Real Estate Quiz #1
Ownership of a unit in a condominium is transferred through: (a)A deed (b)Stock (c)Joint tenancy (d)tenancy in common
(a)A deed
Which of the following would be considered functional obsolescence? (a)A poor lay-out design (b)Termite damage (c)Wear and tear (d)Adverse economic conditions
(a)A poor lay-out design
Where would a person go in order to obtain an FHA or VA loan? (a)An approved mortgage banker (b)An insurance company (c)An FHA or VA office (d)A FNMA office
(a)An approved mortgage banker -go to a lender
Discount points of 1% would be computed based upon the: (a)Loan amount (b)Sale price (c)Sale price less earnest money (d)Sale price less earnest money and mortgage insurance
(a)Loan amount
A mortgage that allows a qualified purchaser to buy a single-family home with no money down (a 100% loan to value ratio) is called a: (a)VA-guaranteed loan (b)Conventional guarantee loan (c)Balloon mortgage (d)Ginnie Mae loan
(a)VA-guaranteed loan
A landlord owns and leases out at least a dozen rentals (reasonable dwelling). When can the landlord legally deny a space to a tenant? (a)When the family size is too large for the unit (b)When the tenant has children (c)When the tenant is mentally impaired (d)When the tenant is physically impaired
(a)When the family size is too large for the unit
Someone who has the authority to Sogn legal documents for another is a(n): (a)Special Agent (b)Attorney-in-fact (c)Broker (d)Attorney-at-law
(b)Attorney-in-fact
Which of the following would be used to transfer ownership of a free standing appliance? (a)Deed (b)Bill of Sale (c)Statement of special conditions (d)Title
(b)Bill of Sale
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 tax assessment for the assiteion of a sidewalk in a neighborhood would be referred to as a(n): (a)Ad valorem tax (b)Special Assessment tax (c)servitude (d)encroachment
(b)Special Assessment tax
Two creditors have an agreement to switch the lien property. This agreement would be referred to as: (a)Subrogation (b)Subordination (c)Defeasance (d)Satisfaction
(b)Subordination - 1st becomes a 2nd=lenders [subrogation=buyer selling title rights to lender]
Which of the following terms BEST describes an "option to purchase"? (a)Deposit (b)Down payment (c)Contract (d)Lease
(c)Contract
Which of the following fees would be avoided with owner financing? (a)Transfer taxes (b)Document preparation fees (c)Discount points (d)Recording fees
(c)Discount points -lender institutions only
A sale of interstate real estate securities would be governed by which organization? (a)ICC (b)CIA (c)SEC (d)HUD
(c)SEC
A property containing 3.5 acres would consist of how many square feet? (a)101,530 (b)127,348 (c)145,900 (d)152,460
(d)152,460 - 1 acre= 43,560
The state government can take property that has been abandoned by the owner through what right? (a)Eminnent domain (b)Taxation (c)Police power (d)Escheat
(d)Escheat
A broker gets a commission regardless of who sells the property. What type of a listing is this? (a)Open listing (b)Net listing (c)Exclusive agency listing (d)Exclusive right to sell listing
(d)Exclusive right to sell listing
Which of the following items would not be an appurtenance? (a)Right (b)Privilege (c)Improvement (d)Reversion
(d)Reversion
Chattel
another term that meant personal property
Bill of sale
document used to transfer personal property
A seller and a buyer agreed on the price and terms on the sale of a house. Both seller and buyer signed the sales contract. Before closing, the seller and buyer agreed to change the closing date. Which of the following would both parties need to sign? (a)Addendum (b)Assignment (c)Acknowledgment (d)Assessment
(a)Addendum
A person occupies a property in a hostile, visible, actual, and direct manner. This is BEST described by which of the following terms? (a)Adverse possession (b)Escheat (c)Voluntary alienation (d)Dedication
(a)Adverse possession
Which of the following statements is true of an adjustable rate mortgage (ARM)? (a)The interest rate can change based upon market indexes agreed to up front (b)The interest rate can only change with the borrower's consent (c)The interest rate cannot change unless it goes up or down more than 2% from the original starting interest rate (d)The loan cannot be sold on the secondary mortgage market
(a)The interest rate can change based upon market indexes agreed to up front
A broker would have to notify the Kansas Real Estate Commission (KREC) upon: (a) change in cooperation commission split with other real estate companies (b) change of business location (c) change in commission structure for salespersons (d) change of business hours
(b) change of business location
A property with a total value of $40,000 was appraised for tax purposes at 25% of market value. If the tax rate was $3 per $100 of the appraised tax value, how much tax was owed? (a)$100 (b)$300 (c)$600 (d)$1,200
(b)$300 PG.45
A house valued at $350,000 will depreciate an average of 3.5% per year. What will be the value after 4 years? (a)$301,000 (b)$303,513 (c)$325,500 (d)$337,750
(b)$303,513 PG.144
The zoning on a residential development allows for multi-family units to be built with a minimum lot size of 6,000 square feet. The private deed restrictions on the development allowed for only single family dwellings with a minimum lot size of 100'x150'. Which of the following would be allowed to be built in this subdivision ? (a)1 duplex per acre (b)2 single family dwellings per acre (c)7 single family dwellings per acre (d)1 four-alex per acre
(b)2 single family dwellings per acre
What duty does a listing agent owe to a prospective buyer? (a)Fiduciary (b)Honest and Fairness (c)Confidentiality (d)Obedience
(b)Honest and Fairness
G has a lease for one year. At the end of the year, G stays over without consent. This would be called an: (a)estate for years (b)estate at sufferance (c)periodic tenancy (d)estate at will
(b)estate at sufferance
Who would determine the amount for maintenance fees in a condominium? (a)The developer (b)The city council (c)The board of directors (d)The individual owners
(c)The board of directors
Which of the following statements is correct regarding a VA loan? (a)The VA makes the loan and the lender guarantees the loan (b)The lender makes the loan and the VA insures the loan (c)The lender makes the loan and the VA guarantees the loan (d)A veteran can obtain a VA loan in the purchase of a rental house
(c)The lender makes the loan and the VA guarantees the loan
Upon which event would a prepayment penalty be enforced? (a)Being late on a monthly mortgage payment (b)The tax escrow amount being insufficient (c)The loan being paid in full before its due date (d)A listing agreement expires
(c)The loan being paid in full before its due date
Which of the following statements BEST describes the effect on mineral rights when the land is sold? (a)They always pass with the sale of the land (b)Mineral rights cannot be sold separately from th eland (c)They pass to the grantee unless specifically noted (d)They must be specified in the deed
(c)They pass to the grantee unless specifically noted
Which of the following items would NOT place a limitation on your rights in property? (a)Taxation (b)Police Power (c)Title insurance (d)Eminent Domain
(c)Title insurance
Which of the following would transfer legal use but not ownership of a property? (a)A deed restrcition (b)an encroachment (c)an easement (d)a lien
