Practice Exam 1

Question 1

A contract of sale states that the earnest money deposit is to be placed in an interest-bearing account with any interest earned to be given to the buyer. This is:

Answer 1

Okay, because the buyer and seller have agreed to this

Question 2

If a buyer’s earnest money check is returned for insufficient funds after being deposited into the broker’s trust account, the broker should:

Answer 2

Tell the seller or cooperating broker that the check bounced

Question 3

Sandy, a 16-year old, enters into a contract to buy a condo from Sue, an adult. Which statement is TRUE?

Answer 3

Sandy can void the entire contract any time before the transaction is closed.

Question 4

Which statement regarding a Veterans Affairs (VA) mortgage is FALSE?

Answer 4

It does not have minimum property requirements

Question 5

Garrett sold his primary residence for $595,000, which was a capital gain of $315,000. How much may Garrett exclude on his income tax as a single individual?

Answer 5

$250,000

Question 6

The Federal Housing Administration’s (FHA) Section 8 program helps low- and moderate-income people by

Answer 6

paying part of their rent.

Question 7

What percentage of a building’s replacement value must be covered by fire insurance according to typical coinsurance clauses?

Answer 7

80%

Question 8

The metes and bounds and monuments of a property can be found in what clause in a deed?

Answer 8

Description

Question 9

A deed is valid only when it is

Answer 9

delivered and accepted.

Question 10

Real estate license laws are designed to

Answer 10

protect the public and maintain high standards

Question 11

When a broker is retained by the buyer, the broker owes the prospective seller

Answer 11

honest, straightforward treatment.

Question 12

A seller’s broker must disclose to a prospective buyer that the

Answer 12

heating system doesn’t work.