National Practice Exam
Stu's seller client, Gabi, wants to figure out how much equity she has in the home she's selling. Gabi paid $200,000 eight years ago and made several great renovations over the years. She still owes $125,000. Stu calculates that comparable home values in her area have risen about 15% since Gabi bought. Assuming Stu pulled appropriate comps, about how much equity does she have? a. $105,000 b. $155,000 c. $205,000 d. $230,000
a. $105,000
Lorena and Julio purchased a home for $205,950. Their loan amount was $164,760, and the assessed value is now $201,500. Their tax rate is 0.63%. How much will their monthly taxes be? a. $105.79 b. $111.04 c. $191.37 d. $86.49
a. $105.79 Monthly taxes are calculated by multiplying the assessed value by the tax rate and dividing by 12: $201,500 × .63% = $1,269.45 ÷ 12 = $105.79.
Hamish makes an offer on a loft in the city for $424,900 with a 10% earnest money deposit. The seller agrees, so Hamish secures an 80% loan. He needs to set aside funds for the mortgage tax as part of his closing costs. The rate in his area is $0.115 per $100. Calculate the mortgage tax Hamish will pay. a. $390.91 b. $439.77 c. $488.64 d. $97.73
a. $390.91 Calculate the loan amount first: $424,900 x .80 = $339,920. Then calculate the tax: $339,920 x 0.00115 = $390.91
Which of the following is an example of an easement? a. A path providing neighborhood access to a pond cuts through part of Hillary's property. b. Michael installed a basketball hoop next to his driveway, six inches outside his property. c. The city seized a formerly private parcel of land for public use. d. The state took ownership of Don's property when no heirs could be located following his death.
a. A path providing neighborhood access to a pond cuts through part of Hillary's property.
What's it called when all parties sign a contract, but before the seller's acceptance is delivered to the buyer? a. Acceptance b. Binding acceptance c. Contract closing d. Exercise of an option
a. Acceptance Acceptance occurs when all parties have signed a given contract. Binding acceptance occurs when the accepted offer is delivered.
The Adams family is financing their loan through Acme Bank and their agent negotiated a great sales price on their new home. Smith Title Company processed the loan documents. The Adamses must purchase mortgage insurance. Who does the insurance protect? a. Acme Bank b. Smith Title c. The Adamses d. The realtor
a. Acme Bank Private mortgage insurance is protection for the lender in the event of buyer default; it is used when the borrower does not have a large enough (usually 20%) down payment.
Jeung gave her agent an earnest money check, and the seller accepted Jeung's offer. What will happen to the check now? a. An escrow agent will hold the funds in a trust account until the agreement's terms are satisfied. b. Her agent will hold the check in the firm's operating account until Jeung's offer is accepted. c. Jeung's agent will transfer the funds to the seller. c. The seller's agent will deposit the funds in his operating account until closing.
a. An escrow agent will hold the funds in a trust account until the agreement's terms are satisfied.
What does the FTC consider to be a deceptive ad? a. Any ad likely to mislead consumers acting reasonably under the circumstances b. Any ad or business practice that causes or is likely to cause injury c. Any ad that makes a health claim d. Any ad with a claim that's clearly not true
a. Any ad likely to mislead consumers acting reasonably under the circumstances
Belinda is a licensee whose client asked her to draft an addendum containing complicated terms that even Belinda doesn't fully understand. Belinda should ______. a. Avoid unauthorized practice of law b. Hire an attorney c. Refuse to work with this client d. Use legalese
a. Avoid unauthorized practice of law Licensees must avoid unauthorized practice of law. Drafting contractual paperwork with uncertain terms would be a violation.
Christine listed her house with you. Tailleur represents the buyer, Rebecca, and the seller's mother, Freida, is paying your commission. Which of these factors determines how legal agency is determined in this situation? a. Christine listed the property with you. b. Christine's mother, Freida, owns the house you listed. c. Freida is paying your commission. d. Tailleur represents the buyer.
a. Christine listed the property with you.