(c)an easement
What is it called when a person takes the cost of purchase and then "recaptures" this amount? (a)A sinking fund (b)Escrow (c)Profit (d)Depreciation
(d)Depreciation
When property is taken for public improvements from an unwilling owner, this is referred to as: (a)Police power (b)taxation (c)Escheat (d)Eminent domain
(d)Eminent domain
A blanket mortgage is usually designed to cover: (a)Both real estate and personal property (b)More than one transaction (c)Loans over an extended period of time (d)More than one piece of property
(d)More than one piece of property
In advertising for prospects, all of the following terms could be sued EXCEPT: (a)Political affiliation (b)Military personnel (c)Upper bracket buyers (d)National margin
(d)National margin
An appraisal is used to give an: (a)Exact value (b)Estimate of sales price (c)Proof of value (d)Opinion of value
(d)Opinion of value
An agreement whereby a person is hired to investigate potential tenants, collect rent and furnish monthly financial statements for an owner is called a: (a)Lease (b)Listing agreement (c)Customer/Client agreement (d)Property management agreement
(d)Property management agreement
An appraiser, in appraising a residential property, notices that there has been an increase in sales of houses of the area. Which valuation approach would be best for the appraiser to use in estimating the value of the residential property? (a)Cost (b)Income (c)Direct Sales Comparisons (Market Data Approach) (d)Gross rent multiplier
(c)Direct Sales Comparisons (Market Data Approach)
Which of the following would cause a property to suffer from functional obsolescence? (a)Foundation problems (b)Factors outside the property lines (c)Factors inherent inside the property lines (d)Physical neglect
(c)Factors inherent inside the property lines
Knowingly misrepresenting a material fact in a deliberate way so that someone else suffers a loss in an attempt to make money is: (a)A mistake (b)Misrepresentation (c)Fraud (d)Collusion
(c)Fraud
A trespass of an improvement is which of the following? (a)Encroachment (b)Easement (c)License (d)Lien
(a)Encroachment
Real estate taxes of $975 were paid for the year January 1. The house sold with a closing date of September 15. How much would the seller receive back? (a)$203.00 (b)$284.40 (c)$690.50 (d)$771.75
(b)$284.40 PG.101
A building was to be constructed with the dimensions of 130 feet long, 30 feet wide and 24 feet high. Contractor A was going to build the building at $8.90 per square foot while Contractor B was going to build it at $.375 per cubic foot. How much could be saved by using Contractor A rather than Contractor B? (a)$200 (b)$390 (c)$2,500 (d)$7,332
(b)$390 PG.152
A property containing 3.5 acres would consist of how many square feet? (a) 127,348 (b) 101,530 (c) 152,460 (d) 145,900
(c) 152,460 1 acre=43,560
Which of the following would a plat mat reveal? (a)Township names (b)Street directions (c)Section numbers (d)Lot and block numbers
(d)Lot and block numbers
Property used for something other than the current zoning is referred to as a: (a)Use by amendment (b)Buffer zone (c)Non-conforming use (d)License
(c)Non-conforming use
What is the purpose of a borrower paying for private mortgage insurance (PMI)? (a)To protect the seller in case the transaction did not close (b)To protect the borrower's interest (c)To insure the lender in case of default (d)To insure the lender in case of a casualty loss
(c)To insure the lender in case of default
What is the purpose of a mortgagor (giver) giving a mortgage (security for the debt) to the mortgagee (receiver) ? (a)To promise payment for the loan (b)So all the terms of the mortgage agreement will be known (c)To pledge property as security for the loan (d)So the borrower can convert property to lender
(c)To pledge property as security for the loan
A contract where one party is bound to perform but the other party is not would be referred to as: (a)Void (b)Bi-lateral (c)Uni-lateral (d)Implied
(c)Uni-lateral
The term that best describes property owned solely and separately is: (a) tenancy in common (b) tenancy by the entireties (c) certificate of title (d) severalty
(d) severalty
An apartment building was exempted from the rules regarding familial status under the Fair Housing Law. Which of the following applicants would it be allowed to accept and still fall under the familial status exemption? (a)A 50 year old nurse who is currently unemployed (b)A retired construction worker who is age 53 (c)A 54 year old retired teacher (d)A 63 year old postal worker who is currently employed
(d)A 63 year old postal worker who is currently employed -Bona Fide retirment comm. -At least 55 years old
Which of the following is NOT a fixture? (a)A new bathtub (b)Extra and attached door locks (c)Built-in dishwasher (d)Above ground pool
(d)Above ground pool
What is it called when a buyer purchases a property, makes monthly installment payments to the seller, and receives the deed after the entire purchase is completely paid? (a)An option (b)A lease (c)A right of first refusal (d)An installment contract
(d)An installment contract
A buyer purchased a seller's home and assumed the seller's loan. The seller does not want to remain liable for the loan. What should the seller do? (a)Put in the sales contract that the seller will not be liable anymore (b)Have the buyer agree to a release of liability in the sales contract (c)Arrange for the title company to give a release of liability to the seller (d)Arrange for the lender to give a release of liability to the seller
(d)Arrange for the lender to give a release of liability to the seller
Which of the following constitutes illegal commingling by a licensee? (a)Salesperson deposits earnest money into a broker's trust account (b)Broker deposits commercial rent receipts fro a property management contract into the trust account (c)Salesperson deposits residential rental money into the trust account (d)Broker deposits payroll funds into the trust account
(d)Broker deposits payroll funds into the trust account
What is the best approach to use I figuring the value of a 15 year old residential property? (a)What the owner originally paid for the property (b)The offering price (c)The owner's opinion (d)Comparable sales of nearby properties that have sold recently
(d)Comparable sales of nearby properties that have sold recently
The purpose of capitalization of income is to: (a)Depreciate the improvements only (b)Factor into valuation the time value of money (c)Account for unusual operating expenses (d)Convert net income into a value indication
(d)Convert net income into a value indication
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
What does an appraisal actually do? (a)Assure value (b)Guarantee value (c)Determine value (d)Estimate value
(d)Estimate value
Which type of relationship is established between principal and broker? (a)Trustor (b)Trustee (c)Blanket (d)Fiduciary
(d)Fiduciary
A property manager of a shopping center desired to rent space to a department store whereby the rent would be based upon the annual gross sales. Which of the following leases would BEST accomplish this? (a)Gross (b)Net (c)Graduated (d)Percentage
(d)Percentage - based on sales [gross=landlord] [net=tenant] [graduated= up and down?]
