National real estate practice exam

A loan for which of the following transactions would be covered under regulation Z?

Buying three condominiums in a resort area

A child owns a life estate and sells the property to a friend. Which of the following statements is true regarding the friend's estate?

It ends when the child dies

A property was in an area with a lot of smoke and soot from nearby factories. it suffers from?

economic (external) obsolescence

A salesperson who wants to obtain a listing with the best protection for the broker should ask for a/an?

exclusive right to sell agreement

A contract for deed can be best thought of as a/an?

installment sales contract

An agreement to waive priority is?

subordination

A tenant was in possession of leased property. The landlord gave a written notice to the tenant to quit. The tenant, however, remained in the property and continued to send rent payments to the landlord. The landlord refused to accept the rent checks. This situation would be described as a?

Tenancy at sufferance

A mortgage contingency usually includes all the following items, EXCEPT?

Commitment date

What is the best approach to use in figuring the value of a 15-year-old residential property?

Comparable sales of nearby properties that have sold recently

In a life state situation, what happens to ownership of the property when the life tenant dies?

title would revert either to the grantor who created the life estate or to some other party named in the deed.

A lender charging an interest rate that is higher than allowed by law would be violating?

usury laws

A contract failed to pay sub-contractors for work performed on a property. What could the sub-contractors do?

File a Mechanic's lien on the improved property

Mr. X bought a house in an area that restricted fences. He then bought a dog and began constructing a fence. What remedies do the neighbors have?

File a private suit in court

What is always true about a real estate commission?

It is always negotiable

What is the main difference between a freehold estate and a non-freehold estate?

A free hold estate always involves ownership

Which of the following transactions would be governed by securities laws?

A lending institution selling mortgages to Freddie Mac

A legal description that uses direction, distances and monuments is called?

A metes and bounds description

The main difference between a cooperative and condominium is that?

A condominium owner owns and finances his own unit

Under the Federal Fair Housing Law, which of the following qualifies as a handicap?

A person with a mental or physical impairment that limits life activities

Under federal fair housing, which of the following would be illegal in advertising?

Adults-only apartments

Why should a listing agent be aware of all the ownership documents that will be used in a real estate transaction?

So the agent can know which documents the seller and buyer will have to sign to complete the transaction

Condominium ownership would NOT be used on which of the following?

An office park

A property that has added value making it a better buy due to the benefit of an easement is called?

Dominant estate

The law that specifies how soon a lawsuit must be filed after a breach of contract is called the?

Statute of Limitations

Which of the following terms BEST describes the practice of encouraging owners to move from an area due to minorities moving in?

Blockbusting

Who does a salesperson owe loyalty to?

Broker

A buyer writes a contract with a contingency that says if a certain thing does not happen, the buyer does NOT have to purchase the property. The contract does not close due to this contingency. Normally, any earnest money should be given to the?

Buyer

A buyer made an offer on a property a broker had listed. The broker presented the offer to the seller. While the seller was still considering the offer, the buyer contacted and informed the broker that the buyer wanted to withdraw the offer. The broker should?

Continue to market the property for the seller

Which valuation approach would be used on a 20 unit apartment building?

Cost

Which approach to value is best to use in estimating the value of vacant land?

Cost approach

Which of the following terms refers to an expense deduction taken by a real estate investor?

Depreciation

What does an appraisal actually do?

Determine value

A seller and buyer are awaiting closing on a real estate transaction. The listing agent learns that a zoning change has just taken place of the property. What should the listing agent do?

Disclose this to all parties in the transaction

A licensee discovers that a number of improvements on a property were built too close to the property line. The property is currently under contract to be sold. Which statement BEST describes what the agent should de?

Disclose to the buyer immediately

A seller of a property could NOT transfer marketable unencumbered title. what should the broker do with any earnest money involved in the transaction?

Give it to the buyer

What is the purpose of earnest money being part of a real estate contract?

It shows the seller that the buyer is serious about following through with the contract

Which of the following is NOT a leasehold estate?

Life Estate

A seller asks his agent what the selling price should be. The agent finds 3 comparable properties in the seller's neighborhood that sold for $120,000, $140,000, and $160,000. In order to estimate the value of the seller's home, which of the following would be the BEST choice?

Make the adjustment to the comparisons and then compare to the seller's property

An agency agreement can always be terminated by?

Mutual agreement by all parties to the contract

Which of the following items would NOT be an appurtenance?

Reversion

When a property is taken through condemnation, it was a result of?

Non-payment of taxes by the owner

S owns a property and lists the property for sale with a broker. The broker find a buyer who makes an offer on the property. S is considered to be the?

Offeree

An owner listed a property with only a broker. After the sale, the broker was NOT due a commission. Which type of listing was MOST likely in effect?

Open

A blanket mortgage usually contains which of the following clauses?

Partial release

If a salesperson is an employee of a broker, then the broker must?

Pay a commission

What is the defining feature of a graduated payment mortgage?

Payments are lower in the early years of the loan

A buyer purchases three properties. After the buyer combines all three properties, the entire parcel is now more valuable than before. This is called?

Plottage

The right of the government to keep things in order and provide for the health, safety and welfare of the general public is called?

Police Power

A listing agent has received several offers on a listed property all at the same time. The listing agent should?

Present all offers together at the same time

An agent is working with a married couple in the purchase of a home. The couple ask the agent how they should take title to the property. The agent should say?

SEE AN ATTORNEY

A written document that is used to promise repayment of a loan is called a?

Promissory Note

Which is usually closest to market value?

Purchase price

Which of the following deeds would give the seller the LEAST amount of liability?

Quitclaim

The right of a person to regain title to property after paying all debts is known as?

Redemption

If an owner tells a licensee not to show the property to minorities, which of the following statements BEST describes the obligations of the agent?

Report the seller to HUB

A person builds a building without a building permit. What is the worst thing that could happen in this situation?

The city would make the person tear the building down.

A commercial tenant leased a commercial space from a landlord. The tenant operated a grocery store on the premises. Which of the following statements would be true if the landlord died?

The heirs have to honor the lease as it runs with the land

A veteran used his eligibility to obtain a VA loan in the purchase of a home. The veteran sold the property, paid off the VA loan, and had his eligibility restored. Which of the following statements is true?

The veteran can use the VA eligibility to purchase another home as the previous VA loan had been paid off.

What is the purpose of a master plan?

To guide in the future development of cities

in doing a survey, monuments are sometimes used?

To legally describe a piece of real estate

what is the purpose of a borrower paying for private mortgage insurance (PMI)

To protect the borrower's interest

An established family grocery store is in an area that has recently been zoned residential. If the grocery store were to be sold, what document would be needed to allow continued use of the grocery store?

Variance

Which of the following statements BEST describes the usual legal effect of a contract signed between an adult and a minor?

Voidable by either party

The principle of progression in the selling of a property would be best illustrated when the other homes in the neighborhood?

Were nicer than the sold property

A mortgage clause that states that the mortgage is due and payable upon certain conditions, such as non-payment is

acceleration clause

A mortgage where the interest rate is subject to adjustments periodically is?

adjustable rate

An escrow or impound account for the lender is for holding?

pre-paid taxes and insurance

A broker tells a buyer that the broker thinks a particular house is the best in the neighborhood. the. buyer purchases the property only to find another property later on that is more desirable. the broker is guilty of

puffing