CO 1st 48hr Course

What effect does inflation have on money's purchasing power? A. Inflation decreases money's purchasing power. B. Inflation has no effect on money's purchasing power. C. Inflation increases money's purchasing power. D. Purchasing power is the same thing as inflation.

A. Inflation decreases money's purchasing power.

Based on capitalization rate alone, which investment involves more risk: one with a 12% cap rate or one with a 8% cap rate? A. 12% B. 8% C. It's impossible determine based on cap rate only. D. They're equally risky.

A. 12%

Bob just closed on his investment property. He's already identified a replacement property that he'll be exchanging into by using a 1031 tax-deferred exchange. How many days does he have to close on his replacement property? A. 180 B. 30 C. 45 D. 60

A. 180

Martin is a property manager who wants to fill a vacant apartment. He needs to avoid discrimination based on which set of protected classes? A. A combination of federally, state, and locally protected classes B. Federally protected classes only C. Locally protected classes only D. State protected classes only

A. A combination of federally, state, and locally protected classes

What does "cash-on-cash return" mean? A. A comparison of before-tax cash flow to cash invested B. Making money hand over fist C. Net income after taxes are deducted D. Trading international currency

A. A comparison of before-tax cash flow to cash invested

Which of the following statements is true regarding the termination date of the Exclusive Rightto-Buy Listing Contract? A. A definite termination date must be included. B. No termination date is required. C. The termination date may not be extended. D. The termination date must be within 60 days of execution.

A. A definite termination date must be included.

During the rental application process, a property manager can't disqualify a tenant for which of these? A. A disability B. Insufficient income C. Lack of credit D. Poor credit history

A. A disability

Max and Heather bought a cute beachside bungalow six years ago. Their estate has no specified end date, and their heirs may inherit it. They have all the rights and privileges you can have in land. This is an example of _______ estate. A. A fee simple B. An ordinary life C. A remainderman D. A reversion

A. A fee simple

What is the statute of limitations? A. A legal deadline B. A limitation on the amount of monetary damages a litigator may seek C. A limit on the number of times an individual can sue in court D. A requirement that all real estate contracts be in writing

A. A legal deadline

Your seller clients have received an offer, and the buyer has included a pre-approval letter. Your clients are a little confused and think a pre-qualification letter is necessary. What's true regarding pre-approval and pre-qualification? A. A pre-approval letter comes with lender verification of buyer-provided data and provides more assurance to the seller. B. A pre-approval letter is based on buyer-provided information that isn't verified. C. Sellers should always insist on a pre-qualification over a pre-approval. D. The pre-qualification takes the buyer's complete financial picture into account.

A. A pre-approval letter comes with lender verification of buyer-provided data and provides more assurance to the seller.

What are community property rights? A. A requirement that all titles for real property acquired by married couples (or one spouse or the other) during their marriage are considered community property B. Each person is entitled to possession of the whole C. Equal ownership with undivided rights of possession D. One person owns the property, and all other interests are severed

A. A requirement that all titles for real property acquired by married couples (or one spouse or the other) during their marriage are considered community property

In which of the following situations is a lender prohibited from enforcing an alienation clause? A. A transfer between parent and child B. A transfer between real estate agent and client C. A transfer between siblings D. A transfer where the buyer is employed by the lender

A. A transfer between parent and child

Eric didn't have direct access to the small lake in his subdivision; he had an easement arranged with his neighbor. Ten months ago, the developer built a public access road to the lake, so Eric stopped using the easement. What type of easement termination is this? A. Abandonment B. Express C. Merger D. Necessity

A. Abandonment

What is a major advantage of real estate investment over other types of investment? A. Ability to leverage B. Aesthetics C. Availability D. Familiarity

A. Ability to leverage

Grace found herself in a breach of contract situation where the other party met some of the terms but not others. Grace thought it would cost a lot of time and money to sue, so she decided to accept the work that had been done and call it good. This is an example of ______. A. Accepting partial performance B. Mutually rescinding the contract C. Rescinding the contract unilaterally D. Suing for damages

A. Accepting partial performance

The property manager's primary responsibility to an owner is to ______. A. Achieve the highest possible return on the owner's investment B. Achieve the lowest possible vacancy rate C. Provide all required reports D. Supervise maintenance and repair tasks

A. Achieve the highest possible return on the owner's investment

In Colorado, what's the category of appraiser that's the most limited regarding scope of appraisal practice? A. Ad Valorem Appraiser B. Certified General Appraiser C. Certified Residential D. Appraiser Licensed Appraiser

A. Ad Valorem Appraiser

When are zoning ordinances created? A. After the master plan has been approved by the community and planning board B. After the site plan has been approved by the planning board C. Before the master plan has been approved by the planning board D. By request to the zoning board of appeals

A. After the master plan has been approved by the community and planning board

What's the definition of an encroachment? A. An intrusion onto another person's property B. An outstanding lien on a property C. The permitted use of another person's property for a specific use D. The purchase of a small portion of another person's property

A. An intrusion onto another person's property

Which economic principle states that the value of property today is impacted by the current value of the total expected future benefits? A. Anticipation B. Conformity C. Highest and best use D. Progression

A. Anticipation

For which of these properties would gross income multiplier be calculated? A. Apartment building with 50 units B. Condominium building with four units C. Duplex used as a rental property D. Single-family, owner-occupied home

A. Apartment building with 50 units

If Vlad the appraiser runs into a valuation issue that he's not sure how to address, which group will be most likely to provide guidance for him? A. Appraisal Practices Board B. Appraisal Qualifications Board C. Appraisal Standards Board D. Appraisal Subcommittee

A. Appraisal Practices Board

Jonas wants to build a home on a property that's zoned for 10,000 square foot lots, but the lot is only 9,785 square feet. What should Jonas apply for? A. Area variance B. Conditional use permit C. Special use permit D. Use variance

A. Area variance

When are apartment owners and property managers required to screen against a specific list of specially designated nationals and blocked persons? A. As a routine part of the tenant screening process B. Every 10th applicant C. Only if English isn't the applicant's first language D. Only if the applicant looks and acts suspicious

A. As a routine part of the tenant screening process

Which environmental issue facing property owners and managers is most commonly found in structures built before 1981? A. Asbestos B. Hazardous waste C. Mold D. Radon

A. Asbestos

Which of the following actions toward an appraiser would be considered proper? A. Asking an appraiser to correct errors in the appraisal report B. Making payment of an appraisal report conditional on the value or estimate to be reached C. Threatening to no longer do business with an appraiser D. Withholding payment for a completed appraisal report

A. Asking an appraiser to correct errors in the appraisal report

Shannon and Rene are sisters who entered into a contract to buy an income property. The sisters got into a dispute, and Shannon wants out of the deal. However, their uncle Jerry wants to replace Shannon on the contract. Shannon agrees to the substitution so they go ahead and do it. Of what is this an example? A. Assignment B. Fraud C. Mutual mistake D. Novation

A. Assignment

Which of the following statements about liens is true? A. Both mechanic's and materialman's liens are junior liens. B. Materialman's liens supersede all other liens. C. Mechanic's liens supersede all other liens. D. Neither mechanic's or materialman's liens are junior liens.

A. Both mechanic's and materialman's liens are junior liens.

Barb has been representing Maria and Tom in the purchase of their new home. She's unable to attend the closing, and another broker from her office, Bryan, agrees to attend in her place. What is Bryan's responsibility regarding accuracy of the closing statement? A. Bryan and Barb are jointly responsible. B. Bryan and Barb's managing broker is responsible. C. Bryan bears no responsibility since he's just filling in for Barb. D. Bryan is solely responsible since he's the one attending the closing.

A. Bryan and Barb are jointly responsible.

Olivia owns lakefront property and therefore holds littoral rights to use the water as she sees fit because she owns up to the average high-water mark. Which of the following is she NOT permitted to do under her littoral rights? A. Build a dam to create a bigger beach area on her frontage. B. Install buoys to create a swimming area. C. Launch her boat from her dock. D. Put up a water volleyball net next to her shoreline.

A. Build a dam to create a bigger beach area on her frontage.

What type of insurance protects the business if it is unable to produce income due to a covered event? A. Business interruption B. Casualty C. Commercial multi-peril D. Surety bonds

A. Business interruption

Marcie bought a duplex, lived in one half, and rented out the other half. This is an example of what type of investing? A. Buy and hold B. Fix and flip C. Passive D. Wholesaling

A. Buy and hold

Which of the following is an action borrowers take to temporarily lower the interest rate on their mortgage loan? A. Buydown B. Down payment C. Gap financing D. Usury

A. Buydown

You're entering into an agreement with a client to help him look for a property to call his own. What type of contract will you use to identify your agency relationship's terms? A. Buyer agency agreement B. Option agreement C. Purchase contract D. Sales contract

A. Buyer agency agreement

How can a foreclosure process be temporarily stalled? A. By filing for Chapter 7 bankruptcy B. By fleeing the state C. By paying off all debts D. By request

A. By filing for Chapter 7 bankruptcy

Sam's kids talked him into putting up the basketball hoop that their grandparents got them for Christmas. On a quiet Saturday afternoon, Sam is busy nailing the backboard to the front of their garage facing the street when one of the officers of the homeowners association walks by. "I'm so sorry," she says, "but you'll have to take that down. Basketball hoops in direct view of the street are prohibited." What is in place in Sam's subdivision that would prohibit this? A. CC&Rs B. Deed warranty C. Law D. Regulation

A. CC&Rs

In terms of investment, liquidity means an investment ______. A. Can easily be converted to cash B. Can't be sold C. Is a cash cow D. Will experience ebbs and flows in value

A. Can easily be converted to cash

Which act was the first to prohibit any exceptions for discrimination based on race or color? A. Civil Rights Act of 1866 B. Fair Housing Amendments Act of 1988 C. Federal Fair Housing Act of 1968 D. Housing for Older Persons Act of 1995

A. Civil Rights Act of 1866

Title One USA will hold the earnest money and provide closing services to Roger's client in the sale of his home. What form must Roger provide to the title company based on this information? A. Closing Instructions B. Closing Statement C. Earnest Money Receipt D. Earnest Money Release

A. Closing Instructions

Rhonda and Jade both consider themselves to be African-American, although Rhonda has much darker skin and hair than Jade. When Rhonda went to the Valley Falls apartment manager's office to request a rental application, she was told there were no vacancies. Jade went in a day later and received an application. This may be discrimination based on _______. A. Color B. National origin C. Race D. Sex

A. Color

Which type of insurance can property managers carry to cover accidents that occur in the office? A. Commercial general liability B. Professional liability coverage C. Residential dwelling policy D. Worker's compensation

A. Commercial general liability

If you're helping a property owner collect rent from tenants who lease space in an office building, you're likely working as a _______. A. Commercial property manager B. Power of attorney C. Residential property manager D. Tenants' agent

A. Commercial property manager

Margaret has received her Closing Disclosure from the lender. To best protect her interests, what should she do with it? A. Compare it to the Loan Estimate. B. File it with her mortgage papers. C. Take it to the closing. D. Use the information to compare loan costs with those of other lenders.

A. Compare it to the Loan Estimate.

To develop a marketing plan for the property owner, the property manager should ______. A. Compare the competition to the rates, condition, amenities, and location of the owner's property B. Ignore the property's vacancy rate C. Rely on the owner to do all of the market research D. Take an existing marketing plan from an old property and modify it slightly

A. Compare the competition to the rates, condition, amenities, and location of the owner's property

To whom would a 1031 tax exchange usually appeal? A. Investors B. Retailers C. Traditional homebuyers D. Wholesalers

A. Investors

As part of preparing a marketing plan for a landlord client, property manager Michelle has gathered information from numerous sources. Which of the following is likely to be most useful to her as she determines whether rent in the building she manages is in line with the competition? A. Complete rent roll from the building she manages D. GIS data showing access points to bike lanes and public transportation C. List of all maintenance and repairs completed in the building for the last 18 months D. Results from millennial marketing survey showing advertising media preferences

A. Complete rent roll from the building she manages

FACTA requires anyone with access to consumers' credit reports to ______. A. Comply with the records disposal rule B. Keep a record of all of the requests they have made for a period of two years C. Report consumers with bad credit so that their spending habits can be monitored D. Sign a confidentiality waiver

A. Comply with the records disposal rule

A deed states, "For love and affection, the receipt and sufficiency of which is hereby acknowledged." What does this statement represent in the deed? A. Consideration B. Granting clause C. Habendum clause D. Subject to clause

A. Consideration

In the case of periodic tenancy or tenancy at will, the terminating party must sign and deliver written notice to the other party before the termination date per specific guidelines. Which of the following is an acceptable way for a landlord to deliver a termination notice to a tenant if the tenant isn't home at the time of the delivery? A. Conspicuously post the notice on the front door of the property B. Deliver to the tenant's neighbor C. Give the notice to any child who resides at the property D. Send the notice via certified mail through the U.S. Postal Service

A. Conspicuously post the notice on the front door of the property

Lisa took out a conventional 30-year mortgage at a 6% interest rate when she bought her home 15 years ago. Her payments today are the same as they were when she made her first payment. What's this an example of? A. Constant payment method B. Graduated payment C. Home equity line of credit D. Straight loan

A. Constant payment method

A vendor and vendee are the parties involved when the finance instrument is a ______. A. Contract for deed B. Last will and testament C. Note with deed of trust D. Note with mortgage

A. Contract for deed

You may see a ______ named as a land contract, real estate contract, contract for sale, agreement for deed, or as articles of agreement. A. Contract for deed B. Deed of trust C. Mortgage D. Promissory note

A. Contract for deed

Which of these principles of value is related to how a change to a portion of a property impacts the value as a whole? A. Contribution B. Impact on value C. Plottage D. Progression

A. Contribution

Real estate investing may be done individually, in partnerships, or through what other means? A. Corporations B. Credit reports C. Credit unions D. E&O insurance

A. Corporations

Your tenant, Tom, has called to complain about a broken water heater. You hire someone to replace it. What type of maintenance are you performing? A. Corrective B. Custodial C. Preventive D. Tenant improvements

A. Corrective

Which approach to value measures the cost to produce a property, including land acquisition and construction costs? A. Cost approach B. Income approach C. Indirect approach D. Sales comparison approach