Zoning laws and deed restrictions are enacted for all of the following reasons EXCEPT to: (a)Protect the public from uncontrolled growth (b)Protect the compatibility of the surrounding land (c)Provide for the health, safety and welfare of the vernal public (d)Provide for the highest and best use of a particular piece of property
(d)Provide for the highest and best use of a particular piece of property "particular piece"
Which of the following is a quitclaim deed most vernally used for? (a)When a normal deed is unavailable (b)When the seller only guarantees title for a certain period of time (c)If a decedent's will is involved in the property (d)To quiet a cloud on the title
(d)To quiet a cloud on the title
Unless specified otherwise, when a property is sold, when would possession of the property normally be given? (a)Upon proof of the lenders approval on the buyers loan (b)Upon the signing of the contract by both seller and buyer (c)At the time of the title commitment being given by the title company (d)Upon the deed being delivered and accepted by the buyer
(d)Upon the deed being delivered and accepted by the buyer
An owner wanted to extend the current garage, but found out that the modification would extend the garage over the side set-back line. What would the owner need to obtain in order to extend the garage past the set-back line? (a)Non-conforming use (b)Building code modification (c)Dedication (d)Variance
(d)Variance
How does a buyer become a client of a broker? (a)By signing an agency agreement with a broker (b)By looking at a broker's in-house listing (c)By writing a sales contract with a broker (d)By looking at other companies' listings with a broker
(a)By signing an agency agreement with a broker
Documents are recorded to provide: (a)Constructive knowledge (b)Actual knowledge (c)Practical knowledge (d)Official knowledge
(a)Constructive knowledge
A sales contract is accepted by both parties with earnest money being involved in the transaction. What should the broker do with the earnest money? (a)Deposit it into an escrow account immediately (b)Deposit it in escrow only after the 3 day right of recession has expired (c)Hang onto it for awhile (d)Deposit into an escrow account at closing
(a)Deposit it into an escrow account immediately
A property appraised for $42,000. If the buyer borrowed $28,000, what is the difference between the two amounts called? (a)Equity (b)Net income (c)Debt service (d)Title
(a)Equity
A residential property was equipped to handle electrical service of 60 amps. The standard in the rest of the homes in the area was 100 amps. Having only 60 amps causes the home to suffer from: (a)Functional obsolescence (b)Environmental obsolescence (c)Economic depreciation (d)Physical depreciation
(a)Functional obsolescence
A real estate purchaser is said to have equitable title when: (a)The real estate contract is signed by both buyer and seller (b)Conveyance occurs (c)The officer is submitted to the seller (d)The purchaser gives an earnest deposit
(a)The real estate contract is signed by both buyer and seller
A buyer purchased a property for $79,650. The buyer obtained a first mortgage for 83% of the purchase price with a 6% down payment. The owner financed the balance of purchase price. What would be the amount for the second mortgage financed by the seller? (a)$8,235.81 (b)$8,761.50 (c)$13,540.50 (d)$17,345.98
(b)$8,761.50 PG.74
A broker told a seller the seller would net $83,000 on the sale after paying a 6% commission. What was the sale price? (a)$87,980 (b)$88,298 (c)$89,370 (d)$90,200
(b)$88,298 PG. 101
In order for a veteran to receive a VA loan, the veteran must first obtain a: (a)Certificate of owner-occupancy (b)Certificate of eligibility (c)Pre-approval from a VA approved lender before making an offer to purchase (d)Non-compete agreement from a VA lender
(b)Certificate of eligibility
According to the Real Estate Settlement Procedures Act (RESPA), the closing statement (HUD-1 Form) must be signed by the buyers, sellers and ...? (a)Listing broker (b)Closing agent (c)Salesperson (d)Recorder of deeds
(b)Closing agent - title company person
Which approach to value would an appraiser be using when one adds the land value to the depreciated replacement cost of a property? (a)Market data (b)Cost (c)Income (d)Gross rent multiplier
(b)Cost
The difference between reproduction cost and present value is: (a)Appreciation (b)Depreciation (c)Market value (d)Book value
(b)Depreciation
Which of the following terms best describes a fiduciary obligation to a client? (a)Subrogation (b)Disclosure (c)Estoppel (d)Liquidity
(b)Disclosure [subrogation=title insurance] [estoppel=loan balance] [liquidity=cash for note sold]
An agreement has been signed by all parties but the terms have NOT been fully performed. Which of the following BEST describes the current status of this agreement ? (a)Executed contract (b)Executory contract (c)Implied contract (d)Unilateral contract (I promise)
(b)Executory contract
When doing an appraisal, an appraiser would MOST likely use which of the following measurements ? (a)Inside measurements (b)Exterior dimensions (c)Individual room measurements, less garage and basement, all added together (d)All individual room measurements
(b)Exterior dimensions
A seller of the property could NOT transfer marketable unencumbered title. What should the broker do with any earnest money involved in the transaction? (a)Give it to the seller (b)Give it to the buyer (c)Pay the broker's commission and give the balance to the seller (d)Pay for any expenses and give the balance to the buyer
(b)Give it to the buyer
The purpose of recording the deed is to protect the: (a)Grantor (b)Grantee (c)Optioner (d)Optionee
(b)Grantee
Under the 1997 tax relief act, a single person can exclude up to $250,000 of capital gains on the sale of an owner occupied residence as long as the person: (a)Was 55 years or older at the time of the sale (b)Had owned and lived on the property for 2 of the past 5 years (c)Person reinvests the profit in a more expensive property (d)Did not own more than 1 home at a time
(b)Had owned and lived on the property for 2 of the past 5 years
A decision to preface a 2-family structure with a commercial building would be an example of: (a)Obtaining a higher selling price (b)Highest and best use (c)Police power (d)IRS regulations
(b)Highest and best use
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 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
In order to be in compliance with the Statute of Frauds, a sales contract must be: (a)In English (b)In writing (c)Acknowledged (d)Recorded
(b)In writing
A buyer phoned a seller to inquire about a piece of real estate the seller had for sale. The buyer and seller agreed to the price and terms over the phone. Which of the following is the MOST LIKELY legal effect of this agreement? (a)Enforceable (b)Non-enforceable (c)Void (d)Voidable
(b)Non-enforceable
Which of the following mortgages uses both real and personal property as security? (a)Chattel (b)Package (c)Purchase money (d)Blanket
(b)Package [chattel=personal property only]
What does a person have who can sign legal papers for another person? (a)Attorney-in-fact (b)Power of attorney (c)Ostensible agency (d)Attorney at law
(b)Power of attorney
The primary purpose of a mortgagor giving a mortgage to the mortgagee is to: (a)Secure the mortgage (b)Secure the debt (c)Secure the deed (d)Secure the title insurance
(b)Secure the debt
Which of the following statements best describes "economic life"? (a)Physical wear and tear (b)The life that property can be used profitably (c)Economic obsolescence (d)Functional obsolescence
(b)The life that property can be used profitably
When can a seller legally cancel a listing agreement? (a)When the buyer defaults on a sales contract (b)When the broker fails to perform (c)When the seller doesn't like the broker's salespeople (d)When the seller is an attorney
(b)When the broker fails to perform
When does title to real estate transfer from the seller to the buyer? (a)When the contract is accepted by all parties (b)When the deed is delivered and accepted (c)When the deed is recorded (d)When the sale price is paid in full
