Practice Exam #1

Question 1

When 2 or more persons agree to act and the agreed upon action has the effect of restraining trade, this is called

Answer 1

an anti-trust conspiracy

Question 2

if bob is conveying an interest in a ranch that he owns out of town to kevin, his friend, Bob is the _______ in this transaction

Answer 2

grantor

Question 3

another term for a title search is…

Answer 3

due diligence

Question 4

What kind of loans to origination fees apply to

Answer 4

government loans

Question 5

if a property is in probate, the real estate commission for the property is set by

Answer 5

the individual court district

Question 6

if Gregory had his credit report pulled by his lender that included data from two or more of the major credit bureaus (TransUnion,Equinox, Experian), the lender pulled a

Answer 6

Merged credit report

Question 7

in regards to a lease option

Answer 7

each month’s rent may consist of the rent and an additional amount which can be applied toward the down payment

Question 8

in the event of death in a joint tenancy

Answer 8

survivor assumes ownership in full

Question 9

a general agent has full authority to

Answer 9

bind the principle to all agreements

Question 10

which condition creates a seller’s market

1. rising of property prices due to inflation
2. the sudden influx of people to an area
3. neighboring homes selling for above list price
4. the addition of several new housing tracts of new homes

Answer 10

sudden influx of people to an area

Question 11

what type of arrangement is a less-than-freehold estate

Answer 11

owner tenant

Question 12

power of attorney means

Answer 12

broker can execute contracts on behalf of the principle

Question 13

if married couple acquires property during their marriage, the property is considered to be

Answer 13

both jointly owned and community property

Question 14

jumbo loan is also known as:

Answer 14

non conforming loan

Question 15

what is the definition of a “note” in terms of real estate

Answer 15

a legal doc. requiring a buyer to repay a mortgage loan at a stated interest rate during a specific period of time.

Question 16

if a mortgage note was executed and a new loan was established on the same property at a higher rate, the prepayment penalty could be..

Answer 16

waived due to recouping losses through a higher interest rate

Question 17

Joy is a public official that keeps records of real property transactions in her area. Joy is known as a:

1. registrar of deeds
2. recorder
3. all of these
4. county clerk

Answer 17

all of these

Question 18

in regards to closing costs, they can be..

Answer 18

both recurring and pre-paids

Question 19

which if the following is considered an “encumbrance”?

all of these
leases
mortgages
easements

Answer 19

all of these

Question 20

grant offered to help in the construction of a new bedroom of his brother’s home and in the rehabilitation of the existing garage that needed repairs. in this situation, grant is contributing:

Answer 20

sweat equity

: contribution to the construction of rehabilitation of a property in the form of labor or services rather than cash

Question 21

if a contractor intends to sell 10 properties in a calendar year, he/she will need

Answer 21

a real estate license

: 8 or more in calendar year requires RE license

Question 22

Even if a person has a low credit worthiness, the fair housing law requires

• none of these
• that lender make good faith attempt to obtain loan
• that the lender make loan away at higher rate
• that lender reconfigure the loan requirements to fit the individual

Answer 22

none of these

Question 23

if an “as-is” clause is inserted into sales contract for a property that seems to be generally ok on outside, this would be

Answer 23

disallowed

: only allowed in most situations if there are “obvious defects” that any prudent person could discover. … to protect consumers

Question 24

a satisfactory home inspection performed by qualified inspector is typically a

Answer 24

contingency

Question 25

if gale (broker) gives financing to jim (owner of construction co.) that is remodeling condo under agreement that gale will have listing, gales agency is

Answer 25

coupled with an interest

Question 26

if a deed includes a promise that the owner will not build a fence, this is one example of

Answer 26

negative covenant

: a promise that owner will NOT do something.. (opposite is “affirmative covenant”)

Question 27

a thorough inspection by a pro that evaluates the structural and mechanical condition of property, and is typically a contingency, is called a

Answer 27

home inspection

Question 28

If Ronald owns a parcel of land complete with a fence surrounding that says “NO TRESPASSING”, he is able to enforce notice by which right?

Answer 28

right to exclude…. one of rights bundled into legal rights of ownership

Question 29

a credit arrangement which allows a customer to borrow against a pre-approved line of credit when purchasing goods and services is called

Answer 29

revolving debt

Question 30

when danielle issues a promissory note to henrietta, she has given her

Answer 30

a written promise to repay a specific amount over a specified period of time

Question 31

a contract for a deed is best described as when

Answer 31

property purchased on an installment plan

..also includes seller holding title to the property for at least 1 year after selling date

Question 32

fund set aside for replacement of common property in condo, PUD or coop project is called a

Answer 32

replacement reserve fund

Question 33

when jenny and max sign the doc that includes the price and terms of property which they are ready to buy, they create

Answer 33

a purchase offer

….until sellar accepts, it is offer, not agreement.

Question 34

in order to make a withdrawal from broker’s trust acct., in addition to authorization from broker, an employee must be

Answer 34

bonded