Real Estate Express Practice Exam

Question 1

Broker Austin represents a party in a transaction where there is a dispute regarding the deposited escrow money. What should Austin do?

Answer 1

Hold the money until both parties (or their lawyers) provide a written release.

Question 2

Which of the following legal description methods has been used the longest in the US?

Answer 2

The metes and bounds system

Question 3

Which of the following would be found in a management proposal?

Answer 3

Schedule of maintenance requirements

Question 4

What is the balance on an amortized loan of $780,000 after the first payment if the interest rate is 5% with a monthly P&I payment of $3,780?

Answer 4

$779,470

Question 5

If a comparable has one less bathroom than the subject, an adjustment is made by

Answer 5

adding value to the comparable.

Question 6

Which of these statements about an independent contractor is false?

Answer 6

He or she is reimbursed for all business expenses.

Question 7

Why is the condition of bearing walls more important than non-bearing walls?

Answer 7

Bearing walls support the ceiling and the roof.

Question 8

A town is replacing a sidewalk that serves eight homes. The length of the sidewalk is 900 feet. Laura’s property has 60 feet of the sidewalk. If the cost of the project to be paid by a special assessment is $18,000, what will Laura’s assessment be?

Answer 8

$1,200

Question 9

Which of the following statements is false regarding a tenancy in common?

Answer 9

The co-owners must be married.

Question 10

Broker Jon is attaching a rider strip to a For Sale sign. What information is most likely on this rider strip?

Answer 10

Jon’s cell phone number

Question 11

A cooperative is

Answer 11

a type of residential property.

Question 12

Which of the following types of property sales typically requires a property condition disclosure?

Answer 12

A three unit, multi-family dwelling

Question 13

Broker Ron wants to open a separate escrow account for each transaction he is involved in. Is this legal?

Answer 13

Yes, there is no legal limit on the number of escrow accounts a broker can have.

Question 14

160 County Drive has 4 acres of open pasture and a 1,900 square foot home. The home has 2 bedrooms and 4 bathrooms. Call 555-555-5555 now for information! What is missing from this advertisement that makes it a blind ad?

Answer 14

The broker’s identification

Question 15

What is a disadvantage of real estate investment?

Answer 15

It is not highly liquid.

Question 16

Alex’s home has been on the market for eight months. What is the most likely reason Alex’s home has not been sold yet?

Answer 16

The property is overpriced.

Question 17

Mary abandoned her property by failing to pay its property taxes, and the property reverted to the state. This is an example of

Answer 17

escheat.

Question 18

Which of the following would be considered community property in a community property state?

Answer 18

A car the spouses bought together after the marriage

Question 19

Home Hoarding Realty is advertising to the public that their managing broker has been in the business 37 years and has sold over 1,250 homes. This is an example of

Answer 19

institutional advertising.

Question 20

Which of the following is a valuable skill for a property manager to have?

Answer 20

Knowledge of building systems

Question 21

Earl orally agreed to a 18-month lease with landlord Blake. Is this contract enforceable?

Answer 21

No, all leases for longer than one year must be in writing to be enforceable.

Question 22

One of the major considerations in a master plan is

Answer 22

the effect of new development on traffic patterns and the environment.

Question 23

The first step in the appraisal process is to

Answer 23

state the problem.

Question 24

On a $280,000 loan, the lender charges a 2 point service charge. How much does the borrower have to pay for just these two points?

Answer 24

$5,600

Question 25

The size of jurisdiction's tax base is derived by

Answer 25

subtracting exemptions from assessed values.

Question 26

Under the _______ of recording, title passes when the conveyance is registered on the title certificate.

Answer 26

Torrens system

Question 27

Which clause protects a lender if he does not want the loan to be assumed by another party?

Answer 27

Alienation

Question 28

Homeowner Louise has been lax in protecting her property rights. According to the ___________, Louise may lose those property rights.

Answer 28

Doctrine of Laches

Question 29

Bobbie decided to redeem her property after a tax sale. Bobbie exercised her

Answer 29

statutory right of redemption.

Question 30

Of the following liens: a $100,000 mortgage, a $2,500 property tax bill, and a $8,000 mechanic's lien, and a $25,000 judgment lien, which will be paid off first after a foreclosure sale?

Answer 30

The $2,500 property tax lien

Question 31

The cost of doing direct mail advertising depends on

Answer 31

the frequency of the mailings.

Question 32

Which of these activities is appropriate to do within the first few days of obtaining a listing?

Answer 32

Have the managing broker send a "thank you for listing" letter to the sellers.

Question 33

Broker Torrey hires salesperson Wes as an independent contractor. As an independent contractor, Wes can expect which of the following from Broker Torrey?