(b)When the deed is delivered and accepted
At closing, all parties receive a copy of the: (a) sales contract (b) agency contract (c) settlement statement (d) loan commitment letter
(c) settlement statement
A tenant and landlord entered into a lease agreement. The leased space became uninhabitable because of the landlord's neglect maintaining the property. Which of the following terms describes the tenant's right to terminate the lease? (a)Non-disturbance clause (b)Actual evidence (c)Constructive eviction (d)Eviction by neglect
(c)Constructive eviction
A buyer was interested in purchasing a home. The buyer found a house to buy but had to obtain financing to purchase. The buyer talked to a lender who gave the buyer in writing a commitment on the interest rate and discount points. This letter is called a: (a)Lock-in commitment (b)Good faith estimate (c)Disclosure statement (d)Uniform Settlement Statement (HUD-1 Form)
(a)Lock-in commitment
A developer bought a property for a development. What would be the best way for the developer to divide the lots in a brand new subdivision? (a)Lot and Block (b)Metes and Bounds (c)Rectangular survey system (d)Street addresses
(a)Lot and Block
A 40 year old school building was being appraised. Which of the following approaches would NOT be used in the appraisal? (a)Market data (b)Cost (c)Unit-in-place (d)Quantity survey
(a)Market data
Which is a voluntary lien against a persons property? (a)Mortgage lien (b)Mechanics lien (c)Judgement lien (d)Property tax lien
(a)Mortgage lien
An insurance policy designed to insure against title defects is paid: (a)Once, when the policy is issued (b)Monthly with the mortgage payment (c)Annually (d)Every three years
(a)Once, when the policy is issued
A 50 unit garden style apartment was completed in 1992. It has two stories but does not have an elevator. Under the 1988 amendments to the Fair Housing Law, which of the following areas must meet handicapped specifications? (a)Only the first floor (b)The first and the second floor (c)Only the second floor (d)Modifications can be made as handicapped persons move in
(a)Only the first floor -If you don't have an elevator
A mortgage where the mortgage pays the mortgagor a fixed amount every month us referred to as a(n): (a)Reverse annuity mortgage (RAM) (b)Open end mortgage (c)Wraparound mortgage (d)Shared appreciation mortgage
(a)Reverse annuity mortgage
At closing, all parties receive a copy of the: (a)Settlement statement (b)Loan commitment letter (c)Sales contract (d)Agency contract
(a)Settlement statement
Which document is required under the Real Estate Settlement Procedures Act (RESPA) to be given before closing? (a)Settlement statement (HUD-1 Form) (b)HUD closing cost booklet (c)Sales contract (d)Good faith estimate of closing costs
(a)Settlement statement
The term that best describes property owned solely and separately is: (a)Severalty (b)Tenancy by the entireties (married) (c)Certificate of title (d)Tenancy in common
(a)Severalty
Salesperson T works for ABC Realty and lists seller M's property for sale. Which of the following best describes the relationships? (a)T works for ABC Realty and ABC Realty is an agent of Seller M (b)T works for Seller M and ABC Realty is an agent of T (c)T would be an agent for the buyer (d)There would be no fiduciary relationships at all
(a)T works for ABC Realty and ABC Realty is an agent of Seller M
A veteran completely repaid a previous VA loan and mortgage. Which of the following statements would be true? (a)The VA benefits are fully restored for future use (b)The veteran receives a discount on insurance for future VA loans (c)The veteran is refunded any discount point money paid by the pervious seller (d)Any lender will now have to give notice of any ore-payment penalty provisions for any future VA loans
(a)The VA benefits are fully restored for future use
A seller listed their single family home with a broker. The seller refused to sell to some particular buyers. When would this be a possible violation of the law? (a)The buyers had a handicapped relative who was going to live in the house (b)The buyers were an unmarried couple (c)The buyers were addicted to illegal substances (d)The buyers were 55 years of age or older
(a)The buyers had a handicapped relative who was going to live in the house [55 or older is only in Bona Fide retirement comm]
Why would an appraiser, in doing an appraisal on a particular piece of property, check out the zoning on that property? (a)To see what the legal uses are for the property (b)To update the title abstract (c)To make sure that no mistakes are on the public record (d)To check for encroachments
(a)To see what the legal uses are for the property
A property owner can deduct depreciation for tax purposes on a property in which of the following circumstances? (a)When the property is a rental property (b)When the property is sold (c)When the property owner makes improvements on the property (d)When the homeowner takes the 55 or over capital gains exclusion
(a)When the property is a rental property -not primary residence... investment property
Easements, rights of ingress and egress, rights, privileges and improvements that transfer with the delivery of the deed are called: (a) Licenses (b) Appurtenances (c) Encumbrances (d) Encroachments
(b) Appurtenances
Someone who has the authority to sign legal documents for another is a(n): (a) attorney-at-law (b) attorney-in-fact (c) special agent (d) broker
(b) attorney-in-fact
Discount points of 1% would be computed based upon the: (a) sale price less earnest money and mortgage insurance (b) loan amount (c) sale price less earnest money (d) sale price
(b) loan amount
A contract where one party is bound to perform but the other party is not would be referred to as: (a) void (b) uni-lateral (c) bi-lateral (d) implied
(b) uni-lateral
A person owned a 6 unit apartment building with each unit renting for $184 a month. If the owner paid a manager 10% of the gross monthly rents, a monthly mortgage payment of $817 and a miscellaneous monthly fee of $44.95, how much would the owner net each month? (a)$112 (b)$132 (c)$245 (d)$278
(b)$132 PG.96
A buyer purchased a $60,000 house and was able to obtain a $36,000 loan. The loan was amortized over 20 years with an interest rate of 9% and a principal and interest payment of $323.90 per month. What was the total interest paid over the term of the loan? (a)$36,000 (b)$41,736 (c)$77,736 (d)$116,604
(b)$41,736 PG.64
A seller wants to net $29,000 after paying off a $33,000 first mortgage, $500 in closing costs and a 7.5% real estate commission. In order to accomplish this, the sale price would have to be: (a)$67,188 (b)$67,568 (c)$69,785 (d)$72,900
(b)$67,568 PG.101
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
(b)$750 PG.75
According to Regulation Z, an advertisement including which of the following terms would require that all the financing terms be disclosed? (a)Low monthly payment (b)7% interest rate (c)Low down payment (d)FHA financing available
(b)7% interest rate -No #'s or all has to be disclosed
Which of the following would be considered an encroachment? (a)Using a residential lot for a business use (b)A building with a roof that extends over the boundary line (c)licenses (d)Violating a private deed restriction
(b)A building with a roof that extends over the boundary line
What is recompense for an appraiser? (a)A fee based on a percentage of the appraised value (b)A fee based on the amount of time and effort (c)A fee agreed upon after the appraisal is completed (d)A standard fee agreed upon by the national appraisal organizations
(b)A fee based on the amount of time and effort
Which of the following would be an example of a lender violating the usury laws? (a)A lender charging less than the maximum legal amount (b)A lender charging more than the maximum legal amount (c)A lender refusing to make loans in questionable areas (d)A lender refusing to make loans under a certain dollar amount
