. Is an instrument of debt

78
Q 
In what type of lease does the lessee agree to pay certain costs of operating the building in order to provide a guaranteed annuity to the lessor?
A. Periodic lease
B. Graduated lease
C. Percentage lease 
D. Net lease
A

D. Net lease

79
Q 
In what type of lease does the lessee agree to pay certain costs of operating the building in order to provide a guaranteed annuity to the lessor?
A. Periodic lease
B. Graduated lease
C. Percentage lease
D. Net lease
A

D. Net lease

80
Q 
Which of the following interests may NOT be mortgage ?
A. Leased fee
B. Leasehold
C. Life estate
D. License
A

D. License

81
Q 
In an appraisal using the income approach, an increase in the caplialization rate results in:
A. A decrease in value 
B. An increase in value  
C. A receptive rate
D. A new offer
A

A. A decrease in value

82
Q 
When the words "point of beginning" are used in a legal description, the property has probably been identified by:
A. Lot and block method 
B. The government survey method
C. The metes and bounds method
D. The azmuth method
A

C. The metes and bounds method

83
Q 
Building codes regulate:
A. Set backs 
B. Zoning 
C. Architectural design
D. Structural integrity
A

D. Structural integrity

84
Q

Dual agency refers to which of the following:
A. Acting as an agent for two buyers who wish to purchase a home
B. Acting for two sellers who wish to sell their house
C. A transaction broker relationship
D. Acting as an agent for a buyer and seller in the same transaction

A

D. Acting as an agent for a buyer and seller in the same transaction

85
Q 
What would an appraiser do as a first step in appraising a vacant site?
A. Determine a capitalization rate 
B. Determine a recapture rate 
C. Do a soil analysis
D. Determine the highest and best use
A

A. Determine a capitalization rate

86
Q 
To be transferred, a warranty must be:
A. Signed by the grantor 
B. Recorded by the grantee
C. Signed by the grantee
D. Filed with the Secretary of State
A

A. Signed by the grantor

87
Q

A developer is building a condominium with 20 units, two floors, but no elevator. In terms of the ADA, the developer must provide accessibility on:
A. The first floor only
B. The second floor only
C. The units to be sold to elderly persons only
D. The whole building

A

A. The first floor only

88
Q

A seller does not wish to sell to any Hispanic buyer. The agent:
A. May select offers which meet this requirement and submit only those
B. Must submit all offers to the client’s instructions
C. Must advise the seller that this is unlawful and that he/she cannot accept the mandate
D. Can have hs license revoked by H.UD

A

D. Can have hs license revoked by H.UD

89
Q 
Which takes preference in a foreclosure?
A. A mechanic's lien
B. A property tax lien
C. An income tax lien
D. A mortgage lien
A

B. A property tax lien

90
Q

A seller sells her house and some furiture is included. The broker should ensure that at closing, she has :
A. A certificate of purchase for the house
B. A note
C. A security finance certificate
D. A bill of sale for the furniture

A

D. A bill of sale for the furniture

91
Q 
A small office building sold for $949,000 and the broker received a commission of $54,990. What was the broker's commission rate?
A. 5.8%
B. 6.2%
C. 7%
D. 11.3%
A

A. 5.8%

92
Q 
A seller wishes to net $845,950 for the sale of her property. If her broker is to receive a fee of 4% of the selling price and an allowance of $50 for expenses, what must the selling price be?
A. $896,757
B. $889,600
C. $898,040
D. $881,250
A

D. $881,250

93
Q 
The provisions of the Americans With Disabilities Act "ADA" are MOST likely to apply to owners of which of the following types of property?
A. Condominiums
B. Time-Share properties 
C. Single-Family residences
D. Multiplex movie theaters
A

D. Multiplex movie theaters

94
Q 
If the interest rate is 5-1/4% and the monthly interest payment is $350, the principal sum would be:
A. $50,000
B. $80,000
C. $70,000
D. $60,000
A

B. $80,000

95
Q

An agent acting as a broker for the seller, presents an offer to buy from the agents former college rommate. The broker knows that the buyer will increase the amount of the offer if the seller turns it down. When presenting the offer, the broker the should?
A. Tell the seller that the buyer will pay more
B. Not disclose that the buyer will pay more to ensure fair treatment of all parties
C. Try to negotiate a fair compromise between what the seller is asking and what the buyer is offering
D. Encourage the seller to delay accepting the offer.

A

B. Not disclose that the buyer will pay more to ensure fair treatment of all parties

Real Estate (3 decks)

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