What type of loan is neither guaranteed nor insured by government agencies? a. Conventional b. Federal Housing Administration (FHA) c. U.S. Department of Agriculture (USDA) d. U.S. Department of Veterans Affairs (VA)
a. Conventional Conventional loans aren't insured or guaranteed by federal government agencies.
In an amortized mortgage, the monthly payment is the same each month. The part used to pay the principal increases each month, while the amount going toward interest ______. a. Decreases b. Increases c. Increases and then decreases d. Stays the same
a. Decreases
The Richards family farm is located on a 10-acre parcel of land, which is very rare to come by in their area. However, the house is rundown and in need of many repairs. Buyers in the area looking for a move-in ready home would need to either look elsewhere or wait several months for the home to be renovated. Which factor is most negatively impacting the value of the Richards' property? a. Demand b. Scarcity c. Transferability d. Utility
a. Demand Although large parcels in the area are scarce, the low demand of buyers willing to buy and wait to live in a property that needs significant repairs is affecting the value.
Ted is in foreclosure but has some equity in his property. An investor suggests that Ted enter into a sales contract with him for a substantially higher price than the investor would actually be paying. The investor pockets the cash and allow the house to be foreclosed on. What sort of scheme is this? a. Equity skimming b. Inflated appraisal c. Silent second d. Straw buyer
a. Equity skimming
Which of these situations represents an illegal tie-in arrangement? a. Grayson tells his seller client, Geneva, that he'll reduce the listing commission if Geneva uses MBS Title Services to close her transaction. b. Martha gives her buyer clients a list of home inspectors and encourages them to call several who are both on and not on the list to find one who meets their needs. c. Monica agrees to rebate a portion of the commission earned when her buyer client buys a house if the client also lists her current home with Monica. d. Trina tells her buyer, Martin, that she won't perform any brokerage services for him unless he signs an agency agreement.
a. Grayson tells his seller client, Geneva, that he'll reduce the listing commission if Geneva uses MBS Title Services to close her transaction.
Why might a licensee want a buyer to sign a buyer representation agreement? a. It helps ensure buyer loyalty. b. It provides the agent with bragging rights. c.It's required by law. d. It will ensure that he'll receive the standard commission rate.
a. It helps ensure buyer loyalty.
In which of these situations is Ronna's fiduciary duty of reasonable skill and care at odds with her duty of obedience? a. Jefferson insists that Ronna interpret the implications of him breaching his contract with a buyer. b. Ronna's buyer client asked her to keep his financial situation confidential. c. Ted, Ronna's broker, insisted that she teach a contracts class, even though she's a new agent. d. Though her customer was adamant, Ronna turned down a commercial listing because it was outside her area of expertise.
a. Jefferson insists that Ronna interpret the implications of him breaching his contract with a buyer. Ronna's duty of reasonable skill and care prohibits her from providing legal advice and supersedes her duty of obedience to Jefferson, her client.
You're explaining to your client that using electronic documents and signatures simplifies the home buying process. Your client is skeptical about these signatures. You describe the Uniform Electronic Transactions Act (UETA) and tell your client ______. a. The UETA gives electronic signatures the same legal weight as "wet" signatures b. The UETA provides a guarantee that electronic signatures will hold up in court c. The UETA requires states to permit electronic signatures on all real estate-related documents d. UETA takes precedence over state laws
a. The UETA gives electronic signatures the same legal weight as "wet" signatures
Which of the following is a legitimate and legal way that an exclusive right-to-sell listing agreement may terminate without the seller owing a commission? a. The listing agent stops working on the listing. b. The seller decides to sell the property without an agent. c. The seller has a change of heart. d. The seller locates a buyer.
a. The listing agent stops working on the listing.
Which of these is an example of legal single license dual agency? a. You represent both the buyer and seller in a single transaction with appropriate consent from both. b. You represent the buyer and a colleague from your firm represents the seller. c. You represent the seller and a colleague from another firm represents the buyer. d. You represent the seller and a colleague from your firm represents the buyer.
a. You represent both the buyer and seller in a single transaction with appropriate consent from both.