(b)A lender charging more than the maximum legal amount
A listing broker wants to know the exact outstanding loan balance on the seller's loan. Which of the following documents should the broker ask the lender to provide? (a)An outstanding balance letter (b)A reduction certificate (c)A letter of estoppel (d)A certified copy of the note
(b)A reduction certificate -issued by the lender&states your current loan balance
Which of the following statements is true of a salesperson? (a)A salesperson is always an independent contractor for a broker (b)A salesperson is an agent for the broker (c)A salesperson has a fiduciary obligation to the vernal public (d)A salesperson can sign a listing without authorization from the broker
(b)A salesperson is an agent for the broker
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
Dual agency is allowed in a real estate transaction as long as: (a)Both the buyer and the seller sign off in the final sales contract (b)Both parties give written informed consent right up front (c)Both parties pay compensation (d)The broker has final confirmation at closing
(b)Both parties give written informed consent right up front
An gent takes a listing on a commercial property. The agent finds a buyer for the property and the buyer and seller both sign a contract for the purchase. Prior to closing, the agent learns that the city plans on putting in a ramp on the back of the property. What should the agent do? (a)Not disclose to the seller so the seller has no liability (b)Disclose to the seller so the buyer can be informed (c)Disclose to the seller and then let the seller determine whether or not to disclose to the buyer (d)Disclose to the buyer only
(b)Disclose to the seller so the buyer can be informed
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 ? (a)It ends when the friend dies (b)It ends when the child dies (c)It becomes a fee absolute when the child dies (d)It becomes a fee absolute when the friend dies
(b)It ends when the child dies
Which of the following would be tax deductible on an individual's personal tax return? (a)Credit card interest (b)Mortgage interest on their residence (c)Depreciation on their residence (d)The cost of replacing a roof on their residence
(b)Mortgage interest on their residence
A mortgage is recorded to protect the: (a)Mortgagor (b)Mortgagee (c)Trustor (d)Trustee
(b)Mortgagee
Which type of listing would NOT have the commission listed as a percentage of the selling price? (a)Open (b)Net (c)Exclusive agency (d)Exclusive right to sell
(b)Net
If the tenant is paying rent, property taxes and hazard insurance, which of the following leases is MOST likely in use? (a)Percentage lease (b)Net lease (c)Gross Lease (d)Ground Lease
(b)Net lease
A buyer and a seller signed a purchase contract on a property. The contract included a time is of the essence clause. After the buyer applied for a loan at a local lender, it became obvious that the buyer could not close until 10 days after the original closing date in the contract. Which of the following statements would be the BEST course of action for the real estate agent involved in the transaction to take? (a)Void the original contract and write a new contract (b)Prepare an amendment to the original contract for both the buyer and seller to sign (c)Tell the seller of the change within 24 hours (d)Tell the buyer the contract cannot be changed
(b)Prepare an amendment to the original contract for both the buyer and seller to sign
What is required for a borrower to pay on a 90% conventional loan covered under FNMA guidelines? (a)Mortgage life insurance (b)Private mortgage insurance (PMI) (c)Credit Life insurance (d)Business interruption insurance
(b)Private mortgage insurance (PMI)
A seller sold property to a buyer. Since the buyer did not have enough money for the down payment, the seller took back a mortgage on the property and loaned the down payment money to the buyer. The seller's interest in the property is secured by a: (a)Package mortgage (b)Purchase money mortgage (c)Growing equity mortgage (d)Reverse annuity mortgage
(b)Purchase money mortgage
Which of the following would be commingling? (a)Putting more than one transaction involving earnest money in an escrow account (b)Putting escrow money into the general office account (c)Putting rental money into the escrow account (d)Refunding earnest money out of the escrow account
(b)Putting escrow money into the general office account
What are three accepted types of legal descriptions? (a)Recorded plat (lot and block), street address, metes and bounds (b)Recorded plat (lot and block), government survey, metes and bounds (c)Government survey, lot and block, street address (d)Street address, sectional, metes and bounds
(b)Recorded plat (lot and block), government survey, metes and bounds
Which of the following methods of appraisal would MOST likely be used when appraising a single family house? (a)Reproduction and income (b)Reproduction and market data (c)Market data and capitalization rate (d)Market data and residual land
(b)Reproduction and market data
One year ago, a seller had work performed on their property. Currently, the seller sold the property to a buyer. Just before closing, it was discovered that there existed a judgment against the seller from the work that was done one year ago. Who would be responsible for this judgment lien? (a)Seller and buyer (b)Seller (c)Broker (d)No one, as the judgement would have expired
(b)Seller
In the process of preparing to present an offer to the seller, a broker receives another offer. The broker: (a)Is required to present the offer received first (b)Should present both offers together (c)Should present the offer that would net the seller the most money (d)Should present the offer that would yield the highest commission
(b)Should present both offers together
A listing agent is showing the listed property to a prospective buyer. The buyer tells the listing agent that a favorable zoning is coming with regard to the listed property. What should the listing agent do? (a)Call the broker for help (b)Tell the seller because of the fiduciary obligation to the buyer (c)Don't tell the seller as this violated the confidentiality to the buyer (d)Don't tell anyone as the buyer could sue the agent for damages if the information was disclosed
(b)Tell the seller because of the fiduciary obligation to the buyer
A corporation who purchased a piece of real estate as a co-owner with an individual would usually take title in which of the following manners? (a)Joint tenancy (b)Tenancy in common (c)Tenancy by the entirety (d)Community property
(b)Tenancy in common a=corp never dies c=only married couples d=only for married couples
Which of the following statements is true about Metes and Bounds description? (a)It is no longer considered to be an accurate legal description (b)The description must end by taking the last leg of the description back to the point of beginning (c)The description cannot be used in states that use the rectangular survey system (d)The last leg must intersect with a meridian or base line
(b)The description must end by taking the last leg of the description back to the point of beginning
Fee simple title would BEST be described as receiving: (a)Diminished rights in a property (b)The maximum rights in a property (c)A life estate in a property (d)dower or curtesy rights in a property
(b)The maximum rights in a property
A buyer purchased a property for $55,000 obtaining a 90% loan. The buyer had to pay 1.5% for a loan origination fee and 2.5 discount points. What is the total amount due at closing from the buyer? (a)$1,980 (b)$3,400 (c)$7,480 (d)$9,756
(c)$7,480 PG.75
XYZ Realty listed a property which was sold by ABC Realty. Salesperson J of ABC Realty procured the buyer. There was no buyer agency agreement involved. Which os the following statements best describes the most likely agency relationship? (a)ABC Realty represented XYZ Realty and the buyer (b)ABC Realty represented the buyer only (c)ABC Realty is a sub-agent of XYZ Realty (d)XYZ Realty is a sub-agent of ABC Realty
(c)ABC Realty is a sub-agent of XYZ Realty
