Practice Exam 5

Question 1

Which approach is based on the premise that many people buy a real property after comparing it to others with similar features?

Answer 1

Sales Comparison Approach

Question 2

What would NOT be part of the development cost of a LOT?

installing curbs
installing storm sewers
constructing a building
installing street lights

Answer 2

constructing a building

Question 3

An actual agency that arises by deduction or inference from other facts and circumstances, including the words and conduct of the parties, best describes what type of agency?

Answer 3

implied / ostensible

Question 4

A situation in which the tenant’s lease has expired and the tenant is no longer paying rent but is living on the property is known as?

Answer 4

estate at sufferance

Question 5

A person owned a 4-plex and lived in one of the units. Are they allowed to refuse to rent to a student from a different national origin?

Answer 5

Yes (1-4 unit apartments and NEVER based on race)

Question 6

The purpose of ___ is to make sure that all members of the brokerage company understand the broker’s philosophy.

Answer 6

a policy and procedures manual

Question 7

The finance fee charged by the lender to make the loan is a

Answer 7

loan origination fee

Question 8

A contract that is binding on only one side is known as

Answer 8

unilateral contract

Question 9

Broker wants to email alll property owners within her “farming” district every 90 days. Does the broker have to follow any sort of ad requirements?

Answer 9

Yes - the CAN-SPAM Act (has to offer an opt-out option)

Question 10

An exercise of police power by a municipality to regulate and control the character and use of the property is called

Answer 10

zoning ordinances

Question 11

The buyer in a land contract is the

Answer 11

vendee

Question 12

A deed would be presumed to have been delivered when what happens?

Answer 12

it was recorded - means the title was properly transferred

Question 13

The environmental hazard found mostly in electrical equipment is

Answer 13

PCBs

Question 14

Title held by a husband and wife may include all of the following forms of ownership EXCEPT:

severalty
tenancy by the entireties
joint tenancy
tenancy in common

Answer 14

severalty - means SOLE ownership

Question 15

Most homeowners insurance policies contain what clause?

Answer 15

coinsurance clause

Question 16

title to real property is conveyed by deed when the deed is

Answer 16

delivered to and accepted by the grantee

Question 17

The amount of a broker’s commission is established by

Answer 17

an agreement between the broker and the seller/buyer

Question 18

If a broker deposits the buyer’s earnest money in a trust account, at what time is the seller entitled to receive it?

Answer 18

at the time of settlement - until a transaction actually closes, the EM is considered part of the purchase price and does not yet belong to the seller

Question 19

What is the lender’s evidence of a debt (loan)?

Answer 19

promissory note

Question 20

When doing a CMA, a salesperson would be LEAST concerned about which of the following?

list prices of properties in the area
sale prices of properties in the area
original price of the home the owner paid
number of properties of similar size/style for sale in the area

Answer 20

original price the owner paid for the property

Question 21

A building development with designed grouping of varied and compatible land uses (housing, rec, commercial centers, industrial parks) all within one contained development or subdivision. This qualifies as a?

Answer 21

planned unit development (PUD)

Question 22

when appraising a commercial property, the appraiser is MOST concerned with what?

Answer 22

income generated by the property

Question 23

Why do buyers apply for a FHA 203(b) loan?

Answer 23

small down payments

Question 24

Risk management refers to

Answer 24

reducing the risk to a level at which it can be managed or tolerated

Question 25

a naturally occurring gas that is suspected of causing lung cancer is known as

Answer 25

radon

Question 26

An item which was personal property but has been attached to and becomes part of the real property is a

Answer 26

fixture (anything attached to the property)

Question 27

husband and wife own property as tenants by the entireties. What is NOT true?

both must consent to sell
each may individually file a partition suit
both are liable for a debt secured by sucker property
Can be ended by divorce

Answer 27

each may individually file a portion suit

Question 28

What is generally incurable because it results from factors that the owner of the subject property cannot control?

Answer 28

external obsolescence

Question 29

what type of tenancies refers to ownership of real property?

Answer 29

tenancy in common

Question 30

The type of real estate loan that allows the lender to increase the outstanding balance of a loan up to the original sum in the note while advancing additional funds is the

Answer 30

wraparound mortgage

Question 31

A leasehold estate is an example of what estate?

Answer 31

less-than-freehold estate

Question 32

faillure to perform provisions of a contract without a legal excuse is known as

Answer 32

breach of contract

Question 33

In order to determine exactly what portion of a mortgage loan the VA will guarantee on behalf of a qualified vet, the borrower must apply for a

Answer 33

certificate of eligibility

Question 34

Can vets apply for another VA loan is they have paid off the previous one?

Answer 34

yes, because a vets entitlement is fully restored if that veteran has paid off all prior VA mortgages

Question 35

What does NOT affect supply?

population
construction costs
government controls
labor force

Answer 35

population

Question 36

The law that requires real estate contract to be in writing to be enforceable is the

Answer 36

statue of frauds

Question 37

Broker represents a buyer - what is the broker responsible for?

appraisal of property
providing sound legal advice
advertising the property on MLS and online
assuring that only certain ethnic groups are shown the property

Answer 37

advertising property on MLS and online