National Exam Questions Flashcards
Individuals who act as intermediaries between the borrower and the lender, qualifying the buyer and finding
lenders are:
Select one:
A. Mortgage brokers
B. Mortgage bankers
C. Banks
D. Savings and Loans
A. Mortgage brokers
Another name for “alienation clause” is:
Select one:
a. Due on sale
b. PITI clause
c. Subordination clause
d. Subrogation clause
a. Due on sale
Which group is not protected by fair housing laws?
Select one:
A. families with children under 18
B. persons 55 or older
C. alcoholics
D. illegal drug users
D. illegal drug users
What type of agreement is used to change the priority of liens?
Select one:
a. Subordination agreement
b. Lis pendens
c. Mortgage agreement
d. Superiority agreement
a. Subordination agreement
The process of determining the worth of something is called:
Select one:
a. valuation.
b. estimating.
c. an appraisal.
d. educated guess.
a. valuation.
A property owner owns land near a waterway with no access to the water. He obtains permission from the state to use the waterway under the doctrine of prior appropriation. How does he obtain access to the waterway?
Select one:
A. apply for an easement by necessity
B. acquire an easement by prescription
C. he must buy the neighboring land in order to gain access.
D. he must negotiate an easement with the owner of the waterfront property.
D. he must negotiate an easement with the owner of the waterfront property.
Real estate investors can defer taxation of capital gains by making property exchanges.
Select one:
True
False
True
Things of abstract value such as the promise for love, affection, friendship or loyalty are known as what type of
consideration?
Select one:
a. Good
b. Valuable
c. Non-monetary
d. Legal
a. Good
The method of arriving at a value by calculating the cost to build an exact replica of the building is called
Select one:
A. reproduction cost
B. replacement cost
C. exact building cost
D. replication cost
A. reproduction cost
All of the following are TRUE concerning Contract for Deed EXCEPT:
Select one:
a. The seller retains title to the property until the debt is paid.
b. The sale and financial agreement are generally combined in one document.
c. In most states the seller does not need to go through foreclosure proceedings if the buyer defaults.
d. The buyer receives full legal title at the act of sale.
d. The buyer receives full legal title at the act of sale.
The seller receives an offer on his house. He responds with a counter offer. While the buyer is considering the counter offer, the buyer sees a house that he likes better and is in a more favorable location. What should his agent advise him to do?
Select one:
a. The agent should tell the buyer to reject the counter offer before putting in an offer on the better house.
b. The agent should advise him to put an offer in on the house he likes more.
c. The agent should advise him to do nothing until the counter offer expires.
d. The agent should tell him that you cannot have two offers at the same time on two different houses.
b. The agent should advise him to put an offer in on the house he likes more.
The letters MAI stand for:
Select one:
a. Master of Appraisal Institute
b. Master Assessment Indicator
c. Most Advanced Indicator
d. Market Analysis Indicator
a. Master of Appraisal Institute
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 transferred most of the Federal Reserve’s responsibilities for enforcing TILA to:
Select one:
a. The Consumer Financial Protection Bureau
b. HUD
c. FHA
d. The states
a. The Consumer Financial Protection Bureau
In a trust deed, the owner is the ________.
Select one:
a. trustor.
b. trustee.
c. beneficiary.
d. subordinator.
a. trustor.
In some cases, the borrower simply gives the property to the lender and the lender cancels the note and forfeits the right to a deficiency judgment. This is called
Select one:
A. deed in lieu of foreclosure
B. friendly foreclosure
C. Dation en Paiement
D. all of the above
D. all of the above
The type of lease that is held by a shareholder/tenant in a cooperative is a
Select one:
A. proprietary lease
B. net lease
C. ground lease
D. percentage lease
A. proprietary lease
The four physical characteristics of land are
Select one:
A. permanence, immobility, complexity, and uniqueness.
B. Fixity, permanence, uniqueness, and balance.
C. Permanence, homeogeneity, uniqueness, and complexity.
D. Situs, permanence, immobility, and complexity.
A. permanence, immobility, complexity, and uniqueness.
A covenant is the same as a
Select one:
A. promise
B. clause
C. lien
D. mortgage
A. promise
A property tax that is imposed only on a specific segment of the community to pay for improvements for that segment is called a
Select one:
A. lien
B. specific lien
C. special assessment
D. spot zoning
C. special assessment
An investor’s rate of return on his investment is called the:
Select one:
A. net annual income
B. gross rent multiplier
C. capitalization rate
D. investment rate
C. capitalization rate
A developer bought some land and wanted to divide it into lots. When can he start selling lots?
Select one:
a. As soon as he chooses
b. When he has a permit
c. When the land is paid for
d. When his plat is approved
d. When his plat is approved
A salesperson working with a co-operating broker has a fiduciary relationship to all EXCEPT:
Select one:
A. the seller
B. the buyer
C. the co-operating broker
D. the listing broker
B. the buyer
A lien which attaches only to the property explicitly stated in the lien is a
Select one:
A. general lien
B. specific lien
C. attachment lien
D. personal lien
B. specific lien
An additional time period in which the borrower can pay a debt and redeem his property is called
Select one:
A. equitable right of redemption
B. loan extension
C. collateral
D. late payment
A. equitable right of redemption
In what type of lease does the tenant pay a flat rate plus a share of the property expenses?
Select one:
a. Net lease
b. Percentage lease
c. Ground lease
d. Land lease
a. Net lease
The actions of real estate professionals may be subject to a higher degree of scrutiny because:
Select one:
a. They have greater involvement with numbers of persons seeking to buy and sell homes.
b. The penalties for real estate agents is higher than for other people.
c. They come in contact with more minorities than other people.
d. They have more opportunity for discrimination.
a. They have greater involvement with numbers of persons seeking to buy and sell homes.
Which type of lease is usually used for residential property?
Select one:
a. Straight Lease
b. Net Lease
c. Percentage Leae
d. Graduated Lease
a. Straight Lease
An agent who is authorized to handle matters of all types for the principal is a:
Select one:
a. Universal agent
b. Special agent
c. General agent
d. Comprehensive agent
a. Universal agent
Legislation that was specifically designed to provide for a national policy of fair housing was the:
Select one:
a. Fair Housing Act of 1968.
b. 1988 Amendment to the Fair Housing Act.
c. Executive Order 11063.
d. Civil Rights Act of 1964.
a. Fair Housing Act of 1968.
Which type of lease automatically terminates at the expiration of the lease without requiring notice?
Select one:
a. Tenancy for Years
b. Tenancy at Will.
c. Periodic Tenancy.
d. Tenancy at Sufferance.
a. Tenancy for Years
What type of fixture is considered personal property even though it is attached to the building?
Select one:
A. Annexed property
B. Trade fixtures
C. Movables
D. There is no such thing.
B. Trade fixtures
A clause in a blanket mortgage which allows for each property to be released from the mortgage as it is sold is
called a:
Select one:
a. partial release clause.
b. defeasance clause.
c. reverter clause.
d. package clause.
a. partial release clause.
In an adjustable rate mortgage or ARM, the interest rate is tied to an economic
Select one:
A. constant
B. index
C. adjustor
D. rate
B. index
Joe and Mary are purchasing a house for $250,000. They have secured an 80% loan at 4.5% for 30 years. The will pay 2 discount points. How much cash will they need at closing?
Select one:
a. $54,000
b. $55,000
c. $4000
d. $50,000
a. $54,000
$250,000 X 80% = $200,000 (loan amount)
$200,000 X 2% = $4,000 (cost of points)
$250,000 - $200,000 = $50,000 (downpayment)
$50,000 + $4000 = $54,000
The correct answer is: $54,000
The buyer’s loan amount and deposit would both be listed on the settlement statement as:
Select one:
A. credit to buyer, nothing to seller
B. credit to buyer, debit to seller
C. debit to buyer, credit to seller
D. debit to buyer, nothing to seller
A. credit to buyer, nothing to seller
A debit is equivalent to a withdrawal and a credit is equivalent to a deposit. The buyer must make deposits into his “account” before he can pay the seller. The loan amount, deposit and down payment are all
deposited into the buyer’s account.
Representing two principals to a transaction without the knowledge and consent of both is
Select one:
A. dual agency
B. undisclosed dual agency
C. subagency
D. designated agency
B. undisclosed dual agency
Another name for Rectangular Survey is:
Select one:
a. Government Survey
b. Lot, Block and Tract
c. Metes and Bounds
d. Monuments and Markings
a. Government Survey
Which of the following types of ownership rights are considered to by future interests?
Select one:
a. Qualified fee estate
b. Determinable fee estate
c. Estate with condition subsequent
d. All of the above
d. All of the above
A type of ownership which extends for an indefinite length of time and includes some or all of the rights contained
in the Bundle of Rights is called a
Select one:
A. freehold estate.
B. non-freehold estate
A. freehold estate.
The two basic types of partnership are:
Select one:
a. general and limited.
b. full and limited.
c. general and partial.
d. full and partial.
a. general and limited.
A sale is to close on July 15. The taxes for the year of $900 are to be paid in arrears on December 31. Using a calendar year and seller pays for day of closing, who will owe for the taxes and how much will they owe? Use a 360 day year.
Select one:
A. $487.50, seller owes
B. $487.50, buyer owes
C. $412.50, seller owes
D. $412.50, buyer owes
A. $487.50, seller owes
Divide the taxes by $900 to find the monthly cost. Since the taxes are paid in arrears, the seller will owe for his part
of the taxes at the closing. The seller has owned the house for 6 1/2 months (January to July 15th). Multiply the
monthly cost by 6.5.
An oral will is called a/an:
Select one:
a. nuncupative will.
b. statutory will.
c. mystic will.
d. There is no such thing as an oral will.
a. nuncupative will.
A type of co-ownership in which all owners must acquire their interest at the same time, hold an equal share, and
has the right of survivorship is called
Select one:
A. tenancy in common
B. joint tenancy
C. tenancy by the entirety
D. community property
B. joint tenancy
In community property, any property acquired outside the marriage, such as an inheritance, is called separate property.
Select one:
True
False
True
The gradual increase in the size of a property as the result of some natural process is called accretion. The land
deposited by this process is called
Select one:
A. alluvion
B. erosion
C. acquisition
D. littoral
A. alluvion
When the debt is paid, the mortgagee cancels the mortgage by filing what instrument?
Select one:
a. Satisfaction of judgment
b. Hypothecation
c. Debt cancellation
d. Lien cancellation
a. Satisfaction of judgment
Legal life estates are ones that are created by law. Which of the following would be a legal life estate?
Select one:
a. A dower
b. A curtesy
c. A homestead
d. All of the above
d. All of the above
An unmarried individual may exclude from income up to ________ of gain realized on the sale or exchange or a residence.
Select one:
a. $250,000
b. $200,000
c. $400,000
d. $500,000
a. $250,000
A house has a market value of $200,000. Assessment for property taxes is 10% of market value. The tax rate is $3 per $100 of assessed value. How much is the property tax?
Select one:
a. $600
b. $1200
c. $300
d. $200
a. $600
Find the assessed value: $200,000 X 10% = $20,000
Find the number of 100’s of assessed value = $20,000 ÷ 100 = 200
Multiply 200 X $3
The borrower, or person making the loan is the:
Select one:
A. mortgagor
B. mortgagee
A. mortgagor
The process by which the value is derived when using two different approaches to value is called
Select one:
A. plottage increment
B. surplus productivity
C. reconciliation
D. unit-in-place method
C. reconciliation
The intentional misrepresentation of a material fact is:
Select one:
A. fraud
B. negligent misrepresentation
C. negligent omission
D. puffing
A. fraud
A general warranty deed absolutely guarantees good title regardless of flaws of title, unrecorded claims,
undisclosed encumbrances, or fraud.
Select one:
True
False
False
The subject property is a 3 bedroom, 2 bath home with a fireplace. It does not have a garage. A comparable sale is found in the neighborhood. It does not have a fireplace but does have a garage. It sold for $95,000. The value of a fireplace is $3000. The value of a garage is $8,000. What would be the value of the subject property?
Select one:
a. $90,000
b. $100,000
c. $108,000
d. $93,000
a. $90,000
If the comparable is superior to the subject, a negative adjustment is made to the subject property. If the
comparable is inferior, a positive adjustment is made. The comp does not have a fireplace and the subject
property does so we add the value of a fireplace to it’s sale price. The comp does have a garage and the subject
property does not, so we subtract the value of a garage to arrive at the adjusted value.
$95,000 + $3000 - $8,000 = $90,000
When appraising an older house for which there are no comparables to be found, what method would you most likely use?
Select one:
A. replacement cost
B. reproduction cost
C. income approach
D. sales comparison approach
A. replacement cost
The Real Estate Settlement Procedures Act, or RESPA, applies to what types of loans?
Select one:
a. New first mortgage residential real estate loans
b. All residential real estate loans
c. First and second mortgage residential real estate loans
d. All real estate loans
a. New first mortgage residential real estate loans
What type of loan is often used for new businesses in order to defer a portion of their mortgage payments until the business has become established and has a greater income?
Select one:
a. graduated payment mortgage.
b. fully amortized mortgage.
c. deficiency mortgage
d. straight loan.
a. graduated payment mortgage.
The principle of value that is the basis for subdivision restrictions is
Select one:
A. competition
B. contribution
C. conformity
D. highest and best use
C. conformity
The additional value between two similar income properties that is due to the land or the location is called
Select one:
A. surplus productivity
B. excess productivity
C. positive situs
D. supply and demand
A. surplus productivity
Agreement among brokers to divide their markets and refrain from competing for each other’s business
Select one:
a. Allocation of markets
b. Price fixing
c. Boycotting
a. Allocation of markets
Conspiracy among brokers to set prices for their services, rather than negotiate such fees
Select one:
a. Allocation of markets
b. Price fixing
c. Boycotting
b. Price fixing
Two or more businesses conspire against other businesses to reduce competition
Select one:
a. Allocation of markets
b. Price fixing
c. Boycotting
c. Boycotting
How do you convert square yards to square feet?
Select one:
a. Multiply the square yards times 9
b. Divide the square yards by nine
c. Multiply the square feet by 9
d. Divide the square feet by 9
a. Multiply the square yards times 9
The annual gross income of an income property minus the operating expenses equals:
Select one:
a. net annual income.
b. gross rent multiplier
c. operating income
d. capitalization rate
a. net annual income.
Because of the trust deed’s _______________ clause, the property can be sold without the necessity of going through a foreclosure.
Select one:
a. power of sale
b. hypothecation
c. defeasance
d. conditional sale
a. power of sale
A person who dies leaving a will is said to have died testate. A person dying without a will is said to have died
Select one:
A. will-less
B. intestate
C. untestated
D. none of the above.
B. intestate
Which type of depreciation is NEVER curable?
Select one:
a. External
b. Physical
c. Functional
d. Depreciated
a. External
One benefit of zoning regulations is to:
Select one:
a. stabilize property values.
b. prevent overdevelopment.
c. keep undesirables out of the neighborhood.
d. create jobs for city workers.
a. stabilize property values.
Commercial appraisals are usually written as a narrative report.
Select one:
True
False
True
A seller wants to sell his house. He must pay off a mortgage of $50,000 and wants to have $30,000 in cash. His broker will charge a 6% commission. What is the least he can sell for?
Select one:
a. $85,106
b. $84,800
c. $85,000
d. $90,000
a. $85,106
If the commission is 6% of the sale price, then the seller’s share is 94% of the sale price. Add the amounts that the
seller needs, then divide by 94%.
$50,000 + $30,000 + 6% = 100%
$50,000 + $30,000 = 94% of the sale price
$80,000 ÷ 94% = $85,106.38 sale price
A contract in which the owner gives a purchaser the right to purchase within a specified time period is called
Select one:
A. an option.
B. installment sale.
C. contract for deed.
D. bond for deed.
A. an option.
A buyer is assuming an outstanding mortgage, which had an unpaid balance of $58,200 after the last payment on August 1. Interest at 10% per annum is paid in advance each month. The sale is to be closed on August 11. What is the amount of prorated mortgage interest to be credited to the seller at the closing? Seller pays for day of closing. Use a 365 day year.
Select one:
A. $15.65
B. $318.90
C. $485.00
D. $582.00
B. $318.90
$58,200 X 10% = $5820; $5820 divided by 365 = $15.95. Seller will be credited for the 12th through the 31st, or 20
days. $15.95 X 20 = $318.90
If the lessee makes improvements to the property, which of the following is TRUE?
Select one:
a. Except for trade fixtures, the lessor has the right to retain the improvements.
b. The lessor must pay the lessee for the improvements.
c. The lessee must remove the improvements when vacating the property.
d. The lessee can deduct the cost of the improvements from the rent.
a. Except for trade fixtures, the lessor has the right to retain the improvements.