Your clients are looking at buying a $200,000 property with a 30-year loan at a 5% interest rate. How much would their principal and interest payment be per month? Plug in the numbers using the amortization chart in your resources see what the payment per month would be. Remember: The monthly payment multiplier is per $1,000 of the mortgage. a. $1,001.32 b. $1,073.64 c. $1,296.21 d. $1.347.91
b. $1,073.64
Seller Adelaide and buyer Colin close on a transaction for two rental condos on March 15. They live in a state where the seller is considered the owner of the property on the day of closing. The combined rental income per month is $4,000. How much rental income can Colin expect to earn in March? a. $2,011.56 b. $2,064.48 c. $2,193.51 d. $2,300.25
b. $2,064.48
Henry submits an offer on a condo and includes an earnest money check for 10% of his offer, which the seller accepts. Later on at closing, he brings a cashier's check for $34,450 (comprising the remaining half of his 20% down payment and $7,950 in closing costs). What's the condo's purchase price in whole dollars? a. $132,500 b. $265,000 c. $344,500 d. $88,333
b. $265,000 Subtract the closing costs from cashier's check amount ($34,450 - $7,950=$26,500) for half of down payment. The total DP was double this ($53,000). Next, divide $53,000 by 20% (to find purchase price ($53,000 ÷ .2=$265,000). Purchase price is $265,000.
A buyer is purchasing a property for $500,000. His lender's loan-to-value ratio is 90%. How much is the buyer financing? a. $400,000 b. $450,000 c. $50,000 d. $500,000
b. $450,000
Roland's farm land is assessed at 1.5 million dollars and the improvements for $500,000. At a tax rate of 4 mills, how much are Rolan's monthly taxes? a. $6,667.00 b. $667.00 c. $8,000.00 d. $80,000.00
b. $667.00
Which of the following may be considered a stigmatized property? a. A home that has been on the market for more than one year b. A home where a homicide, suicide, or haunting occurred c. A home with a panic room d. A home with no basement
b. A home where a homicide, suicide, or haunting occurred
The property management ______ cements the agency relationship between the property manager and the owner. a. Addendum b. Agreement c. Lease d. Waiver
b. Agreement
Through the divorce process, Gail was granted ownership of the couple's vacation timeshare. Gail is ready to sell the timeshare but discovers that her ex-husband Daniel's name is still on the deed, creating a cloud on the title. What should Gail do? a. Ask Daniel to sign a general warranty deed so the new buyers enjoy all the deed covenants. b. Ask Daniel to sign a quitclaim deed to release his ownership share. c. File a quiet title suit against Daniel. d. Purchase a title insurance policy for the new owners to cover any eventual ownership issues.
b. Ask Daniel to sign a quitclaim deed to release his ownership share.
Sophie received title to her grandmother's farm last spring. For almost 100 years, Sophie's family has kept cows and goats on the 120-acre property. The deed came with a caveat: Sophie is never to raise pigs on the farm. If she does, then the property is transferred to her brother. What did Sophie's grandmother create? a. Abatement b. Condition c. Covenant d. Restriction
b. Condition
_______ says that value is created and maintained when the characteristics of a property fit in with its surroundings. a. Anticipation b. Conformity c. Contribution d. Substitution
b. Conformity
Which of the following is a common problem with roof shingles? a. Clean fascia b. Discoloration or curling c. Soffit without holes d. Water buildup and ice damming
b. Discoloration or curling
Derrick just bought his first condo, and he's ready to crack the champagne. Which of the following will Derrick be able to deduct from his income for tax purposes? a. Closing costs b. Discount points c. Down payment d. Transfer fees
b. Discount points
As a residential property manager, Finn can independently make decisions regarding the day-to-day operations of the apartment building he manages. He can hire contractors, screen tenants, pay bills, and enforce lease provisions. What kind of agent is Finn? a. Cooperating b. General c. Limited d. Special
b. General Property managers are general agents for owners, which means they're authorized to perform all of the duties related to the property on the owners' behalf.