Answer 33

Performance expectations

Question 34

Non-judicial foreclosure is required to foreclose on a

Answer 34

Deed of Trust.

Question 35

What is the most common lease term for space in an office building?

Answer 35

3-5 years

Question 36

Which form does RESPA require lenders to use to detail the costs that the buyer and seller will pay at closing?

Answer 36

Closing Disclosure

Question 37

Robert owns his property and enjoys the full bundle of rights. Can he use his property as collateral for debt?

Answer 37

Yes, Robert can encumber his property.

Question 38

Given the net income of a property, the appraiser can determine an opinion of the value for that property by

Answer 38

dividing by the rate of capitalization.

Question 39

Which of the following would qualify as an example of retail property?

Answer 39

A shopping center

Question 40

If a cooperating broker accepts the offer of subagency from a listing broker, to whom does the cooperating broker owe fiduciary duties?

Answer 40

Seller

Question 41

A(n) ________ contract is one that unduly favors the party with superior bargaining power.

Answer 41

unconscionable

Question 42

Neal's home has been foreclosed on and sold at a Sheriff's sale. The sale brought in $500,000 and the total liabilities on the home were $425,000. Who receives the additional $75,000?

Answer 42

Neal

Question 43

Vicky was posing as a customer of Establishment Realty. However, she was really there to see if Establishment Realty was following fair housing laws. Vicky was a

Answer 43

tester.

Question 44

Why is designated agency a good alternative to traditional dual agency?

Answer 44

Even though the same broker represents each party, both the buyer and seller have a licensee who exclusively acts as their agent in the transaction.

Question 45

Francis just signed the papers on a conventional 30-year, $210,000 loan. He was wondering what type of interest will he be paying on the loan. What is the correct answer?

Answer 45

Simple interest

Question 46

What is another common name for the lot and block system of legal descriptions?

Answer 46

The recorded plat method

Question 47

Who can qualify for an FHA loan?

Answer 47

Anyone with qualified income

Question 48

Carla has been walking across a path on John's property for the past 22 years. John knows about this but has never given Carla permission. What might a court grant to Carla?

Answer 48

An easement by prescription

Question 49

What type of agency cannot be revoked by the principal, nor is terminated if the principal dies?

Answer 49

Agency coupled with an interest

Question 50

The Quarry Mountain Subdivision requires all properties to have fences that are at least 8 feet tall surrounding each property. This is an example of

Answer 50

a deed restriction.

Question 51

The cost to replace an improvement with original materials is known as

Answer 51

reproduction cost.

Question 52

A property has a Gross Income Multiplier of 14, and value of $800,000. What is its annual income?

Answer 52

$57,143

Question 53

How might a voidable contract become valid?

Answer 53

If the party who has reason to disaffirm the contract elects instead to perform it

Question 54

What is the definition of "valuable consideration" in regard to contract validity?

Answer 54

Something specifically offered in exchange for something else

Question 55

Why would a property with a rectangular system description also have a metes and bounds legal description?

Answer 55

Because the property is irregular in shape

Question 56

Morgan owned a large condominium on the ocean. She died and no legal heirs were found. Who will receive title to the property?

Answer 56

The state or county

Question 57

The system of land ownership in the United States is known as what?

Answer 57

The allodial system

Question 58

In the appraisal process, looking at the number of recreational facilities, the distances to schools and adequacy of public transportation is called

Answer 58

neighborhood analysis.

Question 59

If a cooperative corporation cannot pay its bills, what would happen?

Answer 59

The corporation owning the property would be dissolved, and all of the residents could lose their interest in the cooperative.

Question 60

A seller decided to back out of a sales contract for no good reason. What recourse does the buyer have?

Answer 60

To sue for specific performance

Question 61

Which statement about a deed in lieu of foreclosure is false?

Answer 61

It gives the borrower an opportunity to change the loan terms.

Question 62

A tenant who stays beyond his lease without consent of the landlord is known as

Answer 62

a tenant at sufferance.

Question 63

The essential criteria for an acceptable legal description is that it

Answer 63

accurately locates the parcel in the opinion of a court.

Question 64

Which of these statements about the Americans with Disabilities Act is TRUE?

Answer 64

An apartment manager might be required to allow a tenant with a disability to widen a doorway.

Question 65

Which of the following best describes the principle of conformity?

Answer 65

A home maintains its highest value by being in a neighborhood with similar-type housing.

Question 66

How does the Federal Reserve control lenders?

Answer 66

They tell lenders what percentage of assets they must keep as reserves.

Question 67

Licensee Alex only represents the buyer in a transaction. What is Alex called in this situation?

Answer 67

A single agent

Question 68

Jordan has a month-to-month lease with landlord Greg. What type of lease did Jordan sign?