A contract between a minor and an adult would be an example of a/an:
Select one:
a. voidable contract.
b. unilateral contract.
c. implied contract.
d. option.
a. voidable contract.
A clause in a promissory note that gives the lender the right to demand payment in full of the entire unpaid debt if the borrower defaults is called a/an:
Select one:
A. defeasance clause
B. acceleration clause
C. prepayment clause
D. lock-in clause
B. acceleration clause
Fixed objects used in the Metes and Bounds method of describing land are known as:
Select one:
a. Monuments
b. Metes
c. Bounds
d. statutes
a. Monuments
What type of easement involves at least two properties?
Select one:
a. easement appurtenant.
b. easement in gross.
c. usufruct.
d. habitation.
a. easement appurtenant.
The borrower’s pledge to repay the loan is known as the:
Select one:
a. promissory note.
b. lien.
c. collateral.
d. mortgage.
a. promissory note.
Which of the following is NOT grounds for termination of an agency relationship?
Select one:
A. death or incapacity of either party.
B. destruction or condemnation of the property
C. failure on the part of the agent to show the property enough times
D. mutual agreement
C. failure on the part of the agent to show the property enough times
A husband and wife own a house together. The husband dies and the widow now owns the house by herself.
What type of ownership does she now have?
Select one:
a. Joint tenancy
b. Community property
c. Severalty
d. None of these
c. Severalty
Which of the following statements could be interpreted as discriminatory?
Select one:
a. I want you to only show my home to Catholics.
b. I want an agent who will bring me the right kind of buyer.
c. We want to sell to good Christian people.
d. All of the above
d. All of the above
If the cost of repairs is greater than the resulting increase in value, then we say the depreciation is
Select one:
A. curable
B. incurable
C. not cost effective
D. not functional
B. incurable
An FHA fund that is similar to private mortgage insurance is:
Select one:
a. mutual mortgage insurance.
b. personal mortgage insurance.
c. member mortgage insurance.
d. FHA insurance.
b. personal mortgage insurance.
The right that insures an owner will be able to use and enjoy his property is the right of:
Select one:
a. Quiet Enjoyment.
b. Possession.
c. Control.
d. Exclusion.
a. Quiet Enjoyment.
When a title company has made a payment to settle a claim covered by a policy, the title company then has a
right to any remedy or damages available to the insured. This is called
Select one:
A. standard policy
B. remediation
C. fair coverage
D. subrogation
D. subrogation
A mortgage that covers both real and personal property is a
Select one:
A. blanket mortgage
B. open-end mortgage
C. package mortgage
D. purchase money mortgage
C. package mortgage
An agreement granting the short term use of a property and which is revocable at any time is called a/an
Select one:
A. easement
B. encroachment
C. license
D. servitude
C. license
Government backed loans are exempt from federal usury laws.
Select one:
True
False
True
The term postive situs may refer to a property with:
Select one:
a. good schools in the area.
b. parks nearby.
c. safe areas.
d. Any of the above.
d. Any of the above.
The person receiving title is known as the:
Select one:
a. grantee.
b. grantor.
c. receiver.
d. receivee.
a. grantee.
An easement appurtenant involves
Select one:
A. one tract of land
B. two tracts of land
C. at least two tracts of land
D. one or more tracts of land
C. at least two tracts of land
An agent notices some cracks in the slab while showing a house. He should
Select one:
A. not say anything because it is not in the seller’s best interest.
B. not say anything because the seller didn’t tell him about it.
C. tell the buyer because it is a material fact.
D. not tell the buyer because the sale might fall through.
C. tell the buyer because it is a material fact.
Replacement cost usually results in a ________ value than Reproduction cost.
Select one:
a. lower
b. higher
c. equivalent
d. less reliable
a. lower
Who can terminate an easement appurtenant?
Select one:
a. Only the dominant tenement
b. Only the servient tenement
c. Either party
d. Both parties must agree to terminate the easement.
a. Only the dominant tenement
If the net annual income on an investment property is $20,000 and the value is $200,000, what is the
capitalization rate?
Select one:
a. 10%
b. 20%
c. 5%
d. 1%
a. 10%
The formula is I over RV. Divide the net income (I) by the value (V) to find the rate (R).
A rental house has a value of $75,000 and an economic life of 40 years. Using straight line depreciation how much will the house depreciate each year?
Select one:
a. $1875
b. $750
c. $2400
d. $7500
a. $1875
Divide the value by the number of years to find the amount per year.
$75,000 ÷ 40 = $1875
A lot is ½ acre. The length is 200 feet. What is the width?
Select one:
A. 100 feet
B. 108.9 feet
C. 120 feet
D. 200 feet
B. 108.9 feet
You must first convert ½ acre to square feet. Remember that 1
acre = 43,560 square feet, so ½ acre = 43,560 ÷ 2 = 21,780 square
feet. Then, using A = L X W, 21,780 = 200 X W. 21,780 ÷ 200 = 108.9.
In addition to income, the Equal Credit Opportunity Act requires that credit applications must be considered only
on the bases of:
Select one:
a. Net worth
b. Job stability.
c. Credit rating.
d. All of the above.
d. All of the above.
Which type of ownership is characterized by possession, interest, time, and title, or PITT is:
Select one:
a. joint tenancy.
b. tenancy in common.
c. tenancy in severalty.
d. condominiums.
a. joint tenancy.
How are building codes enforced?
Select one:
a. By requiring permits.
b. By the police department.
c. By the Sheriff’s department.
d. By the Building Commission.
a. By requiring permits.
What method is used to correct for the curvature of the earth in the Rectangular Survey System?
Select one:
a. Correction lines
b. Abstraction
c. Modified corrections
d. Curved lines
a. Correction lines
A type of insurance that borrowers must have when making a loan that has an LTVR greater than 80% is:
Select one:
a. Private Mortgage Insurance
b. Personal Mortgage Insurance
c. Government Mortgage Insurance
d. Borrower Mortgage Insurance
a. Private Mortgage Insurance
A lease is both a contract and a conveyance.
Select one:
True
False
True
When calculating the value of an income property using the Capitalization Rate, which of the following expenses
is NOT included?
Select one:
a. Monthly debt service, or the mortgage payment
b. Management fees
c. Vacancy losses
d. Taxes and insurance
a. Monthly debt service, or the mortgage payment
Discount points can only be paid by the buyer.
Select one:
True
False
False
The group of lenders who facilitate the buying and selling of mortgages that have been made by the primary mortgage market, by taking over loans that primary lenders have originated is known as:
Select one:
A. Institutional lenders
B. Mortgage bankers
C. Secondary lenders
D. Farmers Home Administration
C. Secondary lenders
A loan which calls for payments of interest only for the term of the loan with the entire principle due at the end of
the term is a
Select one:
A. straight term loan
B. amortized loan
C. partially amortized loan
D. balloon loan
A. straight term loan
A deed which makes no guarantees at all as to the title is a
Select one:
A. general warranty deed
B. special warranty deed
C. bargain and sale deed
D. quitclaim deed
D. quitclaim deed
An “agency coupled with an interest” means that:
Select one:
a. the agent will receive an interest in the thing sold.
b. the agent is dedicated to making the sale happen.
c. the agent will earn a commission on the sale.
d. the agent will earn interest on the deposit money.
a. the agent will receive an interest in the thing sold.
A form of ownership involving several owners holding fee simple title to individual units in a property and
common ownership in the property’s common grounds is called a:
Select one:
A. co-operative
B. condominium
C. MUD
D. PUD
B. condominium
Ownership rights of ocean front property are known as:
Select one:
a. littoral rights.
b. literal rights.
c. appropriated rights.
d. navigation rights.
a. littoral rights.
USPAP, an ethics course that appraisers are required to take is:
Select one:
a. Uniform Standards of Professional Appraisal Practice
b. United States Professional Appraisal Program
c. Uniform Standards of Principles of Appraisal Profession
d. Uniform Statistics of Professional Appraisal Practice
a. Uniform Standards of Professional Appraisal Practice
A couple purchased a home 5 years ago for $160,000. They got a loan for 80% at 6% for 20 years. Their current loan
balance is $152,000. They just got an appraisal for the home and the appraised value is $177,000. What is their equity?
Select one:
a. $25,000
b. $37,000
c. $35,000
d. $20,000
a. $25,000
The equity is the difference between the current loan balance and the current value.
All of the following would be governed by building codes EXCEPT
Select one:
A. electrical system
B. plumbing
C. ceiling supports
D. number of square feet
D. number of square feet
When one party has substantially performed to the terms of the contract but has not completed every detail
exactly as the contract, this is known as:
Select one:
a. substantial performance.
b. executory performance.
c. partial performance.
d. executed performance.
a. substantial performance.
The person who is granted title in a deed is called the:
Select one:
a. grantee
b. grantor
c. trustor
d. trustee
a. grantee
Conditions that must be met before a sales contract is fully enforceable are called?
Select one:
a. contingencies.
b. necessities.
c. addendums.
d. modifications.
a. contingencies.
If the loan amount is $60,000 and the interest rate is 8%, what is the interest payment for the first month?
Select one:
A. $400
B. $480
C. $500
D. $600
A. $400
Use the T formula. Multiply the loan amount times the interest rate to find the yearly interest, then divide by 12 to
find the first month’s interest.
Representing two principals to a transaction without the knowledge and consent of both is
Select one:
A. dual agency
B. undisclosed dual agency
C. subagency
D. designated agency
B. undisclosed dual agency
Do mineral rights transfer when the property is sold?
Select one:
A. Yes, always.
B. No, never.
C. Yes, unless specifically retained in the contract.
D. Only if there has been drilling on the property.
C. Yes, unless specifically retained in the contract.
The selling price X the commission rate = ?
Select one:
a. The commission
b. The down payment
c. The LTVR
d. The interest payment
a. The commission
The amount paid for 1 discount point is equal to 1% of the ___________.
Select one:
a. loan amount
b. selling price
c. down payment
d. closing costs
a. loan amount
A type of seller financing used in connection with a Purchase Money Mortgage is a:
Select one:
a. mechanic’s lien
b. vendor’s lien
c. vendee’s lien
d. seller’s lien
b. vendor’s lien
If a property is sold for an illegal purpose, that contract is
Select one:
A. void
B. voidable
C. unenforceable
D. valid
A. void
Bill has a loan for $50,000 at 9.625% interest for 30 years. The factor from the amortization table is 8.50 for $1,000. Over the total loan, how much interest will Bill pay?
Select one:
A. $103,000
B. $153,000
C. $133,000
D. $ 53,000
A. $103,000
PMI, or Private Mortgage Insurance covers
Select one:
A. the top portion of the loan proceeds over and above the standard 80%.
B. the full loan amount
C. the top 20% of the loan.
D. the top 10% of the loan.
A. the top portion of the loan proceeds over and above the standard 80%.
Which clause in the deed identifies the grantor and the grantee, often including their addresses?
Select one:
A. granting clause
B. vesting clause
C. habendum clause
D. acknowledgment
B. vesting clause
Is a person who is recovered from mental illness protected by the handicap status?
Select one:
a. Yes.
b. No.
Yes
The document which contains the promise to repay along with specific conditions and stipulations is a
Select one:
A. collateral
B. mortgage
C. promissory note
D. pledge
C. promissory note
In which type of listing contract does the seller retain the right to employ as many brokers as he wants to try to sell his property, but is only obligated to pay a commission to the one who actually finds a buyer?
Select one:
A. net listing
B. open listing
C. exclusive agency listing
D. exclusive right to sell listing
B. open listing
When an agent should have known that a statement about a material fact was false, this is called:
Select one:
A. fraud
B. negligent misrepresentation
C. negligent omission
D. puffing
B. negligent misrepresentation
If the buyer has acquired the property subject to an existing mortgage, which of the following is true?
Select one:
a. He cannot have a deficiency judgment entered against him.
b. He can have a deficiency judgment entered against him.
c. The first mortgage is made subordinate to all other mortgages.
d. The lender cannot foreclose on the property.
a. He cannot have a deficiency judgment entered against him.
A federal law which establishes a statewide registry containing information on sex offenders is:
Select one:
a. Megan’s Law
b. Offender Database Law
c. Sex Offender Disclosure Law
d. Martha’s Law
a. Megan’s Law
The gross adjustment is an indication of:
Select one:
a. how good a comparable is.
b. the value of the subject property.
c. how many comparables are needed.
d. the least amount the property will sell for.
a. how good a comparable is.
Under the Lien Theory, the borrower holds legal title to the pledged property and the lender holds a
Select one:
A. conditional title
B. equitable title
C. lien against the property.
D. Deed
C. lien against the property.
The Louisiana term for fixture is:
Select one:
a. separate movables
b. annexation
c. component by attachment
d. trade fixtures
c. component by attachment
In Louisiana, if a property is sold for less than half of the market value at the time of sale, the seller or his heirs can sue to rescind the sale for up to one year from the time of the sale under the concept of
Select one:
A. constructive fraud.
B. legal objective.
C. duress.
D. lesion beyond moiety.
D. lesion beyond moiety.
Anti-trust laws prohibit:
Select one:
A. price fixing
B. agreement between brokers to divide their markets
C. Board of Realtors setting commission rates
D. All of the above
D. All of the above
Which of the following types of deeds is the best one for the grantee?
Select one:
A. general warranty deed
B. special warranty deed
C. quitclaim deed
D. bargain and sale deed
A. general warranty deed
The acquisition of real property through natural or artificial causes, or acts of God is called:
Select one:
a. accession.
b. acquisition.
c. abusus.
d. succession.
a. accession.
Examples of title problems include:
Select one:
a. encroachments
b. technical errors
c. defects in the public records
d. All of the above
d. All of the above
All of the following statements are TRUE Except:
Select one:
a. A real estate mortgage always requires a promissory note.
b. The promissory note accompanying a mortgage must be notarized.
c. In order to give notice of the lien, the mortgage must be recorded.
d. A mortgage is a contract between the lender and the seller.
d. A mortgage is a contract between the lender and the seller.
The party who hires the agent/licensee is known as the:
Select one:
a. client or principal.
b. customer.
c. seller.
d. buyer.
a. client or principal.
The management agreement should contain which of the following?
Select one:
a. A description of the property
b. The agent’s fee
c. Signature of the parties
d. All of the above
d. All of the above
If one of the owners in a joint tenancy or tenancy in common wishes to force the sale of the property, he does so
through:
Select one:
A. escheat
B. condemnation
C. partition suit
D. eminent domain
C. partition suit
What areas does a lender focus on when underwriting a loan?
Select one:
a. The borrower, the property and the location of the property
b. The borrower, the sale price, and the neighborhood
c. The borrower only
d. The property only
a. The borrower, the property and the location of the property
The first Civil Rights law was passed in:
Select one:
a. 1866
b. 1988
c. 1964
d. 1974
a. 1866
The rights to enter and exit your property are known as rights of _________ and __________.
Select one:
a. ingress, egress
b. necessity.
c. appurtenance.
d. prescription.
a. ingress, egress
A Claimant may choose to bring his housing discrimination case either before an Administrative Law Judge or:
Select one:
a. The Attorney General
b. The Board of Realtors
c. A Justice of the Peace
d. The Real Estate Commission
a. The Attorney General
In which of the following types of owner financing does the seller retain title to the property until the full debt is paid?
Select one:
A. Contract for Deed
B. Installment Land Contract
C. Conditional Sales Contract
D. All of the above
D. All of the above
What type of agency relationship exists in a property management agreement?
Select one:
A. universal
B. general
C. special
D. none of the above
B. general
In which quarter of section 28 would the tract of land described as the S½ of the SW ¼ of the NW ¼ of the SE ¼ lie?
Select one:
A. the southwest quarter
B. the northwest quarter
C. the southeast quarter
D. the northeast quarter
C. the southeast quarter
It is okay to refuse a loan solely on the location of the property.
Select one:
True
False
False
Under the law of subagency everyone represents:
Select one:
a. the seller.
b. the buyer.
c. the person they are with at the time.
d. the broker.
a. the seller.
In the sale of real estate, when does the title transfer from the seller to the buyer?
Select one:
a. Upon delivery and acceptance of a deed.
b. When the purchase agreement is signed.
c. When the buyer moves into the house.
d. When the deed is recorded.
a. Upon delivery and acceptance of a deed.
Which method of estimating value would be used to determine the value of a residential lot?
Select one:
a. Sales Comparison
b. Cost Approach
c. Income Approach
d. Replacement Cost
a. Sales Comparison
Deposits of soil that occur from the natural processes of nature and result in the increase in the size of a property
are called:
Select one:
a. alluvion.
b. accretions.
c. build-up.
d. embankments.
a. alluvion.
If the factor from the amortization table is 7.50 and the loan amount is $95,000, what will the monthly payment be, including principle and interest?
