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Real Estate LA > National Exam Questions > Flashcards

National Exam Questions Flashcards

1
Q

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

A. Mortgage brokers

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2
Q

Another name for “alienation clause” is:
Select one:
a. Due on sale
b. PITI clause
c. Subordination clause
d. Subrogation clause

A

a. Due on sale

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3
Q

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

A

D. illegal drug users

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4
Q

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

a. Subordination agreement

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5
Q

The process of determining the worth of something is called:
Select one:
a. valuation.
b. estimating.
c. an appraisal.
d. educated guess.

A

a. valuation.

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6
Q

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.

A

D. he must negotiate an easement with the owner of the waterfront property.

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7
Q

Real estate investors can defer taxation of capital gains by making property exchanges.
Select one:
True
False

A

True

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8
Q

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

a. Good

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9
Q

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

A. reproduction cost

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10
Q

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.

A

d. The buyer receives full legal title at the act of sale.

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11
Q

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.

A

b. The agent should advise him to put an offer in on the house he likes more.

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12
Q

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

a. Master of Appraisal Institute

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13
Q

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

a. The Consumer Financial Protection Bureau

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14
Q

In a trust deed, the owner is the ________.
Select one:
a. trustor.
b. trustee.
c. beneficiary.
d. subordinator.

A

a. trustor.

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15
Q

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

A

D. all of the above

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16
Q

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

A. proprietary lease

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17
Q

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

A. permanence, immobility, complexity, and uniqueness.

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18
Q

A covenant is the same as a
Select one:
A. promise
B. clause
C. lien
D. mortgage

A

A. promise

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19
Q

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

A

C. special assessment

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20
Q

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

A

C. capitalization rate

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21
Q

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

A

d. When his plat is approved

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22
Q

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

A

B. the buyer

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23
Q

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

A

B. specific lien

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24
Q

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

A. equitable right of redemption

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25
Q

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

a. Net lease

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26
Q

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

a. They have greater involvement with numbers of persons seeking to buy and sell homes.

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27
Q

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

a. Straight Lease

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28
Q

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

a. Universal agent

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29
Q

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

a. Fair Housing Act of 1968.

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30
Q

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

a. Tenancy for Years

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31
Q

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.

A

B. Trade fixtures

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32
Q

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

a. partial release clause.

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33
Q

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

A

B. index

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34
Q

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

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

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35
Q

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

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.

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36
Q

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

A

B. undisclosed dual agency

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37
Q

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

a. Government Survey

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38
Q

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

A

d. All of the above

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39
Q

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

A. freehold estate.

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40
Q

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

a. general and limited.

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41
Q

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

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.

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42
Q

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

a. nuncupative will.

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43
Q

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

A

B. joint tenancy

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44
Q

In community property, any property acquired outside the marriage, such as an inheritance, is called separate property.
Select one:
True
False

A

True

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45
Q

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

A. alluvion

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46
Q

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

a. Satisfaction of judgment

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47
Q

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

A

d. All of the above

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48
Q

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

a. $250,000

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49
Q

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

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

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50
Q

The borrower, or person making the loan is the:
Select one:
A. mortgagor
B. mortgagee

A

A. mortgagor

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51
Q

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

A

C. reconciliation

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52
Q

The intentional misrepresentation of a material fact is:
Select one:
A. fraud
B. negligent misrepresentation
C. negligent omission
D. puffing

A

A. fraud

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53
Q

A general warranty deed absolutely guarantees good title regardless of flaws of title, unrecorded claims,
undisclosed encumbrances, or fraud.
Select one:
True
False

A

False

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54
Q

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

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

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55
Q

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

A. replacement cost

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56
Q

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

a. New first mortgage residential real estate loans

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57
Q

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

a. graduated payment mortgage.

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58
Q

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

A

C. conformity

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59
Q

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

A. surplus productivity

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60
Q

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

a. Allocation of markets

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61
Q

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

A

b. Price fixing

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62
Q

Two or more businesses conspire against other businesses to reduce competition
Select one:
a. Allocation of markets
b. Price fixing
c. Boycotting

A

c. Boycotting

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63
Q

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

a. Multiply the square yards times 9

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64
Q

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

a. net annual income.

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65
Q

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

a. power of sale

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66
Q

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.

A

B. intestate

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67
Q

Which type of depreciation is NEVER curable?
Select one:
a. External
b. Physical
c. Functional
d. Depreciated

A

a. External

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68
Q

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

a. stabilize property values.

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69
Q

Commercial appraisals are usually written as a narrative report.
Select one:
True
False

A

True

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70
Q

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

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

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71
Q

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

A. an option.

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72
Q

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

A

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

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73
Q

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

a. Except for trade fixtures, the lessor has the right to retain the improvements.