A. Cost approach

Which one of the following tasks helps Diana fulfill her property management duty of providing maintenance and completing improvements? A. Creating and implementing a preventive maintenance schedule B. Creating an operating budget in which income is greater than expenses C. Generating monthly financial reports for property owner review D. Minimizing vacancy rates by doing market analyses and offering market-based rent rates

A. Creating and implementing a preventive maintenance schedule

Which of the following is a life estate in a property held by a widower? A. Curtesy B. Dower C. Estate at will D. Remainderman

A. Curtesy

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

A ______ is a method of conveying real property from one party to another. A. Deed B. Power of attorney C. Promissory note D. Recordation

A. Deed

By law, any adverse action taken against an applicant that is based on the credit report must be ______. A. Disclosed to the consumer in writing B. Reported to a credit reporting agency C. Reported to a state website D. Reported to the IRS

A. Disclosed to the consumer in writing

Leonard is offered a loan at 5.75%. Because he plans to be in his home for several years, he chooses to pay points up front to have the rate reduced to 5.25%. What's this an example of? A. Discount points B. Down payment C. Gap financing D. Usury

A. Discount points

Kurt bought a vacant lot in a development that was 85% completed. When he started working with the builder to lay out where the house and driveway would be, they found he would need an easement because his driveway would spill over onto the adjacent lot by a few feet. Kurt owns the _______ estate or tenement. A. Dominant B. Gross C. Prescriptive D. Servient

A. Dominant

Which of the following could an investor who sells an apartment house buy using a 1031 exchange? A. Duplex, office building, or warehouse B. Duplex only C. Office building only D. Warehouse or office building only

A. Duplex, office building, or warehouse

Roger has a buyer client who is purchasing a Colorado home built before 1978. Which two documents must Roger ensure that his client receives related to lead-based paint? A. EPA lead-based paint brochure and Lead-Based Paint Disclosure form B. EPA lead-based paint brochure and Residential Property C. Disclosure Lead-Based Paint Disclosure and Residential Property D. Disclosure Synopsis of the Lead-Based Paint Hazard Reduction Act and EPA lead-based paint brochure

A. EPA lead-based paint brochure and Lead-Based Paint Disclosure form

Kurt bought a vacant lot in a development that was 85% completed. When he started working with the builder to lay out where the house and driveway would lie, it was determined that he would need an easement because his driveway would spill over onto the adjacent lot by a few feet. What type of easement is this? A. Easement appurtenant B. Easement by necessity C. Easement by prescription D. Easement in gross

A. Easement appurtenant

Which of the following clients would be the best fit for a condo community with an HOA and restrictive covenants? A. Elion travels often for work. He doesn't have time for yardwork, but he likes things just so. He enjoys having amenities close by. B. Genoa is a retired professor. She loves sipping white wine while listening to classical music. Her dream is to have a chartreuse house. C. Joe has a boat, a motorcycle, and an RV. He often has visitors come and stay in the RV for his weekend-long barbecue shindigs. D. Martha likes to do everything her way. She knows what flowers she likes, and she's going to plant them wherever she wants to.

A. Elion travels often for work. He doesn't have time for yardwork, but he likes things just so. He enjoys having amenities close by.

The Kelo vs. City of New London U.S. Supreme Court ruling was controversial because the U.S. Constitution prohibits the government from taking private property except for "public use". What governmental power was central to this case? A. Eminent domain B. Escheat C. Police power D. Taxation

A. Eminent domain

_________ is the power of the government to take private land for public use. A. Eminent domain B. Encumbrance C. Escheat D. Foreclosure

A. Eminent domain

In what type of leasehold is the duration of the lease unknown at the time it's created? A. Estate at will B. Estate for years C. Periodic estate D. Tenancy at sufferance

A. Estate at will

In order to ______, a commercial property manager must take care to enforce lease provisions. A. Evict tenants B. Negotiate leases C. Oversee property maintenance D. Qualify tenants

A. Evict tenants

What's one of the things a licensee must do in order to prepare a client for closing? A. Explain who will be at the closing and what to expect. B. Perform a home inspection. C. Provide an abstract of title. D. Provide the Loan Estimate.

A. Explain who will be at the closing and what to expect.

Tenants are protected from discrimination by ______. A. Fair housing laws B. Landlord laws C. The goodwill of landlords D. The Tenant Rights Act

A. Fair housing laws

What does the Financial Institutions Reform, Recovery, and Enforcement Act require? A. Federally related appraisals must be conducted by an appraiser who's either licensed or certified by the state. B. Federally related transactions need not be appraised. C. Non-federally related transactions must be appraised by government employees. D. Real estate licensees who perform appraisals must have a federal security clearance.

A. Federally related appraisals must be conducted by an appraiser who's either licensed or certified by the state.

Dustin lives in the foothills where flooding is common in the spring. What overlay zone would apply to this area? A. Floodplain overlay B. Rural community overlay C. Urban development overlay D. Watershed overlay

A. Floodplain overlay

Which type of appraisal report makes use of pre-printed documents? A. Form report B. Letter report C. Narrative report D. Printed report

A. Form report

Stephanie was having trouble making her mortgage payments. Now her payments are lower than they were, and she's able to pay them each month. This is because her lender ______. A. Gave her a loan modification B. Is preparing to foreclose and doesn't care if her loan is in default C. Is supplementing her payments with a grant fund D. Told her to pay whatever she could afford

A. Gave her a loan modification

Which of the following terms is most closely associated with legal nonconforming use? A. Grandfathering B. Setback requirement C. Special use permit D. Variance

A. Grandfathering

Maxwell is a tenant. His lease has a fixed rent in which the landlord pays all taxes, insurance, and maintenance expenses. What type of lease does he have? A. Gross B. Ground C. Net D. Variable

A. Gross

Which one of the following property manager's duties requires the property manager to remind tenants that they must provide 30 days' written notice prior to terminating their lease? A. Handle move-outs/move-ins. B. Maintain the property. C. Perform a market analysis. D. Respond to tenant complaints.

A. Handle move-outs/move-ins.

When a real estate transaction is financed using a contract for deed, what advice should real estate agents give to their clients? A. Have an attorney review the contract. B. Have an institutional loan officer review the contract. C. It would be wiser to use a mortgage or deed of trust. D. Make sure a promissory note is attached to the deed.

A. Have an attorney review the contract.

Although a completed Seller's Property Disclosure form is supposed to be accurate, buyers are encouraged to ________. A. Have an inspector of their choice inspect the property B. Have their broker inspect the property C. Perform a self-inspection of the property D. Review any previous inspections performed on the property

A. Have an inspector of their choice inspect the property

During periods of inflation, what are you likely to see? A. Higher interest rates B. Lower interest rates C. More buyers D. No buyers

A. Higher interest rates

According to Colorado law, unless otherwise stated in a lease, which of the following is a lessor's responsibility? A. If a multi-unit building has a shared HVAC system, the lessor must keep the building warm and habitable. B. If the property is accidentally destroyed, the lessor is responsible for making repairs. C. The lessor is responsible for property maintenance and repairs. D. The lessor must make the property habitable if it isn't by the time the lease commences.

A. If a multi-unit building has a shared HVAC system, the lessor must keep the building warm and habitable.

As a Colorado broker, you've listed one of your own properties for sale. Where do you disclose this information? A. In the Broker Remarks section of the MLS listing B. No disclosure required C. On the Brokerage Disclosure to Buyer form D. On the Dual Status Disclosure form

A. In the Broker Remarks section of the MLS listing

When an investment property has a capitalization rate that's fairly high, which of the following is true? A. It involves a fair amount of risk. B. It involves very little risk. C. It will have a high appraised value. D. The rate of return on the investment will be high.

A. It involves a fair amount of risk.

Siblings Julia and Gene are co-owners of a small retail building in which a tanning salon is currently operating. Gene really wants to leave his ownership interest to his son when he dies, but the way in which they own the property doesn't allow him to do so. What type of ownership do they have? A. Joint tenancy B. Tenancy by the entirety C. Tenancy in common D. Tenancy in severalty

A. Joint tenancy

Marcy is Jon's customer. Jon has been working with Marcy in the purchase of her new home. What's Jon's responsibility regarding the closing statement? A. Jon bears the same responsibility for accuracy of the closing statement whether working with a client or a customer. B. Jon is responsible for taking the signed closing statement to his employing broker, but he bears no responsibility for the accuracy of the statement. C. Jon is responsible only for explaining the form to Marcy at closing. D. Jon's not responsible since Marcy isn't his client.

A. Jon bears the same responsibility for accuracy of the closing statement whether working with a client or a customer.

Voluntary alienation includes which of the following? A. Kali intentionally transfers her property to Sandy. B. Laura took possession of Nancy's property by adding a previous claim to her current claim. C. Maurice's property is taken from him because he failed to pay his property taxes. D. Steve died without a will.

A. Kali intentionally transfers her property to Sandy.

Which of these situations would meet the definition of "uninhabitable" according to the Warranty of Habitability Act? A. Last week's hailstorm broke Hazel's bedroom window, and now the wind whistles through the hole unimpeded. B. Laura notified her landlord in writing of a dripping faucet, which has been defective for more than two rental periods. C. Smitty sustained an injury while living on the property, and he's unable to work as a result. D. When Kevin's dad came to visit, he burned himself on the gas stove while trying to cook dinner.

A. Last week's hailstorm broke Hazel's bedroom window, and now the wind whistles through the hole unimpeded.

When negotiating the purchase of a property that's subject to an existing lease, it's critical for your client to clearly understand the lease terms, including the property management responsibilities, rent amount, renewal/purchase options, and the ______. A. Lease duration B. Lease start date C. Security deposit amount D. Tenants' phone number

A. Lease duration

Which of the following is a duty of a property manager? A. Maintaining the property B. Picking up after tenants' pets C. Referring all interested tenants directly to the owner D. Showing the property to potential buyers

A. Maintaining the property

You want to become a planned unit development (PUD) property manager. What is an area of responsibility that you will undertake? A. Managing maintenance, landscaping, security issues, and concerns, and enforcing the regulations B. Overseeing the construction of commercial buildings C. Paving the way with municipal agencies and other local organizations to embrace the development project D. Working primarily with lenders and investors

A. Managing maintenance, landscaping, security issues, and concerns, and enforcing the regulations

Which of these requirements must zoning ordinances meet in order to pass the validity test? A. Must be for the purpose of public health, safety, and general welfare B. Must be solely for economic development purposes C. Must identify which segment of an area's population they apply to D. Provisions must be high level and open to interpretation

A. Must be for the purpose of public health, safety, and general welfare

Randolph, a seller, has an open listing agreement with you. Randolph locates a buyer himself. Who is owed a commission? A. No one B. You and the buyer C. You are D. You, but only a 10% open listing fee

A. No one

Dennis manages a building and needs to fill a vacant apartment. He has an applicant who just emigrated from Germany, and Dennis is concerned that Mrs. Edelman, a current tenant whose family survived the Holocaust, won't be comfortable with a German neighbor. Should Dennis deny the application? A. No, because it would be a violation of fair housing laws. B. No, because putting them together could help heal the wounds of the past. C. Yes, because it's his job to be sensitive to the needs of the current tenants. D. Yes, because it's important that the tenants get along.

A. No, because it would be a violation of fair housing laws.

Madeline is a property manager who's calculating the vacancy rate for the apartment building she manages. What formula would she use to do this? A. Number of vacant units ÷ total units B. Number of vacant units x total units C. Period of time ÷ number of vacant units D. Total units ÷ number of vacant units

A. Number of vacant units ÷ total units

What's the formula used to calculate vacancy rate? A. Number of vacant units ÷ total units B. Number of vacant units x total units C. Period of time ÷ number of vacant units D. Total units ÷ number of vacant units

A. Number of vacant units ÷ total units

As a(n) ______ property manager, you need to negotiate favorable leases with businesses. Longer-term leases are great for the owner, but you want to make sure you build in stepped-up increases in leasing rates. A. Office B. Planned unit development C. Real estate development D. Residential

A. Office

Eileen entered into a contract to buy Peter's home. The contract specified that Peter must leave the refrigerator with the home, and he must replace the roof before closing. During the preclosing walk-through, Eileen confirmed the house had a nice new roof, but also found that Peter took the refrigerator with him. Eileen decided she didn't want the refrigerator that much anyway so she didn't make a fuss. This is an example of ______ of the contract. A. Partial performance B. Performance C. Reinforcement D. Voiding

A. Partial performance

What are the three primary acts that impact mortgage loan disclosure? A. RESPA, TILA, and Dodd-Frank B. RESPA, TRID, and Dodd-Frank C. TRID, TILA, and Dodd-Frank D. TRID, TILA, and ECOA

A. RESPA, TILA, and Dodd-Frank

Violet purchased a house from Nick, and assumed the existing loan. Nick wants to make sure he isn't liable if Violet ever defaults. What can he do to remove his name from the loan agreement? A. Request a novation B. Request a subordination C. Sign an assumption agreement D. Sign a release of liability with the lender

A. Request a novation

Contingencies normally include the responsible party's name, the deadline for the contingency removal, and _______. A. The actions required for removal B. The date the contingency was added C. The reason the contingency was added D. Three reasons why the contingency is required

A. The actions required for removal

The property management agreement cements what relationship between the property manager and the owner? A. The agency relationship B. The landlord-tenant relationship C. The owner relationship D. The service relationship

A. The agency relationship

When would a lender require a mortgage insurance premium? A. The borrower has an FHA mortgage. B. The borrower is unable to put at least 20% down on a conventional loan. C. The borrower is unable to put at least 25% down on a conventional loan. D. The borrower wishes to lower his interest rate on a loan.

A. The borrower has an FHA mortgage.

A Colorado buyer reviews the seller's counteroffer and agrees provided the closing date is changed. What is the BEST course of action to respond? A. The buyer's agent should complete a new CBS that reflects the seller's counterproposal but changes the closing date to reflect buyer's proposed date. B. The buyer's agent should verbally ask the seller's agent to send over a new CBS. C. The buyer should return the Counterproposal form back to the seller and ask them to complete a new Counterproposal with the closing change. D. The buyer should sign the seller's Counterproposal form and include a separate signed amendment with the change to the closing date

A. The buyer's agent should complete a new CBS that reflects the seller's counterproposal but changes the closing date to reflect buyer's proposed date.