Select one:
A. $700.00
B. $725.00
C. $750.00
D. $712.50
D. $712.50
Multiply the factor times the number of thousands being borrowed.
If a promissory note is not secured by a mortgage, it is called a/an:
Select one:
A. collateral note
B. conditional note
C. unsecured note
D. void note
C. unsecured note
The person benefiting from an easement appurtenant is called the
Select one:
A. dominant estate
B. servient estate
A. dominant estate
An owner’s right to the use of things below the surface of the property is known as:
Select one:
a. mineral rights.
b. riparian rights.
c. littoral rights.
d. situs rights.
a. mineral rights.
Regulation Z establishes guidines for which aspect/s of the lending process?
Select one:
a. Disclosure of Loan Cost
b. Borrower’s Right of Rescission
c. Fair Advertising Practice
d. All of the above
d. All of the above
A method of estimating cost which would likely be used for a warehouse with 20 foot ceilings is:
Select one:
a. Cubic foot method
b. Square foot method
c. Quantity survey
d. Unit-In-Place method
a. Cubic foot method
The period for redemption of property sold for taxes in Louisiana is a minimum of
Select one:
A. 1 year
B. 2 years
C. 3 years
D. 5 years
C. 3 years
A lease in which the lessee sublets the property to a sublessee is called a:
Select one:
a. sub-lease.
b. assignment.
c. reversionary lease.
d. sandwich lease.
d. sandwich lease.
Ownership by a husband and wife in which the husband and wife each have separate, equal ownership in anything acquired by the marriage is called
Select one:
A. joint tenancy
B. tenancy by the entirety
C. community property
D. tenancy in common
C. community property
Meridians and range lines both run parallel to each other and
Select one:
A. north-south
B. east-west
A. north-south
One difference between a freehold estate and a non-freehold estate is:
Select one:
a. A non-freehold estate is for a determinate length of time.
b. A non-freehold estate does not confer possession.
c. A freehold estate cannot be willed.
d. A freehold estate is for a determinate length of time.
a. A non-freehold estate is for a determinate length of time.
A salesperson has a friend whose parents have just passed away, and he and his siblings want to sell their parents’ house. The siblings have all verbally agreed to designate the friend to handle the sale of the property. Which of the following is true?
Select one:
a. The purchase agreement is not binding because all of the heirs did not sign.
b. The purchase agreement is binding because verbal agreements are legal.
c. The purchase agreement is binding because only one heir has to sign.
d. The purchase agreement is not binding because only the probate court can sell the property.
a. The purchase agreement is not binding because all of the heirs did not sign.
The gradual exposure of land behind a receding waterline is called
Select one:
A. erosion
B. alluvion
C. reliction
D. dereliction
C. reliction
The most common type of leasehold interest is
Select one:
A. tenancy (or estate) for years
B. periodic tenancy
C. tenancy at will
D. tenancy at sufferance
A. tenancy (or estate) for years
A type of lease that allows the seller-lessee to retain the use of the property while freeing his capital for investment and expansion is called:
Select one:
a. Sale-leaseback
b. Proprietary lease
c. Index lease
d. Net lease
a. Sale-leaseback
Things that are near a property and affect the value of the property are called
Select one:
A. externalities
B. extremities
C. situs
D. contributers
A. externalities
In addition to being pre-paid interest, discount points are considered:
Select one:
a. increased yield to the lender.
b. part of the down payment.
c. part of the principal.
d. increased yield to the borrower.
a. increased yield to the lender.
If credit is denied, what act requires that the lender must provide the applicant with a statement detailing the reasons for rejection?
Select one:
a. Fair Credit Reporting Act
b. Equal Credit Opportunity Act
c. Credit Reporting Act
d. RESPA
a. Fair Credit Reporting Act
Which of the following statements is TRUE?
Select one:
a. Fair housing violations occur when the broker or agent attempts to force their own selection upon the
customer/client.
b. Violations may be committed by person who is a member of a protected class against another member
of the same protected class.
c. The agent chosen may be of the same or similar cultural background, or not, at the option of the
client/customer.
d. All of the above.
d. All of the above.
An agent who works as a/an ______________ pays his own income tax and social security.
Select one:
a. independent contractor
b. employee
c. licensee
d. buyer’s agent
a. independent contractor
The method by which real property may become personal property is called
Select one:
A. Adaptability
B. Annexation
C. Severance
D. Attachment
C. Severance
The system of ownership which allows individuals to own land absolutely, without obligation to political superiors
is known as the:
Select one:
a. allodial system.
b. fuedal system.
c. vassal system.
d. inidvidual system.
a. allodial system.
How many acres are in the tract of land described as the S½ of the SW ¼ of the NW ¼ of the SE ¼ of section 28?
Select one:
A. 2
B. 5
C. 10
D. 2
B. 5
Which of the following is NOT true concerning VA loans?
Select one:
A. no down payment is required.
B. it is assumable
C. it is guaranteed
D. it is insured
D. it is insured
A lot measures 50 feet by 150 feet. What is the area in square feet?
Select one:
A. 750 square feet
B. 5000 square feet
C. 7500 square feet
D. not enough information
C. 7500 square feet
Which type of lien generally takes priority over all other liens in the case of foreclosure?
Select one:
a. Property tax lien
b. Mechanic’s lien
c. First mortgages
d. Junior mortgages
a. Property tax lien
A general warranty deed contains how many covenants?
Select one:
a. one
b. three
c. five
d. seven
c. five
The guarantees in a general warranty deed are of quiet enjoyment, seizen, warranty forever, further assurance,
and against encumbrances.
Commissions paid to salespersons must be reported on:
Select one:
A. IRS 1099 MISC form
B. IRS 1099 S form
C. Tax-deferred form
D. Does not have to be reported
A. IRS 1099 MISC form
A house is purchased for $180,000. The buyers obtain an 80% loan at 6% for 30 years. How much will they need for
the down payment?
Select one:
a. $36,000
b. $18,000
c. $30,000
d. $144,000
a. $36,000
If they are borrowing 80% of the sale price, then the downpayment will be 20% of the sale price.
Which of the following is TRUE of discount points?
Select one:
a. Discount points are rate equalization factors.
b. Discount points are pre-paid interest.
c. Discount points are increased yield to the lender.
d. All of the above.
d. All of the above.
All of the following are TRUE of a trust deed EXCEPT:
Select one:
a. The owner of a property (trustor) transfers title to a third party (trustee) in exchange for a loan or other
consideration from the lender or beneficiary.
b. The trustee holds the title for the benefit of the lender or beneficiary to secure the loan the lender has made to
the trustor.
c. As long as the trustor does not go into default, he retains full legal rights to the property.
d. The borrower’s signature is NOT required on both documents.
d. The borrower’s signature is NOT
required on both documents.
A 50 acre tract of land sold for $15,000 per acre. The commission was 10%. The selling agent received 50% of the
commission paid to the broker. How much did the selling agent receive?
Select one:
A. $750
B. $3,750
C. $37,50
D. $37,500
D. $37,500
Find the selling price by multiplying the number of acres times the price per acre. Then find the commission by multiplying the selling price by 10%. Then find half of that number.
An investor wishes to receive a 10% rate of return on his investment. If gross income for the year is $60,000 and
annual expenses are $10,000, how much should he pay for the property?
Select one:
A. $50,000
B. $150,000
C. $500,000
D. $600,000
C. $500,000
The formula is similar to the T formula but uses net income and capitalization rate to find value. Net income divided by the capitalization rate equals the value.
The selling price of a property would be listed how on the closing statement?
Select one:
A. debit to the buyer, credit to the seller.
B. credit to the buyer, debit to the seller.
C. debit to the buyer, nothing to the seller.
D. credit to the buyer, nothing to the seller.
A. debit to the buyer, credit to the seller.
A type of tenancy which is called a “poor man’s will” is:
Select one:
a. joint tenancy.
b. tenancy in common.
c. tenancy by the entirety.
d. sole tenancy.
a. joint tenancy.
The act that ensures that nonresident aliens and foreign corporations pay income tax based on gains from the
disposition of U.S. real property is the:
Select one:
A. Foreign Investment and Real Property Tax Act
B. RESPA
C. Regulation Z
D. 1031 Tax-deferred Exchange
A. Foreign Investment and Real Property Tax Act
Economic characteristics of land include all of the following EXCEPT:
Select one:
a. Utility
b. Scarcity.
c. Fixity of Investment.
d. Situs.
a. Utility
Reproduction cost is usually much higher than replacement cost.
Select one:
True
False
True
Another term for “offer and acceptance” is “meeting of the minds”.
Select one:
True
False
True
An agent who is authorized to perform a specific act or to handle a specific business matter for the principal is
called a:
Select one:
a. Special agent
b. General agent
c. Universal agent
d. Customary agent
a. Special agent
An easement granted for a utility, pipeline, railroad, or water line would most likely be a/an
Select one:
A. easement appurtenant
B. easement in gross
C. easement by necessity
D. right of use
B. easement in gross
A free-standing china cabinet built to fit into a corner of a dining room would be considered
Select one:
A. a fixture
B. personal property
C. attached
D. encumbered
B. personal property
An older house has very small closets, however there is enough room to enlarge the closets without detracting from the size or appearance of the rooms. This would most likely be an example of
Select one:
A. curable physical depreciation
B. incurable physical depreciation
C. curable functional depreciation
D. incurable functional depreciation
C. curable functional depreciation
A warehouse is in an area that has recently been zoned residential, but the warehouse is allowed to remain as a
non-conforming use. The owner decides he needs a bigger building. If he tears it down, can he rebuild a larger facility in that location?
Select one:
A. yes, because he was allowed to remain after the zoning change.
B. no, under no circumstances
C. no, unless he appeals for and receives a zoning variance.
D. only if he gets the entire area rezoned
C. no, unless he appeals for and receives a zoning variance.
The covenant in a general warranty deed that ensures the owner with full possession of the title is:
Select one:
a. Seizen
b. Warranty forever
c. Further assurance
d. Latent possession
a. Seizen
All of the following agencies are responsible for enforcement of the Fair Housing Laws EXCEPT:
Select one:
a. The Real Estate Commission
b. The Office of Equal Opportunity
c. The Department of Housing and Urban Development
d. Federal and State Courts
a. The Real Estate Commission
An Attorney’s Opinion is based on the Abstract of Title.
Select one:
True
False
True
The main difference between mortgage brokers and mortgage bankers is that mortgage bankers:
Select one:
a. use their own funds and service the loan.
b. act as intermediaries between the borrower and lender.
c. do not service the loan.
d. There is no difference.
a. use their own funds and service the loan.
If the buyer should default in an earnest money contract, the seller may retain the earnest money deposit as:
Select one:
a. compensation
b. liquidated damages
c. partial downpayment
d. escrow
b. liquidated damages
When using a 365 day year to calculate proration of taxes, use the ___________ cost.
Select one:
a. daily
b. monthly
c. weekly
d. bi-monthly
a. daily
The single most important thing in determining the value of a property is
Select one:
A. situs
B. market analysis
C. transferability
D. demand
A. situs
A property has an assessed value of $25,000. The tax rate is 20 mills. What is the tax?
Select one:
A. $450
B. $525
C. $500
D. $475
C. $500
The formula is: Tax = mills X number of 1000’s of assessed value.
In a specific performance contract, if either party fails to meet the obligations of the contract, the other party may:
Select one:
a. sue for rescision of the contract.
b. sue for damages.
c. sue to have the sale completed.
d. Any of the above
d. Any of the above
The primary difference between the purchase money mortgage and the contract for deed is that, in the contract for deed, the seller retains legal title to the property until part or all of the debt is paid.
Select one:
True
False
True
A term that refers to linear measurements is:
Select one:
a. Metes
b. Bounds
c. Measures
d. Tracts
a. Metes
Highrise developments which combine offices, stores, theaters, and apartments, and other facilities in a single building are called
Select one:
A. co-operatives
B. condominiums
C. Planned Unit Developments (PUD’s)
D. Mixed Unit Developments (MUD’s)
D. Mixed Unit Developments (MUD’s)
An agent tells a prospective buyer that a problem with the foundation has been corrected knowing that it has not.
This would be an example of
Select one:
A. puffing
B. mistake of fact
C. misrepresentation
D. following the owners instructions
C. misrepresentation
In the Common Law states, a contract is not considered valid unless each party has pledged to exchange something of value with the other party. This is called:
Select one:
a. consideration.
b. acceptance.
c. objective.
d. capacity.
a. consideration.
A monetary claim upon the property of another, which uses the property itself as security for payment of a debt is a
Select one:
A. lien
B. escheat
C. assessment
D. taxation
A. lien
In some states the borrower may have up to two years to redeem his property by paying off the debt after the foreclosure. This is known as?
Select one:
a. statutory rights of redemption
b. equitable redemption
c. deficiency judgment
d. non-judicial foreclosure
a. statutory rights of redemption
In some states there is an additional period of redemption after the foreclosure sale. This is called
Select one:
A. equitable redemption
B. statutory redemption
C. ordinary process
D. executory process
B. statutory redemption
A two acre lot is 300 feet wide. How long is this lot?
Select one:
A. 290.4 feet
B. 250.6 feet
C. 202.9 feet
D. 145.2 feet
A. 290.4 feet
It is the duty of the agent to obtain the highest possible price for the client’s property.
Select one:
True
False
True
Property owners who believe that their interests have been unfairly limited by zoning regulations may appeal to the:
Select one:
a. Zoning Review Board
b. Appelate Courts
c. Mayor
d. Real Estate Commission
a. Zoning Review Board
Which of the following are types of Involuntary Transfer?
Select one:
A. Eminent Domain
B. Escheat
C. Adverse Possession
D. All of the above
D. All of the above
A Bill of Sale is used for:
Select one:
a. real estate.
b. personal property.
c. chattel only.
d. None of the above.
b. personal property.
Title insurance generally covers defects that
Select one:
A. are known to the buyer
B. are in the public records
C. are listed in the deed
D. none of the above
B. are in the public records
A 15 hour course on ethical practice that appraisers are required to take is:
Select one:
a. Uniform Standards of Professional Appraisal Practice, or USPAP
b. Appraiser Ethics 101
c. Appraisal Practice 101
d. Appraisal Standards 101
a. Uniform Standards of Professional Appraisal Practice, or USPAP
An office building has a monthly income of $10,000. The GRM for the area is 12. What is the value of the building using the gross rent multiplier formula?
Select one:
A. $120,000
B. $144,000
C. $1,200,000
D. $1,440,000
D. $1,440,000
The formula is: GRM X Rent = Value. Remember that for residential property you use monthly rent, and for
commercial property you use yearly rent.
A type of leasehold interest which runs for a determinate length of time with a specified expiration date, and which is the most common type of leasehold interest
Select one:
A. tenancy for years
B. periodic tenancy
C. tenancy at will
D. tenancy at sufferance
A. tenancy for years
Andrew secures a loan for $40,000 at 7.5% interest for 20 years. The monthly payment is $322.24. What is the principal payment for the first month?
Select one:
A. $22.24
B. $72.24
C. $250.00
D. $300.00
B. $72.24
Use the T formula. Multiply the loan amount by the interest rate to get the yearly interest amount as of the first
month, then divide that by 12 to get the first month’s interest payment. Then subtract the first month’s interest
payment from the monthly payment and that will leave the principal portion of the first payment.
The agent is authorized to represent the broker in real estate transactions and owes the same fiduciary duties to the broker as to the client. The broker is therefore a principal of the sales associate.
Select one:
True
False
True
Which of the following is/are forms of owner financing?
Select one:
A. bond for deed
B. contract for deed
C. installment land contract
D. all of the above
D. all of the above
Capitalization rate represents what?
Select one:
a. The rate of return on an investment.
b. The value.
c. The gross income.
d. The net income.
a. The rate of return on an investment.
The best answer to the question of how many comparables should be used is:
Select one:
a. 1-2
b. 3-5
c. 5-7
d. As many as necessary
d. As many as necessary
All of the following are examples of agency relationship EXCEPT
Select one:
A. listing agreement
B. purchase agreement
C. property management agreement
D. broker/salesperson agreement
B. purchase agreement
A condition that prevents the new owner from performing some action or activity is called a:
Select one:
a. condition subsequent.
b. reverter condition.
c. determination.
d. qualification.
a. condition subsequent.
Which of the following would meet the definition of having a disability?
Select one:
a. A woman who is 8 months pregnant.
b. An impairment of mobility that doesn’t prevent the person from using stairs.
c. An impairment that substantially limits one or more of the person’s major life activities.
d. A person who lost his little finger in an accident.
c. An impairment that substantially limits one or more of the person’s major life activities.
A listing agreement is an example of special agency.
Select one:
True
False
True
What signatures are required on a deed or conveyance?