Acme Realty offers discounted services. Berringer Realty and Hawthorne Real Estate Group decide to not show any of Acme's listings and to prohibit showings from Acme buyers to drive Acme out of business. This is an example of _______. a. A tie-in arrangement b. Group boycotting c. Market allocation d. Price fixing
b. Group boycotting
Gerald practices real estate in a state that recognizes sub-agency. Which of the following statements is true of Gerald's authority to appoint a sub-agent? a. He can independently appoint a sub-agent at any time during the transaction. b. He must receive the principal's permission in writing in order to appoint a sub-agent. c. Only Gerald's broker can appoint a sub-agent. d. Only the principal can appoint a sub-agent.
b. He must receive the principal's permission in writing in order to appoint a sub-agent. Any delegation of a licensee's agency-related tasks must be made in writing, and must be approved by the principal.
When appraisers look past how a property is being used to determine a more optimal function, what are they determining? a. Cost to replace b. Highest and best use c. Market value d. Value in use
b. Highest and best use
Jane is selling her home to Micah. What must occur for Jane to effect a transfer of title to Micah? a. Jane must accept the deed. b. Jane must deliver the deed to Micah. c. Micah must acknowledge the deed. d. Micah must sign the deed.
b. Jane must deliver the deed to Micah.
Which of these is the best definition of real estate? a. Everything that's not real property b. Land, plus all things permanently attached to it naturally or artificially c. Real property, plus all of the interests, benefits, and rights included in ownership d. The earth's surface extending downward to the center of the earth and upward to infinity, including permanently attached natural objects
b. Land, plus all things permanently attached to it naturally or artificially
Everything in your office is potentially at risk from thieves and other criminals. Because of this, what should you never do? a. Invite clients to the office. b. Leave clients unattended in the office. c. Lock your computer. d. Use a computer.
b. Leave clients unattended in the office.
During a site evaluation to determine property value, all of the following factors are important to consider EXCEPT ______. a. Access to utilities b. Neighborhood demographics c. The property's size and shape d. Topography
b. Neighborhood demographics Topography, utilities, and a property's size and shape all are considered during a site visit to determine property value. Neighborhood demographics might be of interest to the buyer, but generally won't be considered by an appraiser.
The property manager for a senior living community refuses to show a rental to a family with a young child. Does this violate fair housing law? a. No, senior communities may exclude prospective renters belonging to any of the otherwise protected classes. b. No, senior communities may refuse to sell or rent properties to families. c. Yes, the couple is being discriminated against on the basis of age. d. Yes, the couple is being discriminated against on the basis of familial status.
b. No, senior communities may refuse to sell or rent properties to families. Senior housing facilities or communities may refuse to sell or rent properties to families with minor children or those younger than 55. Discrimination on the basis of race is always prohibited.
The parcel of land Monty just bought is 43,891 square feet. Approximately how many acres does Monty have? a. Four b. One c. Three d. Two
b. One
Brandon has a right-to-use timeshare. What can he NOT do with this type of timeshare? a. Allow a friend to use his week. b. Pass the timeshare on to an heir. c. Purchase an additional week if it becomes available. d. Try to exchange weeks with another timeshare holder.
b. Pass the timeshare on to an heir.
Jerry and Simon signed a contract so that Jerry could purchase all of Simon's restaurant equipment for one price after Simon closes his restaurant next month. The contract contains a provision that states Jerry has one year from the purchase date to file a suit relative to the purchase. After the year is up, Jerry forfeits the right. What kind of contract clause is this? a. Specific time b. Statute of limitations c. Time is of the essence d. Time of performance
b. Statute of limitations
Who is responsible for following up on issues identified in the inspection report to ensure that they are addressed? a. The buyers b. The buyer's agent c. The listing agent d. The sellers
b. The buyer's agent The licensee representing the buyers is responsible for tracking any issues the inspection uncovers and the sellers agree to repair, to ensure that they are repaired prior to closing.
Moira has delivered a counter-offer to some potential buyers for her property. Which of these best states the time frame for the buyers' acceptance? a. The buyers have five days to respond. b. The buyers must respond by the time and date specified in the counter-offer. c. The buyers must respond within the time frame originally noted as their offer acceptance date. d. The counter-offer is active until the seller accepts or rejects it.
b. The buyers must respond by the time and date specified in the counter-offer.
