National Test Questions Flashcards
Imaginary reference lines that run north and south are ________________
Meridan Lines
Credit to the sell is ____________
The sales price
When evaluating and implementing risk management, an example of control would be to __________________________
install smoke detectors for the hearing impaired
An FHA loan is _______________
credit to the buyer
Subsurface rights include _________
OIl
A family with children was told that they cannot rent a unit in an apartment building. Is this acceptable?
Yes, if the unit is a designated senior housing building
Under the Clean Water Act that pertains to permits, what is the next step after a public hearing?
The district engineer of the Army Corps of Engineers may issue or deny a permit
A buyer and seller enter into a written binding contract in which the seller agrees to sell at a specific price for a set term. Later the buyer decides not to buy the property, and the seller has no recourse against the buyer. The contract is _________________
an option agreement
At the closing of a purchase contract, the terms used to create the settlement documents come from the ______________________
Purchase contract
In reconciliation, the appraiser ____________________
estimates the value of a property
The priority of liens is determined by the type of lien and when it was recorded. A property has the following liens:
Mortgage to LKJ bank, recorded December 12, 1999
Mortgage to MBH bank, recorded February 3, 2000
Property tax lien, dated May 4, 2001
IRS tax lien, dated June 7, 2000
What is the priority of these liens?
Property taxes, LKJ bank, MBH bank, IRS taxes
An appraiser has been asked to determine the value of a church. The appraiser has determined the best approach to value for this property is the cost approach. While determining the value, the appraiser will consider all of the following EXCEPT
adjusted square footage of the subject and comparable
A buyer and a seller enter into a purchase agreement. The agreement includes a contingency that the buyer can terminate the contract if she cannot sell her current home. This type of agreement is
an executory contract
A city residential broker has been asked by a family friend to list and sell their large ranch. In this case, the broker
should only take the listing if the broker is competent to sell this type of property.
The broker of a real estate firm would MOST likely be in violation of trust account rules if the broker
deposits earnest money into an operations account.
The market in Sunnyvale has been very active in the last few months, with many property sales resulting in multiple offers. In this type of market, the BEST way for owners to determine the market value of their home is to
get an appraisal.
A retail store in a residential neighborhood is MOST likely an example of
nonconforming use
All of the following are characteristics of value EXCEPT
net return
A borrower is closing on her new 30-year fully amortized loan. At closing, what document will she sign that will give the lender security for the loan?
Deed of trust
All of the following are true of a VA Loan EXCEPT
the veteran may buy both investment and single-family properties with the loan at the same time.
The seller tells the broker, “If you bring me a buyer, I will pay you a commission.” The broker MOST likely has what type of agreement with the seller?
Unilateral open listing
A property for sale has an easement that the listing broker notes in the MLS. The purchase agreement does not mention the easement, but it appears in the title work. Which of these is TRUE?
The easement transfers with the deed as an appurtenance and has been disclosed.
Urea-formaldehyde foam insulation (UFFI) can cause all of the following EXCEPT
ulcers
A buyer representation can be terminated by
death of the broker
What is the loan balance in the third month of a loan (after two payments) on a $250,600 loan at 5.25% if it has fixed monthly principal and interest payments of $1,385.82 for 15 years? (Round to nearest dollar.)
250,020
An essential element of a valid deed that conveys the rights and privileges of ownership to the buyer is called the
words of conveyance
A buyer signed a purchase agreement to buy a parcel of land. However, the buyer did so under force and duress. The contract is considered
voidable
A handicapped tenant moves into a building and wishes to make changes to make the unit more accessible. The landlord may require the tenant to
pay for the improvements
The purpose of deed restrictions is to
protect the interests of property owners
The multiple listing service (MLS) excludes
open listings
The document that summarizes all publicly recorded documents that create the chain of title is known as
an abstract
In the purchase agreement, the buyer and the seller agreed to liquidated damages as a remedy for default. If the buyer defaults, the seller
keeps only the buyers earnest money
A valid contract to transfer interests in real property would require all of the following EXCEPT
the buyer must give earnest money to the seller as consideration for selling.
A broker suspects that there is an issue with the seller’s roof, but the seller insists that it was recently repaired. To avoid a claim of misrepresentation, the broker should inform interested buyers that
they should have an expert examine the roof.
All of the following are examples of material facts that should be disclosed EXCEPT
the past owner had HIV.
A promissory note is one of many legal documents a borrower is required to sign when borrowing money to purchase a property. The purpose of the promissory note is to
serve as the primary evidence of the outstanding debt.
A sales agent has been hired as a listing agent to represent a seller; in this case, the sales agent and brokerage firm owe the seller all of the following EXCEPT
disclosure to all buyers of the seller’s pending divorce (or non material fact information)
An encroachment is
found on the improvement location certificate.
A seller has agreed to act as the buyer’s bank. The seller and the buyer signed a contract for deed to help the buyer purchase the seller’s home. When will the buyer receive possession and title?
Possession is received as agreed to in the contract, and title is received upon making the final loan payment.
Who regulates public drinking water?
The Safe Drinking Water Act (SDWA)
All of the following are examples of police power EXCEPT
it is the right to enforce condemnation.
The buyer’s agent and the buyer are doing a walk-through before closing. There was a large storm in the area the previous night, and the buyer and the broker found water in the basement. Whom should the buyer’s agent inform first of this material fact?
The buyer, who will need to decide what steps, if any, to take
A real estate broker must know what items are required to create valid agreements. All of the following are considered essential to the validity of a purchase agreement EXCEPT
the buyer supplying earnest money.
Which of the following is TRUE about the transfer of residential property?
Fixtures must be excluded if the seller is not conveying them, while personal property must be included for the buyer to receive it.
Legal agreements may be valid, void, or voidable, depending on whether they contain all the required essential elements of a contract. All of the following would make a contract voidable EXCEPT
it isn’t in writing.
A contract with someone who has been declared incompetent by a court is
void
The document used to establish the duties of both the property manager and the property owner is known as a
management contract
An investor wanting to know his return on investment would use what formula?
Current net income divided by cost to purchase
A commercial tenant pays a base rent of $1,000 per month plus a percentage of the owner’s taxes, maintenance costs, and insurance. This type of lease is known as
A net lease
In a reverse mortgage, the homeowner
pays a fixed interest rate.
The main purpose of a conveyance deed in a real estate transaction is to
transfer title from the grantor to the grantee.
According to federal government lending regulations, a buyer purchasing a home must have an appraisal for all the following types of financing EXCEPT
seller carry.
Hazards in real property can usually be found by a thorough property inspection. Which of the following hazards is relatively easy to detect and inexpensive to mitigate?
Radon
A seller decides NOT to sell a property despite of having an executory contract with a buyer. The buyer’s remedy is to
sue the seller for specific performance to force compliance with the agreement.
Rental rates have increased by 2% in the last six months. Which appraisal principle BEST explains this rate increase?
Principle of supply and demand
A neighborhood has determined that it needs new street lighting and sidewalks. The city has told the residents that it is unable to pay for these improvements with tax dollars. In order to get the work done, the residents could
seek a special assessment to cover these public improvements
Under the Truth in Lending Act and Regulation Z, the borrower has a rescission right for
a home equity loan.
Commissions for a brokerage firm may be set by
the principal broker and then through negotiation.