Select one:
a. The grantor only
b. The grantee only
c. The grantor and the grantee
d. None
a. The grantor only
Purchase Money Mortgage grants:
Select one:
a. Contract for Deed
b. Purchase Money Mortgage
c. Equitable Title
c. Equitable Title
Seller delivers the deed when all of the payments have been made with:
Select one:
a. Contract for Deed
b. Purchase Money Mortgage
c. Equitable Title
a. Contract for Deed
Seller delivers title at the act of sale with:
a. Contract for Deed
b. Purchase Money Mortgage
c. Equitable Title
b. Purchase Money Mortgage
A will usually names a person to carry out the instructions of the will. This person is called the
Select one:
A. administrator
B. dower
C. curtesy
D. executor
D. executor
The action which cancels the note when the full debt is paid and defeats any interest the mortgagee has had in
the collateral property is called:
Select one:
A. satisfaction of judgment
B. de-pledging
C. collateral removal
D. cancellation action
A. satisfaction of judgment
A hidden structural defect that would not be discovered by ordinary inspection is called a:
Select one:
A. caveat emptor
B. latent defect
C. hazard
D. stigma
B. latent defect
When a tenant is forced to vacate the premises because of a breach of contract on the part of the landlord, such as failure to repair the heating unit, this is called
Select one:
A. actual eviction
B. constructive eviction
B. constructive eviction
f net annual income is $35,000 and the value is $500,000, what is the capitalization rate?
Select one:
A. 6.5%
B. 7.0%
C. 7.5%
D. 8.0%
B. 7.0%
The formula is I over RV. Divide the net income (I) by the value (V) to find the rate (R).
$35,000 ÷ $500,000 = 7%
When the borrower conveys title to the lender, the title is said to be:
Select one:
a. alienated
b. partial
c. loaned
d. subrogated
a. alienated
While FHA loans are insured, VA loans are:
Select one:
A. guaranteed.
B. secured
C. 100%
D. never guaranteed or insured
A. guaranteed.
To be valid, a deed must have all the following EXCEPT
Select one:
A. names of grantor and grantee
B. consideration
C. description of property being conveyed
D. signature of grantee
D. signature of grantee
The most probable price in terms of money which a property should bring in a competitive and open market is:
Select one:
a. market cost.
b. market value.
c. market price.
d. situs.
b. market value.
What is a life estate in reversion?
Select one:
a. A life estate that reverts to the original owner or his heirs upon the death of the life estate owner.
b. A life estate that reverts to the remainderman.
c. A life estate that has been recalled or reversed.
d. A life estate that reverts to the state upon the death of the life estate owner.
a. A life estate that reverts to the original owner or his heirs upon the death of the life estate owner.
One may lose his legal rights if he inexcusably fails to exercise them within a reasonable time period under the concept of
Select one:
A. rescision.
B. laches.
C. breach.
D. menace.
B. laches.
The broker who finds the buyer is known as the:
Select one:
a. cooperating broker.
b. listing broker.
c. contract broker.
d. buying broker.
a. cooperating broker.
A description that reads “Lot 5, Block B, Wildwood Heights” would be which type of description?
Select one:
A. metes and bounds
B. lot, block and tract
C. rectangular survey
D. municipal address
B. lot, block and tract
An addition to an existing will is called a:
Select one:
a. codicil.
b. probate.
c. devise.
d. dower.
a. codicil.
The loan amount divided by the value is called:
Select one:
a. Economic depreciation
b. Redlining
c. LTVR,, or loan to value ratio
c. LTVR,, or loan to value ratio
Discriminating against certain neighborhoods when making loans
Select one:
a. Economic depreciation
b. Redlining
c. LTVR,, or loan to value ratio
b. Redlining
A loss in value from forces outside the property
Select one:
a. Economic depreciation
b. Redlining
c. LTVR,, or loan to value ratio
a. Economic depreciation
In March of 1989 two protected classes were added to the Fair Housing Law. They were familial status and:
Select one:
a. Handicap status
b. Race
c. Religion
d. Gender
a. Handicap status
What type of depreciation is used when depreciating property for income tax purposes?
Select one:
a. Straight Line Depreciation
b. Economic Depreciation
c. Incurable Depreciation
d. Reverse Depreciation
a. Straight Line Depreciation
Combining two or more lots into one is known as:
Select one:
a. assemblage.
b. contribution.
c. combination.
d. alteration.
a. assemblage.
During an economic recession we would expect property values to do what?
Select one:
a. decline.
b. stay the same.
c. rise.
d. fluctuate.
a. decline.
The agent whose actions are the primary reason for a sale taking place is said to be the:
Select one:
A. designated agent
B. procuring cause
C. duty agent
D. agent of record
B. procuring cause
Which of the following would be a type of specific voluntary lien?
Select one:
a. A mortgage
b. A tax lien
c. A special assessment
d. A judgment
a. A mortgage
A broker received a 10% commission on the first $100,000 of the sale price on a vacant piece of land which sold for
$199,000. If the broker received $14,950 for the sale, give the rate of commission for the balance.
Select one:
A. 4%
B. 4.5%
C. 5%
D. 6%
C. 5%
What type of taxation is used to pay for specific improvements in a specified area such as street lights?
Select one:
a. special assessments.
b. ad valorem taxes.
c. subdivision liens.
d. curb assessments.
a. special assessments.
It is often safer to use ____________ rather than remove asbestos.
Select one:
a. Encapsulation
b. Reduction
c. Remediation
d. Burning
a. Encapsulation
Which clause in a mortgage pledges the collateral property to the mortgage?
Select one:
a. The granting clause
b. The warranty clause
c. The hypothecation clause
a. The granting clause
Handicap status does NOT include illegal drug users.
Select one:
True
False
True
Personal property may become real property by what method?
Select one:
a. By annexation
b. By severance
c. By detachment
d. Never
a. By annexation
A group which buys conventional and FHA and VA backed loans is
Select one:
A. Federal National Mortgage Association
B. Government National Mortgage Association
C. Federal Home Loan Mortgage Corporation
D. Federal Agricultural Mortgage Corporation
A. Federal National Mortgage Association
The right of a title company to any remedy or damages available to theinsured, when the title company has made a payment to settle a claim covered by the policy is known as:
Select one:
a. subrogation.
b. encroachment.
c. extension.
d. acquisition.
a. subrogation.
A partially amortized loan with a balloon payment would have a ____________________ monthly payment
than a fully amortized loan.
Select one:
A. higher
B. lower
B. lower
A number which represents the time period over which a building or house will be usable if no maintenance is done is:
Select one:
a. Economic Life
b. Age Life
c. Effective Age
d. Life Expectancy
a. Economic Life
The acquisition of title to property by possession of the property for a statutory number of years is called
Select one:
A. eminent domain
B. escheat
C. voluntary transfer
D. adverse possession
D. adverse possession
A type of ownership which extends for a set period of time is called a
Select one:
A. freehold estate
B. non-freehold estate
B. non-freehold estate
The Civil Rights Act of 1866 prohibits discrimination based on
Select one:
A. sex
B. color
C. race
D. national origin
C. race
A corporation is managed by a board of directors.
Select one:
True
False
True
A loan is obtained for $100,000 for 30 years at 8.5%. The monthly payment is $768.91. What is the total interest on
the loan?
Select one:
a. $176,807
b. $276,807
c. $76,807
d. $27,706
a. $176,807
Multiply the monthly payment (principal & interest) times the total number of payments (360) to get the total principal and interest paid. Then subtract the principal (100,000) to find total interest.
An encroachment constitutes actual notice.
Select one:
True
False
True
What clause provides for oversight of operations of investment properties during foreclosure?
Select one:
a. Receiver clause
b. Subordination clause
c. Subrogation clause
d. Defeasance clause
a. Receiver clause
Does the selection of an agent of similar background by a customer or client violate the fair housing laws?
Select one:
a. Not as long as the open choice is made by the customer or client, not by the broker or agent.
b. Yes, always.
c. No, never.
d. Not as long as the Board of Realtors is notified and approves.
a. Not as long as the open choice is made by the customer or client, not by the broker or agent.
A way of temporarily lowering the interest rate on a loan by pre-paying some of the interest is a:
Select one:
a. Buy-down
b. Reverse mortgage
c. Partially amortized loan
d. Open end loan
a. Buy-down
The profit realized from the sale or exchange of an asset is:
Select one:
A. capital gain
B. deferred gain
C. real gain
D. preferred gain
A. capital gain
Who is NOT protected by the fair housing laws?
Select one:
A. individuals who would provide a direct threat to the health and safety of others.
B. individuals who have been convicted of illegal manufacture or distribution of controlled substances.
C. illegal drug addicts.
D. all of the above.
D. all of the above.
FHA permits no pre-payment penalties or lock-in clauses on its insured loans.
Select one:
A. True
B. False
A. True
The practice of charging more that the legally allowable interest is termed:
Select one:
a. Usury
b. Acceleration
c. Excessive interest
d. Unsecured interest
a. Usury
A loan is made for $50,000 at 8% interest for 30 years. The factor from the amortization table for $1000 is 7.65. Find
the monthly payment, principle and interest.
Select one:
A. $300.00
B. $333.33
C. $382.50
D. $395.00
C. $382.50
Which of the following is true concerning tenancy in common?
Select one:
a. It is the simplest form of ownership.
b. Each owner must own an equal share.
c. Each owner must obtain ownership at the same time.
d. The ownership cannot be willed.
a. It is the simplest form of ownership.
If a buyer has a mortgage on a piece of land on which he plans to build a house, he may need to have that loan
______________ in order to get a loan to build the house.
Select one:
a. subordinated.
b. subrogated.
c. conveyed.
d. alienated.
a. subordinated.
Which of the following can homeowners deduct from their gross income on their federal tax return?
Select one:
a. mortgage interest payments on first and second homes.
b. property taxes.
c. loan discoun points.
d. All of the above.
d. All of the above.
The private ownership of real property is known as:
Select one:
a. fee simple ownership
b. feudal ownership
c. equitable ownership
d. real ownership
a. fee simple ownership
A term which means that the lender is given a lien against the borrower’s collateral property and, if default occurs, the lender can file foreclosure proceedings in order to recover his interest in the property is:
Select one:
a. Hypothecation
b. Defeasance
c. Redemption
d. Alienated
a. Hypothecation
A contract which is communicated in words, whether spoken or written is a/an:
Select one:
a. express contract.
b. implied contract.
c. unilateral contract.
d. sole contract.
a. express contract.
Ownership along navigable riparian waterways is
Select one:
A. to the water’s edge
B. to the high water line
C. to the midpoint
D. to the low water line
A. to the water’s edge
In what type of lease does the lessee pay rent on the land only?
Select one:
a. Ground Lease
b. Net Lease
c. Percentage Lease
d. Straight Lease
a. Ground Lease
If someone adds a balcony to his house that extends over the neighbor’s property line, he is violating what right?
Select one:
a. Air rights
b. Mineral rights
c. Alluvion rights
d. Riparian rights
a. Air rights
The principle which is the basis for the Income Approach to value is
Select one:
A. substitution
B. supply and demand
C. anticipation
D. externalities
C. anticipation
Which of the following are duties of the property manager?
Select one:
a. collect rent
b. show and lease space
c. maintain the property
d. All of the above
d. All of the above
The clause of reconveyance in a Trust Deed is analogous to the defeasance clause in a mortgage.
Select one:
True
False
True
Riparian owners of land that is adjacent to non-navigable waterways have ownership to what point?
Select one:
a. The mid-point of the waterway
b. The edge of the waterway
c. 20 feet from the water’s edge
d. 10 feet from the water’s edge
a. The mid-point of the waterway
Which of the following would NOT be considered an encroachment?
Select one:
a. a party wall.
b. a garage built over the property line.
c. a fence that extends one foot across the property line.
d. a second floor addition that extends beyond the property line.
a. a party wall.
How do you convert inches to feet?
Select one:
a. Divide the inches by 12
b. add a decimal in front of the inches
c. Multiply the inches by 12
d. Divide 12 by the inches
a. Divide the inches by 12
A mortgage which is used for owner financing and combines an assumption and owner financing is a
Select one:
A. package mortgage
B. blanket mortgage
C. purchase money mortgage
D. wrap-around mortgage
D. wrap-around mortgage
An office building rents for $1000 per month. The GRM for the area is 120. What is the value of the building?
Select one:
a. $1,440,000
b. $120,000
c. $12,000,000
d. $14, 400,000
a. $1,440,000
The formula is GRM X Rent = Value. Remember to use monthly rent for residential property and yearly rent for
commercial property.
Two houses are in an area that does not have subdivision restrictions. One house has 4,000 square feet and has a large front gallery with columns. The other house is 1,000 square feet and has a plain facade. What principal will most likely affect the values of these houses?
Select one:
a. Progression and Regression
b. Competition
c. Balance
d. Highest and Best Use
a. Progression and Regression
The distance from streets or sidewalks that buildings can be erected is known as:
Select one:
a. easement.
b. setback.
c. zoning.
d. downzone.
b. setback.
If two lots are combined resulting in an increase in the value of the lots, this is
called:
Select one:
A. assemblage
B. plottage increment
C. reconciliation
D. change
B. plottage increment
A timeshare owner purchases the right to use a property for a specific period of time.
Select one:
True
False
True
The terms Price, Cost, and Value all mean the same thing.
Select one:
True
False
False
The process of determining the risk a lender is incurring by lending a sum
of money to a certain borrower is referred to as:
Select one:
a. Underwriting
b. Overwriting
c. Purchase power
d. Buyer ability
a. Underwriting
In what way may an item of real property become personal property?
Select one:
a. By severance
b. By annexation
c. By attachment
d. By detachment
a. By severance
The power of the government to enact and enforce laws to protect the health,
safety, morals and welfare of the general public is called
Select one:
A. eminent domain
B. zoning
C. police powers
D. encumbrances
C. police powers
RESPA, or the Real Estate Settlement Procedures Act requires lenders to
disclose what?
Select one:
a. Settlement costs at closing.
b. Interest costs after closing.
c. Total interest paid on the loan.
d. Any kickbacks made on the loan.
a. Settlement costs at closing.
A will made orally by a testator who is near death is a:
Select one:
a. Nuncupative
b. Holographic
c. Statutory
d. Mystic
a. Nuncupative
If a complaint is filed against a property manager for discrimination, the
complaint is filed with
Select one:
A. HUD
B. NAR
C. Board of Realtors
D. Board of Complaints
A. HUD
If a property is in a good location we say it has
Select one:
A. negative situs
B. positive situs
C. externatlities
D. amenities
B. positive situs
A security instrument that secures for the repayment of a debt is a:
Select one:
A. mortgage
B. trust deed
C. A or B
C. A or B
Easements in gross are most commonly used for which of the following?
Select one:
a. utilities.
b. access to a landlocked property.
c. party walls.
d. levees.
a. utilities.
The basis for the relationship between the owner and the property manager is:
Select one:
a. The management agreement
b. State laws
c. A listing agreement
d. A lease agreement
a. The management agreement
The rate of return the investor can expect to receive from his investment in a
property expressed as a percentage is the:
Select one:
a. capitalization rate
b. net operating income
c. net annual income
d. anticipated income
a. capitalization rate
All lenders must use a standard mortgage form.
Select one:
True
False
False
Peggy must pay 2½ points on a $75,000 mortgage. How much will the points
cost?
Select one:
A. $1,000
B. $1,875
C. $1,950
D. $2,400
B. $1,875
A type of depreciation that results from outdated design or technology is called
Select one:
A. physical depreciation
B. functional depreciation
C. external depreciation
D. incurable depreciation
B. functional depreciation
The method by which an environmental hazard is reduced is called:
Select one:
a. Abatement
b. Remediation
c. Removal
d. Rebatement
a. Abatement
Another name for Contract for Deed is
Select one:
A. Installment Land Contract
B. Conditional Sales Contract
C. Agreement to Convey
D. All of the above.
D. All of the above.
The buyer may contract with a broker to find property for the buyer. In this type
of representation, the buyer is the client. This is known as:
Select one:
a. buyer agency.
b. dual agency.
c. broker cooperation.
d. buyer brokerage.
a. buyer agency.
Agent Jones negotiates the sale of a home for $165,000. The commission is 6% and will be split equally between the two brokers. How much does Agent Jones
receive if he gets 60% of his broker’s share?
Select one:
a. $2970
b. $495
c. $5940
d. $2650
a. $2970
Find the full commission by multiplying the selling price by the commission
rate. Then find each broker’s half. Then multiply that amount by 60%.
$165,000 X 6% = $9900
$9900 ÷ 2 = $4950
$4950 X 60% = $2970
The seller received an offer on his home and sent a counter offer to the buyer.