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74
Q

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

a. voidable contract.

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75
Q

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

A

B. acceleration clause

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76
Q

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

a. Monuments

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77
Q

What type of easement involves at least two properties?
Select one:
a. easement appurtenant.
b. easement in gross.
c. usufruct.
d. habitation.

A

a. easement appurtenant.

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78
Q

The borrower’s pledge to repay the loan is known as the:
Select one:
a. promissory note.
b. lien.
c. collateral.
d. mortgage.

A

a. promissory note.

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79
Q

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

A

C. failure on the part of the agent to show the property enough times

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80
Q

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

A

c. Severalty

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81
Q

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

A

d. All of the above

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82
Q

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

A

B. incurable

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83
Q

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.

A

b. personal mortgage insurance.

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84
Q

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

a. Quiet Enjoyment.

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85
Q

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

A

D. subrogation

86
Q

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

A

C. package mortgage

87
Q

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

A

C. license

88
Q

Government backed loans are exempt from federal usury laws.
Select one:
True
False

A

True

89
Q

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.

A

d. Any of the above.

90
Q

The person receiving title is known as the:
Select one:
a. grantee.
b. grantor.
c. receiver.
d. receivee.

A

a. grantee.

91
Q

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

A

C. at least two tracts of land

92
Q

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.

A

C. tell the buyer because it is a material fact.

93
Q

Replacement cost usually results in a ________ value than Reproduction cost.
Select one:
a. lower
b. higher
c. equivalent
d. less reliable

A

a. lower

94
Q

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

a. Only the dominant tenement

95
Q

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

a. 10%
The formula is I over RV. Divide the net income (I) by the value (V) to find the rate (R).

96
Q

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

a. $1875
Divide the value by the number of years to find the amount per year.
$75,000 ÷ 40 = $1875

97
Q

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

A

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.

98
Q

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.

A

d. All of the above.

99
Q

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

a. joint tenancy.

100
Q

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

a. By requiring permits.

101
Q

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

a. Correction lines

102
Q

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

a. Private Mortgage Insurance

103
Q

A lease is both a contract and a conveyance.
Select one:
True
False

A

True

104
Q

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

a. Monthly debt service, or the mortgage payment

105
Q

Discount points can only be paid by the buyer.
Select one:
True
False

A

False

106
Q

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

A

C. Secondary lenders

107
Q

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

A. straight term loan

108
Q

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

A

D. quitclaim deed

109
Q

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

a. the agent will receive an interest in the thing sold.

110
Q

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

A

B. condominium

111
Q

Ownership rights of ocean front property are known as:
Select one:
a. littoral rights.
b. literal rights.
c. appropriated rights.
d. navigation rights.

A

a. littoral rights.

112
Q

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

a. Uniform Standards of Professional Appraisal Practice

113
Q

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

a. $25,000
The equity is the difference between the current loan balance and the current value.

114
Q

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

A

D. number of square feet

115
Q

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

a. substantial performance.

116
Q

The person who is granted title in a deed is called the:
Select one:
a. grantee
b. grantor
c. trustor
d. trustee

A

a. grantee

117
Q

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

a. contingencies.

118
Q

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

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.

119
Q

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

A

B. undisclosed dual agency

120
Q

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.

A

C. Yes, unless specifically retained in the contract.

121
Q

The selling price X the commission rate = ?
Select one:
a. The commission
b. The down payment
c. The LTVR
d. The interest payment

A

a. The commission

122
Q

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

a. loan amount

123
Q

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

A

b. vendor’s lien

124
Q

If a property is sold for an illegal purpose, that contract is
Select one:
A. void
B. voidable
C. unenforceable
D. valid

A

A. void

125
Q

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

A. $103,000

126
Q

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

A. the top portion of the loan proceeds over and above the standard 80%.

127
Q

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

A

B. vesting clause

128
Q

Is a person who is recovered from mental illness protected by the handicap status?
Select one:
a. Yes.
b. No.

A

Yes

129
Q

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

A

C. promissory note

130
Q

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

A

B. open listing

131
Q

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

A

B. negligent misrepresentation

132
Q

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

a. He cannot have a deficiency judgment entered against him.

133
Q

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

a. Megan’s Law

134
Q

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

a. how good a comparable is.

135
Q

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

A

C. lien against the property.

136
Q

The Louisiana term for fixture is:
Select one:
a. separate movables
b. annexation
c. component by attachment
d. trade fixtures

A

c. component by attachment

137
Q

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.

A

D. lesion beyond moiety.

138
Q

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

A

D. All of the above

139
Q

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

A. general warranty deed

140
Q

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

a. accession.