Which of the following statements is true about constructive eviction? A. The court may award damages to the tenants. B. The court may order the vacated tenants to pay monetary damages to the landlord. C. The landlord can shut off the power to the unit, thereby forcing the tenant out. D. The tenants who abandoned the property may never legally re-enter the premises.

A. The court may award damages to the tenants.

Which of the following is true regarding termination of a tenancy for years lease? A. The lease automatically ends on the date stated in the lease, with no notice required by either party. B. The terminating party must deliver notice to the other party within three months of the termination date. C. The terminating party must provide written notice, including the property description and termination date. D. The terminating party must sign the notice and deliver it to the other party before 30 days prior to termination date.

A. The lease automatically ends on the date stated in the lease, with no notice required by either party.

Which entity establishes zoning ordinances? A. The local governing body B. The planning board of appeals C. The state D. The zoning board of appeals

A. The local governing body

Which of the following information in a report would NOT help your owner assess whether your rental rates are competitive? A. The number of occupants in each of your units B. The number of unit applications accepted in the past six months C. The number of vacancies in the property D. The vacancy rate of your property compared to a similar, nearby property

A. The number of occupants in each of your units

If there is some kind of defect on a property's title, what effect does this level of transferability have on the property's value? A. The value falls. B. The value remains unchanged. C. The value rises. D. Transferability has no effect on value.

A. The value falls.

You're a property manager reviewing an application from prospective tenants Saed and Jean, an unmarried couple who have two children. Since you have an obligation to the property owner to ensure that tenants will pay their rent and maintain the unit properly, you screen carefully. Which of these items should be part of your screening process? A. Their credit rating B. Their familial status C. Their nationality D. Their religion

A. Their credit rating

Which of the following statements is true of investment properties? A. They can be leveraged. B. They're guaranteed to make a profit. C. They're highly liquid. D. They're very low risk.

A. They can be leveraged.

Why might a property owner ask you to prepare a report showing the trend in rental delinquency rates? A. To assess the adequacy of tenant income screening processes B. To assess your ability to manage tenant relations C. To determine if rental rates are too high compared to your competitors' rates D. To forecast the amount of effort that will be required to collect the late rents

A. To assess the adequacy of tenant income screening processes

Jeff has filed a quiet title suit against Roger. What's the purpose of this suit? A. To clear up a cloud on title B. To clear up a property line dispute C. To exercise his right to quiet enjoyment of the property D. To prohibit the seller from releasing the buyer's name

A. To clear up a cloud on title

In a seller-financed real estate transaction in Colorado using a land installment contract, what's the role of the public trustee? A. To collect property taxes from the borrower and hold them in escrow B. To ensure that all parties understand their rights in case of foreclosure C. To hold title to the property until the debt is repaid D. To record the Real Estate Transfer Declaration

A. To collect property taxes from the borrower and hold them in escrow

What's the purpose of the Square Footage Disclosure in Colorado? A. To disclose to the buyer and seller the source of the square footage measurement the broker used in marketing materials B. To disclose to the listing broker the square footage of the house for marketing purposes C. To notify the county assessor's office of the home's square footage D. To verify the accuracy of the appraiser's square footage measurements

A. To disclose to the buyer and seller the source of the square footage measurement the broker used in marketing materials

What's the purpose of an assessor's parcel number? A. To identify a property for tax purposes B. To identify the assessor assigned to a particular property C. To identify the number of parcels an assessor has revalued D. To provide a numeric rating related to a parcel's size

A. To identify a property for tax purposes

Property manager Ariadne is inspecting four of her units that were recently vacated. She's determining how much of each tenant's security deposit she may need to retain, and why. For which of these tenants will Ariadne NOT be allowed to retain part of the security deposit? A. Unit 12 has worn areas in the carpet, which was last replaced seven years ago, but is otherwise clean. B. Unit 25 has a mural painted on the living room wall (no permission on record). It's otherwise clean. C. Unit 37 has not been cleaned and a few personal belongings are still remaining, but appears to otherwise have only normal wear and tear. D. Unit 3 is missing window coverings in one bedroom and has a hole in a closet door, but is otherwise clean.

A. Unit 12 has worn areas in the carpet, which was last replaced seven years ago, but is otherwise clean.

When is a loan modification considered? A. When a borrower has missed payments but still has some financial security B. When interest rates have changed by more than two points since the loan was originated C. When the borrower has filed for bankruptcy D. When the lender sells the financial instrument

A. When a borrower has missed payments but still has some financial security

Which type of loan is insured by the Federal Housing Administration? A. Conventional B. Government C. Home equity line of credit D. Rural development

B. Government

With a periodic estate lease, a landlord must remind tenants that their lease will ______. A. Automatically expire B. Automatically renew C. Automatically terminate D. Receive an automatic increase

B. Automatically renew

Allen picked up remodeling skills from his family's construction business. Which of the following real estate investments is most suited to these skills? A. Buy and hold B. Fix and flip C. Limited partnership D. Wholesaling

B. Fix and flip

Which of the following statements related to 1031 tax-deferred exchanges is true? A. Foreign investors may not participate. B. Foreign investors may participate. C. Investors may not participate. D. Residential homeowners may participate.

B. Foreign investors may participate.

Clancy has a grocery store in an area that was zoned residential after he opened for business. When you stop by for a bag of corn nuts, he complains, "I'll have to move!" You tell him ______. A. "I'll be happy to list your store for you, because you'll have to sell within six months." B. "You don't have to sell if you continue to use the property in the same manner without expansion or upgrades." C. "You'll be an illegal nonconforming use." D. "You need a special variance permit."

B. "You don't have to sell if you continue to use the property in the same manner without expansion or upgrades."

Morgan is a single taxpayer and real estate investor. She buys homes for cheap, fixes them up while living in them, and sells them for a profit. How much can she exclude if she realizes a gain from the sale of her current property (assuming she meets all the criteria to exclude the gain)? A. $25,000 B. $250,000 C. $50,000 D. $500,000

B. $250,000

Morgan is a single taxpayer and real estate investor. She buys homes for cheap, fixes them up while living in them, and sells them for a profit. How much can she exclude if she realizes a gain from the sale of her current property (assuming she meets all the criteria to exclude the gain)? A. $25,000 B. $250,000 C. $50,000 $ D. 500,000

B. $250,000

The law requires that property managers use credit reporting ______. A. As a means to avoid getting stuck with a deadbeat tenant B. At least once a week C. Fairly D. Only when a tenant has other application red flags

C. Fairly

What is the capital gains exclusion amount? A. $125,000 for single taxpayers, $250,000 for married couples filing jointly B. $250,000 for single taxpayers, $500,000 for married couples filing jointly C. $25,000 for single taxpayers, $50,000 for married couples filing jointly D. $50,000 for single taxpayers, $100,000 for married couples filing jointly

B. $250,000 for single taxpayers, $500,000 for married couples filing jointly

A property is generating $100,000 in income and has expenses of $25,000. The investor pays $3,000 toward mortgage principal each year and $32,000 toward interest, plus another $4,000 in income taxes. What is the before-tax cash flow? A. $36,000 B. $40,000 C. $45,000 D. $50,000

B. $40,000

If a property has a potential gross income of $50,000, a vacancy and collection loss of 10%, and taxes are another 10%, what's the effective gross income? A. $40,000 B. $45,000 C. $50,000 D. $55,000

B. $45,000

A four-unit rental property has a sales price of $700,000. Monthly gross rent is estimated at $7,000. What is the gross rent multiplier? A. 10 B. 100 C. 83 D. 8.3

B. 100

Which section of the Internal Revenue Code allows the owner of real property to sell that property, then reinvest the proceeds in a "like-kind" property and defer paying any capital gains taxes? A. 1030 B. 1031 C. 180 D. 360

B. 1031

A 30-unit income-producing property has a sales price of $6 million. Annual gross income is estimated at $500,000. What's the gross income multiplier? A. 10x B. 12x C. 14x D. 8x

B. 12x

Based on capitalization rate alone, which investment will have the higher appraised value: one with a 10% cap rate or one with a 4% cap rate? A. 10% B. 4% C. Cap rates have nothing to do with appraised value. D. It's impossible determine based on cap rate alone.

B. 4%

Glenn is purchasing a home for $400,000. The property appraised at $415,000 and Glenn is financing $300,000. What's the loan-to-value ratio? A. 72% B. 75% C. 82% D. 96%

B. 75%

Unless otherwise stated, Colorado prorations are based on ______________________. A. 30 days in each month B. A calendar year of 365 days C. A calendar year of 366 days D. A statutory year of 360 days

B. A calendar year of 365 days

Vacancy rates are a key indicator of supply of and demand for tenant occupancy spaces. Which of the following is true? A. A decrease in vacancy rate indicates a decreased demand for space. B. A decrease in vacancy rate indicates an increased demand for space. C. An increase in vacancy rate indicates an increased demand for space. D. Vacancy rates alone can be used to analyze whether or not to invest in a rental property.

B. A decrease in vacancy rate indicates an increased demand for space.

The contract that allows a tenant to live on the property is _______. A. A binder B. A lease C. A leasehold D. An estate agreement

B. A lease

Pamela inherited a piece of property that has been in her family for generations. She wants to find the property's exact boundaries. What should contain this information? A. A fence company's records B. A legal description of the property C. A satellite image of the property D. Old family photos of the property

B. A legal description of the property

A legal notice that a lawsuit is pending that affects the title of a property is called _______. A. A judgment lien B. A lis pendens C. An estate and inheritance tax lien D. A voluntary lien

B. A lis pendens

What is a principal meridian? A. An east-west line used as a reference point in the rectangular government survey system B. A north-south line used as a reference point in the rectangular government survey system C. The center-most section identified in the rectangular government survey system D. The center-most township identified in the rectangular government survey system

B. A north-south line used as a reference point in the rectangular government survey system

Which term is defined as land that is built up by water depositing sand, silt, or gravel? A. Accession B. Accretion C. Avulsion D. Erosion

B. Accretion

What does the buyer's signature on the Seller's Property Disclosure form indicate? A. Acceptance of the property as-is B. Acknowledgment of receiving the form C. Offer to purchase property D. Waiver of the right to a home inspection

B. Acknowledgment of receiving the form

What should a Colorado licensee do for a client who is making an offer to purchase a property in which more is owed by the seller than the listed price? A. Add the Loan Assumption Addendum to the Contract to Buy and Sell Real Estate and explain to your clients how assumption works B. Add the Short Sale Addendum to the Contract to Buy and Sell Real Estate and explain how the short sale process works C. Advise them to work with an attorney to draft an addendum to the Contract to Buy and Sell Real Estate that's appropriate to a short sale situation D. Use the Contract to Buy and Sell Real Estate (Short Sales) form to write up their offer

B. Add the Short Sale Addendum to the Contract to Buy and Sell Real Estate and explain how the short sale process works

Fannie Mae's multi-state note includes a due-on-sale clause, also known as a(n) ______ clause. A. Acceleration B. Alienation C. Exculpatory D. Subordination

B. Alienation

The act of transferring ownership of a property is known as _______. A. Accession B. Alienation C. Devising D. Granting

B. Alienation

Which of the following refers to rights that come with the land? A. Adverse possession B. Appurtenance C. Lis pendens D. Servient

B. Appurtenance

What are improvements with regard to property? A. Another name for a building permit B. Artificial attachments to land that include items such as fencing, buildings, and walkways C. Natural fixtures that are part of the land and that enhance its value D. The right to increase the value of a property

B. Artificial attachments to land that include items such as fencing, buildings, and walkways

Janet rents a condo in Colorado Springs. The lease doesn't specify when the rent is due. According to Colorado law, unless specified in the lease, rent is due ____________. A. At the beginning of the rental period B. At the end of the rental period C. The first week of each month D. The second week of each month

B. At the end of the rental period

Which of these appraiser requirements does AIR NOT specify? A. Be able to access the data needed to perform an appraisal B. Be knowledgeable about the global market rates C. Be licensed or certified in the state where the property is located D. Be qualified to appraise the property involved in the transaction

B. Be knowledgeable about the global market rates

In a deed of trust, who is the trustor? A. Agent B. Borrower C. Lender D. Neutral third party

B. Borrower

Which loan is a type of gap financing that is used temporarily until the consumer can obtain permanent financing? A. Blanket loan B. Bridge loan C. Reverse mortgage D. Wrap-around mortgage

B. Bridge loan

Which of the following statements about the lead-based paint inspection is true? A. Buyers are required by law to have the inspection performed if they're purchasing a home built before 1978. B. Buyers can waive their right to an inspection. C. If the seller discloses knowledge of lead-based paint in the home, the buyer is required to have an inspection. D. The inspection is required for homes built after 1978.

B. Buyers can waive their right to an inspection.

When investors put money into an investment property, they expect to get back the principal they put in plus interest or profit. What is the name for the return of principal? A. Capitalization B. Capital recapture C. Dividends D. Net operating income

B. Capital recapture

Income over and above expenses received from an investment is known as ______. A. Capitalization B. Cash flow C. Reversion D. Yield

B. Cash flow

A comparison of before-tax cash flow to cash invested is known as ______. A. After-tax cash flow B. Cash-on-cash return C. Income rate value D. Return on investment

B. Cash-on-cash return

In Colorado, which category of appraiser is allowed to appraise any type of real property? A. Ad Valorem Appraiser B. Certified General Appraiser C. Certified Residential Appraiser D. Licensed Appraiser

B. Certified General Appraiser

The Institute of Real Estate Management, an affiliate of the National Association of REALTORS®, offers a specific certification program. What designation would you earn upon completing this program? A. Certified Manager of Buildings B. Certified Property Manager C. Certified Residential Real Estate Expert D. Specialized Property Expert

B. Certified Property Manager

Which type of analysis performed by a property manager includes a look at the properties within the market area that will be competing for tenants? A. Analysis of alternatives B. Competitive analysis C. Market analysis D. Property analysis

B. Competitive analysis

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

Chadwick is a developer considering purchasing a large piece of unimproved land for a subdivision development. What should he do before committing to the project? A. Apply for financing. B. Conduct a feasibility study. C. Phone a friend. D. Start marketing the property to see if there are buyers.