While the buyer was considering the counter offer, the seller received a higher
offer with better terms. The seller’s agent advise him to:
Select one:
a. Accept the better offer.
b. Wait until he hears from the first buyer. He can only accept the second offer if the first buyer rejects the counter offer.
c. Reject the second offer.
d. Withdraw the counter offer before it is accepted and then accept the
second offer.
d. Withdraw the counter offer before it is accepted and then accept the
second offer.
All of the following statements are true of FHA loans EXCEPT:
Select one:
a. No pre-payment penalty is allowed.
b. Loans are assumable.
c. MIP is required.
d. Require higher down payment.
d. Require higher down payment.
Which of the following would be the BEST example of a buffer zone?
Select one:
A. A warehouse between an industrial area and a park
B. An apartment building between a shopping center and an office park
C. A park between a shopping center and a residential area
D. A shopping center between two residential areas
C. A park between a shopping center and a residential area
The person conveying title is known as the:
Select one:
a. grantor.
b. grantee.
c. seller.
d. giver.
a. grantor.
Adjustable rate mortgages are also known as:
Select one:
a. variable rate mortgages.
b. buydowns.
c. reverse mortgages.
d. sale and leaseback.
a. variable rate mortgages.
Which method of appraisal is most often used for appraising income producing
properties?
Select one:
a. Income Approach
b. Sales Comparison Approach
c. Cost Approach
d. Market Data Approach
a. Income Approach
The Habendum Clause specifies the type of estate being transferred.
Select one:
True
False
True
Joint tenancy is illegal in Louisiana.
Select one:
True
False
True
Riparian rights only apply when more than one property adjoins the same body
of water.
Select one:
True
False
True
A clause in the listing agreement which ensures that the agent receives a
commission if his client buys the house after the listing contract has expired is
called a
Select one:
A. subordination clause.
B. alienation clause.
C. protection clause.
D. acceleration clause.
C. protection clause.
The purpose of the trustee is to:
Select one:
a. oversee the trust agreement.
b. lend the money.
c. pay off the debt.
d. collect the interest on the note.
a. oversee the trust agreement.
A will which is prepared by an attorney, witnessed and signed is known as a
Select one:
A. statutory will
B. holographic will
C. mystic will
D. nuncupative will
A. statutory will
The quickest process for foreclosure is
Select one:
A. ordinary process
B. executory process
B. executory process
The promise to repay a debt is traditionally backed up by some sort of security arrangement, a second loan instrument with which the borrower pledges an interest of one kind or another in the property he is financing to the lender. The pledged property is called:
Select one:
a. Collateral
b. A mortgage
c. Debt security
d. Damages
a. Collateral
The act of taking private property for public use through the right of eminent
domain is called:
Select one:
a. condemnation.
b. taxation.
c. ad valorem.
d. commencement.
a. condemnation.
A special assessment has been levied for a subdivision to improve the drainage
system in the subdivision. Which homeowner is most likely to pay the largest tax, if taxed as front footage?
Select one:
A. The lowest lot because it has the worst drainage problem
B. All lots will be assessed equally.
C. The corner lots
D. The largest corner lots.
D. The largest corner lots.
A continuous linking of owners stretching back to the first owner or the original
land grant is called a/an
Select one:
A. attorney’s opinion
B. abstract of title
C. chain of title
D. certificate of title
C. chain of title
Who is responsible for setting the commission rate that a broker charges?
Select one:
a. It is set by agreement between the broker and the client.
b. It is set by MLS.
c. It is set by the Real Estate Commission.
d. It is set by the agent getting the listing.
a. It is set by agreement between the broker and the client.
Which of the following purchases agricultural loans from original lenders?
Select one:
A. Farmer Mac
B. GNMA
C. GHLMC
D. HUD
A. Farmer Mac
Discount points are calculated on the
Select one:
A. sale price
B. appraised value
C. loan amount
D. market value
C. loan amount
What type of zoning is used to promote the highest and best use of the land?
Select one:
a. Directive zoning
b. Spot zoning
c. Protective zoning
d. Conditional zoning
a. Directive zoning
The selling price of a property would be listed how on the closing statement?
Select one:
A. debit to the buyer, credit to the seller.
B. credit to the buyer, debit to the seller.
C. debit to the buyer, nothing to the seller.
D. credit to the buyer, nothing to the seller.
A. debit to the buyer, credit to the seller.
Panic selling for financial gain by insinuating that a minority group is moving into the area is known as
Select one:
A. steering.
B. blockbusting.
C. redlining.
D. permissible practice.
B. blockbusting.
A Bargain and Sale Deed with Covenant is equivalent to:
Select one:
a. Special Warranty Deed
b. Quitclaim Deed
c. General Warranty Deed
d. Sheriff’s Deed
a. Special Warranty Deed
How many square feet are in one acre?
Select one:
a. 43,560
b. 45,360
c. 48,360
d. 87,120
a. 43,560
Contract for Deed, a type of owner financing, is also known as:
Select one:
a. Installment Land Contract
b. Conditional Sales Contract
c. Agreement to Convey
d. All of the above.
d. All of the above.
The promise to repay a debt is contained in the central instrument of the loan
agreement. This instrument is called the:
Select one:
a. Promissory Note
b. Collateral
c. Loan Security
d. Debt
a. Promissory Note
The letters PITI stand for:
Select one:
a. principal, interest, taxes, and insurance.
b. principal, interest, term and insurance.
c. principal, income, taxes, and interest.
d. principal, interest, term and income.
a. principal, interest, taxes, and insurance.
All or part of the gain on the sale of a personal residence is exempt from capital
gains tax if another residence is bought and occupied within 24 months of the
sale of the old residence.
Select one:
A. True
B. False
A. True
A title insurance policy that protects the borrower is a:
Select one:
a. mortgagor’s policy.
b. mortgagee’s policy.
c. standard policy.
d. extended policy.
a. mortgagor’s policy.
A wall that lies on the boundary line between two lots is called a/an:
Select one:
a. party wall easement.
b. easement by necessity.
c. easement in gross.
d. easement by prescription.
a. party wall easement.
When paying discount points, the cost of the points is calculated how?
Select one:
a. On the loan amount.
b. On the selling price.
c. On the listing price.
d. On the down payment.
a. On the loan amount.
The factor from the amortization table for $1000 at 8.5% is 7.69. What would be
the monthly payment, principal and interest, on a loan of $70,000?
Select one:
a. $538.30
b. $468.50
c. $639.40
d. $587.43
a. $538.30
Multiply the factor times the number of thousands of the loan amount (70).
Which of the following are types of private liens?
Select one:
a. mortgages
b. mechanic’s liens
c. vendor’s liens
d. All of the above
d. All of the above
This clause insures that the broker will receive a commission if his client buys
the house within a certain time period after the listing agreement has expired.
Select one:
a. Reserve Clause
b. Multiple Listing Clause
c. Protection Clause
d. Agency with Interest
c. Protection Clause
The method of estimating cost that is most often used is:
Select one:
a. square foot method.
b. unit-in-place method.
c. cubic foot method.
d. quantity survey method.
a. square foot method.
RESPA requires the lender to disclose within 3 days of loan application:
Select one:
A. interest rates
B. number of payments
C. Loan Estimate Form
D. amount of monthly payment
C. Loan Estimate Form
A fee simple estate may have special conditions or limitations attached to the
ownership. This is called:
Select one:
a. a fee simple defeasable estate.
b. a conditional estate.
c. a non-freehold estate.
d. a modified freehold estate.
a. a fee simple defeasable estate.
Lenders are not required to advertsie credit terms, but if they advertise some
credit details, they fust fully disclose the terms.
Select one:
True
False
True
Anything man-made that is added to the land such as homes, buildings, fences
or sidewalks is known as
Select one:
A. movables
B. improvements.
C. fixtures.
B. improvements.
An agent listed a house and was told by the seller not to show his home to anyone who is not a U.S. citizen. Which of the following is TRUE?
Select one:
a. It’s too late for the agent to refuse to comply because the house is already listed.
b. The agent must obey the instructions of his client because it is a fiduciary duty.
c. The agent must show the house to anyone who wishes to see it if
they qualify for financing.
d. The agent should just hop that no one who is not a citizen wants to see it.
c. The agent must show the house to anyone who wishes to see it if
they qualify for financing.
The right that allows an owner to sell, will, or give away his/her property is the
Right of:
Select one:
a. disposition.
b. dispossesion.
c. exclusion.
d. possession.
a. disposition.
Consideration is required in a valid deed. Consideration can be in the form of:
Select one:
a. Money
b. Love
c. Affection
d. Any of the above.
d. Any of the above.
An agent authorized by the broker to act as the agent of a specific principal is
known as a:
Select one:
a. designated agent.
b. solel agent.
c. seller’s agent.
d. buyer’s agent.
a. designated agent.
The rights contained in the Bundle of Rights are:
Select one:
a. separable.
b. not separable.
c. not transferable.
d. separable only by death.
a. separable.
When would an appraiser use the Cost Approach?
Select one:
A. when he can not find comparables
B. for the first house in a subdivision
C. For a church or other structure for which there are no comparables.
D. all of the above
D. all of the above
Under the Lien Theory, title is said to ___________________ to the lender.
Select one:
A. default
B. hypothecate
C. manifest
D. lien
B. hypothecate
Subdivision restrictions are also known as:
Select one:
a. restrictive conditions.
b. easements.
c. restrictive covenants.
d. ordinances.
c. restrictive covenants.
Prepayment penalties are not allowed in FHA and VA loans.
Select one:
True
False
True
Which of the following is/are ways in which a lease may be terminated?
Select one:
A. expiration of the term of the lease.
B. Agreement of the parties
C. Eviction
D. All of the above.
D. All of the above.
If a selling broker is to get 60% of a sales commission from a listing broker,
what would be the selling broker’s share of a 7% commission on a $75,000
house?
Select one:
A. $1,570
B. $3,150
C. $5,250
D. $5,500
B. $3,150
The unauthorized use or occupation of another’s property such as a fence built
over the property line is known as:
Select one:
a. An encroachment
b. An easement
c. A license
d. A merger
a. An encroachment
The 4 distinguishing features of the Metes and Bounds System are
Select one:
A. point of beginning, linear measurements, fixed reference points,
compass directions.
B. ranges, townships, section lines, point of beginning.
C. monuments, point of beginning, compass directions, linear
measurements.
D. point of beginning, lot, block, tract.
A. point of beginning, linear measurements, fixed reference points,
compass directions.
What type of leasehold runs for a determinate length of time, up to a specified date of expiration and automatically terminates upon the expiration of the lease, so neither the lessor nor the lessee need give notice prior to its termination and no renewal of the tenancy occurs without the completion of a new lease.?
Select one:
a. Tenancy for years
b. Periodic tenancy
c. Tenancy at will
d. Tenancy at sufferance
a. Tenancy for years
What type of interest does the lessor have in the rights that he gives to the tenant?
Select one:
A. conditional ownership
B. partial ownership
C. reversionary
D. non
C. reversionary
The period of time over which a property is considered to be useful is the:
Select one:
a. effective age.
b. age-life depreciation.
c. economic life.
d. external age.
c. economic life.
Two investors buy a building as joint tenants. One of the investors dies. Which
of the following is true as to ownership of the building?
Select one:
A. The dead investor’s interest goes to his heirs
B. The remaining investor owns the building as a co-owner with the heirs.
C. The remaining investor owns the building in severalty.
D. The heirs and the remaining investor are now joint tenants.
C. The remaining investor owns the building in severalty.
When is a licensed real estate agent exempt from the Fair Housing Laws?
Select one:
a. Never.
b. When selling property to minors.
c. When unaware that she is violating a Fair Housing Law.
d. When leasing property to illegal immigrants.
a. Never.
What is the major difference between the title theory and the lien theory?
Select one:
a. In title theory, the borrower deeds his property to the lender, and in lien theory, the borrower gives a lien right to the lender.
b. In title theory, the borrower gives a lien right to the lender, and in lien theory the borrower gives title to the lender.
c. There are no major differences.
d. In title theory the lender is given a deed of trust, while in lien theory the lender is given the right to sue.
a. In title theory, the borrower deeds his property to the lender, and in lien theory, the borrower gives a lien right to the lender.
Dispossession resulting from the lessor’s failure to maintain his part of the
lease agreement is:
Select one:
A. actual eviction
B. constructive eviction
C. default eviction
D. direct eviction
B. constructive eviction
A clause in a deed that provides for the property to revert to the original owner if
conditions of ownership are not met is called a:
Select one:
a. defeasance clause
b. reverter clause
c. qualifier clause
d. conditional clause
b. reverter clause
How many square feet are there in an acre?
Select one:
A. 5,280
B. 26,000
C. 43,560
D. 45,360
C. 43,560
A husband and wife own a house together. The husband dies and the widow now owns the house by herself. What type of ownership did she have?
Select one:
a. Joint tenancy
b. Community property
c. Tenancy by the entireties
d. Any of the above
d. Any of the above
A title insurance policy generally covers all of the following EXCEPT
Select one:
A. mistakes in the public records
B. forged documents
C. incompetent sellers
D. unrecorded deeds
D. unrecorded deeds
The term “situs” refers to
Select one:
A. commercial property.
B. location.
C. how much property is available.
D. Economic value.
B. location.
The desire to purchase along with the ability is called
Select one:
A. value
B. competition
C. supply and demand
D. demand
D. demand
A foreclosure by power of sale is known as a/an:
Select one:
a. non-judicial foreclosure
b. friendly foreclosure
c. deed in lieu of foreclosure
d. statutory redemption
a. non-judicial foreclosure
How many sections are in a township?
Select one:
A. 10
B. 25
C. 36
D. 48
C. 36
Every township is subdivided into 36 square parcels called sections. Sections
measure a mile on each side and therefore have an area of 1 square mile, or
640 acres.
All of the following are methods of legal land description EXCEPT:
Select one:
a. Municipal address
b. Lot, Block and Tract
c. Rectangular Survey
d. Metes and Bounds
a. Municipal address
A clause which is found in certain types of mortgages that gives permission for
another, subsequent lender to assume the rights of a first mortgage lien is
called a:
Select one:
A. alienation clause
B. acceleration clause
C. subordination clause
D. defeasance clause
C. subordination clause
An agent tells a prospective buyer that seepage in a basement has been
corrected, knowing that the crack has simply been filled and painted over. This
is an example of
Select one:
A. puffing.
B. mistake of fact.
C. misrepresentation.
D. permissible because the owner told him to say it.
C. misrepresentation.
Prepaid taxes are recorded as what on the closing statement?
Select one:
a. credit to seller, debit to buyer
b. debit to seller, credit to buyer
c. credit to seller, nothing to buyer
d. credit to buyer, nothing to seller
a. credit to seller, debit to buyer
In what year was sex/gender added to the Fair Housing Laws as a protected class?
Select one:
a. 1974
b. 1988
c. 1968
d. 1996
a. 1974
There are two McDonalds restaurants in a city. One is in a busy area and sells lots of hamburgers. The other one is in an area of lower density and doesn’t sell as many hamburgers. Although the buildings, lot size and product are similar, the two businesses have a different value. The difference is attributed to the location and is called:
Select one:
a. Surplus Productivity
b. Conformity
c. Competition
d. Balance
a. Surplus Productivity
The theory that there is one particular use for each property that will bring the
highest value, is called
Select one:
A. competition
B. progression and regression
C. balance
D. highest and best use
D. highest and best use
When a person dies with no will and no heirs, his property is said to ________ to
the state.
Select one:
a. escheat
b. devise
c. attach
d. donate
a. escheat
The subject property is a 2,500 square foot home. A comparable is found that
has 2,300 square feet. Using a value of $100 per square foot, what adjustment
should be made for the difference in square feet?
Select one:
A. +$20,000
B. -$20,000
C. +$2,000
D. -$2.000
A. +$20,000
If the comparable is superior to the subject, a negative adjustment is made to
the subject property. If the comparable is inferior, a positive adjustment is
made.There is a difference of 200 square feet. Multiply 200 times the value per
square foot.
The term that means that the contract must be performed within the time limit
specified is:
Select one:
a. specific performance.
b. Equity.
c. Conditional acceptance.
d. Time is of the essence.
d. Time is of the essence.
Tenancy by the Entirety is most similar to:
Select one:
a. joint tenancy.
b. community property.
c. ownership in severalty.
d. tenancy in common.
a. joint tenancy.
A loan was approved for 90% of the appraised value. If the first monthly interest payment is $393.75 and the interest rate is 7%, what was the appraised value?
Select one:
A. $67,500
B. $75,000
C. $56,250
D. $51,030
B. $75,000
Use the T formula: Find the yearly interest by multiplying the monthly interest times 12, then divide by 7% to find the loan amount. Then divide the loan amount by 90% to find the appraised value
An assumption would be listed how on the settlement statement?
