Real Estate EXAM
Between the time a buyer and seller signed a sales contract and closing, the zoning on the property was changed. Does the listing agent need to disclose this fact to the buyer who is a customer? A » Yes, because the listing agent owes a fiduciary responsibility to the buyer B » Yes, the agent should notify the buyer immediately C » No, the buyer is out of luck because of caveat emptor D » No, the agent should not tell the buyer because that might hurt the seller
B » Yes, the agent should notify the buyer immediately
A fixture would be defined as: A » chattel B » an item that is attached to a building C » personal property D » covenants that run with the land
B » an item that is attached to a building
A condominium development with a long standing established homes association would be governed by the: A » long established tenants B » association of unit owners C » developer of the condominium D » state licensing agency
B » association of unit owners
A buyer's new loan would show up on the closing statement as a: A » debit to the buyer B » credit to the buyer C » debit to the buyer and a credit to the seller D » credit to the buyer and a debit to the seller
B » credit to the buyer
A listing agent was showing a buyer customer a property listed by the agent. While showing the property, the agentnoticed a crack in the basement wall that was covered by some boxes. The agent should: A » not disclose this fact to the buyer as the agent is a seller's agent B » disclose this material fact to the buyer C » disclose this fact to the seller and then see if the seller wants to tell this to the buyer D » call the broker for help
B » disclose this material fact to the buyer
A natural occurrence whereby radioactive gases in the ground decay and then possibly infiltrate structures is called: A » asbestos B » radon gas C » carbon monoxide D » mold
B » radon gas
An owner listed a property with a broker. However, the broker failed to do anything to market the property. If the owner wanted to sell the property personally without paying a commission, what should the owner do? A » Write a letter of abandonment to the broker B » Wait 60 days and relist with another broker C » Terminate the listing before the expiration date D » File a suit for abandonment
C » Terminate the listing before the expiration date
An owner installed some built-in bookshelves in the family room. Which of the following statements would be true when the property is sold? A » The owner would be able to take the bookshelves since they were installed by the owner B » The owner would be able to take the bookshelves by signing a bill of sale document C » The bookshelves would be considered a fixture and would stay with the property when sold D » The bookshelves would be considered a trade fixture and could be removed by the owner
C » The bookshelves would be considered a fixture and would stay with the property when sold
In a contract for deed, when does the buyer obtain legal title? A » At the signing of the sales contract B » At closing C » When the contract terms are satisfied D » Only after recording of the deed
C » When the contract terms are satisfied
Mold issues would most likely be associated with a property: A » that has lead based paint B » that has a high level of radon gas C » in a low-lying area with high humidity D » that is well ventilated
C » in a low-lying area with high humidity
A person owned a property next to a stream. The owner's rights to use the stream are referred to as: A » dower B » curtesy C » riparian D » navigational
C » riparian
A broker found a ready, willing and able minority who offered full price for a house. The seller refused to sell because the buyer was a minority. The broker could legally do all of the following EXCEPT: A » sue for a commission B » inform the prospective buyer that help is available from HUD C » inform the seller that a violation of federal fair housing laws has occurred D » show the property only to non-minorities
D » show the property only to non-minorities
A buyer took out a $6,000 loan for 10 years at 10.5% interest. The buyer made principal payments of $75 a month on the loan in addition to interest. What would be the principal loan balance after 6 months of payments? A » $5,000 B » $5,235 C » $5,550 D » $6,000
Each month the loan balance was reduced by $75. $75 X 6 months = 450 (total principal paid over the six months). $6,000 (original loan) - 450 (paid on principal) = $5,550 (loan balance).
Appraisal
The estimation of a property's market value by a licensed appraiser to assist banks in making loans to home buyers.
Deed
The legal document that determines who has ownership of a property. This is the document transferred from seller to buyer at closing.
Adjustable Rate Mortgage (ARM)
a home loan with an interest rate that adjusts over time based on the market.
Amortization
a period in which a loan balance is gradually paid off from a mortgage payment that includes both principal and interest.