B. Conduct a feasibility study.

Which economic principle 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

When a landowner voluntarily creates a legal agreement with a land trust or government entity that includes permanent use and development restrictions on the land, that agreement is called a ______. A. Condemnation B. Conservation easement C. Judgement D. Prescriptive easement

B. Conservation easement

Karsten had a great experience with his apartment and landlord until about two months ago, when the plumbing in the unit above started leaking into his apartment. The landlord keeps saying he'll fix it but hasn't, and now Karsten has mold growing on the ceiling and walls. Karsten is moving out before his lease has expired, which is a form of ______. A. Actual eviction B. Constructive eviction C. Mutual agreement D. Tenant retaliation

B. Constructive eviction

What is Colorado's standard residential purchase contract called? A. Agreement to Purchase Real Estate B. Contract to Buy and Sell Real Estate (Residential) C. Real Estate Purchase Contract D. Real Estate Purchase/Sale Agreement

B. Contract to Buy and Sell Real Estate (Residential)

Which of the following loans may require compliance with Appraiser Independence Requirements? A. Commercial B. Conventional C. FHA D. VA

B. Conventional

In a 1031 tax-deferred exchange, what role does the qualified intermediary serve? A. Acts as trustee B. Coordinates the exchange C. Insures the replacement property D. Records the deed

B. Coordinates the exchange

Which of the following is NOT a characteristic of a corporation? A. Corporations are recognized legal entities. B. Corporations are tangible and nontaxable. C. Corporations are taxable. D. Corporations have tax rates separate from individual tax rates.

B. Corporations are tangible and nontaxable.

Spring has sprung, and you need to hire someone to clean out the flower beds at an apartment complex. What type of maintenance will you be having performed? A. Corrective B. Custodial C. Preventative D. Tenant improvements

B. Custodial

What acronym can be used to remember factors that influence real property value? A. CRUD B. DUST C. GIVEN D. OLD CAR

B. DUST

What's the point from which elevation is measured? A. Base line B. Datum C. Monument D. Principal meridian

B. Datum

Boris is an appraiser working for the Smith family. They've hired him to perform an appraisal on their six-bedroom house. What two types of data will Boris gather? A. Digital and hand-written B. General and specific C. Old and recent D. Pertinent and non-related

B. General and specific

Which of these individuals will the provisions of the Warranty of Habitability Act protect? A. Charlene, a landlord, pays a good salary to a property manager to be responsible for all maintenance and repair issues. B. Debra, a tenant, tries to stay warm by doing housework, because the heater stopped working a week ago and hasn't been fixed. C. Leo, a landlord, doesn't have the funds to replace the leaky roof on his apartment building. But he gives his tenants buckets to catch the water. D. Tim, a tenant with a drinking problem, can't even remember how his unit got trashed and the door broken down.

B. Debra, a tenant, tries to stay warm by doing housework, because the heater stopped working a week ago and hasn't been fixed.

Richard gave his town six acres adjacent to his property for use as a public park. This type of property transfer is called a ______. A. Compensatory deed B. Dedication by deed C. Deed of gift D. Government deed

B. Dedication by deed

A third party holds legal title to Jackie and Tom's house until their loan is paid off. What type of security instrument was used to secure the real estate transaction? A. Deed B. Deed of trust C. Free title D. Mortgage

B. Deed of trust

Area vacancy rates have historically been around 15%, but have increased to 25%. Which of the following is a true statement? A. Both supply and demand for rental space have increased. B. Demand for rental space has decreased. C. Demand for rental space has increased. D. Vacancy rates will soon return to the 15% average

B. Demand for rental space has decreased.

Darrell lives in a very rural area where price levels have remained low for several years. What does this indicate about demand for housing in the area? A. Demand is high. B. Demand is low. C. Supply is low. D. The market is booming.

B. Demand is low.

The property management proposal includes information such as ______. A. Details about the property manager's personal interests and hobbies B. Details about the property manager's qualifications C. Personal information about the property manager's family D. The benefits and bonuses the owner will give the property manager in return for services rendered

B. Details about the property manager's qualifications

Which of the following scenarios is an example of novation? A. Cynthia has a contract with Jack to buy his house. She terminates the contract after the inspection and writes a similar contract on a new property with Jeff. B. Doug is buying Norm's farm, but has a serious accident and no longer wants to own a farm, so his daughter Linda decides to buy the property. Norm agrees to the substitution of Linda for Doug in the purchase contract, effectively creating a new contract. C. Marcie contracts to buy Suzanna's beauty salon. Marcie gets cold feet, though, and terminates the contract. D. Using a clause in the original purchase contract, Roxanne assigns her contractual right to purchase a property to her friend, Caroline.

B. Doug is buying Norm's farm, but has a serious accident and no longer wants to own a farm, so his daughter Linda decides to buy the property. Norm agrees to the substitution of Linda for Doug in the purchase contract, effectively creating a new contract.

Public hearings that allow citizens to voice their opinions about zoning ordinances are examples of _________________. A. Democracy B. Due process C. Eminent domain D. Police power

B. Due process

John, a broker, is transferring an earnest money check he received from a buyer to the title company that will hold the earnest money in escrow. What form should he be sure to get from the title company? A. Earnest Money Notification B. Earnest Money Receipt C. Earnest Money Release D. Earnest Money Transfer

B. Earnest Money Receipt

The doctrine of laches refers to the _______ of restrictive covenants/deed restrictions. A. Creation B. Enforcement C. History D. Types

B. Enforcement

Derrick was thrilled to find out that the land he purchased includes several small caves. He's been spelunking for about three years and looks forward to exploring the caves on weekends. Which real property right allows him to do so? A. Disposition B. Enjoyment C. Exclusion D. Possession

B. Enjoyment

Drew violated the terms of his lease by having pets, so property manager Sheila has started ______ proceedings to get him removed from the apartment. A. Abandonment B. Eviction C. Expiration D. Termination

B. Eviction

Ricky Nubbins is three months behind in his rent and has received several reminders from the landlord that the rent is past due. As a result, the landlord has begun working through proper channels to legally end Ricky's lease before the contract end date. The landlord is terminating his lease through ______. A. Abandonment B. Eviction C. Expiration D. Mutual agreement

B. Eviction

The ______ clause protects the borrower's assets that aren't part of the voluntary lien from a deficiency judgment in case of foreclosure. A. Cross-default B. Exculpatory C. Non-recourse D. Subordination

B. Exculpatory

The contract Jack is signing has a clause that protects his assets from a deficiency judgment in case of foreclosure. What is this called? A. Cross-default B. Exculpatory C. Non-recourse D. Subordination

B. Exculpatory

Which act requires a property manager to send an adverse action letter to the rejected applicant if the decision to reject were based in whole or in part on the applicant's credit score? A. Fair and Accurate Credit Transaction Act of 2003 (FACTA) B. Fair Credit Reporting Act (FCRA) C. Identity Theft Enforcement and Protection Act D. USA PATRIOT Act

B. Fair Credit Reporting Act (FCRA)

Your client submits an application to rent a condo unit. He has excellent credit and has had the same job for a long time. He uses a cane to help with his mobility. When his application is rejected, he feels it's due to his disability. He is protected under what federal law? A. Civil Rights Act of 1866 B. Fair Housing Amendments Act of 1988 C. Federal Fair Housing Act of 1968 D. Housing and Community Development Act of 1974

B. Fair Housing Amendments Act of 1988

Joe gave land to a school, but still wanted to have some control over its use, so a deed was prepared that gave the school title as long as the land is used for educational purposes. What type of interest does the school have? A. Fee simple conditional B. Fee simple determinable C. Fee simple subject to a condition subsequent D. Legal life estate

B. Fee simple determinable

An investor is analyzing a property by looking at its ability to produce future income. The property is a 10-unit apartment building. Which of the following would be used to determine this value? A. Effective gross income B. Gross income multiplier C. Gross rent multiplier D. Potential gross income

B. Gross income multiplier

Paul wants to rent an apartment from Wendy, but he doesn't have a Social Security number. Wendy explains that in order to rent to him, he must provide her with an acceptable form of identification. Paul hands her his green card. What does Wendy do? A. Asks Paul if he has another form of identification; a green card is not acceptable B. Hands Paul a lease agreement to fill out C. Hands the card back to Paul and tells him she cannot rent to him D. Tells him he will need to have a U.S. citizen vouch for him and co-sign the lease

B. Hands Paul a lease agreement to fill out

Anita is a new buyer. Luckily, ______ will help her before the sale and can reimburse her after the sale if a title issue arises. A. Her buyer's agent B. Her title insurance C. Seller credits D. Seller disclosures

B. Her title insurance

Appraiser Jamie is looking past how a property is being used to determine a higher value. What is Jamie determining? A. Cost to replace B. Highest and best use C. Loan value D. Value in use

B. Highest and best use

Appraiser John is determining how a property is being used to determine a more optimal function. What is he determining? A. Cost to replace B. Highest and best use C. Mortgage value D. Value in use

B. Highest and best use

Scott is moving out of his rented apartment at the end of the month. When he first signed the lease, he gave his landlord a security deposit equal to one month's rent. What should he expect regarding that deposit? A. His landlord will return the deposit on the day Scott's lease terminates, minus any deductions the landlord deems necessary. B. His landlord will return the deposit within 30 days, along with an itemized list accounting for any amounts the landlord retained from it. C. His landlord will use the deposit to cover Scott's final rental payment. This is standard practice, because it allows the renter to have funds for a deposit on a new rental. D. His landlord will use the security deposit to pay for the wear and tear on the unit during the time Scott lived there, and will return any amount remaining within 60 days.

B. His landlord will return the deposit within 30 days, along with an itemized list accounting for any amounts the landlord retained from it.

Juan has decided to invest his small inheritance in real estate. He is drawn to the fact that he can add a building where there wasn't one previously and immediately increase the value of his investment. Which economic characteristic of real property is this? A. Area preference B. Improvements C. Permanence D. Scarcity

B. Improvements

Which of the following elements is included in the Contract to Buy and Sell Real Estate? A. A neighborhood description B. Inclusions and exclusions C. The average annual property taxes D. The seller's equity in the property

B. Inclusions and exclusions

Which approach to finding property value estimates the current value of future income? A. Cost approach B. Income capitalization approach C. Sales comparison approach D. Taxable revenue approach

B. Income capitalization approach

Capitalization is the process of using ______. A. Capital to build equity B. Income to calculate value C. Sales to determine income D. Value to calculate income

B. Income to calculate value

Many property managers use private adjusters to file and negotiate insurance claims on behalf of the owner because _________. A. Any knowledge of insurance is out of the property manager's area of expertise B. Insurance claims are complex and require special skills C. Private adjusters do not charge D. Property managers never negotiate

B. Insurance claims are complex and require special skills

Only ______ is paid until the end of a straight mortgage loan term, when the principal is repaid in full. A. Insurance B. Interest C. Points D. Principal

B. Interest

Harry is comparing two investments. Investment property A has a capitalization rate of 12%, and investment property B has a capitalization rate of 19%. Which of the following is a true statement? A. Investment property A involves higher risk. B. Investment property A involves less risk. C. Investment property A will be valued lower than property B. D. Investment property B involves less risk.

B. Investment property A involves less risk.

Sean hasn't paid his property tax. The tax collector places a lien on his property. How is this lien classified? A. Involuntary, general B. Involuntary, specific C. Voluntary, general D. Voluntary, specific

B. Involuntary, specific

What does the right of redemption allow? A. It allows a property owner to freely give away her property to another and release it of any and all liens against it. B. It allows a property owner to pay back any debts or liens against their property until a foreclosure sale is held. C. It allows a property owner to sue a neighboring property owner over boundary disputes. D. It allows the government to satisfy liens against a property through a foreclosure sale.

B. It allows a property owner to pay back any debts or liens against their property until a foreclosure sale is held.

Which of the following most closely describes a use variance? A. It impacts neighboring properties. B. It requires a show of economic hardship. C. It's detrimental to the area as a whole. D. It's required for physical deviations.

B. It requires a show of economic hardship.

What is the name for a loan that creates a lien against property that already has been pledged as collateral? A. Additional loan B. Junior loan C. Step loan D. Sub loan

B. Junior loan

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

What takes precedence in the tenant-landlord relationship? A. An employment contract B. Landlord-tenant laws C. Lease terms D. The agency agreement

B. Landlord-tenant laws

What's the name of the clause in a promissory note where this language appears: "If the Note Holder has not received the full amount of any monthly payment by the end of ______ calendar days after the date it is due, I will pay a late charge to the Note Holder"? A. Fees and additional charges clause B. Late charge provision C. Lock-in clause D. Prepayment provision

B. Late charge provision

Selma and Richard have the temporary right to live at 123 Elm Street. They can come and go and use the property as they see fit, but they can't do so indefinitely. They must vacate the property at the end of next year. What sort of interest do they have in 123 Elm Street? A. Fee simple estate B. Leasehold estate C. Life estate D. Reversionary estate

B. Leasehold estate

Why might a buyer get a great deal on a real estate owned property? A. Federal regulations require that REOs be sold below market value. B. Lenders and their shareholders don't like to keep properties on their books longer than necessary. C. There are no agent commissions to pay for REO transactions. D. There are special government financing programs for purchasing REOs.

B. Lenders and their shareholders don't like to keep properties on their books longer than necessary.

Joe is drafting an easement agreement allowing his neighbor to use his boat ramp. In addition to the legal property description and sketch, which of the following details should also be included in the easement agreement? A. Abandonment agreement B. Liability and responsibility assignment C. Servient estate's promise not to use D. Statement of necessity

B. Liability and responsibility assignment

You're selling a property located in a subdivision. Which form of legal description will you likely see for this property? A. Developer's identifier B. Lot and block C. Metes and bounds D. Monument

B. Lot and block

Oscar bought an older home and hired a contractor to replace the old knob and tube wiring throughout the house. He was invoiced for the work, but 60 days have passed, and Oscar has yet to pay the bill. The electrician filed a lien against Oscar's house. What type of lien is this? A. HOA-related B. Mechanic's C. Mortgage D. Special assessment

B. Mechanic's

Which of these situations does the Americans with Disabilities Act address? A. Marcus, a property manager, routinely dismisses rental applications from families with children under the age of 18. B. Meridian Apartments provides a gym and pool area for residents, but it's not accessible to residents who use wheelchairs. C. Metro Agents hired an interpreter to assist Spanish-speaking clients with the real estate process. D. The Golden Gate senior housing center has no exercise or activity center for its residents.

B. Meridian Apartments provides a gym and pool area for residents, but it's not accessible to residents who use wheelchairs.