Select one:
a. credit to buyer, debit to seller
b. debit to buyer credit to seller
c. credit to buyer, nothing to seller
d. debit to seller, nothing to buyer
a. credit to buyer, debit to seller
Another word for “covenant” is:
Select one:
a. promise.
b. gift.
c. donation.
d. requirement.
a. promise.
Regulation Z covers which of the following?
Select one:
A. agricultural loans
B. personal property credit transactions
C. loans to individuals for all real estate credit transactions for personal, family, and household purposes
D. business or commercial loans
C. loans to individuals for all real estate credit transactions for personal, family, and household purposes
A type of lien which protects workmen, contractors, suppliers of materials, and
others who provide labor or material to build or improve real property from nonpayment for their services is a:
Select one:
a. Mechanic’s lien
b. Workman’s lien
c. Material lien
d. Vendee’s lien
a. Mechanic’s lien
What type of ownership does the owner of a condominium have?
Select one:
a. Ownership in sevarlty of his unit and co-ownership of the common elements.
b. Co-ownership of the entire property.
c. Ownership in severalty of his unit and no ownership of the common grounds.
d. Ownership in severaly of his unit and joint tenancy in the common elements.
a. Ownership in sevarlty of his unit and co-ownership of the common elements.
The party who hires the agent, normally the buyer or the seller or the landlord or
tenant is called the:
Select one:
a. Principal
b. Customer
c. Buyer
d. Seller
a. Principal
A contract is not valid unless each party has pledged to exchange something of
value with the other party. The thing pledged is called consideration.
Consideration may be either __________ or __________.
Select one:
a. good, valuable
b. cash, check.
c. check, a loan.
d. a promise, a lien.
a. good, valuable
For mortgages, interest is always calculated on a _________ basis.
Select one:
a. yearly
b. monthly
c. daily
d. quarterly
a. yearly
A loan in which payments start small and become larger over the term of the
loan is a:
Select one:
A. partially amortized loan
B. adjustable rate loan
C. straight loan
D. graduated loan
D. graduated loan
An office building has a monthly rental income of $8,000. If the GRM is 13.5,
what is the value of the building?
Select one:
a. $1,296,000
b. $108,000
c. $129,600
d. $1,250,000
a. $1,296,000
$8000 X 12 = $96,000 yearly rent
13.5 X $96,000 = $1,296,000 value
A property has an assessed value of $30,000. The tax rate is $4/100 of
assessed value. What is the tax?
Select one:
a. $1200
b. $120
c. $12,000
d. $400
a. $1200
When the tax rate is expressed in dollars, you multiply the tax rate times the
number of 100’s of assessed value.
A type of lease in which the rent is tied to an external index, such as the cost-ofliving index or the consumer price index, is a/an
Select one:
A. gross lease
B. percentage lease
C. graduated lease
D. index lease
D. index lease
Which clause in a deed contains the actual words of conveyance?
Select one:
A. granting clause
B. vesting clause
C. execution clause
D. acknowledgment
A. granting clause
A statement saying that a person signing the document has done so of his own
free will and that he is the person whose signature appears on the document is
a/an
Select one:
A. constructive notice
B. acknowledgment
C. verification
D. affirmation
B. acknowledgment
A loan is made for $60,000 at 8% interest. How much is the first month’s
interest payment?
Select one:
A. $400
B. $480
C. $500
D. $4800
A. $400
You can use the T formula. Multiply the loan amount by the interest rate, then
divide by 12 to get the first month’s interest payment.
When using the Sales Comparison Approach, if a comparable sale has more
square feet than the subject property, you would adjust its sales price ________
by an amount equal to the value of the difference in square feet.
Select one:
a. down.
b. up.
c. double.
d. half.
a. down.
The Federal Reserve regulates the flow of money and interest rates by controlling:
Select one:
a. discount rates.
b. the LTVR.
c. the number of points that can be charged.
d. the size of loans.
a. discount rates.
A developer has 160,000 square feet that he will divide into lots that measure
75 X 100. He will reserve 10,000 for streets. How many lots will he have?
Select one:
a. 20
b. 15
c. 25
d. 30
a. 20
Lot size is 75 X 100 = 7500 sq. ft.
160,000 sq. ft. - 10,000 sq. ft (roads) = 150,000 sq. ft.
150,000 sq. ft ÷ 20 lots
All of the following are examples of transfer by accession EXCEPT:
Select one:
a. acquisitive prescription.
b. accretion.
c. reliction.
d. attachment.
a. acquisitive prescription.
A contract which is created by the actions of the party or parties is:
Select one:
a. an implied contract.
b. an express contract.
c. a voidable contract.
d. an illegal contract.
a. an implied contract.
Lenders and other creditors are required to inform all rejected credit applicants
of the reasons for denying or terminating credit. Notice must be given in writing
within ___ days.
Select one:
a. 30
b. 10
c. 15
d. 60
a. 30
Which of the following statements is TRUE regarding a tenant making changes
to a rental unit to accommodate a handicap?
Select one:
a. A tenant may make changes to their unit to accommodate their handicap, however, they must do so at their own expense and must put the unit back in its original condition when vacating
b. A tenant may make changes to the rental unit to accommodate a
handicap and the landlord is required to pay for the changes.
c. A tenant can require the landlord to make changes to a rental unit to
accommodate a handicap.
d. The tenant cannot make or require the landlord to make changes to a rental unit to accommodate a handicap.
a. A tenant may make changes to their unit to accommodate their handicap, however, they must do so at their own expense and must put the unit back in its original condition when vacating
The principle which is the basis for the Sales Comparison Approach to value is
Select one:
A. substitution
B. supply and demand
C. anticipation
D. externalities
A. substitution
Which of the following statements is true of an option?
Select one:
A. It is a sales contract.
B. It is a type of purchase agreement.
C. It is not mutually binding.
D. It is unenforceable.
C. It is not mutually binding.
If a house sold for $175,000 with a loan of 80% at 7% interest for 20 years, how
much is the transfer tax if the tax rate is $3/1000?
Select one:
A. $300
B. $500
C. $525
D. $700
C. $525
Transfer tax is just like a sales tax - it is charged on the sale amount.
In which of the following types of leases is the rent generally tied to an external
index?
Select one:
a. Graduated Lease
b. Ground Lease
c. Index Lease
d. Straight Lease
c. Index Lease
Littoral rights usually extend to what point?
Select one:
a. The point of high tide.
b. The point of low tide.
c. Midway between high tide and low tide.
d. There are no ownership rights of the seashore.
a. The point of high tide.
A property sold for $175,000. The commission was 6%. What was the dollar
amount of the commission?
Select one:
A. $2,916
B. $10,000
C. $10,500
D. $15,000
C. $10,500
Multiply the selling price times 6%. You can use the T formula: $175,000 X 6%
Earnest money is also known as:
Select one:
a. liquidated damages.
b. specific performance.
c. down payment.
d. security deposit.
a. liquidated damages.
_____________occurs when the agent accidentally fails to perform some act,
such as delivering a counteroffer.
Select one:
a. Negligent omission
b. Negligent misrepresentation
c. Fraud
d. Puffing
a. Negligent omission
The fiduciary duty that says the broker must obey all the legitimate instructions
of the principal is:
Select one:
a. Obedience
b. Loyalty
c. Reasonable care
d. Disclosure
a. Obedience
The seller’s agent is helping a buyer write a purchase agreement. The buyer tells
the salesperson that if it came down to it he would pay more. What should the
salesperson do with this information?
Select one:
a. He should advise the buyer that he should not disclose any information
that he would not tell the seller himself.
b. tell the seller
c. keep it confidential
d. disclose confidential information about the seller to keep it fair
a. He should advise the buyer that he should not disclose any information
that he would not tell the seller himself.
A fee charged by lenders for originating a loan is a/an:
Select one:
a. Loan origination fee
b. Downpayment
c. Discount point
d. PMI
a. Loan origination fee
A group which buys mortgages from primary lenders is called the:
Select one:
a. Secondary mortgage market
b. Subsidiary mortgage market
c. Non-conventional mortgage market
d. Underwriting mortgage market
a. Secondary mortgage market
Which of the following properties would be exempt from the familial status law?
Select one:
A. housing intended for persons 62 years or older, or housing occupied by
at least one person 55 or older per unit.
B. housing in which at least 80% of the units are occupied by persons 55
or older.
C. both a and b.
D. none, there are no exemptions.
C. both a and b.
Real property consists of
Select one:
A. land
B. improvements
C. plants, trees and crops
D. all of the above
D. all of the above
In a trust deed the borrower must sign two documents. They are promissory
note and a ___________.
Select one:
a. trust deed.
b. mortgage.
c. reconveyance deed.
d. trustee deed.
a. trust deed.
When acting as a dual agent, which of the following can the agent NOT
disclose?
Select one:
a. Confidential information that the licensee may know about either client,
without permission.
b. The price or terms the seller or landlord will take other than the listing price without permission of the seller or landlord.
c. The price or terms the buyer or tenant is willing to accept without
permission of the buyer or tenant.
d. All of the above
d. All of the above
Errors regarding the facts of a contract are called
Select one:
A. constructive fraud.
B. actual fraud.
C. mistake of fact.
D. mistake of law.
C. mistake of fact.
Which type of agency requires a power of attorney?
Select one:
a. Universal agency
b. Special agency
c. General agency
d. Buyer agency
a. Universal agency
Clauses or promises in a mortgage which give additional protection to the
mortgagee are called:
Select one:
a. covenants.
b. hypothecation.
c. pledges.
d. additional clauses.
a. covenants.
When using a 365 day year for prorating property taxes, the cost of the taxes is
calculated on what basis?
Select one:
a. Daily
b. Monthly
c. Semi-annually
d. Hourly
a. Daily
A clause which makes the mortgage non-assumable (assumable means that a
buyer can assume or take over the seller’s mortgage) is a/an:
Select one:
A. acceleration clause
B. alienation clause
C. subordination clause
D. prepayment clause
B. alienation clause
A mortgage which is secured by both real and personal property is a
Select one:
A. package mortgage
B. blanket mortgage
C. purchase money mortgage
D. wrap-around mortgage
A. package mortgage
A husband and wife own their home as tenants in the entireties. The wife dies
and names their two children to inherit her interest in the home. Which of the
following statements is true?
Select one:
A. The children and their father own the home as joint tenants.
B. The children and their father own the home as tenants in common.
C. Only the children own the home.
D. The children have no ownership in the home.
D. The children have no ownership in the home.
A sales contract in which either party can sue to have the sale completed should the other party default on the contract is called
Select one:
A. earnest money contract
B. specific performance contract
C. liquidated damages
D. multiple listing contract
B. specific performance contract
The subject property is a 1500 sq.ft. home. Comparable one is 1450 sq.ft., selling price $85,000. Comparable two is 1475 sq.ft., selling price $88,000. Comparable three is 1550 sq.ft., selling price $93,000. Based on square foot alone, and using a value of $50 per square foot for adjustment, what would the value of the subject property be?
Select one:
A. 87,500
B. 89,250
C. 90,500
D. 89,083
D. 89,083
The four agents of productivity are:
Select one:
a. Capital, Labor, Management & Land
b. Demand, Utility, Scarcity and Transferability
c. Capital, Demand, Utility and Scarcity
d. Management, Labor, Cash and Land
a. Capital, Labor, Management & Land
Which of the following is the LEAST likely cause for depreciation?
Select one:
A. decreasing land value
B. physical depreciation
C. functional depreciation
D. being next to a busy highway
A. decreasing land value
How many comparables should be used when using the sales comparison
approach to value?
Select one:
A. 3
B. 3 to 5
C. at least 5
D. as many as necessary
D. as many as necessary
Two houses in the same neighborhood were both built twenty years ago. The
first house is in excellent condition and the second one needs a lot of repairs.
Which of the following statements is TRUE?
Select one:
A. They would both have the same assessed value.
B. They would each have a different effective age.
C. The house needing repair would be an example of functional depreciation.
D. The house needing repairs would probably sell quicker.
B. They would each have a different effective age.
The desire to purchase along with the necessary capital is the definition of
Select one:
A. capitalization
B. supply and demand
C. demand
D. anticipation
C. demand
Two lots which are too narrow to build on are combined into one lot that is more
useful and has a higher value. This is increase in value is called
Select one:
A. plottage increment
B. assemblage
C. reconciliation
D. recombination
A. plottage increment
All of the types of depreciation may be curable EXCEPT
Select one:
A. physical
B. functional
C. economic
D. They are all curable
C. economic
How does a real estate agent usually arrive at the listing price?
Select one:
A. by asking his or her broker
B. by asking the seller
C. by comparing the property to recent sales of similar properties
D. by calculating the cost per square foot to build a similar structure
C. by comparing the property to recent sales of similar properties
The most accurate method of estimating cost is the
Select one:
A. square foot method
B. cubic foot method
C. unit in place method
D. quantity survey method
D. quantity survey method
The sales comparison approach is based on the principle of
Select one:
A. anticipation
B. substitution
C. highest and best use
D. supply and demand
B. substitution
On a loan of 95%, on what part of the loan would PMI be required?
Select one:
A. 5%
B. 10%
C. 15%
D. 95%
C. 15%
A clause in a loan which makes the entire principle and interest due immediately upon default is
Select one:
A. defeasance clause
B. enforcement clause
C. acceleration clause
D. novation clause
C. acceleration clause
Who does the mortgagee’s title insurance benefit?
Select one:
A. the lender
B. the borrower
C. the seller
D. the buyer
A. the lender
Regulation Z requires
Select one:
A. disclosure of closing costs
Regulation Z requires
Select one:
A. disclosure of closing costs
B. disclosure of financing costs including interest rate
C. a minimum down payment
D. a fair market value
C. a minimum down payment
D. a fair market value
B. disclosure of financing costs including interest rate
RESPA requires
Select one:
A. A good faith estimate of all closing costs within 3 days of loan application
B. A return of the deposit within 3 days of loan application if the buyer
changes his mind.
C. Rescind the loan within 3 days if interest rates change
D. Disclosure of all financing costs including interest rate
A. A good faith estimate of all closing costs within 3 days of loan application
A lender refusing to make a loan to a qualified borrower because of the location
of the property is an example of
Select one:
A. blockbusting
B. steering
C. age discrimination
D. redlining
D. redlining
What does a subordination agreement do?
Select one:
A. makes the full amount of the loan due
B. changes the term of the loan
C. changes the priority of recorded mortgages
D. makes a down payment unnecessary
C. changes the priority of recorded mortgages
The FHA is most similar to a/an
Select one:
A. bank
B. savings and loan
C. insurance company
D. mortgage company
C. insurance company
A loan which has smaller monthly payments with a lump sum due at the end of the term is a
Select one:
A. term loan
B. balloon loan
C. negatively amortized loan
D. junior loan
B. balloon loan
Which of the following would protect the lender against title problems?
Select one:
A. mortgagor’s title insurance
B. mortgagee’s title insurance
C. private mortgage insurance
D. banker’s insurance
B. mortgagee’s title insurance
If a buyer is allowed to assume the seller’s loan, but must pay the current
interest rate, the loan must have had what type of clause
Select one:
A. alienation
B. subordination
C. assumption
D. defeasance
A. alienation
If the full amount of the debt is not recovered through foreclosure, the lender
can
Select one:
A. obtain a deficiency judgment
B. sue for secondary foreclosure
C. do nothing
D. obtain a partial release
A. obtain a deficiency judgment
The purpose of a mortgage certificate is to
Select one:
A. list any and all liens on a property
B. state the amount of the mortgage
C. state the terms of the mortgage
D. cancel a mortgage
A. list any and all liens on a property
A written promise to repay a debt is a
Select one:
A. lien
B. mortgage
C. promissory note
D. judgment
C. promissory note
Mr. and Mrs. Buyer purchase a home from the Sellers. They will assume the Sellers’ existing loan and the Sellers will owner finance the remaining balance after the down payment. This type of financing is called a:
Select one:
A. blanket mortgage
B. package mortgage
C. creative mortgage
D. wraparound mortgage
D. wraparound mortgage
A loan is obtained for $95,000 at 7% for 30 years. The factor from the amortization table for $1000 at 7% for 30 years is 6.65. What would be the principle and interest amount of the monthly note, to the nearest dollar?
Select one:
A. $632
B. $555
C. $665
D. not enough information
A. $632
A room measures 24 feet by 30 feet. How much would it cost to carpet the
room if the cost of the carpet is $20 per square yard, including installation?
Select one:
A. $14,400
B. $1,600
C. $1,440
D. $1,200
B. $1,600
A house is sold and the closing is scheduled for June 30th. The taxes for the
year of $600 were paid by the seller on January 1st. How much will the buyer
owe at the closing for the taxes? Use a 360 day year.