141
Q

Examples of title problems include:
Select one:
a. encroachments
b. technical errors
c. defects in the public records
d. All of the above

A

d. All of the above

142
Q

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.

A

d. A mortgage is a contract between the lender and the seller.

143
Q

The party who hires the agent/licensee is known as the:
Select one:
a. client or principal.
b. customer.
c. seller.
d. buyer.

A

a. client or principal.

144
Q

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

A

d. All of the above

145
Q

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

A

C. partition suit

146
Q

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

a. The borrower, the property and the location of the property

147
Q

The first Civil Rights law was passed in:
Select one:
a. 1866
b. 1988
c. 1964
d. 1974

A

a. 1866

148
Q

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

a. ingress, egress

149
Q

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

a. The Attorney General

150
Q

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

A

D. All of the above

151
Q

What type of agency relationship exists in a property management agreement?
Select one:
A. universal
B. general
C. special
D. none of the above

A

B. general

152
Q

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

A

C. the southeast quarter

153
Q

It is okay to refuse a loan solely on the location of the property.
Select one:
True
False

A

False

154
Q

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

a. the seller.

155
Q

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

a. Upon delivery and acceptance of a deed.

156
Q

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

a. Sales Comparison

157
Q

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

a. alluvion.

158
Q

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

A

D. $712.50
Multiply the factor times the number of thousands being borrowed.

159
Q

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

A

C. unsecured note

160
Q

The person benefiting from an easement appurtenant is called the
Select one:
A. dominant estate
B. servient estate

A

A. dominant estate

161
Q

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

a. mineral rights.

162
Q

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

A

d. All of the above

163
Q

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

a. Cubic foot method

164
Q

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

A

C. 3 years

165
Q

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.

A

d. sandwich lease.

166
Q

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

A

C. community property

167
Q

Meridians and range lines both run parallel to each other and
Select one:
A. north-south
B. east-west

A

A. north-south

168
Q

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. A non-freehold estate is for a determinate length of time.

169
Q

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

a. The purchase agreement is not binding because all of the heirs did not sign.

170
Q

The gradual exposure of land behind a receding waterline is called
Select one:
A. erosion
B. alluvion
C. reliction
D. dereliction

A

C. reliction

171
Q

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

A. tenancy (or estate) for years

172
Q

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

a. Sale-leaseback

173
Q

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

A. externalities

174
Q

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

a. increased yield to the lender.

175
Q

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

a. Fair Credit Reporting Act

176
Q

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.

A

d. All of the above.

177
Q

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

a. independent contractor

178
Q

The method by which real property may become personal property is called
Select one:
A. Adaptability
B. Annexation
C. Severance
D. Attachment

A

C. Severance

179
Q

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

a. allodial system.

180
Q

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

A

B. 5

181
Q

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

A

D. it is insured

182
Q

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

A

C. 7500 square feet

183
Q

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

a. Property tax lien

184
Q

A general warranty deed contains how many covenants?
Select one:
a. one
b. three
c. five
d. seven

A

c. five
The guarantees in a general warranty deed are of quiet enjoyment, seizen, warranty forever, further assurance,
and against encumbrances.

185
Q

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

A. IRS 1099 MISC form

186
Q

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

a. $36,000
If they are borrowing 80% of the sale price, then the downpayment will be 20% of the sale price.

187
Q

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.

A

d. All of the above.

188
Q

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.

A

d. The borrower’s signature is NOT
required on both documents.

189
Q

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

A

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.

190
Q

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

A

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.

191
Q

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

A. debit to the buyer, credit to the seller.

192
Q

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

a. joint tenancy.

193
Q

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

A. Foreign Investment and Real Property Tax Act

194
Q

Economic characteristics of land include all of the following EXCEPT:
Select one:
a. Utility
b. Scarcity.
c. Fixity of Investment.
d. Situs.

A

a. Utility

195
Q

Reproduction cost is usually much higher than replacement cost.
Select one:
True
False

A

True

196
Q

Another term for “offer and acceptance” is “meeting of the minds”.
Select one:
True
False

A

True

197
Q

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

a. Special agent

198
Q

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

A

B. easement in gross

199
Q

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

A

B. personal property

200
Q

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

A

C. curable functional depreciation

201
Q

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

A

C. no, unless he appeals for and receives a zoning variance.

202
Q

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

a. Seizen

203
Q

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

a. The Real Estate Commission

204
Q

An Attorney’s Opinion is based on the Abstract of Title.
Select one:
True
False

A

True

205
Q

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

a. use their own funds and service the loan.

206
Q

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

A

b. liquidated damages

207
Q

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

a. daily

208
Q

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

A. situs

209
Q

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

A

C. $500
The formula is: Tax = mills X number of 1000’s of assessed value.

210
Q
A

Real Estate LA (14 decks)

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