What is the best definition for "the time value of money"? A. It's not wise to sell your time for money. B. Money gains or loses value over time. C. Money increases in value over time. D. Time is money.

B. Money gains or loses value over time.

What is the borrower charged for all FHA loans? A. Discount point B. Mortgage insurance premium C. Pre-payment penalty D. Private mortgage insurance

B. Mortgage insurance premium

Which one of these commercial property manager's duties requires the property manager to secure a profitable deal for the landlord and also to negotiate a lease the commercial tenant can afford? A. Evict tenants who fail to comply with the terms and conditions of the lease agreement. B. Negotiate leases. C. Oversee the maintenance of buildings on the property. D. Qualify potential tenants.

B. Negotiate leases.

All the following reports may be your responsibility as a property manager EXCEPT ______. A. Monthly and annual financial reports B. Neighborhood sales C. Tenant roll D. Vacancy report

B. Neighborhood sales

Jax works for the owner of an apartment complex. He performs maintenance on the property. If a tenant complains of a problem such as a broken refrigerator or a blocked drain, he's the one who tackles the problem and gets it fixed. Does Jax need a real estate license? A. No, Colorado doesn't consider property management a real estate activity requiring a license. B. No, Jax isn't doing anything that requires a real estate license, such as collecting rent or negotiating leases. C. Only if he works on commission rather than as a salaried employee. D. Yes, all employees who work with tenants in any capacity are required to hold a real estate license.

B. No, Jax isn't doing anything that requires a real estate license, such as collecting rent or negotiating leases.

Your buyer's Colorado contract contains an inspection deadline of June 14. On June 16, the buyer states that she wishes to terminate the contract because of items found during the inspection. Does she have grounds to terminate the contract? A. No. Contracts can't be terminated based on inspection results. B. No. She would be in default of the contract's terms C. Yes. Inspection results aren't subject to contingency deadlines. D. Yes. The Dates and Deadlines section of the contract is flexible.

B. No. She would be in default of the contract's terms

The standard deed of trust in Colorado allows a _________. A. Judicial foreclosure B. Non-judicial foreclosure C. Statutory right of redemption D. Transfer with assumption

B. Non-judicial foreclosure

A _______ is an estate that conveys possession and control, but not title. A. Freehold estate B. Nonfreehold estate C. Temporary estate D. Title-free estate

B. Nonfreehold estate

Which of the following is prohibited under federal fair housing laws? A. Noting that a property has an in-law apartment B. Offering different terms, conditions, or privileges based on protected class status C. Requiring income verification before offering financing D. Using the phrase "first-time homebuyer" in an advertisement

B. Offering different terms, conditions, or privileges based on protected class status

Randa is trying to lower the vacancy rates for the commercial property she manages because her revenue targets have increased by 8% over the next year. What type of budget contains this revenue detail? A. Capital reserve B. Operating budget C. Stabilized D. Variable

B. Operating budget

Judy is showing a home in a town comprised of smaller "villages," each with a small shopping area and surrounded by lovely green space with trails and playgrounds. What classification of zoning describes this area? A. Commercial B. Planned unit development C. Residential D. Special land use

B. Planned unit development

The fewer properties on the market, the greater the scarcity. What's the effect on prices? A. Prices are pushed downward. B. Prices are pushed upward. C. Prices remain the same. D. There's no correlation between scarcity and price.

B. Prices are pushed upward.

In property management, what's the legal and binding contract that spells out the duties for both the property manager and property owner? A. Power of attorney B. Property management agreement C. Property management proposal D. Service contract

B. Property management agreement

When an installment land contract is used in Colorado, the _________ will collect taxes, hold them in escrow, and pay them to the county treasurer each year. A. Colorado Department of Revenue B. Public trustee C. Settlement agent D. State treasurer

B. Public trustee

Which term means "for another's life"? A. Fee simple B. Pur autre vie C. Remainderman D. Reversion

B. Pur autre vie

As a(n) ______ property manager, you work with architects and contractors to get the thing built. You may or may not also handle the leasing of the building to tenants. A. Office B. Real estate development C. Residential D. Retail

B. Real estate development

Which type of property manager is most likely to work for real estate developers and investors? A. Office B. Real estate development C. Residential D. Retail

B. Real estate development

Which of the following is true about residential tenants who run businesses out of the home in Colorado? A. Residential tenants running business out of a home can place signage however they see fit. B. Residential tenants running business out of a home may not have the same rights to place signage that commercial tenants have. C. They may place signage on the leased property advertising the business, as long as it complies with state, county, and city regulations. D. They may place signage on the leased property advertising the business, as long as it doesn't bother the neighbors.

B. Residential tenants running business out of a home may not have the same rights to place signage that commercial tenants have.

Jack's tenant, Sam, resided in the rental unit when his neighbor, Sonja, tripped on a log that stuck out from the lawn into the abutting sidewalk. Sonja suffered a broken wrist. Under Colorado law, unless stated otherwise in a lease, who is liable for Sonja's injury? A. Jack B. Sam C. Sonja D. The city

B. Sam

Trinity has been named executor of her uncle's will. What does this mean? A. She receives all her uncle's possessions and property. B. She's responsible for carrying out the will's provisions. C. She's responsible for taking care of her uncle until his death. D. She's responsible for the probate of her uncle's will.

B. She's responsible for carrying out the will's provisions.

Which one of the following types of ownership termination allows each tenant to have a specific, divided portion (partition) of the property exclusively? A. Termination by division B. Termination of co-ownership by partition C. Termination of estate in severalty D. Termination of joint tenancies

B. Termination of co-ownership by partition

Eliot is considering buying property subject to an easement to use the boat dock located on the neighboring property. What detail should Eliot specifically look for in the easement agreement that could reveal additional costs to owning the property? A. Circumstances under which the easement would be breached or terminated B. Terms for easement maintenance, such as taxes, insurance, and repairs C. The servient estate's promise not to disturb easement use or access D. What exact usage rights the dominant estate has to the easement

B. Terms for easement maintenance, such as taxes, insurance, and repairs

What notification does the Licensee Buy-Out Addendum provide to the seller? A. That the licensee may use the commission earned from the sale as part of the purchase price B. That the seller has the right to cancel the contract C. That the seller will have access to commission rebates when the buyer is a licensee D. That transactions with licensees may lead to greater seller profit

B. That the seller has the right to cancel the contract

Trinity has applied for a home equity line of credit to perform some upgrades on her home. Within what timeframe must her lender provide the Closing Disclosure? A. At closing B. The Closing Disclosure isn't required for a HELOC. C. Three days before closing D. Three days from her loan application date

B. The Closing Disclosure isn't required for a HELOC.

What's the purpose of an Agreement to Amend/Extend Contract? A. To amend the buyer's or seller's agreement with the broker B. To amend the terms of or extend due dates on the original contract C. To extend the date on which the listing agreement ends D. To respond to the home inspection results

B. To amend the terms of or extend due dates on the original contract

Under what circumstances may a Colorado seller choose not to complete the residential Source of Water Disclosure form? A. The buyer waives the right to receive information about the property's potable water source. B. The Water & Sewer Supply section of the Seller's Property Disclosure is completed. C. The water source is a private well. D. The water source is a public source.

B. The Water & Sewer Supply section of the Seller's Property Disclosure is completed.

When a government entity exercises its powers to create zoning ordinances, what must be followed? A. Federal zoning codes B. The area's comprehensive plan C. The state's zoning codes D. Universal design standards

B. The area's comprehensive plan

Which of the following is a potential concern of a buyer who's entering into a contract for deed with a seller? A. The agreement isn't legal. B. The buyer could lose the property after missing only one mortgage payment. C. The buyer's credit rating may suffer. D. The seller can call the loan due for no reason.

B. The buyer could lose the property after missing only one mortgage payment.

Which statement correctly describes a contract for deed? A. Contract for deed is another name for a deed of trust. B. The contract for deed is usually used in a seller-financed transaction. C. The contract for deed is usually used when a commercial lender is securing a mortgage loan. D. The parties to a contract for deed are the beneficiary and the vendee.

B. The contract for deed is usually used in a seller-financed transaction.

How is the purchase agreement impacted if a contingency isn't met or is rejected? A. The agreement must be negotiated. B. The contract is voidable. C. The party who failed to meet the contingency must pay a fine. D. The party who rejected the contingency must offer an alternative

B. The contract is voidable.

How is the purchase agreement impacted if a contingency isn't met or is rejected? A. The agreement must be negotiated. B. The contract is voidable. C. The party who failed to meet the contingency must pay a fine. D. The party who rejected the contingency must offer an alternative.

B. The contract is voidable.

What happens after a foreclosure if there isn't enough money from the sale to pay off all of the lien holders against a property? A. All claims are void if there isn't enough money after the foreclosure sale of the property. B. The former owner may owe a debt to lien holders who aren't fully paid. C. The former owner's wages will be garnished for the remainder of what's owed. D. The lien holders must refile on the former owner's next property.

B. The former owner may owe a debt to lien holders who aren't fully paid.

Which of the following occurs if a tenant dies during the term of an estate at will tenancy lease? A. The lease becomes part of the deceased tenant's estate. B. The leasehold automatically terminates. C. The lease is subject to a constructive eviction. D. The property is considered abandoned, and the landlord may sue the tenant's family for damages.

B. The leasehold automatically terminates.

Which of the following is an example of easement termination by merger? A. The dominant estate owner takes action that shows a clear intent to stop using the easement. B. The owner of a servient estate buys the property of the dominant estate. C. The owner of the dominant estate has an alternate route and no longer needs the easement. D. The owners of both estates decide not to use the easement.

B. The owner of a servient estate buys the property of the dominant estate.

Why would an appraiser use gross income multiplier, direct capitalization, or yield capitalization-rather than gross rent multiplier-to determine the value of an income property? A. It's the appraiser's personal preference. B. The property has income from other sources in addition to rent. C. These calculations are simpler to do than using gross rent multiplier. D. Using gross rent multiplier is only appropriate for single-family residences.

B. The property has income from other sources in addition to rent.

Who is responsible for completing the Seller's Property Disclosure form in Colorado? A. The home inspection agent B. The seller C. The seller's broker D. The selling broker

B. The seller

What is the future value of money? A. The value of today's money, now B. The value of today's money, tomorrow C. The value of tomorrow's money, today D. The value of yesterday's money, today

B. The value of today's money, tomorrow

Which of the following is a true statement about the relationship between capitalization rate and value? A. Capitalization rate and value are the same thing. B. There is an inverse relationship between the two. C. When capitalization rate goes down, so does value. D. When capitalization rate goes up, so does value.

B. There is an inverse relationship between the two.

Which of the following is true of all Colorado Real Estate Commission-provided brokerage disclosure forms? A. They prohibit you from acting as a transaction-broker. B. They provide definitions of the possible brokerage relationships. C. They're all contracts to provide brokerage services. D. You're encouraged, but not required, to use the commission disclosure forms.

B. They provide definitions of the possible brokerage relationships.

Which of the following statements is true about active real estate investments? A. They're most attractive to those who want to be silent partners. B. They require an effort to make a profit. C. They require a real estate license. D. They typically don't require any skill or money.

B. They require an effort to make a profit.

Danette hasn't paid the first quarter water bill on her property. It was due on April 1. She's closing with the buyer, Jason, on April 1. What type of expense is this and how will it appear on the settlement statement? A. This is an accrued expense, and will appear as a buyer debit and a seller credit. B. This is an accrued expense, and will appear as a seller debit and a buyer credit. C. This is a prepaid expense, and will appear as a buyer debit and a seller credit. D. This is a prepaid expense, and will appear as a seller debit and a buyer credit.

B. This is an accrued expense, and will appear as a seller debit and a buyer credit.

How do Colorado brokers comply with the requirement that they advise consumers to seek legal and tax counsel before signing the Contract to Buy and Sell Real Estate? A. By completing the Legal Counsel Disclosure form B. Through a clause in the contract C. Through an acknowledgment checkbox in the contract's signature block D. Through an oral admonition to clients and customers

B. Through a clause in the contract

Lawrence is a buyer closing on a home purchase for which he's obtaining financing. He receives a Loan Estimate from his lender. What's the purpose of this document? A. To detail the amount Lawrence needs to bring to closing B. To detail the estimated closing costs for Lawrence's loan C. To disclose the interest rates available on this lender's various loan programs D. To disclose the lender's source of loan funds

B. To detail the estimated closing costs for Lawrence's loan

When Shauna looked at the legal description of the property she was interested in purchasing, she read the following: "Beginning at the corner of State Route 61 and Hallowell Road, north for 314 feet, then southwest for 193 feet." In this description, what does "north for 314 feet" represent? A. A benchmark B. A bound C. A mete D. A monument

C. A mete

To what form of dispute resolution do buyers and sellers agree when signing the Contract to Buy and Sell Real Estate? A. Binding arbitration B. Binding mediation C. Non-binding mediation D. Specific performance

C. Non-binding mediation

What is a bound? A. A line that runs east to west B. A line that runs north to south C. A physical feature that defines the boundaries of the land D. The direction and distance of a line forming the boundary of a property

C. A physical feature that defines the boundaries of the land

FTC privacy rules state that a landlord or property manager doesn't have to obtain a tenant's written consent before sharing the tenant's information with ______. A. A neighbor B. Another tenant C. A police officer D. A retired property owner

C. A police officer

HOAs are most commonly formed as which kind of organization? A. C-Corporation B. Limited liability company C. Non-profit D. Partnership

C. Non-profit

Which of the following describes a subdivision plat? A. A collection of subdivision regulations and zoning ordinances B. A map that defines zoning districts C. A record in the county clerk's office that can serve as the legal description on a deed D. A record of the previous owners of a tract of land

C. A record in the county clerk's office that can serve as the legal description on a deed

How are groundwater rights in Colorado determined? A. According to littoral water rights B. According to riparian water rights C. According to the doctrine of prior appropriation D. According to the rule of capture

C. According to the doctrine of prior appropriation

The ______ modifies the terms of or changes the due dates on an original signed purchase contract. A. Addendum of Sale B. Agreement to Amend/Extend Broker's Agreement C. Agreement to Amend/Extend Contract D. Counterproposal

C. Agreement to Amend/Extend Contract

According to the FTC privacy rule, a landlord or property manager would have to obtain a tenant's written consent before sharing the tenant's personal information with which of the following? A. A consumer reporting agency B. Another rental housing owner or manager C. An unaffiliated third party D. A police officer

C. An unaffiliated third party

Who is responsible for developing the Uniform Standards of Professional Appraisal Practice (USPAP) that licensed appraisers must follow? A. Appraisal Practices Board B. Appraisal Qualifications Board C. Appraisal Standards Board D. Appraisal Subcommittee

C. Appraisal Standards Board

Which act provides consumers with remedies if they become victims of discrimination in the sale, rental, or financing of housing? A. Civil Rights Act of 1866 B. Equal Credit Opportunity Act of 1974 C. Fair Housing Amendments Act of 1988 D. Housing and Community Development Act of 1974

C. Fair Housing Amendments Act of 1988

Leases can end in several key ways. Mutual agreement and eviction are two. What is another way that a lease can terminate? A. Conversion B. Criminal use C. Expiration D. Neglect

C. Expiration

The most common way for a lease to terminate is _______. A. Abandonment B. Eviction C. Expiration D. Foreclosure

C. Expiration

When it comes to investments, capitalization rate, risk, and value are closely tied together. Which of the following is a true statement? A. A higher capitalization rate results in a higher value. B. A lower capitalization rate indicates higher risk. C. A lower capitalization rate indicates lower risk. D. A lower capitalization rate results in a lower value.