Select one:
A. $350
B. $250
C. $300
D. $400
C. $300
A house sells for $180,000 and the buyers have obtained an 80% loan. The house appraised for $185,000. How much will be required for the down payment?
Select one:
A. $144,000
B. $36,000
C. $41,000
D. $37,000
B. $36,000
A house sells for $125,000. The brokerage firm charges a 6% commission. Both the selling agent and the listing agent work for the same broker. If the listing agent receives 35% of the full commission, how much will she earn?
Select one:
A. $7,500
B. $3,750
C. $2,625
D. $1,250
C. $2,625
A woman bought a house 7 years ago for $85,000. The down payment was
$10,000, and she obtained a loan of $75,000. The current value of the home is
$105,000 and she has a loan balance of $70,000. What is her equity?
Select one:
A. $35,000
B. $30,000
C. $25,000
D. none of the above
A. $35,000
A house was listed for $145,000 and sold for $142,000. The loan amount was
$113,600. The transfer tax is $4 per $1000. How much is the tax?
Select one:
A. $454
B. $475
C. $568
D. $580
C. $568
A borrower qualifies for an 80% LTVR. The selling price of the property is $110,000 and the appraised value is $104,000. How much will be required for
the down payment?
Select one:
A. $22,000
B. $20,800
C. $26,800
D. $6,000
C. $26,800
A lender requires 3 months escrow of interest for a loan of $80,000 at 7%. How
much must be escrowed?
Select one:
A. $5,600
B. $467
C. $700
D. $1400
D. $1400
What is the appraised value of a property which is financed at 80% of the appraised value if the loan amount is $100,000?
Select one:
A. $120,000
B. $125,000
C. $80,000
D. $100,000
B. $125,000
A house has 2,000 square feet. Replacement cost is currently $50 per square foot. Using the cost approach, what would be the estimated value of the house?
Select one:
A. $100,000
B. $90,000
C. $110,000
D. $150,000
A. $100,000
An investment property has a gross income of $50,000 with annual expenses
$10,000. If the capitalization rate is 10%, what is the value of the property?
Select one:
A. $40,000
B. $350,000
C. $400,000
D. $433,000
C. $400,000
A house has a market value of $150,000. Property in the area is assessed at
20%. The tax rate is 35 mills. How much is the property tax?
Select one:
A. $5,250
B. $4,200
C. $1,500
D. $1,050
D. $1,050
A seller wants to sell his house and pay off a mortgage of $43,000. He will have
attorney’s fees of $2,500, and he needs to net $30,000 cash. If he has to pay a 6% commission to his broker, what does the selling price need to be?
Select one:
A. $80,319
B. $80,030
C. $80,000
D. $85,000
A. $80,319
If a property is sold for an illegal purpose, then the contract would be considered
Select one:
A. void
B. voidable
C. valid
D. unilateral
A. void
Which of the following would be considered a service contract?
Select one:
A. listing agreement
B. purchase agreement
C. option
D. executed sales contract
A. listing agreement
What type of title does a buyer have in a property for which he has signed a
purchase agreement but the sale has not yet closed?
Select one:
A. legal title
B. right of entry
C. equitable title
D. none
C. equitable title
On the closing statement any new loan proceeds would be listed as
Select one:
A. credit to the buyer
B. credit to the seller
C. debit to the buyer
D. debit to the seller
A. credit to the buyer
If a seller defaults on a sales contract, what happens to the earnest money?
Select one:
A. He must return it to the buyer.
B. He must return it to the buyer plus a like amount.
C. He may keep it.
D. He must use it to pay the broker
B. He must return it to the buyer plus a like amount.
Which of the following is true of an option?
Select one:
A. It is a sales contract.
B. It is a bilateral contract.
C. It is not mutually binding.
D. It is a type of purchase agreement.
C. It is not mutually binding.
A contract between a 17 year old and an adult would be
Select one:
A. void
B. voidable by the minor
C. voidable by either party
D. illegal
B. voidable by the minor
A type of listing in which the seller retains the right to sell her property without
paying a commission is a/an
Select one:
A. exclusive listing
B. exclusive right to sell listing
C. exclusive agency listing
D. net listing
C. exclusive agency listing
A protection clause in a listing agreement provides for
Select one:
A. the listing to continue for 30 days beyond the expiration date if the
broker chooses
B. the broker to be protected from vicarious liability
C. the broker to receive a commission if the house sells after the listing has expired
D. the broker to receive a commission if the property sells within a specified number of days after the expiration date to someone whom the broker introduced to the seller
D. the broker to receive a commission if the property sells within a specified number of days after the expiration date to someone whom the broker introduced to the seller
What is the best way to avoid disputes over whether an item is a fixture?
Select one:
A. settle any disputes in court
B. list any questionable items in the purchase agreement
C. tell the buyers that the seller has the last word on what is or is not a
fixture
D. hire an attorney
B. list any questionable items in the purchase agreement
A contract which is determined by the actions of the parties is a/an
Select one:
A. implied contract
B. express contract
C. void contract
D. unilateral contract
A. implied contract
If the seller who has signed a sales contract dies before the closing and the
heirs do not want to sell, what can the buyer do?
Select one:
A. nothing
B. sue for specific performance
C. sue for partition sale
D. appeal to the board of realtors
B. sue for specific performance
Filing a contract in the public records of the court house is considered
Select one:
A. actual notice
B. specific notice
C. constructive notice
D. acknowledgment
C. constructive notice
An executory contract is one which
Select one:
A. has been signed and completed
B. has been recorded
C. has been notarized
D. has been signed but not performed
D. has been signed but not performed
The deposit on a rejected offer should be given to
Select one:
A. the seller
B. the buyer
C. the lender
D. the listing agent
B. the buyer
A property description that begins at one point on the property line and
proceeds along the perimeter of the property using compass directions and
linear measurements is
Select one:
A. lot, block and tract
B. rectangular survey
C. metes and bounds
D. the subdivision method
C. metes and bounds
A system of measurement that is based on squares of land which are known as
townships and sections is
Select one:
A. lot, block and tract
B. rectangular survey
C. metes and bounds
D. monuments and markings
B. rectangular survey
There are how many sections in a township?
Select one:
A. 16
B. 35
C. 36
D. 48
C. 36
A fixture which is permanently attached to a structure is considered
Select one:
A. chattel
B. real property
C. personal property
D. movable
B. real property
If a person claims to own a property to which he does not have clear title, in
front of the owner and witnesses and the owner does not object, he may acquire title through
Select one:
A. adverse possession
B. attachment
C. quitclaim
D. suit to quiet title
A. adverse possession
If a single owner receives title to a property what type of ownership does he
have?
Select one:
A. common
B. in severalty
C. joint tenancy
D. tenancy by the entirety
B. in severalty
A person occupying a property without the consent of the owner is a
Select one:
A. tenant in common
B. tenant at sufferance
C. tenant at will
D. tenant for years
B. tenant at sufferance
Ownership of a condominium usually includes:
Select one:
A. joint ownership of the unit and the common areas
B. tenancy in common of the unit and the common areas
C. fee simple ownership of the unit and a specified undivided interest in the common areas
D. separate ownership of the unit and joint tenancy in the common areas
C. fee simple ownership of the unit and a specified undivided interest in the common areas
In which of the following real estate investments does the owner own stock in a corporation but no ownership of the property itself?
Select one:
A. cooperative
B. condominium
C. apartment building
D. subdivision
A. cooperative
The cost of adding street lights to a subdivision would be paid for by
Select one:
A. the city
B. the developer
C. special assessment
D. the parish
C. special assessment
In states where water is scarce, ownership and use of water is often controlled by the state rather than by the adjacent land owner. This practice is known as
Select one:
A. states
B. doctrine of prior appropriation
C. avulsion
D. water allocation rights
B. doctrine of prior appropriation
The process of converting real property to personal property is known as
Select one:
A. severalty
B. accession
C. defeasance
D. severance
D. severance
Ownership of a property in the proportion of ¼ and ¾ would be
Select one:
A. joint tenancy
B. tenancy by the entirety
C. tenancy in common
D. tenancy in severalty
C. tenancy in common
A man is a joint tenant with two other investors in the ownership of an
apartment building. He dies leaving his entire estate to his only child. What
percent of the apartment building does the child own?
Select one:
A. One third
B. One fourth
C. One half
D. None
D. None
Under a lease, a landlord does which of the following with his possessory
interest in the property?
Select one:
A. subordinates it
B. alienates it
C. novates it
D. assigns it
D. assigns it
A person who owns a life estate can
Select one:
A. sell it
B. lease it
C. mortgage it
D. all of the above
D. all of the above
Which of the following types of ownership allows for unequal ownership
interests?
Select one:
A. joint tenancy
B. tenancy in common
C. tenancy by the entireties
D. community property ownership
B. tenancy in common
If an agent knows of a material defect and does not tell a prospective buyer
about it, this would be
Select one:
A. puffing
B. mistake of fact
C. misrepresentation
D. steering
C. misrepresentation
Which of the following would an agent be required to disclose to a potential
buyer?
Select one:
A. a person living in the house died of AIDS
B. there was a murder on the property
C. the house was previously occupied by a drug dealer
D. the foundation has a crack in it
D. the foundation has a crack in it
An agent who represents both the buyer and seller in the same transaction with
the written consent of both is a/an
Select one:
A. undisclosed dual agent
B. disclosed dual agent
C. subagent
D. illegal agent
B. disclosed dual agent
When can an agent receive a fee for obtaining a service contract?
Select one:
A. if disclosed to all parties
B. if under $75
C. if requested by the seller or buyer
D. never
A. if disclosed to all parties
If a multiple listing service sets the commission rate that its members can
charge, this would be an example of
Select one:
A. fair business practice
B. blockbusting
C. price fixing
D. monopoly
C. price fixing
In a net listing, the broker receives
Select one:
A. any monies remaining after the seller pays off all liens
B. a percentage of the sales price
C. a fixed preset amount
D. any amount above a preset amount determined by the seller at the time of the listing
D. any amount above a preset amount determined by the seller at the time of the listing
The selling broker is often referred to as the
Select one:
A. cooperating broker
B. listing broker
C. subagent
D. lesser broker
A. cooperating broker
The best type of listing for the broker to be sure of a commission is
Select one:
A. open listing
B. exclusive right to sell listing
C. exclusive agency listing
D. implied listing
B. exclusive right to sell listing
A buyer wants to make an offer that is much lower than the listed price and the
agent is sure the seller will not accept it. What should the agent do?
Select one:
A. tell the buyer to make a higher offer
B. not present the offer
C. present the offer
D. tell the buyer his offer will insult the seller
C. present the offer
Which of the following is/are fiduciary duties?
Select one:
A. disclosure
B. obedience
C. loyalty
D. all of the above
D. all of the above
A listing broker presents an offer to purchase and the seller accepts. Later the
seller decides not to sell. Which of the following is true?
Select one:
A. The seller does not have to sell
B. The seller owes the broker a commission.
C. The seller can rescind the sale.
D. The buyer has no recourse.
B. The seller owes the broker a commission.
A broker who lists a property is considered a
Select one:
A. general agent
B. universal agent
C. special agent
D. dual agent
C. special agent
How can an agency relationship be terminated?
Select one:
A. expiration
B. mutual agreement of the parties
C. completion of the purpose of the agency
D. all of the above
D. all of the above
If an agent receives two offers on a property on the same day and can not meet with the seller until evening, how should the agent present the offers?
Select one:
A. in the order that they were received
B. the highest offer first
C. all at the same time
D. only present the best offer
C. all at the same time
Agent Al works strictly on commission and his broker does not withhold any taxes. Al is probably considered a/an
Select one:
A. independent contractor
B. employee
C. part time employee
D. assistant
A. independent contractor
If a broker deposits a client’s earnest money deposit into the broker’s personal
account, this would be:
Select one:
A. commingling
B. okay as long as he does not spend it
C. puffing
D. accretion
A. commingling
A broker agrees to finance the construction of houses in a subdivision with the understanding that he will be able to list the houses once they are built. This is an example of
Select one:
A. an illegal contract
B. an agency coupled with an interest
C. dual agency
D. none of the above
B. an agency coupled with an interest
The 1988 amendment to the Fair Housing Act added which two protected classes?
Select one:
A. sex and handicapped
B. familial status and sex
C. familial status and handicapped
D. national origin and familial status
C. familial status and handicapped
Which protected class was added to the Fair Housing Act in 1974?
Select one:
A. race
B. national origin
C. handicapped
D. sex
D. sex
The Fair Housing Act applies to
Select one:
A. residential housing only
B. all public buildings
C. residential and commercial buildings
D. apartments only
A. residential housing only
Which of the following are exempt from the provisions of the Fair Housing Act?
Select one:
A. the sale or rental of a single family home occupied by a person whodoes not own more than 3 such homes, a broker or salesperson is not used, and discriminatory advertising is not used.
B. the rental of rooms or units in an owner occupied one- to four-family dwelling.
C. units owned by private clubs or religious organizations, as long as
membership is not discriminatory.
D. All of the above
D. All of the above
When do the exemptions to the Fair Housing Act NOT apply?
Select one:
A. when they involve race
B. when a licensed real estate agent is used
C. when discriminatory advertising is used.
D. All of the above
D. All of the above
Buffer zones are used to
Select one:
A. separate areas of differing land use
B. separate areas having different market value
C. provide land for parks
D. provide extra traffic lanes
A. separate areas of differing land use
Changing the zoning of an area from one of higher density to one of lower density is called
Select one:
A. spot zoning
B. protective zoning
C. downzoning
D. buffer zoning
C. downzoning
An example of an encroachment is
Select one:
A. a driveway giving access to an adjoining property
B. a lien
C. a mortgage
D. a fence that extends beyond the property line
D. a fence that extends beyond the property line
If a property is sold with conditions and the buyer does not abide by the
conditions, what can happen?
Select one:
A. the buyer will be fined
B. the buyer can rescind the sale
C. the seller can take back the property
D. the property must be sold
C. the seller can take back the property
The act of taking private property for public use is
Select one:
A. condemnation
B. eminent domain
C. escheat
D. quick taking
A. condemnation
To acquire a property through the right of eminent domain, the city must
Select one:
A. obtain a judgment in court
B. pay just compensation to the landowner
C. prove that the action is necessary
D. all of the above
D. all of the above
Which of the following are private means of regulating land use?
Select one:
A. zoning
B. restrictive covenants
C. building permits
D. eminent domain
B. restrictive covenants
The property of a person who dies with no will and no heirs goes to
Select one:
A. the state
B. charity
C. the federal government
D. the sheriff
A. the state
An apartment building in an area that is zoned for single family residences
would be an example of
Select one:
A. variance
B. non-conforming use
C. spot zoning
D. blockbusting
B. non-conforming use
The power of the government to enact and enforce laws to protect the health,
safety, and welfare of the public is
Select one:
A. police powers
B. zoning laws
C. restrictive covenants
D. eminent domain
A. police powers
An encroachment would most likely be found by
Select one:
A. title exam
B. survey
C. suit to quiet title
D. abstract of title
B. survey
Which of the following would receive payment first?
Select one:
A. 6 month old mechanic’s lien
B. 3 month old federal tax lien
C. 2 month old state tax lien
D. 10 month old mechanic’s lien
B. 3 month old federal tax lien
All of the following are examples of involuntary alienation EXCEPT
Select one:
A. escheat
B. eminent domain
C. sale with warranty
D. adverse possession
C. sale with warranty
The four basic ways governments can encumber real estate are
Select one:
A. police powers, eminent domain, taxation, escheat
B. zoning, appropriation, deed restriction, liens
C. police powers, deed restrictions, taxation, escheat
D. eminent domain, taxation, police powers, deed restrictions
A. police powers, eminent domain, taxation, escheat
An easement appurtenant can be cancelled by
Select one:
A. the dominant tenement
B. the servient tenement
C. merger
D. both A and C
D. both A and C
Deed restrictions are the same as
Select one:
A. police powers
B. zoning laws
C. restrictive covenants
D. deed of trust
C. restrictive covenants
If a person wants to build a grocery store on the corner of a residential
subdivision, he would need a
Select one:
A. zoning variance
B. non-conforming use
C. zoning permit
D. protective zoning
A. zoning variance
If a power company obtains an easement to build a power line across a person’s property, this would be an example of
Select one:
A. eminent domain
B. easement in gross
C. easement appurtenant
D. rescission
B. easement in gross
An environmental impact statement covers
Select one:
A. the impact of existing structures on the environment
B. the impact of increased population on the environment
C. the projected impact of proposed structures on the environment
D. the impact of water use on the environment
C. the projected impact of proposed structures on the environment
Two basic goals of a property manager are to
Select one:
A. collect rent and provide for repairs
B. produce an income and maintain the value of the property
C. find tenants and collect rent
D. hire staff and rent units
B. produce an income and maintain the value of the property
If an apartment building is sold while it is leased, which of the following is true?