A developer has a 50 acre development with 500 feet of lake frontage. A purchaser of a non-lakefront lot would want which of the following included in the purchase? (a)A gross easement to the lake (b)A license granting access to the lake (c)An appurtenant easement to the lake (d)A deed restriction regarding conveyance to certain minorities
(c)An appurtenant easement to the lake
Which of the following would lead to an increase in the demand for residential rental property? (a)An increase in the vacancies of other rental property nearby (b)An increase in the number of federal reserve transactions (c)An increase in mortgage rates (d)An increase in building home permits
(c)An increase in mortgage rates
A loan was amortized for a 30 year period. If the remains loan balance was due at the end of 7 years, this is BEST described by which of the following terms? (a)Reverse annuity (b)Term note (c)Balloon payment (d)Amortized segment (doesn't exist)
(c)Balloon payment
A seller and buyer agreed contractually on the sale of a property. The sale could not be closed on time according to the original contract. However, both parties wanted to extend the closing date. Which of the following would be BEST to accomplish this? (a)Void the original contract and re-write a new contract (b)Change the closing date in the original contract and have the seller initial the change (c)Change the closing date in the original contract and have all parties initial the change (d)No initials are needed as to the change since both parties have verbally agreed to the changes
(c)Change the closing date in the original contract and have all parties initial the change
Which of the following statements is true of a counter-offer made by a seller? (a)It must be in writing (b)It must be close to the terms of the initial offer made by the buyer (c)It voids the previous offer (d)The seller becomes the offeree
(c)It voids the previous offer
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 mobility impaired person was renting a unit in an apartment complex. Half of the units have assigned parking spaces near the door. The other half do not. The owner: (a)May charge extra money to the handicapped person for providing the parking space near the door (b)Must take a vote of all the tenants to see if the other tenants want to allow the handicapped person a parking space (c)Must give a parking space near the door to the handicapped person if one is available and a need is demonstrated (d)Must give a parking space near the door only if other disabled people
(c)Must give a parking space near the door to the handicapped person if one is available and a need is demonstrated
A broker listed a property for sale at $450,000. The actual value of the property was $490,000. The broker had his sister purchase the property for $400,000, put in $5,000 of earnest money in the broker's escrow account, and received $6,000 in commission on undisclosed agreement. The broker is in violation of: (a)Listing a property for $450,000 which has a value of $490,000 (b)Offering the property for less than the full list price (c)Not disclosing his future ownership interest through his sister's purchase (d)Taking the $6,000 in commission on the sale
(c)Not disclosing his future ownership interest through his sister's purchase
An established family grocery store is an area that has recently been zoned residential. If the grocery store was to be sold, what document would be needed to allow continued use of the grocery store? (a)Building permit (b)Special use permit (c)Pre-existing non-conforming use (d)Variance
(c)Pre-existing non-conforming use "before zoning"
A person buys a property obtaining a 30 year mortgage. After a few years, the owner sells the property and uses the proceeds to pay off the loan. The best way to prove that the mortgagee has been paid off is with a(n): (a)Mortgage defeasance clause (b)Quitclaim deed (c)Release or satisfaction of mortgage (d)Accurate copy of the final closing statement
(c)Release or satisfaction of mortgage
A rental property sold with a closing date of September 18th. The rent of $500 had been paid on September 1st. The buyer is credited with the day of closing. Which of the following statements is correct? (a)Buyer pays the seller $216.67 (b)Buyer pays the seller $300.00 (c)Seller pays the buyer $216.67 (d)Seller pays the buyer $300.00
(c)Seller pays the buyer $216.67 PG.101
A relocation company purchased a property. The relocation company in trying to sell the property only wanted to guarantee the property since they have owned it. The type of deed necessary to accomplish this would be a: (a)Quitclaim deed (b)General warranty deed (c)Special warranty deed (d)Bargain and sale deed
(c)Special warranty deed
A property was assessed at $150,000 with a rate of $27.50 per $1,000. The next year the tax rate was reduced to $25 per $1,00 and the assessed value went up by 10%. The taxes would: (a)Be increased (b)Be decreased (c)Stay the same (d)Be abated
(c)Stay the same PG.45
A couple getting married wanted to take title to property whereby the heirs would receive interest if either were to die. What form of ownership should they choose? (a)tenancy in the entireties (b)Joint tenants with right of survivorship (c)Tenants in common (d)Severalty
(c)Tenants in common
H had a property for sale for $129,000. B made an offer for $123,000. H made a counter-offer of $127,000. Which of the following statements is NOT true regarding this situation? (a)H's counter-offer terminated the first offer (b)With the second offer, B would become the offeree (c)The counter-offer would be binding on B (d)In the original transaction, B was the offeror
(c)The counter-offer would be binding on B
Which of the following statements best described the purpose of an alienation clause in a mortgage? (a)To make sure that the principal and interest payments are kept current (b)To make sure that the real estate taxes are being paid in a timely fashion (c)To protect a lender's security position (d)To make sure the property had adequate maintenance and repairs
(c)To protect a lender's security position
What interest does a condominium owner have in common with other condominium owners? (a)Divided interest In the common properties (b)Undivided interest in the limited common properties (c)Undivided interest in the common area (d)Undivided interest in the master deed plan
(c)Undivided interest in the common area
Which of the following is NOT considered as an operating cost in a property management budget? (a)Lawn maintenance and snow removal (b)Repairs (c)Vacancy and lost rent (d)Utilities
(c)Vacancy and lost rent
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
Which of the following would transfer legal use but not ownership of a property? (a)A deed restriction (b)an encroachment (c)an appurtenant easement to the lake (d)A deed restriction regarding conveyance to certain minorities
(c)an appurtenant easement to the lake
Principal and interest payments for a certain mortgage rate are estimated at $12 per $1,000 of loan amount. If the property is listed at $54,000 and the buyer makes a full-price offer, what would the down payment be if the buyer only wanted to spend $450 per month for principal and interest payments? (a)$9,000 (b)$12,000 (c)$15,500 (d)$16,500
(d)$16,500 PG.64
A salesperson earned a 2.75% commission on $600,000 in sales for the year. However, the salesperson had only taken a draw against commission of $150 per week for the entire year for the salesperson's salary. What would be the total amount earned by the salesperson? (a)$7,800 (b)$8,700 (c)$12,400 (d)$16,500
(d)$16,500 PG.95
A property was purchased for $178,000. Over the past three years, the homes in this area had appreciated at 8% per year. If the current trend continues, what will this new property be worth at the end of the next three years? (a)$198,467 (b)$203,568 (c)$220,720 (d)$224,229
(d)$224,229 PG.144
The rent on a property was $360 per month. The landlord allowed the tenant to leave early but charged rent through April 22nd. As the tenant had paid the full monthly rent on April 1st, the maximum refund to the tenant would be: (a)$360 (b)$264 (c)$108 (d)$96