As Brandon's listing agent, Lily must disclose all known material facts relative to Brandon's property. Which of the following is a zoning-related fact that Lily might have to disclose to prospective buyers? a. Brandon's subdivision was farmland back in the 1950s. b. The property is right in the middle of a historic preservation district. c. The zoning board may require the developer to include parklands in the neighborhood expansion. d. Two of the residents on Brandon's street have in-home occupations.
b. The property is right in the middle of a historic preservation district.
Xavier deposited a $3,000 earnest money check into his personal account for safekeeping while he was on vacation. The balance in his account when he left on vacation was $4,200, and when he returned, it was $2,800. He withdrew enough funds from his savings account to cover the earnest money check and delivered the funds to the escrow agent. Which statement best represents Xavier's issue? a. Xavier is guilty of commingling. b. Xavier is guilty of commingling and conversion. c. Xavier is guilty of conversion. d. Xavier is guilty of theft.
b. Xavier is guilty of commingling and conversion. Because Xavier's balance fell below the amount required to cover the earnest money check, he's guilty of both commingling and conversion, even though he replaced the funds.
Your clients want to include multiple contingencies in their offer. If you know it's a competitive bidding situation, you say, ______. a. "Contingencies kill deals." b. "Great idea. This will help our offer stand out." c. "Let's evaluate which contingencies matter most to you and consider omitting the rest." d. "To be competitive, you should remove all contingencies."
c. "Let's evaluate which contingencies matter most to you and consider omitting the rest."
Katherine purchased a property for $255,000, borrowing $242,250. The assessed value of the property is $249,700. The property appraisal came in at $257,000. Which of these amounts is used in calculating the transfer tax? a. $242,500 b. $249,700 c. $255,000 d. $257,000
c. $255,000
A buyer has a 30-year, $750,000 loan with a 5.75% interest rate. How much of the first monthly payment is interest? a. $10,869.57 b. $3,500.93 c. $3,593.75 d. $3,750.27
c. $3,593.75
Almanzo is buying a horse farm for $695,000 and put down 15% in earnest money. His closing costs and down payment total $139,000. How much will he need to bring to closing? a. $20,850 b. $29,750 c. $34,750 d. $39,000
c. $34,750 Almanzo set aside $104,250 as earnest money ($695,000 x 0.15). Subtract that from his total due at closing, and you get $34,750 ($139,000 - $104,250) as the amount he'll need to bring to closing.
A CMA or a BPO is an example of ______. a. A formal appraisal b. An assessment c. An informal estimate of market value d. An inspection
c. An informal estimate of market value
Casey signed a contract form offering a purchase price of $309,000 on a home, and gave his agent a $5,000 earnest money deposit. The owner is out of town and her agent can't reach her. At this point what does Casey have? a. An executory contract b. An implied contract c. An offer d. A voidable contract
c. An offer Until the terms are negotiated and the contract is signed by both parties, acceptance hasn't occurred and the sales contract is considered an offer.
Sam decided to build a swimming pool in his yard. He built it one foot inside his neighbor's property. What is this an example of? a. Easement b. Eminent domain c. Encroachment d. Necessity
c. Encroachment
Which real property ownership right protects the owner from harassment or interference? a. Control b. Disposition c. Enjoyment d. Possession
c. Enjoyment
In general, a person in a position of loyalty and trust is a(n) ______. a. Attorney-in-fact b. Client c. Fiduciary d. Mortgage lender
c. Fiduciary
The Office of Fair Housing and Equal Opportunity is a part of which federal department? a. CIA b. HHS c. HUD d. NHA
c. HUD
What happens to an initial offer from the buyer after a seller counters? a. It becomes the back-up offer. b. It's accepted by the seller until the buyer accepts the counter. c. It's no longer in play. d. Sellers cannot counter a buyer's initial offer.
c. It's no longer in play.
Which clause in the listing agreement gives the listing broker the authority and obligates the broker to market the property to other brokers? a. Broadcast clause b. Marketing clause c. Multiple listing clause d. Provisionary clause
c. Multiple listing clause
Which type of listing can help a real estate professional determine how quickly a home in a given price range received an accepted offer? a. Expired b. Foreclosed c. Pending d. Withdrawn
c. Pending
When representing the seller, what duty do you owe a buyer? a. Advise the buyer on negotiating a better price. b. Pre-qualify the buyer before presenting their offer to your seller. c. Present offers from the buyer to your seller. d. Recommend the buyer obtain a property inspection.
c. Present offers from the buyer to your seller.