C. A lower capitalization rate indicates lower risk.

Which of the following would most likely be regulated by an HOA? A. Age B. Curfew C. Exterior paint D. Interior furnishings

C. Exterior paint

What term is used in the Dates and Deadlines section to indicate items that require resolution? A. Concerns B. Disputes C. Objections D. Resolutions

C. Objections

Jim and Crystal bought their rundown little "shack" 15 years ago. Over the years, they've made structural improvements, built additions, and remodeled nearly every square inch of the property. They're ready for their next adventure and have sold their property for a capital gain of $300,000. Assuming they meet all the criteria to qualify for the capital gain exclusion (and are married filing jointly), how much of this gain can they exclude? A. $100,000 B. $250,000 C. $300,000 D. $500,000

C. $300,000

The lender will charge a one-and-a-half-point origination fee and two loan discount points. What will be the total due for points on a $115,000 loan? A. $1,725 B. $2,300 C. $4,025 D. $575

C. $4,025

A homeowner has $80,000 of principal left to pay on her mortgage. Her home was recently appraised at $156,000, which is $13,000 more than what she purchased it for. How much equity does she have in her home? A. 100% B. $13,000 C. $76,000 D. $80,000

C. $76,000

A four-unit rental property has a sales price of $800,000. Annual gross rent is estimated at $72,000. What is the gross rent multiplier? Round if necessary. A. 11 B. 111 C. 133 D. 95

C. 133

Steven put down $10,000 toward a property's purchase price, financed the rest, and now has a cash flow of $2,800 after repairs and debt service. What's his ROI? A. 21% B. 26% C. 28% D. 32%

C. 28%

John wants to do a 1031 tax exchange with a property he just sold. How many days does he have to identify a new property for the exchange? A. 180 B. 30 C. 45 D. 60

C. 45

Which of the following is an example of a ground lease? A. A landowner allows another party to harvest crops on his property. B. A landowner gives oil and gas companies permission to explore on her land. C. A landowner leases undeveloped land to another party, who then builds on that land. D. A landowner temporarily provides another party mineral rights to a property.

C. A landowner leases undeveloped land to another party, who then builds on that land.

A tenant's right to occupy a property is known as _______. A. A contract B. A freehold estate C. A leasehold estate D. An estate agreement

C. A leasehold estate

Which of the following is a true statement about how adjustments are made in the sales comparison approach? A. Adjustments are made to the subject property, not the comparables. B. Appraisers adjust downward when a comparable is missing a feature found in the subject property. C. Appraisers adjust upward when a comparable is missing a feature found in the subject property. D. Only three adjustments per comparable property are allowed; otherwise it's not considered sufficiently similar.

C. Appraisers adjust upward when a comparable is missing a feature found in the subject property.

Which of the following actions toward an appraiser would be considered improper? A. Asking an appraiser to consider additional, appropriate property information B. Asking an appraiser to correct errors in the appraisal report C. Asking an appraiser to remove information about adverse property conditions from an appraisal report D. Giving an appraiser additional details, substantiation, or explanation for the appraiser's value conclusion

C. Asking an appraiser to remove information about adverse property conditions from an appraisal report

Johnstone Realty holds the earnest money for its transactions, but clients select a title company that conducts the closing. When must Johnstone execute and submit Closing Instructions? A. As soon as the earnest money is received B. At closing C. Before the title deadline on the purchase contract D. Immediately preceding closing

C. Before the title deadline on the purchase contract

After switching careers, Alice just graduated from culinary school and is looking to purchase a house. Until she gets her feet wet with her new job, she knows the cost of living with her mortgage is going to be tight. Which mortgage might help her manage her expenses each month? A. Adjustable-rate B. Amortized C. Budget D. Straight

C. Budget

Sam has a mortgage payment that includes his property taxes and property insurance. What type of mortgage does Sam have? A. Adjustable B. Amortized C. Budget D. Straight

C. Budget

What is the definition of "before-tax cash flow"? A. Cash flow after property taxes are considered. B. Cash flow before property taxes are considered. C. Cash flow before taking income taxes into account. D. Cash flow taking income taxes into account.

C. Cash flow before taking income taxes into account.

Millie wants an appraisal of the home she's inherited in a desirable area. She expects the value to be around $5 million. Which category of appraiser qualification does this appraisal require? A. Ad Valorem Appraiser B. Certified Commercial Appraiser C. Certified Residential Appraiser D. Licensed Appraiser

C. Certified Residential Appraiser

What type of insurance provides two or more forms of coverage (e.g., business crime, business auto, boiler and machinery, marine and farm, liability) for commercial properties? A. Business interruption B. Casualty C. Commercial multi-peril D. Surety bonds

C. Commercial multi-peril

A(n) _____ is used to amend an original offer to purchase. A. Addendum B. Amend/extend form C. Counterproposal form D. Revised contract of sale

C. Counterproposal form

Regina, a Colorado broker, is assisting both Ted (the seller) and Alyssa (the buyer) in a transaction but is representing neither of them. What is Alyssa's role in the transaction? A. Client B. Consumer C. Customer D. Transaction client

C. Customer

In Colorado, the informational form that explains the different types of brokerage relationships available is known as the _______. A. Agency Disclosure Form B. Brokerage Relationship Disclosure Form C. Definitions of Working Relationships Form D. Listing Agreement Disclosure Form

C. Definitions of Working Relationships Form

Marci owns a small apartment building, and is considering investing in another one. She's analyzing area vacancy rates to get an idea of market supply and demand. Area vacancy rates have historically been around 6%, but have decreased to 2%. Which of the following is a true statement? A. Both supply and demand for rental space have increased. B. Demand for rental space has decreased. C. Demand for rental space has increased. D. Vacancy rates will soon return to the average rate.

C. Demand for rental space has increased.

Bethany has agreed to purchase Derrick's property using a land contract. Who holds legal title to the property during the term of the loan? A. Bethany B. Both Bethany and Derrick C. Derrick D. The state

C. Derrick

For which of these properties would gross rent multiplier be calculated? A. Apartment building with 50 units B. Condominium building with 20 units C. Duplex used as a rental property D. Single-family, owner-occupied home

C. Duplex used as a rental property

An easement is one type of encumbrance that can affect a property. Which of these statements about easements is true? A. An easement is a right acquired by one party to use the land of another party, usually for one day. B. An easement requires the property owner's express permission. C. Easements are often established by a written agreement between the parties. D. Easements must be removed before property can be transferred.

C. Easements are often established by a written agreement between the parties.

Which real property ownership right protects the owner from harassment or interference? A. Control B. Disposition C. Enjoyment D. Possession

C. Enjoyment

Cedric is opening a model railroad shop, but he knows that he'll only run the store until his partner finishes law school. He signed a three-year lease, after which the lease will terminate. What kind of leasehold is this? A. Estate at sufferance B. Estate at will C. Estate for years D. Periodic estate

C. Estate for years

Which type of leasehold lasts for a defined period of time and automatically terminates when that period ends? A. Estate at sufferance B. Estate at will C. Estate for years D. Periodic estate

C. Estate for years

Elvin owns 150 acres of prime hunting land. Every year, he gets requests from private groups that would like to use his land for a day or two during hunting season. He sometimes grants these requests, but this year, he's decided to only use it himself with his friends. Which right in the bundle of rights says that he can say no to these requests? A. Control B. Enjoyment C. Exclusion D. Possession

C. Exclusion

Which act created the Office of Fair Housing and Equal Opportunity under the Department of Housing and Urban Development? A. Americans with Disabilities Act of 1990 B. Equal Credit Opportunity Act of 1974 C. Federal Fair Housing Act of 1968 D. Housing and Community Development Act of 1974

C. Federal Fair Housing Act of 1968

Which of the following requires a landlord or property manager to obtain a tenant's written consent before sharing any information about the tenant with an unaffiliated third party? A. Fair and Accurate Credit Transaction Act of 2003 (FACTA) B. Fair Credit Reporting Act (FCRA) C. Federal Trade Commission (FTC) privacy rule D. USA PATRIOT Act

C. Federal Trade Commission (FTC) privacy rule

Which type of an estate doesn't end automatically when the stated event or condition occurs? A. Fee simple absolute B. Fee simple determinable C. Fee simple subject to a condition subsequent D. Freehold

C. Fee simple subject to a condition subsequent

Tenant qualification and acquisition is an important part of Ron's duties as a commercial property manager. Which of the following tasks is likely to maximize his success when performing this duty? A. Adhering to operational and capital reserve budgets B. Developing a list of stable contractors who are available at a moment's notice for emergencies C. Finding a mix of long- and shorter-term tenants for steady and maximum income D. Finding a way to reduce janitorial and maintenance costs

C. Finding a mix of long- and shorter-term tenants for steady and maximum income

Which of these transactions must comply with Appraiser Independence Requirements? A. Duplex being purchased with a Federal Housing Administration loan B. Five-unit residence being purchased with a conventional loan C. Four-unit residence being purchased with a conventional loan D. Single-family home property being purchased with a Veterans Administration loan

C. Four-unit residence being purchased with a conventional loan

A form of depreciation or loss in value caused by defects in design is called _______. A. Economic obsolescence B. External depreciation C. Functional obsolescence D. Physical depreciation

C. Functional obsolescence

A property manager has just met with Lena, who is interested in renting a vacant unit. What's the best way for the property manager to determine how reliable Lena will be with rent? A. Ask Lena what her credit score is. B. Decide that because Lena was on time and professionally dressed, she will be good for her rent. C. Get permission in writing from Lena to run a credit report. D. Wait and see if the check for her security deposit is good.

C. Get permission in writing from Lena to run a credit report.

An investor is analyzing a three-unit property by looking at its ability to produce future income. Which of the following would most likely be used to determine this value? A. Effective gross income B. Gross income multiplier C. Gross rent multiplier D. Potential gross income

C. Gross rent multiplier

Which of the following statements regarding HOA responsibilities and duties is true? A. An HOA's responsibilities are limited to notifying residents who are out of compliance. B. HOAs are in charge of collecting fees that cover costs for individual units' wear and tear. C. HOAs can place liens on properties if owners don't pay their dues. D. If there's extra money in the bank, the HOA board members can keep it as payment for their service.

C. HOAs can place liens on properties if owners don't pay their dues.

Shana received a devise from her mother. What might this be? A. A written message B. Her mother's car C. Her mother's farm D. Her mother's jewelry

C. Her mother's farm

Lisa purchased an older home with a large backyard that's perfect for her pack of collies to romp in. Six months after she bought the property, a total stranger knocked on her door and told her he's the true property owner. After investigating, it turns out the person who sold Lisa the property had forged the deed without the true owner's knowledge. What's true about Lisa's situation? A. Her homeowner's policy may protect her from loss. B. Her lender must initiate a quiet title action to resolve the issue. C. Her title insurance policy may protect her from loss. D. The county clerk where the documents were recorded is liable.

C. Her title insurance policy may protect her from loss.

What's the public trustee's role when a real estate transaction in Colorado uses the deed of trust as a security instrument? A. Acts as settlement agent at closing B. Assesses the amount of property tax to be paid into escrow C. Holds title to the property in trust while the loan is being repaid D. Records the transaction in county land records

C. Holds title to the property in trust while the loan is being repaid

Identifying the purpose of the appraisal leads the appraiser to do what next? A. Determine highest and best use B. Estimate value of land C. Identify data needed D. Use three approaches to estimate value

C. Identify data needed

Which of the following would be a description used for real property? A. Above-ground B. Free-standing C. In-ground D. Movable

C. In-ground

As a property manager for several residential landlords, Tomas must provide critical reports to each of the property owners for whom he works. Which of the following information points needs to be updated and issued monthly? A. Days late for tenant rental payments B. Fair market value of each property C. Income and expenses for each property D. Number of vacation days taken by property employees

C. Income and expenses for each property

The contract for deed is also known as a _______________. A. Alternative mortgage B. Deed of trust C. Installment land contract D. Seller carryback

C. Installment land contract

What does the I in the acronym MARIA stand for, when determining whether an item is a fixture? A. Inferred ownership of property B. Installment method of the fixture C. Intention in placing item on land D. Itemized list of the property's fixtures

C. Intention in placing item on land

Kevin is having an appraisal performed on a piece of property he's interested in buying. He's especially interested in hearing about the estimated rate of return the property could pull. What type of value is he interested in? A. Assessed value B. Insured value C. Investment value D. Value in use

C. Investment value

Which is a true statement about the capitalization process? A. It doesn't consider capital recapture. B. It provides a rate of depreciation for assets. C. It uses income to calculate value. D. The same capitalization rate is used for every investment.