Answer 68

Estate from period-to-period

Question 69

Which of these listing agreement statements is false?

Answer 69

The seller can change the listing agreement whenever he or she wants.

Question 70

Which of the following wills may be considered invalid?

Answer 70

A will that is not signed

Question 71

A type of mortgage which allows the lender to increase the outstanding balance of a loan up to the original amount of the loan in order to advance additional funds is called an

Answer 71

open-end mortgage.

Question 72

Which of the following statements best describes what happens with a judicial foreclosure?

Answer 72

The mortgaged property is sold under the supervision of a court.

Question 73

Unlike buyer/seller agency agreements that create _________, the management agreement creates ________.

Answer 73

special agency, general agency

Question 74

Under what type of contract is a seller obligated to sell, but the buyer is not obligated to buy?

Answer 74

Option

Question 75

Broker Jack has an agreement with seller Mauve that says Jack will receive compensation if anyone except Mauve sells Mauve’s home. This is an example of

Answer 75

exclusive agency.

Question 76

When the agency relationship has been terminated, the licensee is no longer considered the principal’s agent and does not owe any further duties to the principal except for

Answer 76

accounting and confidentiality.

Question 77

What is a forecast of income and expenses that can be projected over five years?

Answer 77

Stabilized budget

Question 78

"This property has the best view in the entire county." This statement is an example of

Answer 78

puffing.

Question 79

What type of clause allows a broker to collect a commission for some period of time after the listing expires?

Answer 79

A carryover clause

Question 80

Which principle is used with the Sales Comparison Approach to value?

Answer 80

Substitution

Question 81

Real estate licensees should know enough about building ordinances to be able to

Answer 81

alert clients of potential problems in a home.

Question 82

A written pledge by a lender to lend a certain amount of money to a qualified borrower on a particular piece of real estate for a specified time under specific terms is a(n)

Answer 82

conditional approval.

Question 83

Seller Monica is selling her property to Harriet. What is Monica's primary responsibility at closing?

Answer 83

To deliver marketable title

Question 84

Justin defaulted on his home mortgage payments. The lender obtained a court order to foreclose on the property. At the foreclosure sale, Justin's house sold for $339,000 and the unpaid balance of his loan is $400,000. What must the lender do to recover the $61,000 Justin still owes?

Answer 84

Seek a deficiency judgment.

Question 85

Which is false regarding a promissory note?

Answer 85

It is the term used for a note that is guaranteed or insured by a governmental agency.

Question 86

The assessed value of Sidney's home is $350,000 but the home was recently appraised at $225,000. As a result, Sidney believes her tax bill is way too high. What option does Sidney have?

Answer 86

She can file a complaint with the local board of assessment review.

Question 87

What are the primary advantages of PEX piping?

Answer 87

PEX piping is able to withstand both high and low temperatures and it is highly resistant to chemicals.

Question 88

How does Planned Unit Development zoning differ from ordinary zoning?

Answer 88

It requires that multiple tracts of land be developed according to a single design for efficient use of space.

Question 89

Gerald is 55, single, and resides on his 3 acre property. Why will Gerald qualify for a homestead exemption?

Answer 89

Because he lives on the property

Question 90

New salesperson Juliet has been assigned office duty for Saturday and Sunday. What is another common term for office duty?

Answer 90

Floor time

Question 91

A(n) ________ is one that conflicts with the ordinances that were enacted after the use commenced.

Answer 91

legal nonconforming use

Question 92

Escrow moneys should be held in the broker's

Answer 92

escrow account.

Question 93

Which parties typically purchase title insurance once the transaction is complete?

Answer 93

The lender and buyer

Question 94

Which of these is a violation of Sherman Antitrust laws?

Answer 94

Market allocation

Question 95

A buyer told broker Lena that she wants to move to a Cuban neighborhood. Then the buyer asked if Lena could show her the best home in a Cuban area. How should Lena respond to this request?

Answer 95

Lena should explain to the buyer that she ethically and legally cannot recommend housing based on national origin.

Question 96

Should a licensee who represents both the buyer and seller tell the buyer about material defects on the seller's property?

Answer 96

Yes, any defects known to the broker should have been disclosed to the buyer.

Question 97

A broker induces an owner to sell by telling him that Muslims are moving into the neighborhood. This broker is guilty of

Answer 97

blockbusting.

Question 98

Ownership of a property reverted to the grantor of the estate when its usage failed to conform to a stated condition in the grant. What type of estate existed?

Answer 98

Fee simple defeasible

Question 99

An income producing property rents for $2,790 per month and the GRM is 97. What is the estimated market value of the property?

Answer 99

$270,630

Question 100

Owner Tom decided to lease out his basement to a college student. By leasing the basement, Tom has

Answer 100

transferred a portion of his bundle of rights.