Select one:
A. The lease terminates at the act of sale.
B. The lease terminates 30 days after the act of sale.
C. The tenants must negotiate a new lease with the new owner.
D. The new owner must honor the lease.
D. The new owner must honor the lease.
In which type of lease does the lessee pay a flat fee plus a portion of the expenses?
Select one:
A. gross lease
B. net lease
C. percentage lease
D. straight lease
B. net lease
In which type of lease would the lessee pay a percentage of his income?
Select one:
A. gross lease
B. net lease
C. percentage lease
D. graduated lease
C. percentage lease
Which of the following estates is always inheritable?
Select one:
A. life estate
B. fee simple
C. joint tenancy
D. leasehold
A. life estate
The right of the lessor to remove tenant’s personal property and hold it until rent is paid is called:
Select one:
A. right to eviction
B. right to sequester
C. right to assign
D. right to retain improvements.
B. right to sequester
A person who has a history of mental illness but is recovered, is still
protected under the handicapped class.
Select one:
True
False
True
What type of relationship does the property manager have with the property
owner?
Select one:
a. a fiduciary relationship
b. an agency relationship
c. a general agency relationship
d. All of the above.
d. All of the above.
Discount points are applied to the loan balance.
Select one:
True
False
False
When a party fails to meet contractual obligations, the contract is to be
breached.
Select one:
True
False
True
The type of legal life estate that exempts the family’s primary residence from
forced sale for the satisfaction of personal debts is called:
Select one:
a. homestead.
b. curtesy.
c. dower.
d. life estate.
a. homestead.
During an economic recession we would expect property values to do what?
Select one:
a. decline.
b. stay the same.
c. rise.
d. fluctuate.
a. decline.
A corporation is considered a legal entity.
Select one:
True
False
True
Conventional loans today normally have a loan to value ratio of:
Select one:
a. 80%
b. 90%
c. 100%
d. 50%
a. 80%
Generally, any loan approved for more than 80% LTVR must have private
mortgage insurance (PMI). The borrower pays an insurance premium for an
insurance policy which covers the top portion of the loan proceeds advanced
over and above the standard 80%.
Deposits of soil that occur from the natural processes of nature and result in
the increase in the size of a property are called:
Select one:
a. alluvion.
b. accretions.
c. build-up.
d. embankments.
a. alluvion.
When using the gross rent multiplier, or GRM, to estimate value of a commercial
property, you would use what type of rent?
Select one:
a. yearly rent
b. monthly rent
c. capitalized rent
d. quarterly rent
a. yearly rent
The capital gain on the sale of a personal residence is exempt if the seller has
lived there for at least 2 of the last 5 years.
Select one:
A. True
B. False
False
Personal property may become real property by what method?
Select one:
a. By annexation
b. By severance
c. By detachment
d. Never
a. By annexation
A type of easement in which one land owner has access across his neighbor’s
land would be a/an:
Select one:
a. easement appurtenant.
b. easement in gross.
c. legal servitude.
d. right of use
a. easement appurtenant.
An additional time period in which the borrower can pay a debt and redeem his
property is called
Select one:
A. equitable right of redemption
B. loan extension
C. collateral
D. late payment
A. equitable right of redemption
The practice of using commingled funds as the broker’s own money is called:
Select one:
a. Conversion
b. Fraud
c. Mingling
d. Disloyalty
a. Conversion
A ____________ is a security instrument that creates a lien.
Select one:
a. mortgage.
b. collateral.
c. deed.
d. title.
a. mortgage.
How many square feet are there in an acre?
Select one:
A. 5,280
B. 26,000
C. 43,560
D. 45,360
C. 43,560
All of the following are TRUE concerning Contract for Deed EXCEPT:
Select one:
a. The seller retains title to the property until the debt is paid.
b. The sale and financial agreement are generally combined in one document.
c. In most states the seller does not need to go through foreclosure proceedings if the buyer defaults.
d. The buyer receives full legal title at the act of sale.
d. The buyer receives full legal title at the act of sale.
Areas which separate areas of diverse zoning classifications are called
Select one:
A. variances
B. protective zoning
C. downzoning
D. buffer zones
D. buffer zones
Real Estate investors can defer taxation of capital gains by making a property
exchange. This is called:
Select one:
a. a 1031 tax-deferred exchange.
b. a 1099 tax exchange.
c. a 941 tax-deferred exchange.
d. a capital gains exchange.
a. a 1031 tax-deferred exchange.
A person assigned to oversee the operations of income producing properties while in foreclosure is called a/an:
Select one:
a. receiver.
b. trustor.
c. reconveyer.
d. beneficiary.
a. receiver.
Which of the following is not considered a material fact or defect requiring
disclosure?
Select one:
A. environmental hazards
B. problems with the foundation
C. a leak in the roof
D. an occupant of the house died of AIDS
D. an occupant of the house died of AIDS
A contractual relationship between a broker and a client under which one or
more licensees affiliated with the broker are designated as agents of the client is:
Select one:
a. Designated agency
b. Single agency
c. Dual agency
d. Subagency
a. Designated agency
The relationship of the borrower’s total monthly housing expense to income,
expressed as a percentage is:
Select one:
a. MMI
b. PITI
c. housing expense ratio
d. MIP
c. housing expense ratio
Exaggerating a property’s benefits such as views or landscaping is called:
Select one:
a. Puffing
b. Misrepresentation
c. Fraud
d. Caveat emptor
a. Puffing
If a promissory note is not secured by a mortgage, it is called a/an:
Select one:
A. collateral note
B. conditional note
C. unsecured note
D. void note
C. unsecured note
There are three basic types of buyer agency agreements. In which type is the
agent guaranteed a commission regardless of who sells the property?
Select one:
A. open buyer agency
B. exclusive agency buyer agency
C. exclusive buyer agency
D. none of the above
C. exclusive buyer agency
A clause in a promissory note that gives the lender the right to demand payment in full of the entire unpaid debt if the borrower defaults is called a/an:
Select one:
A. defeasance clause
B. acceleration clause
C. prepayment clause
D. lock-in clause
B. acceleration clause
Which of the following is true of Deed of Trust Foreclosure?
Select one:
A. It is the most common type of foreclosure.
B. The property can be sold without going through the court action of foreclosure.
C. It eliminates the statutory period of redemption.
D. All of the above.
D. All of the above.
Which of the following are types of private liens?
Select one:
a. mortgages
b. mechanic’s liens
c. vendor’s liens
d. All of the above
d. All of the above
A contract in which the owner gives a purchaser the right to purchase within a
specified time period is called
Select one:
A. an option.
B. installment sale.
C. contract for deed.
D. bond for deed.
A. an option.
A loan in which payments start small and become larger over the term of the
loan is a:
Select one:
A. partially amortized loan
B. adjustable rate loan
C. straight loan
D. graduated loan
D. graduated loan
Jane sold a house for $160,000 that she listed. Her broker charges a 6%
commission and she receives 60% of the commission. How much did Jane receive?
Select one:
a. $5760
b. $6000
c. $9,600
d. $3,840
a. $5760
Multiply the selling price times the commission rate to find the full commission.
Then multiply that amount times 60% to get Jane’s share.
Littoral rights usually extend to what point?
Select one:
a. The point of high tide.
b. The point of low tide.
c. Midway between high tide and low tide.
d. There are no ownership rights of the seashore.
a. The point of high tide.
The right of the federal, state, or local government to take private property for
public use is known as:
Select one:
A. eminent domain
B. condemnation
C. escheat
D. adverse possession
A. eminent domain
Tenancy by the Entirety is most similar to:
Select one:
a. joint tenancy.
b. community property.
c. ownership in severalty.
d. tenancy in common.
a. joint tenancy.
A house sells for $100,000 which was a profit of 25%. What was the original
cost of the house?
Select one:
A. 75,000
B. 80,000
C. 85,000
D. 90,000
B. 80,000
Think of the original cost as 100%, then the new value will be 125%. So, $100,000 is 125% of the original cost.
The factor from the amortization table for $1000 loan amount at 8.5% interest for 30 years is 7.69. If the loan amount is $150,000 what is the monthly payment, principal and interest?
Select one:
a. $1153.50
b. $153.50
c. $1550.50
d. $553.50
a. $1153.50
Multiply the factor of 7.69 by the number of thousands of the loan amount
(150) to get the monthly payment.
An impartial party appointed to oversee a trust agreement is a:
Select one:
a. Trustee
b. Trustor
c. Beneficiary
d. Agent of trust
a. Trustee
Which type of deed provides the LEAST protection for the grantee?
Select one:
A. general warranty deed
B. special warranty deed
C. quitclaim deed
D. bargain and sale deed
C. quitclaim deed
The letters “CCR” stand for:
Select one:
a. Covenants, Conditions, and Restrictions
b. Contracts, Conditions, and Reserves
c. Covenants, Contracts, and Restrictions
d. Covenants, Conditions, and Reversions
a. Covenants, Conditions, and Restrictions
The FHA’s maximum mortgage payment includes:
Select one:
a. Principal and interest
b. taxes
c. insurance
d. All of the above (PITI)
d. All of the above (PITI)
Regulation Z establishes guidines for which aspect/s of the lending process?
Select one:
a. Disclosure of Loan Cost
b. Borrower’s Right of Rescission
c. Fair Advertising Practice
d. All of the above
d. All of the above
The tax on a property is $600. The tax rate is 30 mills. Property is assessed at
50% of market value. What is the market value of the property?
Select one:
A. $20,000
B. $40,000
C. $50,000
D. $60,000
B. $40,000
The formula is: Tax = mills X number of 1000’s of assessed value.
All real estate sales and rental offices must display the Fair Housing poster
where it can be seen by all.
Select one:
True
False
True
The “55 or older” exemption to the familial status class requires that ____ of the
units be occupied by persons 55 or older, and must provide significant facilities
and services to meet the physical and social needs of older persons.
Select one:
a. 80%
b. 50%
c. 90%
d. 100%
a. 80%
There are two exemptions to the familial status protected class. Housing intended for persons 62 years or older, or for housing occupied by at least one person 55 or older per unit in 80% of the units.
An assumption would be listed how on the settlement statement?
Select one:
a. credit to buyer, debit to seller
b. debit to buyer credit to seller
c. credit to buyer, nothing to seller
d. debit to seller, nothing to buyer
a. credit to buyer, debit to seller
A debit is equivalent to a withdrawal and a credit is equivalent to a deposit. In
an assumption, the seller is withdrawing the remaining loan proceeds from his
“account” and depositing them in the buyer’s account.
When a title company has made a payment to settle a claim covered by a policy, the title company then has a right to any remedy or damages available to the insured. This is called
Select one:
A. standard policy
B. remediation
C. fair coverage
D. subrogation
D. subrogation
When finding the interest rate on a loan, the interest payment amount must be:
Select one:
a. yearly
b. monthly
c. daily
d. weekly
a. yearly
The person in a mortgage who pledges his property as collateral for the loan is
called the:
Select one:
a. mortgagor.
b. mortgagee.
c. giver.
d. receiver.
a. mortgagor.
There are two types of eviction. They are:
Select one:
a. actual and constructive
b. delinquent and constructive
c. immediate and actual
d. primary and secondary
a. actual and constructive
In which of the following situations would an appraiser be likely to use the cost
approach?
Select one:
a. A church
b. A school
c. The first house in a subdivision
d. All of the above.
d. All of the above.
If the dominant and servient tenements are the same person, the easement is
terminated by:
Select one:
a. merger.
b. prescription.
c. expiration.
d. relinquishment.
a. merger.
How do you convert square feet to square yards?
Select one:
a. Divide the square feet by 9
b. Multiply the square feet by 9
c. Divide the square yards by 9
d. Divide the area by 9
a. Divide the square feet by 9
The lender is NOT required to reveal the total amount of interest which will be
payable during the full term of the loan.
Select one:
True
False
False
A number which represents the time period over which a building or house will
be usable if no maintenance is done is:
Select one:
a. Economic Life
b. Age Life
c. Effective Age
d. Life Expectancy
a. Economic Life
The mortgagee’s rights of hypothecation allow him to go into court and obtain a judgment
against the mortgagor in the event of his default.
Select one:
True
False
True
The buyer may contract with a broker to find property for the buyer. In this type
of representation, the buyer is the client. This is known as:
Select one:
a. buyer agency.
b. dual agency.
c. broker cooperation.
d. buyer brokerage.
a. buyer agency.
A group which is under the auspices of the Housing and Urban Development
(HUD) and which acquires loans for urban renewal projects, housing for the
elderly, and other federal housing programs is:
Select one:
A. A. Federal National Mortgage Association
B. Government National Mortgage Association
C. Federal Home Loan Mortgage Corporation
D. Federal Agricultural Mortgage Corporation
B. Government National Mortgage Association
Land is permanent, immobile, complex and unique.
Select one:
True
False
True
Fixed objects used in the Metes and Bounds method of describing land are
known as:
Select one:
a. Monuments
b. Metes
c. Bounds
d. statutes
a. Monuments
The process of determining the worth of something is called:
Select one:
a. valuation.
b. estimating.
c. an appraisal.
d. educated guess.
a. valuation.
When calculating value using the GRM, ____________ rent is used for residential
properties and ______________ rent is used for commercial properties.
Select one:
a. monthly, yearly
b. yearly, monthly
c. monthly, quarterly
d. quarterly, yearly
a. monthly, yearly
What must the government do before exercising it’s right of eminent domain?
Select one:
a. The government must prove that the property is needed and must pay the owner just compensation, that is, a sum of money equal to fair market value of the property.
b. Nothing. They have the right to take private property for any reason.
c. The government must prove a need but does not have to compensate the owner.
d. The government does not have to prove a need but does have to compensate the owner.
a. The government must prove that the property is needed and must pay the owner just compensation, that is, a sum of money equal to fair market value of the property.
A contract in which all the parties have met all the terms and conditions of the
contract, and the contract is completed is:
Select one:
a. executed.
b. executory.
c. completed.
d. established.
a. executed.
The person receiving title is known as the:
Select one:
a. grantee.
b. grantor.
c. receiver.
d. receivee.
a. grantee.
When a testator dies his will must go through a court proceeding called
Select one:
A. devise
B. codicil
C. probate
D. succession
C. probate
A large expensive house is located next door to a one bedroom frame house.
The large house would experience a decrease in value due to what principle?
Select one:
a. regression.
b. anticipation.
c. contribution.
d. change.
a. regression.
How are discount points calculated?
Select one:
a. Each point costs 1% of the loan amount.
b. Each point costs 1% of the sale price.
c. Each point costs 1% of the appraised value.
d. Each point costs 1% of the sale price or appraised value, whichever is
lower.
a. Each point costs 1% of the loan amount.
When a tenant occupies a premises without the landlord’s consent, it is called
Select one:
A. tenancy for years
B. periodic tenancy
C. tenancy at will
D. tenancy at sufferance
D. tenancy at sufferance
A violation of the Fair Housing Laws is considered a misdemeanor UNLESS:
Select one:
a. Violence is involved.
b. The violation was intentional.
c. It is the second violation.
d. Never, it is always a felony.
a. Violence is involved.
The buyers are assuming the sellers loan. The closing is on June 15th. The loan
balance is $60,000 and the interest rate is 5%. Interest is paid at the end of the
month. At the closing the sellers will owe the buyers how much in prorated
interest for the month? Seller pays for day of closing.
Select one:
a. $125
b. $250
c. $1500
a. $125
Multiply the loan amount by the interest rate to find the yearly interest. Then
divide that number by 360 days to find the daily interest cost. Multiply the daily
interest rate by 15 days.
$60,000 X 5% = $3000 (yearly interest)
$3000 ÷ 360 days = $8.33
$8.33 X 15 days = $125 seller owes
The right that insures an owner will be able to use and enjoy his property is the
right of:
Select one:
a. Quiet Enjoyment.
b. Possession.
c. Control.
d. Exclusion.
a. Quiet Enjoyment.
Appraisers sometimes make adjustments for conditions of sale such as:
Select one:
a. property rights being conveyed
b. financing terms
c. market conditions
d. All of the above
d. All of the above
On the closing statement an assumption of the seller’s loan would be listed as:
Select one:
a. debit to seller, credit to buyer
b. credit to seller, debit to buyer
c. debit to seller, nothing to buyer
d. credit to seller, nothing to buyer
a. debit to seller, credit to buyer
A type of lease that is used by a business to raise capital and involves selling
the property and then leasing it from the new owner is called a
Select one:
A. escalated lease
B. index lease
C. ground lease
D. sale-leaseback
D. sale-leaseback
An agent has a fiduciary relationship with the:
Select one:
A. client or principle
B. customer
C. agent
D. subagent
A. client or principle