Deirdre lost her job, and the bank foreclosed on her condo. Which of the following of her outstanding debts will the bank pay first? a. Credit card balance b. Medical bills c. Property taxes d. Student loan
c. Property taxes
Seller Gina feels awful that Martha, who was going to buy her property, lost her job. Gina decides to _________ Martha from the purchase contract. a. Assign b. Reform c. Release d. Rescind
c. Release With a release, one party to a contract can agree (in writing) to not hold the other party responsible for the contract terms and obligations.
The Millers moved to a small town and were interested in buying a house. At the first meeting with real estate sales professional Nora, she asked them where they went to church. They replied that they were atheists and didn't attend church. Nora then told them that she didn't know of any listings that met their needs, even though that wasn't true. Nora is discriminating based on ______. a. Familial status b. National origin c. Religion d. Sex
c. Religion
The UETA makes it legal and binding for contracts to be ______. a. Completed verbally b. Filed without signatures c. Signed electronically d. Written by a broker
c. Signed electronically
In marketing her new listing, Alice asks the photographer to "touch-up" the photos of the house so that the old roof and siding look as though they are new. Which statement about this is true? a. If Alice didn't have the actual color of either the roof or the siding changed, this does not rise to the level of false advertising. b. This is deceptive advertising for which Alice, but not her broker, can be disciplined c. This is deceptive advertising for which both Alice and her broker may be disciplined. d. This is not a deceptive practice since any serious buyer will see the actual property before making an offer.
c. This is deceptive advertising for which both Alice and her broker may be disciplined. This is deceptive advertising for which Alice may be disciplined. Because her broker is responsible for Alice's license-related behaviors, the broker may also be disciplined.
Warren signed a contract with the Samsons for the sale of property he didn't own. What type of contract is this? a. Enforceable b. Unilateral c. Void d. Voidable
c. Void
Rex needs to handle some money he acquired during an "unsavory" business deal. He agrees to sign his boat over to his colleague, Ben, if Ben can launder the money and return it to Rex as part of a legal business dealing. What kind of contract do Rex and Ben have? a. Executed b. Executory c. Void d. Voidable
c. Void A contract for an illegal purpose is void!
Recently retired Admiral Bongo and his wife, Lucy, contact you. They want you to help them purchase their dream house now that he's retired, but one that has the necessary accommodations for the admiral's disability. They also confide in you that they don't have a lot of money saved up for a down payment. Which type of financing may work best for them? a. A conventional loan combined with a seller carry back. b. A conventional loan using the admiral's retirement money as a down payment. c. An FHA 203(k) loan to fix their new home up. d. A VA loan, which requires no down payment.
d. A VA loan, which requires no down payment.
While Martha's paying off her loan, her lender is holding on to something that includes her name, property address, the interest rate on her loan, what the late charge amount would be, and the amount and term of the loan. When her loan is paid off, the lender returns it to Mary, marked paid in full. What is this item? a. A deed of trust b. A mortgage c. An assignment d. A promissory note
d. A promissory note
Which of the following is an example of constructive eviction? a. A landlord locks a tenant out of her unit after she fails to pay her rent for three months. b. A tenant chooses not to renew a lease when the term expires and moves out. c. A tenant dies. d. A tenant moves out of the apartment after repeated unsuccessful requests to the landlord to repair the broken water heater.
d. A tenant moves out of the apartment after repeated unsuccessful requests to the landlord to repair the broken water heater.
In a real estate transaction, which two parties are owed the same duties? a. Clients and cooperating agents b. Clients and customers c. Clients and other parties d. Customers and other parties
d. Customers and other parties Other parties in the transaction are owed the same duties as customers. Only clients receive the full offering of your duties.