(d)$96 PG.101
A broker sold a commercial property for $1.5 million. The broker earned a total commission of $88,500. If the broker was paid 6% on the first $1.2 million of sales price, what was the broker's rate of commission on the amount of sale price over $1.2 million? (a)3% (b)4.5% (c)5% (d)5.5%
(d)5.5% PG.95
The Metes and Bounds method of giving a legal description uses: (a)A plat map (b)Meridians and base lines (c)A lot and block description (d)Exact distances going in definite directions
(d)Exact distances going in definite directions
A contract for deed can be best thought of as an: (a)Option (b)Lease (c)Sale/Leaseback (d)Installment sale contract
(d)Installment sale contract
J and S owned a commercial property as joint tenants.If S were to die, who would receive the property? (a) S's estate (b) S's family (c)J's family (d)J
(d)J
In which of the following cases would an exclusive agency agreement have been entered into? (a)Any broker who sells the property gets the commission (b)Any broker can sell the property and split the commission among many brokers (c)The owner must pay a commission regardless of who sells it (d)Only the broker or the owner may sell the property
(d)Only the broker or the owner may sell the property
An owner of a condominium unit failed to pay the property taxes. Which of the following acts is MOST likely to occur? (a)A tax lien will be placed against the condominium complex (b)An investigation of the condominium complex will reveal a cloud on the title (c)The condominium complex will suffer from a tax sale (d)Ownership of the condominium unit will be jeopardized
(d)Ownership of the condominium unit will be jeopardized
Which of the following liens would take priority over all others? (a)The liens that was recorded first (b)Judgement lien (c)Mechanics lien (d)Real Estate tax lien
(d)Real Estate tax lien
A grantee is going to sue a grantor based on a cloudy title. The grantor would most likely prevail in this lawsuit under which circumstance? (a)The grantor had been declared mentally incompetent by the courts (b)The grantor conveyed the property with a general warranty deed (c)The grantor had paid for the buyer's title insurance policy (d)The grantor conveyed the property with a quitclaim deed
(d)The grantor conveyed the property with a quitclaim deed
An owner decided not to list their property for sale with a broker but rather decided to be a for-sale-by-owner. Which would be true regarding advertising under the Federal Fair Housing Laws? (a)The owner would be exempt from the requirements for 30 days (b)The owner would be exempt from the requirements for 60 days (c)The owner would be exempt as a broker was not used in selling the property (d)The owner would not be exempt as advertising under Fair Housing Laws applies to all residential sales
(d)The owner would not be exempt as advertising under Fair Housing Laws applies to all residential sales
The direct sales comparison (market data approach) is best used when: (a)The comparable are dissimilar (b)The comparable are old (c)There are not a lot of comparable in the area (d)There are lots of comparable in the area
(d)There are lots of comparable in the area
What is the purpose of a broker preparing a closing statement for the buyer and seller at closing? (a)To provide the buyer and seller a list of all the loan costs (b)To be in compliance with the equal credit opportunity act (c)To be in compliance with Regulation Z (d)To provide the buyer and seller with an accounting of all funds related to the transaction
(d)To provide the buyer and seller with an accounting of all funds related to the transaction
As a condition of owning space in a condominium, the owners were assessed a monthly fee for the use of the clubhouse and swimming pool. An owner did not use either the clubhouse or the swimming pool. The owner: (a)Could file a suit to partition the use of the clubhouse and swimming pool (b)Could sell the rights to the use of the clubhouse and swimming pool to another party (c)Would receive a 50% discount on the monthly fee (d)Would still have to pay the full monthly assessment
(d)Would still have to pay the full monthly assessment
T deeds a property to L giving L a life estate in the property. T also selects R to receive the property after L dies. When L dies, this would become an: (a)fee estate for L's estate (b)Conditional fee estate (c)estate in reversion (d)estate in remainder
(d)estate in remainder
An encroachment on a property on a property would most likely be discovered through a: (a)Title search (b)questionnaire to the neighbors (c)abstract (d)survey
(d)survey
A commercial priority with a net operating income of $18,500 was capitalized at 12%. What is the value? (a)$20,720 (b)$22,200 (c)$154,166 (d)$185,000
(c)$154,166
How to determine fixture? (fixture=real estate)
MIA Method, intention, adaption
Sellers who hire agents to represent them and sell their properties are: (a)Agents (b)Principals (c)Customers (d)Sub-agents
(b)Principals (clients)
When is a purchaser said to have "equitable title"? (a)At the signing of the sales contract by both buyer and seller (b)When the transference occurs (c)When the purchaser gives earnest money (d)When the offer is submitted to the seller
(a)At the signing of the sales contract by both buyer and seller
When an option to buy is exercised, the contract becomes: (a)Bilateral (b)Unilateral (c)Expressed (d)Implied
(a)Bilateral
A purchaser entered into a contract to purchase a home. The purchaser wanted a clause in the contract to protect against the loss of earnest money in the event a loan could not be obtained. Which of the following items would BEST protect the purchaser? (a)Financing contingency (b)Listing contingency (c)A statement of special arrangements to get the earnest money refunded (d)Option contingency
(a)Financing contingency -or loan contingency or mortgage contingency
A salesperson earned 2.75% commission on $600,000 in sales for the year. However, the salesperson had only taken a draw against commission of $150 per week for the entire year for the salesperson's salary. What would be the total amount earned by the salesperson? (a) $16,500 (b) $12,400 (c) $ 7,800 (d) $ 8,700
(a) $16,500 600,000x.0275=16,500
A person obtained a $75,000 loan with the lender charging a 1% loan origination fee. What was the amount of the fee? (a) $750 (b) $600 (c) $950 (d) $800
(a) $750 75,000 x .01 = 750
A property worth $81,900 was rented out at $700 per month. What would be the gross rent multiplier (GRM) for this property? (a) 117 (b) 750 (c) 1,404 (d) 324
(a) 117 81,900/700 = GRM
What is the best approach to use in figuring the value of a 15 year old residential property? (a) Comparable sales of nearby properties that have sold recently (b) What the owner originally paid for the property (c) The offering price (d) The owner's opinion
(a) Comparable sales of nearby properties that have sold recently
What is it called when a person takes the cost of purchase and then recaptures this amount? (a) Depreciation (b) Escrow (c) Profit (d) A sinking fund
(a) Depreciation
Who enacts the real estate law in Kansas? (a) Kansas Legislature (b) Kansas Attorney General (c) Director of the Kansas Real Estate Commission (d) Kansas Real Estate Commission
(a) Kansas Legislature
A seller sold their property for $90,000 paying a 9.5% commission. The seller owed $20,000 on their first mortgage and carried back a second mortgage of $60,000 on behalf of the buyer. What would the seller net on this transaction? (a)$1,450 (b)$61,450 (c)$81,450 (d)$90,000
(a)$1,450 PG.101
A buyer bought a $72,000 property obtaining a 90% loan. The lender required annual private mortgage insurance (PMI) of .5% paid up front and 1 1/2 each month. What was the monthly PMI? (a)$27 (b)$34 (c)$39 (d)$45
(a)$27 PG.74
Real Estate taxes on a property are $1,004. If the property is sold with a closing date of April 23rd and the seller is responsible for the day of closing, what would be the seller's responsibility for the real estate taxes? (a)$315 (b)$453 (c)$706 (d)$1,008
