L&P 1 Q

Question 1

The seller says he fixed the water seepage in his basement and tells the broker to make sure the buyer is aware of the repair. The broker knows this is not true but obeys the seller. The broker is guilty of

Answer 1

misrepresentation.

Question 2

The point at which supply and demand are balanced is known as

Answer 2

equilibrium.

Question 3

According to law, a trade fixture is

Answer 3

Personality

Question 4

Which of the following would NOT be an improvement?

Answer 4

Crops

Question 5

Joan is interested in a house that fits most of her needs, but it is located in a busy downtown area where she is not sure she wants to live. Her concern about the property location is called:

Answer 5

area preference

Question 6

The phrase “bundle of legal rights” is properly included in:

Answer 6

the definition of real property

Question 7

A rancher owns a parcel of land on which oil was discovered. Who owns the oil if the rancher has not previously conveyed the oil rights?

Answer 7

The Rancher

Question 8

Certain items on the premises that are installed by the tenant and are related to the tenant’s business are called:

Answer 8

Trade fixtures

Question 9

Which of the following is NOT an economic characteristic of land?

Answer 9

A. Scarcity
( ) B. Permanence of investment
( X ) C. Uniqueness
( ) D. Area preference

Question 10

Joe leases store space to Bob for a restaurant, and Bob installs his ovens, booths, counters, and other equipment. When do these items become real property?

Answer 10

When Bob defaults on his rental payments.

Question 11

A salesperson takes a listing which is approved by the supervisory broker. The property was shown by a number of brokers, including the supervisory broker who brings an offer to the seller. What brokerage relationships exist between the parties?

Answer 11

Broker is an agent for the seller, buyer is a customer

Question 12

The buyer of a $125,000 home has paid $2,000 as earnest money and has a loan commitment for 70 percent of the purchase price. The balance of the cash the buyer needs to complete the transaction is

Answer 12

35,500

Question 13

Mary listed her house for sale at $100,000. If her cost was 80 percent of the listing price, what will her percentage of profit be if her real estate is sold for the listing price?

Answer 13

25%

Question 14

The L’s sold their vacation home for $88,000. If they made a profit of 10 percent, what was the original cost of the property?

Answer 14

$80,000

Question 15

The real estate broker’s responsibility to keep the principal informed of all the facts that could affect a transaction is the duty of

Answer 15

Disclosure

Question 16

A broker is permitted to represent both the seller and the buyer in the same transaction when

Answer 16

both parties have been informed and agree to the dual representation

Question 17

Upon discovering a latent defect in the property, the licensee should discuss the problem with the seller and then

Answer 17

inform any prospective buyers of the defect

Question 18

A buyer who is shown properties listed for rent by a broker is the broker’s:

Answer 18

customer

Question 19

A seller has listed her home with a broker for $90,000, and the broker tells a prospective buyer to submit a low offer because the seller is desperate to sell. The buyer offers $85,000 and the seller accepts it. In this situation

Answer 19

the broker has violated his agency relationship with the seller

Question 20

Which duty would be easiest to provide when you are representing both the buyer and the seller in the same transaction?

Answer 20

Accounting