Another term for a valuation is ______. a. Assessment b. Comparative market analysis c. Evaluation d. Formal appraisal
d. Formal appraisal
Shari's clients want her to post that there are "no showings on weekends" on the MLS. Shari knows that will significantly cut down on their market exposure. Her duty of reasonable skill and care is in conflict with her duty of ______. a. Accounting b. Disclosure c. Loyalty d. Obedience
d. Obedience
Brynn's listing agent told potential buyers that all offers on Brynn's property would be considered at 5 p.m. on May 3. By that date and time, four offers had been made. The persons making these offers are the ______. a. Examiners b. Executors c. Offerees d. Offerors
d. Offerors
Which type of buyer agency offers the flexibility to work with multiple agents but results in buyers acting on their own behalf since no agent owes fiduciary duties? a. Exclusive agency b. Exclusive right to represent c. Limited agency d. Open agency
d. Open agency
Tyra owns a nail salon that's located in a strip mall. Her rent every month includes $1,800 base rent and 10% of her gross sales. What kind of lease does Tyra have? a. Graduated b. Gross c. Net d. Percentage
d. Percentage
Melisa's mother gave her house to Melisa, along with a signed copy of the deed granting ownership to Melisa. Years later, Melisa decides to downsize by selling the property. The title company shows that the property is still in Melisa's mother's name. What does Melisa have to do to clear this up? a. File a suit to quiet title. b. Present the signed deed to the new buyer. c. Present the signed deed to the title company. d. Record the signed deed.
d. Record the signed deed. To preserve the chain of title, Melisa needs to record the signed deed. Then future records will show an unbroken chain of title.
Jim is meeting with a client at a listing. Outside the basement window, there are wood shavings. The client asks Jim if they mean there are termites in the home. What would be an appropriate response? a. Investigate further before offering an opinion. b. Offer his opinion that it usually doesn't mean there are termites present. c. Reassure the client that there is no termite infestation. d. Refer the client to a qualified pest professional.
d. Refer the client to a qualified pest professional.
Which of the following statements best describes a listing that terminates by performance? a. Evan performed all required fiduciary duties and tasks in listing Von's house, even though it didn't sell before the listing expired. b. Greg listed a property that failed to sell during the term of the listing agreement. Aside from that, he performed all the tasks promised to the seller. c. Marty listed Todd's condo. With Marty's efforts they got almost to closing only to have the buyer's financing fall through. d. Roberto listed a property for Terrence. After two failed offers, the property made it to a successful closing.
d. Roberto listed a property for Terrence. After two failed offers, the property made it to a successful closing.
Sima purchased a cooperative. When the sale goes through, what will she own? a. An option to purchase b. A stock portfolio c. Real estate d. Shares in a corporation
d. Shares in a corporation
Samuel and Yoshi have worked at the same firm for a few months and get along well. Samuel mentions he has a credit score in the low 800s. Yoshi, who's just starting out, persuades Samuel to sign for a loan to help Yoshi buy a property, since his credit isn't good enough. Yoshi promises to make the mortgage payments, but two months after the deal closes, Yoshi moves across the country. Samuel's now stuck with a $400,000 mortgage. What type of scheme is this? a. Equity skimming b. Inflated appraisal c. Silent second d. Straw buyer
d. Straw buyer Unfortunately, Samuel was a straw buyer. His credit was used to purchase a property and secure financing, so when Yoshi skipped town, Samuel was left with the responsibility of paying the mortgage.
Brent and Kathy recently bought a property in a gated community. While doing some landscaping they noticed that their neighbor's shed seems to be over the lot line and on their property. What should they consult to determine if the shed is an encroachment? a. Deed b. HOA covenant c. Mortgage d. Survey
d. Survey
Florence lives in a planned community with an HOA regulation that prohibits flagpoles. As a veteran, she feels strongly about displaying the flag on Independence Day, Flag Day, and Veteran's Day, so she put up a pole for that purpose. How can the regulation be enforced? a. Any member of the HOA may take Florence to criminal court to enforce the regulation. b. Anyone may take Florence to court to enforce the regulation. c. Only the HOA board of directors may take Florence to court to enforce the regulation. d. The HOA has the power to enforce the regulation through fines or by taking Florence to court.
d. The HOA has the power to enforce the regulation through fines or by taking Florence to court.