C. It uses income to calculate value.

Ryanne is a tenant in a single-family home owned by Dominick. What type of interest does Ryanne have in the property? A. Freehold B. Homestead C. Leasehold D. Lifelong

C. Leasehold

Dawn owns a bungalow three miles from the city center. She rents it to Bob and Jan Siegel. Dawn is a ______. A. Beneficiary B. Lessee C. Lessor D. Trustee

C. Lessor

Colorado is a _____________ state. A. Combination theory B. Intermediate theory C. Lien theory D. Title theory

C. Lien theory

Which of the following is a passive type of real estate investment? A. Buy and hold B. Fix and flip C. Limited partnership D. Wholesale

C. Limited partnership

What information is listed on the promissory note? A. Appraised value of property pledged as collateral B. Legal description of the collateral property C. Loan amount and schedule of repayment D. Title history of the collateral property

C. Loan amount and schedule of repayment

A calculation that describes the amount being borrowed compared to the value of a property is called ______ ratio. A. Appraisal B. Housing C. Loan-to-value D. Total debt

C. Loan-to-value

You're the buyer's agent and are meeting with the seller for the first time. You present the seller with a brokerage disclosure form and explain that you represent the buyer. You then ask the seller to acknowledge receipt of the agency disclosure, but the seller refuses to sign the form. What do you do? A. Explain to the seller that unless the disclosure is acknowledged, the transaction can't continue. B. Leave immediately. C. Make a note of the seller's refusal on the agency disclosure, and the date it was presented. D. Tell the seller that he's required by law to sign the form.

C. Make a note of the seller's refusal on the agency disclosure, and the date it was presented.

What is the general purpose of an HOA? A. Act as an intermediary between disputing neighbors. B. Enact laws that keep certain people out of the community. C. Make and enforce rules for the properties in its jurisdiction. D. Recruit desirable residents to the community.

C. Make and enforce rules for the properties in its jurisdiction.

Liam is a contractor who discloses his right to place a lien on the properties where he works in the event of non-payment. What type of lien is this? A. Income tax B. Judgment C. Mechanic's D. Mortgage

C. Mechanic's

"Beginning at a stake and stones about 30 feet from the center of the brook that runs across the road Southwesterly from the dwelling house of the late Henry Nelson ..." is an example of what type of legal description? A. Benchmark B. Lot and block C. Metes and bounds D. Rectangular

C. Metes and bounds

If an item is permanently attached to a property, a court would most likely consider it a fixture if it passes which of the following tests? A. Adaptability of item to land's use B. Agreement of the parties C. Method of annexation D. Relationship of the parties

C. Method of annexation

Which environmental and health issue is best addressed by property owners and managers educating employees and tenants on how to both prevent it and to clean it up if it appears? A. Asbestos B. Hazardous waste C. Mold D. Radon

C. Mold

Gloria is renting a cottage from Edward when she lands a job in Canada. She still has six months left on her lease, but Edward tells her he usually has no problem renting the cottage and releases her with no penalty. What type of lease termination is this? A. Constructive eviction B. Expiration C. Mutual agreement D. Periodic estate termination

C. Mutual agreement

Leases may be terminated by expiration, eviction, or ______. A. Death B. Extermination C. Mutual agreement D. Relocation

C. Mutual agreement

In which of the following situations can the state use its power of escheat? A. Hannah passed away with no children and no debt, other than $83,000 left on her mortgage. B. Maury died, and his three children are upset because his estate isn't large enough to settle all of his debts. C. Nadine died with no heirs and no debt. D. Sam died with no will, and his son lives overseas.

C. Nadine died with no heirs and no debt.

Under Colorado law, when does a landlord have the right to enter the leased premises? A. Any time B. In an emergency C. Never, unless otherwise stated in the lease D. Two days prior to the lease expiration

C. Never, unless otherwise stated in the lease

Which one of the following statements about community property rights is true? A. All 50 states have community property rights. B. Community property rights are illegal in all 50 states. C. Nine states have community property rights. D. Only nine states out of 50 do not have community property rights.

C. Nine states have community property rights.

Which agency is charged with enforcing fair housing laws and holding all parties accountable for compliance with these laws and regulations? A. Office of Civil Rights B. Office of Equal Credit Opportunity C. Office of Fair Housing and Equal Opportunity D. Office of Housing and Community Development

C. Office of Fair Housing and Equal Opportunity

Reporting on local economic and other trends and activities will help you and the property owner plan and set goals. Which of the following trends would have the most negative impact on your property's vacancy rates? A. A local university is opening a branch campus in your neighborhood. B. Mortgage interest rates have risen drastically. C. One of your closest competitors has just finished a complete renovation of its property. D. Two major area employers are hiring.

C. One of your closest competitors has just finished a complete renovation of its property.

What kind of budget serves two primary purposes: to help property managers maximize profitability and to avoid unforeseen major expenses? A. Cash reserve B. Expense C. Operating D. Stabilized

C. Operating

June specified in her will how title to her home would transfer. At her death, alternate conveyance occurred. What likely happened? A. Fraud B. Intestate hereditary C. Operation of law D. Testate succession

C. Operation of law

Which agency is charged with enforcing fair housing laws and holding all parties accountable for compliance with these laws and regulations? A. Office of Civil Rights B. Office of Equal Credit C. Opportunity Office of Fair Housing and Equal Opportunity D. Office of Housing and Community Development

C. Opportunity Office of Fair Housing and Equal Opportunity

Which one of the following commercial property managers' duties requires that they keep the property and facilities in good condition and schedule and budget for needed repairs and upkeep work? A. Lease the property. B. Negotiate leases. C. Oversee the maintenance of buildings on the property. D. Qualify potential tenants.

C. Oversee the maintenance of buildings on the property.

When Saundra Neill signed a property management agreement with Henderson Properties, Inc., she made sure the agreement stated explicitly that Henderson owned each property she would be managing. In which section of the agreement would she find this verification? A. Description of duties B. Insurance provision C. Owner's covenants D. Signature of the parties

C. Owner's covenants

How are previous years' unpaid taxes handled at closing? A. Paid by buyer B. Paid by lender C. Paid by seller D. Prorated between buyer and seller

C. Paid by seller

According to Colorado law, unless otherwise stated in a lease, which of the following is a lessee's responsibility? A. Maintain and repair the premises B. Make the premises habitable before the lease commences C. Pay rent at the end of the rental period D. Pay rent in advance of the rental period

C. Pay rent at the end of the rental period

How can a foreclosure be stopped or prevented? A. Auction B. Fleeing the state C. Paying all outstanding liens against the property D. Refinancing

C. Paying all outstanding liens against the property

Building codes, zoning laws, and environmental legislation are examples of which force that influences property value? A. Economic B. Physical/environmental C. Political/governmental D. Social

C. Political/governmental

The ______ clause in a deed of trust allows the lender to foreclose non-judicially. A. Equitable right of redemption B. Non-judicial foreclosure C. Power of sale D. Statutory right of redemption

C. Power of sale

What's part of the licensee's role in the closing process? A. Nothing B. Paying the closing fees C. Preparing clients for closing D. Preparing the closing documents

C. Preparing clients for closing

It's time to change the air filters in a 10-unit apartment complex. What type of maintenance will you be performing? A. Corrective B. Custodial C. Preventive D. Tenant improvements

C. Preventive

Charlize is monitoring market indicators in a particular area for her client who wants to buy an oceanfront home. Which market indicator will tell her how much prices have fluctuated in the area over the past two years? A. Inventory rates B. New building permits C. Price levels D. Sales volume

C. Price levels

Property owners may keep, sell, or lease their rights. Those rights include which of the following? A. Collusion B. Encroachment C. Profit and license D. Tax-free status

C. Profit and license

What document should detail the typical reports a property manager needs to provide for a property owner? A. Employee policies and procedures manual B. Lease agreements C. Property management agreement D. Property management proposal

C. Property management agreement

Which party do the courts' decisions generally favor when there's conflict between zoning restrictions and individual property rights? A. Counties B. Planning boards C. Property owners D. States

C. Property owners

Rob had a contractor gut and renovate the kitchen in his condo after the first mortgage was recorded. He didn't like the quality of some of the work, and refused to pay the contractor. Soon after that, Rob left his job. For more than a year, he hasn't paid the mortgage, property taxes, or HOA assessments. Now his condo's in foreclosure. Which of the following is the correct priority of liens? A. Mechanic's lien, property tax, super lien, first mortgage B. Property tax, mechanic's lien, super lien, first mortgage C. Property tax, super lien, first mortgage, mechanic's lien D. Property tax, super lien, mechanic's lien, first mortgage

C. Property tax, super lien, first mortgage, mechanic's lien

The Colorado deed of trust uses a ______________, who will handle the release of title when the loan has been repaid in full. A. Common beneficiary B. Private trustee C. Public trustee D. Trustee in name

C. Public trustee

Colorado's deed of trust conveys title to the property to the _____________ to hold in trust until the loan is repaid. A. Colorado Real Estate B. Commission Public beneficiary elected by the financial commission C. Public trustee in the county where the property is located D. State treasurer

C. Public trustee in the county where the property is located

What type of arrangement allows the buyer to retain title to the property, but places a security interest in the property on behalf of the seller? A. A straight-term loan B. Land contract C. Purchase money mortgage D. Wrap-around mortgage

C. Purchase money mortgage

An inheritable freehold estate that's a fee simple defeasible (where the grantor can reclaim ownership) is also known as ______. A. Fee absolute B. Fee simple C. Qualified fee D. Tenancy at will

C. Qualified fee

How can Colorado real estate brokers help ensure appraisal accuracy for residential properties? A. Ask appraisers to use the cost approach B. Become a licensed appraiser in Colorado C. Record all seller concessions in the property transaction documents D. Work only with Certified General Appraisers

C. Record all seller concessions in the property transaction documents

What discriminatory lending practice by lenders resulted in the destruction of whole neighborhoods, with perfectly good housing left abandoned? A. Blockbusting B. Gerrymandering C. Redlining D. Steering

C. Redlining

What's the term for a lender refusing to lend in a specific area, often based on the area's minority make-up? A. Blockbusting B. Gerrymandering C. Redlining D. Steering

C. Redlining

For residential property managers dealing with prospective tenants, their responsibilities include checking ______. A. Bank account balances B. Employment drug test results C. References D. School transcripts

C. References

What's the best way for a property manager to assess an applicant's financial status? A. Call the applicant's current landlord and ask how often the rent was paid on time and if any checks bounced. B. Charge a higher application fee and see if the check clears. C. Request a rent-related credit history from a credit reporting company. D. Request the applicant's last three pay stubs.

C. Request a rent-related credit history from a credit reporting company.

As a(n) ______ property manager, you know there's a lot more turnover in your area of expertise. A. Office B. Real estate development C. Residential D. Retail

C. Residential

If a buyer intends to use part of his commercial property purchase as a residence, what form should you attach to the sales contract? A. Change of Status Addendum B. Land Conversion Addendum C. Residential Addendum D. Short Sale Addendum

C. Residential Addendum

What type of appraisal report contains minimal detail, and may be prepared for a specific client for an explicit, limited purpose? A. Appraisal report B. Oral report C. Restricted appraisal report D. Summary report

C. Restricted appraisal report

Which of the following defines capital recapture? A. Expected rate of return on an investment B. Process that uses income to calculate value C. Return of the original investment D. Return on investment

C. Return of the original investment

What classification of water rights includes the two smaller sub-classifications of navigable and non-navigable waterways? A. Groundwater B. Littoral C. Riparian D. The doctrine of appropriation

C. Riparian

What type of investment strategy is most similar to a 1031 tax-deferred exchange? A. Buy and hold B. Fix and flip C. Rolling over funds from one IRA into another D. Wholesaling

C. Rolling over funds from one IRA into another

When a seller-financed transaction in Colorado uses the contract for deed, the ______ must inform the county treasurer that the public trustee will be paying the property taxes, by filing a notice of transfer form. A. Borrower B. Public trustee C. Seller D. Settlement agent

C. Seller

The market for real estate in Chad's area has experienced a sudden increase in demand, and there aren't enough homes to go around. It seems like a bidding war ensues for every available property. What's the condition of the real estate market in Chad's area? A. Buyer's market B. Imbalanced market C. Seller's market D. Stagnant market

C. Seller's market

It's impossible to generalize the impact events in other areas have on local real estate values. Which characteristic of the real estate market does this refer to? A. Immobility B. Indestructibility C. Slow to respond D. Uniqueness

C. Slow to respond

A ______ is a tract of land divided into lots or plots and used for building purposes. A. Plat B. Site plan C. Subdivision D. Topographic map

C. Subdivision

Real estate is a _______, unlike stocks or bonds. A. Buy-and-hold investment B. Novice-friendly investment C. Tangible asset class D. Tax-free holding

C. Tangible asset class

Unlawful possession after the expiration of a lease is called ______. A. Estate for years B. Leasehold estate C. Tenancy at sufferance D. Tenancy at will

C. Tenancy at sufferance

Which type of ownership includes unity of time, title, interest, possession, and marriage? A. Freehold estate B. Joint tenancy C. Tenancy by the entirety D. Tenancy in common

C. Tenancy by the entirety

Which of the following describes a periodic tenancy? A. Tenancy after the lawful authority has expired, after which the landlord may evict B. Tenancy for an unknown period of time, with either party permitted to terminate the lease by giving notice C. Tenancy for a specified period of time that automatically renews itself for the same length of time unless one party terminates D. Tenancy of definite duration that terminates automatically and is inheritable

C. Tenancy for a specified period of time that automatically renews itself for the same length of time unless one party terminates

In which form of co-ownership is a person's ownership inheritable? A. Joint tenancy B. Tenancy by the entirety C. Tenancy in common D. Tenancy in severalty

C. Tenancy in common

Landlord Cindy rents a home to tenant Dave. While visiting, Dave's Aunt Myra got burnt while sifting logs in the built-in fire pit. According to Colorado law, unless stated in the lease, who is liable for Aunt Myra's injury? A. Aunt Myra B. Landlord Cindy C. Tenant Dave D. The fire pit manufacturer

C. Tenant Dave

Landlord Cindy rents a home to tenant Dave. While visiting, Dave's Aunt Myra got burnt while sifting logs in the built-in fire pit. According to Colorado law, unless stated in the lease, who is liable for Aunt Myra's injury? A. Aunt Myra D. Landlord Cindy C. Tenant Dave D. The fire pit manufacturer

C. Tenant Dave

What is the 200% rule as it relates to tax-deferred exchanges? A. The capital gains realized from the property sale cannot be more than 200% of the original purchase price. B. The capital gains realized from the property sale cannot be more than 200% of the sale price. C. The combined fair market value of the property (or properties) being exchanged into cannot be more than 200% of the relinquished property. D. The fair market value of the relinquished property must be 200% more than the property (or properties) being exchanged into.