(a)$315 PG.101
A commercial property had annual gross income of $63,250 and annual vacancies and operating expenses of $24,360. If the prevailing capitalization rate was 10%, what would be the value? (a)$388,900 (b)$630,500 (c)$750,800 (d)$975,100
(a)$388,900 PG.154
A real estate salesperson with CBT Realty lists a property for sale. A salesperson with MRT Realty finds a buyer who buys the listed property. The sales price was $60,000 with a 6% commission. If CBT Realty received 55% of the total commission, how much would the salesperson with MRT Realty receive assuming the split with MRT Realty is 50/50 between the broker and salesperson? (a)$810 (b)$1,980 (c)$1,620 (d)$990
(a)$810 PG.101
A property worth $81,900 was rented out at $700 per month. What would be the gross rent multiplier (GRM) for this property? (a)117 (b)324 (c)750 (d)1,404
(a)117
Which of the following elements must be in a contract to have a valid contract? (a)A clear description of the land (b)A clear description of the land, house and improvements (c)Earnest money (d)Good faith estimate of closing costs
(a)A clear description of the land
Which of the following statements best describes a plat? (a)A document that records a subdivision on the public record (b)A document using meridians and base lines (c)A diagram of how buildings are to be constructed (d)An instrument showing the property borders
(a)A document that records a subdivision on the public record
Which of the following would be a violation of the Sherman Anti-trust Laws? (a)A group of brokers setting a common commission rate (b)A broker establishing a commission split between the employer and employee (c)An agent directing buyers toward areas based on race (d)A lender limiting loans to a certain geographical area
(a)A group of brokers setting a common commission rate
A person owned a condominium and leased it to K for one year. What did this create ? (a)A leasehold estate (b)A time share (c)A tenancy by the entireties (d)A conditional fee estate
(a)A leasehold estate
A commercial tenant's lease for a seafood store was about to expire. The tenant began dismantling display cases that the tenant had originally installed. The owner of the property informed the tenant that the tenant could not dismantle the display cases. Which of the following statements is correct concerning this situation? (a)The tenant would be able to take the cases only if the tenant paid the owner for the fair market value of the cases (b)The tenant would be able to take the cases and would not have to pay the owner for the fair market value of the cases (c)The owner would be able to keep the cases only if the owner paid the tenant for the fair market value of the cases (d)The owner would be able to keep the cases and would not have to pay the tenant for the fair market value of the cases
(b)The tenant would be able to take the cases and would not have to pay the owner for the fair market value of the cases
Some buyers, in purchasing a property, ask the agent how they should take title to the property. The agent should explain: (a)The various types of ownership and help the buyers choose which one is best for them (b)The various types of ownership and have the buyers consult an attorney (c)To the the buyers that they must take title to this new property in the same way they owned their previous property (d)To the buyers that this type of information would cost the buyers extra money
(b)The various types of ownership and have the buyers consult an attorney
A seller sold a property to a buyer. The property contained built-in bookshelves. Which statement is true regarding the built-in bookshelves? (a)They must be transferred through a bill of sale (b)They stay with the property as they are permanently attached (c)They could be removed only if the removal did not cause permanent damage to the property (d)They could be sold separately as bookshelves are classified as personal property
(b)They stay with the property as they are permanently attached
What is the primary purpose of the Federal National Mortgage Association (FNMA)? (a)To make money available to primary buyers (b)To buy notes from primary lenders (c)To buy primarily FHA and VA loans (d)To manage and liquidate loans originated by the federal government
(b)To buy notes from primary lenders
The purpose of the encumbrances clause in a vernal warranty deed is to protect against: (a)Zoning laws (b)Unrecorded liens that may affect the value of property (c)Ad valorem taxes (d)recorded covenants
(b)Unrecorded liens that may affect the value of property
An appraiser should lend most validity to the market data approach on which of the following properties? (a)Oil refinery (b)Vacant land (c)Gas station (d)Hotel
(b)Vacant land
When is an item considered to be real estate? (a)If it adds value to the land (b)When it is permanently attached to the land (c)If it is capable of being depreciated for tax purposes (d)If it will be used for more than 5 years
(b)When it is permanently attached to the land
If a salesperson is an employee of a broker, then the broker must: (a)Give yearly vacations (b)Withhold FICA and federal tax (c)Pay a commission (d)Pay a salary instead of commission
(b)Withhold FICA and federal tax
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
When a property is taken through condemnation, it was a result of: (a)the owner dying intestate and having no heirs (b)the government exercising the right of eminent domain (c)non-payment of taxes by the owner (d)a violation of the private deed restrictions by the owner
(b)the government exercising the right of eminent domain
The right of a party to the use and occupancy of a property for a stipulated recurring period is known as a(n): (a)Life estate (b)timeshare (c)cooperative (d)easement
(b)timeshare
How does a buyer become a client of a broker? (a) By writing a sales contract with a broker (b) By looking at a broker's in-house listings (c) By signing an agency agreement with a broker (d) By looking at other companies' listings with a broker
(c) By signing an agency agreement with a broker ALWAYS treat them as a customer until they sign to agree to work with you...then become a client
A property with a total value of $40,000 was appraised for tax purposes at 25% of market value. If the tax rate was $3 per $100 of the appraised tax value, how much tax was owed? (a) $1,200 (b) $ 100 (c) $ 300 (d) $ 600
(c)$ 300 $40,000 (market value) X 25% = 10,000 (appraised tax value). $3 per $100 is the same as 3%. $10,000 X 3% = $300 (taxes owed).
A tenant was considering a lease on a 50x100 foot space. The rent was quoted at $5.00 per square foot annually with a 4 year lease term. If the tenant can negotiate a 5 year lease and only pay rent for the first 4 years, what would be the effective rent per month on a 5 year lease? (a)$4.00 (b)$5.00 (c)$1,667 (d)$2,083
(c)$1,667 PG.106
A three year old property appraised for $98,000. If it depreciated an average of 10% per year, what was the original value of the property? (a)$68,600 (b)$132,000 (c)$140,000 (d)$326,667
(c)$140,000 PG.144
A person bought a lot for $28,000 and then added improvements in the amount of $150,000. The owner wanted to make a profit of 5% on the lot and 40% on the improvements. What would the sale price have to be? (a)$210,000 (b)$228,000 (c)$239,400 (d)$258,100
(c)$239,400 PG.152
A property sold for $60,000 with the buyer obtaining a $57,200 loan. The seller agreed to pay 6 discount points. How much would the seller owe for the discount points? (a)Nothing, as the buyer always pays the discount points (b)$2,358 (c)$3,432 (d)$3,600
(c)$3,432 PG.75
A property manager of a 10 unit apartment received a commission of 8% of the annual gross rental income plus $175 for each new tenant. Six of the units rent for $650 each per month and the remainder rent for $550 each per month. The manager was able to find four new tenants during the year. If there was a 10% vacancy factor, what was the property manager's annual income? (a)$1,188 (b)$4,880 (c)$5,970 (d)$6,556
(c)$5,970 PG.96