Aidan accepted a contract for the sale of his home. The home inspection report reveals that certain aspects of the house don't meet the current building code. What's the most likely result? a. Aidan and the purchaser will negotiate the expense of bringing the house up to code. b. Aidan must bring the house up to code. c. The contract will fail to close because of code violations. d. The house is probably not required to meet the current code.
d. The house is probably not required to meet the current code. Most municipalities permit existing construction to be sold and occupied without meeting current code, although there are exceptions for some safety considerations
When purchasing a short sale or foreclosure, what's one of the biggest frustrations buyers face? a. Insurance companies' refusal to insure homes sold as distressed properties b. Restrictions on the amount a lender will finance on a distressed property c. The difficulty of finding a real estate professional to help them with the purchase. d. The length of time it takes to purchase a distressed property
d. The length of time it takes to purchase a distressed property
The seller and ______ must approve a short sale. a. A broker b. A short sale specialist c. The new buyer d. The seller's lender
d. The seller's lender
The Shores are in the process of buying a beautiful 3,000-square-foot home from the Bishops. They've completed all the required paperwork on their loan application. Mary's analyzing the package to determine their ability to repay the loan. She examines the property's value, the property type, and the loan-to-value ratio, among other things. Her recommendation is that the Shores' loan application be approved. What is Mary's role? a. Member of the loan committee b. The seller c. The seller's real estate agent d. The underwriter
d. The underwriter
If individuals want to use their property in a way that's not permitted by a zoning ordinance, they must submit a request for a variance or special use permit to which one of the following groups? a. The architectural review board b. The building department c. The planning board d. The zoning board of appeals
d. The zoning board of appeals
Which type of antitrust violation occurs when the providing of one service is made dependent on the customer or client obtaining another recommended service? a. Group boycotting b. Market allocation c. Price fixing d. Tie-in arrangement
d. Tie-in arrangement
Many real estate contracts contain the phrase ________, reminding the parties to avoid unnecessary delays to the transaction, and to adhere to all contract dates. a. Haste makes waste b. Patience is a virtue c. Seek the advice of an attorney d. Time is of the essence
d. Time is of the essence
Which statement correctly identifies a federal fair housing law and what it addresses? a. The Civil Rights Act of 1866 made it illegal to discriminate on the basis of age and gender. b. The Fair Housing Act of 1968 attempted to eliminate discrimination based on gender. c. The Housing and Community Development Act of 1974 added marital status to the list of protected classes. d. Title VIII of the Civil Rights Act of 1968 prohibits housing discrimination based on race, color, national origin, and religion.
d. Title VIII of the Civil Rights Act of 1968 prohibits housing discrimination based on race, color, national origin, and religion.
Your client, Ray, is worried about title issues that may arise after closing. Remind Ray of his secret protection: ______. a. Buyer Trust Fund b. Litigation c. Seller guarantees d. Title insurance
d. Title insurance
Sylvan, the seller, and Eric, the buyer, have signed an option agreement, which is an offer to purchase a specific piece of real estate without the obligation to buy it. Until Eric exercises his option to buy, only Sylvan is bound by the option agreement; he may not sell the property to anyone else during the option period. What type of contract is this? a. Bilateral b. Executed c. Mutual d. Unilateral
d. Unilateral A contract in which consideration is only offered by one of the parties is a unilateral contract. In other words, the consideration only goes one way.
Picture a drawing of a section of land. Where is Township 1 located? a. Lower left (SE) corner b. Lower right (SW) corner c. Upper left (NW) corner d. Upper right (NE) corner
d. Upper right (NE) corner
Which factor that influences value considers the property's function? a. Demand b. Scarcity c. Transferability d. Utility
d. Utility
If a contract is for an illegal purpose, it's ______. a. Enforceable b. Legal c. Valid d. Void
d. Void
Manuel is selling his home to Selena. He has an existing loan that he'll continue to make payments on, and he's extending credit to Selena for the balance of the purchase price. She will make monthly payments to him. What type of financing are the parties using in this transaction? a. Home equity loan b. Loan amalgamation c. Refinance d. Wrap-around loan
d. Wrap-around loan