Escrow
when a neutral third party holds on to funds during a transaction
Which of the following statements is true regarding a condominium? A » Stock is used to transfer ownership B » The owners have a proprietary lease C » Ownership must be done under joint tenancy D » The owners have an undivided interest in the common areas
D » The owners have an undivided interest in the common areas
In a contract for deed, when does the buyer receive the deed to the property? A » When the contract is signed B » When the deed is recorded C » When the contract is recorded D » When the payment obligation is paid in full
D » When the payment obligation is paid in full
A mortgage clause that states that the mortgage is due and payable upon certain conditions, such as non-payment is: A » prepayment B » subordination C » defeasance D » acceleration
D » acceleration
All license renewals must be returned to the KREC: A » 60 days prior to the expiration date B » 30 days prior to the expiration date C » 30 days after the expiration date D » by the expiration date
D » by the expiration date
When ownership is conveyed through the transfer of shares of stock, this is: A » joint tenancy B » tenants in common C » condominium D » cooperative
D » cooperative
The purpose of an appraisal is to: A » give an opinion of a home's sale price B » assure value C » determine value D » estimate value
D » estimate value
A person obtained a $75,000 loan with the lender charging a 1% loan origination fee. What was the amount of the fee? A » $600 B » $750 C » $800 D » $950
$75,000 x 1% = $750
The number of continuing education hours required for a salesperson for the mandatory core is: A » 3 B » 6 C » 9 D » 12
A » 3
A seller lists with Broker X. Broker Y sells the property. To whom does the seller owe a commission? A » Broker X B » Broker Y C » Broker X and Broker Y's salesperson D » Broker X and Broker Y
A » Broker X
A builder owns a large piece of property. The builder decides to turn the property into a subdivision of homes but decides to keep the lake frontage on all the lots for himself. What would a buyer of one of the lots prefer to have? A » Easement appurtenance B » Easement in gross C » Easement by prescription D » License
A » Easement appurtenance
What type of interest does the buyer receive in the property after the seller accepts the offer? A » Equitable B » Easement C » Record D » Equity
A » Equitable
A seller sold a property to a buyer with the seller also transferring the refrigerator to the buyer as a personal propertyitem. The document needed for the transfer of the refrigerator would be a: A » bill of sale B » assignment agreement C » transfer by deed D » contract for deed
A » bill of sale
In which of the following cases would a licensee NOT pay a fee? A » Change of company name B » Change of company location C » Deactivating a license D » Reactivating a license
C » Deactivating a license
Which of the following would have the greatest influence on appraisal value? A » Original price owner paid for the property B » Assessed value of the property C » Local economic conditions D » The average of local comparable sold properties
C » Local economic conditions
A developer wants to develop a new subdivision of homes in the suburbs surrounding a major city. What type of legal description would most likely be used? A » Rectangular Survey System B » Metes and Bounds C » Lot and Block D » Geodetic Survey System
C » Lot and Block
Which of the following terms BEST describes the practice of encouraging owners to move from an area due to minorities moving in making the neighborhood more integrated? A » Steering B » Blockbusting C » Redlining D » Puffing
B » Blockbusting
A buyer made an offer on a house and the seller accepted the offer as written. The buyer wanted some of the seller's personal property to remain with the house. The personal property would transfer to the buyer under which of the following conditions? A » If it fit into a particular spot in the house B » If it was included in the contract C » If it was verbally stated by the listing broker D » If it was verbally agreed to between the seller and buyer
B » If it was included in the contract
Which would most likely happen to a broker who refuses to allow the KREC auditors to examine his records? A » The broker would be reprimanded by the local Board of Realtors B » The broker`s license would be revoked C » The broker would lose the right to act as an escrow agent but keep the license D » The broker would be forced to become a salesperson
B » The broker`s license would be revoked
A salesperson buys a house that is in foreclosure pursuant to redemption rights. Who must the salesperson contact immediately as to this purchase? A » The sheriff B » The mortgage holder C » The KREC D » The attorney general
B » The mortgage holder
What is the difference between an FHA loan and a VA loan? A » Interest rates are lower on a VA loan B » Veterans receive a certificate of eligibility in obtaining a VA loan C » The money comes from the federal government on FHA loans D » The Veteran's Administration insurance does not cost any extra money
B » Veterans receive a certificate of eligibility in obtaining a VA loan
Which of the following acts would be permitted under the 1968 Federal Fair Housing Act? A » Advertising to special groups only B » Selling or renting to someone based on their national origin C » Not renting a house to someone because they have a poor credit history D » Telling someone a house has been rented when it actually has not
C » Not renting a house to someone because they have a poor credit history
A real estate licensee purchased a home that was in foreclosure. How many days does the licensee have in which to give written notice to the mortgage holder of the licensee`s purchase? A » 10 days B » 15 days C » 20 days D » 30 days
C » 20 days
What type of tax would be proposed for a property according to the market value? A » Added assessment tax B » Special assessment tax C » Ad valorem tax D » Estate tax
C » Ad valorem tax
As required by the license law, all interpretations of the license act shall be done by the: A » legal counsel hired by the commission B » Governor of Kansas C » Attorney General of Kansas D » Director of the KREC
C » Attorney General of Kansas
A licensed Florida broker is doing seminars on Florida property at dinners in various places in Kansas. Some people have asked her if they can purchase the properties. Which is true regarding her need for a Kansas license?
D » She needs a Kansas license to market Florida properties in Kansas
Which of the following liens would be characterized as a specific lien? A » Judgment lien B » Inheritance tax lien C » Income tax lien D » Ad valorem tax lien
D » Ad valorem tax lien
What does an appraisal actually do? A » Assure value B » Guarantee value C » Determine value D » Estimate value
D » Estimate value
A person was employed by a utility company to acquire easements on behalf of the utility. Which of the following statements is true? A » No license would be required if the person was paid by salary only B » A license would be required for this person C » A license would be required only if the person was not paid a salary D » No license would be required if the person acquired gross easements, not appurtenant easements
D » No license would be required if the person acquired gross easements, not appurtenant easements
How much notice must the KREC give a broker before auditing an escrow account? A » 24 hours B » 3 days C » 1 week D » No notice
D » No notice
A new tenant was negotiating a lease in a retail shopping center. The tenant was new and did not have a lot of prior business experience. The landlord thought that over the next few years the tenant's sales would increase quite a bit. What would be the BEST type of lease for the landlord and tenant to enter into which would provide a fair overall return for both parties? A » Net B » Gross C » Ground D » Percentage
D » Percentage
A tenant was leasing a property which rented for $300 per month. On March 20th, the tenant notified the landlord that the tenant was leaving April 20th. The tenant had pre-paid the $300 per month rent on March 1st. The landlord charged the tenant a pro-rated amount of rent for April and a $600 penalty for terminating the lease. What was the total amount owed by the tenant? A » $600 B » $800 C » $900 D » $1,000
The tenant owes 20 days of rent for April (April 1 - April 20). $300 divided by 30 days = $10 per day x 20 days equals $200 prorated April rent. $200 + $600 penalty = $800 total.