C. The combined fair market value of the property (or properties) being exchanged into cannot be more than 200% of the relinquished property.

Rob is selling property in Colorado. No matter what county his property is in, what can he expect to pay for recording costs? A. He'll pay $10 for the first page and $2 for each subsequent page. B. He'll pay $5 for the first page and $1 to $5 for each subsequent page. C. The cost will vary depending on county. D. The seller doesn't pay for recording costs

C. The cost will vary depending on county.

In the CREC-approved deed of trust, who is designated to hold the property in trust? A. The buyer's broker B. The closing agent or company providing title insurance C. The county's public trustee D. The lender

C. The county's public trustee

What would happen if a lease contained provisions that violated a state's landlord-tenant law? A. The landlord or property owner would face civil charges. B. The lease would be enforceable with written consent from the tenant. C. The lease would be legally unenforceable. D. The written lease would supersede the law.

C. The lease would be legally unenforceable.

When calculating loan-to-value ratios, which of the following will be used by the lender? A. The appraisal value B. The greater of the sales price or appraisal value C. The lesser of the sales price or appraisal value D. The sales price

C. The lesser of the sales price or appraisal value

Who's responsible for verifying that a client knows what documentation to bring to closing? A. The client B. The lender C. The licensee who's representing the client D. The title insurance representative

C. The licensee who's representing the client

Before development of its new zipper factory begins, XYZ Corp. finds out that a section of the property it wants to build on is prone to flooding. It decides to dedicate this portion of the property to the government for public use to get out of handling the maintenance and drainage issues. The local government refuses. Why? A. Flood insurance wasn't offered. B. The government can't accept land dedications from corporations. C. The maintenance or cost to fix the problem might outweigh the benefits of its use. D. There's no consideration given from the grantor for warranties against flooding.

C. The maintenance or cost to fix the problem might outweigh the benefits of its use.

Which title insurance policy does the seller usually purchase? A. The buyer's extended coverage policy B. The lender's policy C. The owner's policy for the buyer D. The seller doesn't pay for any title insurance

C. The owner's policy for the buyer

The capitalization process uses a capitalization rate, which is based on what? A. Estimates of future sales B. Last year's sales C. The performance of comparable properties D. The stock market

C. The performance of comparable properties

Colorado's surface water is owned by ____________. A. The federal government B. The owners of the land above it C. The public D. Whomever has been granted the water by court decree

C. The public

What does it mean when the seller signs and dates the Seller's Property Disclosure form? A. The seller is accepting the buyer's purchase offer. B. The seller is acknowledging receipt of the disclosure. C. The seller is acknowledging the completeness and accuracy of the disclosure. D. The seller is guaranteeing that the property and its systems are in good condition.

C. The seller is acknowledging the completeness and accuracy of the disclosure.

If there's no potable water source on a property, which of the following is true? A. The buyer must do a well feasibility test prior to closing. B. The seller can't lawfully sell the property. C. The seller must disclose that fact on an addendum. D. The seller must provide a credit to the buyer.

C. The seller must disclose that fact on an addendum.

Which of the following is the best definition of an existing lien satisfaction fee? A. The buyer pays this fee before closing to the lender. It is a good faith deposit toward the mortgage. B. The buyer pays this fee to their broker, separately from the commission. It ensures the broker's full cooperation in the transaction. C. The seller pays this fee to the mortgage lender. It clears the balance of their current mortgage. D. This nominal fee is paid by either the buyer or seller, and it ensures that the buyer receives a clean title.

C. The seller pays this fee to the mortgage lender. It clears the balance of their current mortgage.

When looking at a rectangular government survey system map, where would Section 36 be located? A. The exact center of the township B. The northeastern-most section of the township C. The southeastern-most section of the township D. The southwestern-most section of the township

C. The southeastern-most section of the township

What's the minimum number of business days prior to closing that lenders have to provide borrowers with the Closing Disclosure form? A. Five B. Four C. Three D. Two

C. Three

Above all, why should a property manager have some knowledge of systems such as heating, ventilation, air conditioning, structural engineering, waterproofing, plumbing, electrical, gas, oil, water, security, maintenance, and elevators? A. To instruct tenants on how to make all repairs themselves B. To make income on the side C. To minimize the potential of receiving bad advice on repairs, replacements, and parts D. To seek personal enrichment

C. To minimize the potential of receiving bad advice on repairs, replacements, and parts

What is the purpose behind Appraiser Independence Requirements? A. To ensure that all appraisers are independently licensed B. To lobby the U.S. Congress and state legislatures to pass appraiser-promoting laws C. To protect appraisers' ability to assess an accurate value for a property by avoiding outside pressure or influence D. To provide appraisers with education and emergency funds to ensure that their appraisal practice is successful

C. To protect appraisers' ability to assess an accurate value for a property by avoiding outside pressure or influence

Of the following, which is considered a typical accrued adjustment? A. Heating oil in the tank B. Prepaid taxes C. Unpaid real estate taxes D. Utilities billed and paid in advance

C. Unpaid real estate taxes

Of the following, which is considered a typical accrued adjustment? A. Heating oil in the tank B. Prepaid taxes C. Unpaid real estate taxes D. Utilities billed and paid in advance

C. Unpaid real estate taxes

Which of the following is a typical accrued adjustment? A. Heating oil in the tank B. Prepaid taxes C. Unpaid real estate taxes D. Utilities billed and paid in advance

C. Unpaid real estate taxes

Which of the following is a typical accrued adjustment? A. Heating oil in the tank B. Prepaid taxes C. Unpaid real estate taxes D. Utilities billed and paid in advance

C. Unpaid real estate taxes

Lisa moved into a property in an overlay zone that restricts building height and visual impact along the skyline to preserve the magnificent view of Pike's Peak. Which overlay zone is this? A. Rural community overlay B. Urban growth overlay C. View protection overlay D. Watershed overlay

C. View protection overlay

Select the choice that best translates this clause into plain English. "Upon payment of all sums secured by this Mortgage, Mortgagee shall discharge this Mortgage without cost to Mortgagor. Mortgagor shall pay all costs of recordation, if any." A. The borrower must pay all recording fees if the property is transferred to another owner. B. The borrower will be charged a fee when the loan has been paid off to ensure that the satisfaction of the note is recorded. C. When the borrower has fully paid off the loan, the lender will record that the note is satisfied. D. When the borrower has fully paid off the loan, the lender will retain the note that is satisfied.

C. When the borrower has fully paid off the loan, the lender will record that the note is satisfied.

Hometrust Real Estate uses Heritage Title Company to hold all earnest money deposits. When is Hometrust required to submit closing instructions to Heritage? A. By the title deadline on the purchase contract B. Immediately preceding the closing C. When the earnest money is delivered to D. Heritage When the purchase contract is signed

C. When the earnest money is delivered to

Hometrust Real Estate uses Heritage Title Company to hold all earnest money deposits. When is Hometrust required to submit closing instructions to Heritage? A. By the title deadline on the purchase contract B. Immediately preceding the closing C. When the earnest money is delivered to Heritage D. When the purchase contract is signed

C. When the earnest money is delivered to Heritage

Like other agency agreements, the property management agreement details the terms of "employment" between the _______ (agent) and the _______ (client). A. Landlord; tenant B. Owner; property manager C. Owner; tenant D. Property manager; owner

D. Property manager; owner

Travis made the final payment on his loan according to the loan terms. What must the note holder do to acknowledge that the debt has been repaid? A. Assign the note to Travis. B. Destroy the note. C. Endorse the note and return it to Travis. D. Sign the note, mark it "paid in full," and return it to Travis.

D. Sign the note, mark it "paid in full," and return it to Travis.

Population growth, marriage rates, and attitudes toward education are examples of which force that influences property value? A. Economic B. Physical/environmental C. Political/governmental D. Social

D. Social

The gross income multiplier for an area is 12x. If the estimated annual rent is $10,000, what's the property's estimated value? A. $10,000 B. $100,000 C. $12,000 D. $120,000

D. $120,000

A property has 10 units and is 90% occupied. Rent is $500 per month. Total vacancy and collection loss equals 10%. What's the potential gross income? A. $4,500 B. $5,000 C. $54,000 D. $60,000

D. $60,000

The gross rent multiplier extracted from an area is 122. If the monthly rent is $800, what's the estimated value of the property? A. $11,712 B. $122,000 C. $8,000 D. $97,600

D. $97,600

Which of the following best describes a sales contract? A. A legally binding, oral contract between a property's potential buyer and a listing agent B. A legally binding, oral contract between a property's potential buyer and seller C. A legally binding, written contract between a property's potential buyer and a listing agent D. A legally binding, written contract between a property's potential buyer and seller

D. A legally binding, written contract between a property's potential buyer and seller

Jose is an investor who found and closed on an investment property, then decided to sell a property other than the one originally marked for the exchange. What is this an example of? A. A buy and hold B. A fickle investor C. A fix and flip D. A reverse tax-deferred exchange

D. A reverse tax-deferred exchange

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.

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.

Which of these groups is responsible for ensuring that states follow the minimum standards required of appraisers as stated in the Financial Institutions Reform, Recovery, and Enforcement Act of 1989? A. Appraisal Practices Board B. Appraisal Qualifications Board C. Appraisal Standards Board D. Appraisal Subcommittee

D. Appraisal Subcommittee

Via her broker, Irene makes an offer of $285,000 for Don's house. Don has decided he won't sell for less than $290,000. How does he convey this to Irene? A. By calling her B. By emailing her C. By having his broker call her broker D. By using a counter proposal

D. By using a counter proposal

What purpose do restrictive covenants serve? A. Covenants are created to keep certain types of people out of the community. B. Covenants are merely aesthetic suggestions; residents don't actually have to comply. C. Covenants are state laws that are mandated and enforced through local enabling statutes. D. Covenants preserve a community's overall aesthetics, presentation, and its residents' way of life.

D. Covenants preserve a community's overall aesthetics, presentation, and its residents' way of life.

Which agency enforces Title II under the Americans with Disabilities Act of 1990, when it relates to state and local public housing, housing assistance, and housing referrals? A. Department of Civil Rights B. Department of Equal Opportunity C. Department of Housing and Community Development D. Department of Housing and Urban Development

D. Department of Housing and Urban Development

Your clients, the Nguyens, have signed a contract for deed to purchase a property. What rights do the Nguyens receive? A. Equitable and justifiable title B. Equitable and legal title C. Equitable and legal title and right of possession D. Equitable title and possession of the property

D. Equitable title and possession of the property

When someone dies intestate with no heirs, the real property owned by that person may be taken by the state through _______. A. Bulldozer B. Descent C. Eminent domain D. Escheat

D. Escheat

Kirk is in the process of screening a new batch of tenant applicants. As part of his normal process and in an accordance with the USA PATRIOT Act, Kirk checks the SDN list. What is Kirk checking for? A. He is checking each applicant's credit history. B. He is checking to see if all of the applicants have Social Security numbers. C. He is checking to see if any of the applicants are on the FBI's Most Wanted list. D. He is screening his tenants against a specific list of specially designated nationals and blocked persons.

D. He is screening his tenants against a specific list of specially designated nationals and blocked persons.

Prior to the _______, there was no legal protection for women who endured sexual harassment from landlords and sellers when they attempted to obtain housing. A. Civil Rights Act of 1866 B. Fair Housing Amendments Act of 1988 C. Federal Fair Housing Act of 1968 D. Housing and Community Development Act of 1974

D. Housing and Community Development Act of 1974

Which act states that communities and facilities that meet certain criteria for providing housing to older persons are legally exempt from familial status discrimination? A. Fair Housing Amendments Act of 1988 B. Federal Fair Housing Act of 1968 C. Housing and Community Development Act of 1974 D. Housing for Older Persons Act of 1995

D. Housing for Older Persons Act of 1995

Harrison owns a shopping center that had significant retail client turnover in the past couple of years. He's asked the property manager, Prasad, to revamp the marketing plan to try to eliminate turnover. Prasad completed the market analysis; what step should he undertake next? A. Build an advertising campaign. B. Create a marketing message. C. Ensure that rents are appropriate. D. Identify appropriate retail targets.

D. Identify appropriate retail targets.

When is Colorado's Closing Instructions form required? A. If a managing broker conducts the closing in the brokerage office B. If an attorney conducts the closing C. If the brokerage holds the earnest money and also conducts the closing D. If the brokerage holds the earnest money but a title company conducts the closing

D. If the brokerage holds the earnest money but a title company conducts the closing

When is Colorado's Closing Instructions form required? A. If a managing broker conducts the closing in the brokerage office B. If an attorney conducts the closing C. If the brokerage holds the earnest money and also conducts the closing D. If the brokerage holds the earnest money but a title company conducts the closing

D. If the brokerage holds the earnest money but a title company conducts the closing

Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 states that its purpose, in part, is to require that real estate appraisals used in connection with federally related transactions be performed ______. A. By licensed real estate professionals B. By members of the Appraisal Foundation C. In the most expeditious and inexpensive way possible D. In writing, and in accordance with uniform standards

D. In writing, and in accordance with uniform standards

What's the definition of "potential gross income"? A. After-tax income B. Before-tax income C. Income received after expenses are deducted D. Income that a property could bring if fully leased

D. Income that a property could bring if fully leased

Why is it important that the legal description appears in real estate documents? A. It defines the duties an agent owes a client. B. It details the terms for a lease. C. It outlines all of the terms of a real estate purchase. D. It precisely locates the property and its boundaries.

D. It precisely locates the property and its boundaries.

Contrary to federal fair housing laws, the state where Katrina lives includes age as a protected class. Which of these statements about this conflict is true? A. Katrina can follow either the federal or the state law as long as she is consistent. B. Katrina is permitted to follow whichever law is least restrictive. C. Katrina must follow federal law for any federally related transaction. D. Katrina must follow the more restrictive of federal or state law.

D. Katrina must follow the more restrictive of federal or state law.

Which of the following describes a right-of-way easement? A. A dock that a neighbor shares with another for launching his boat B. A fence that divides two neighbors' properties C. A recreation area of a condo that anyone can rent out for parties D. Land that a railroad company runs its track through

D. Land that a railroad company runs its track through

To be an effective property manager, a licensee must be familiar with a variety of ______. A. Agency disclosures B. Employment contracts C. Independent contractor agreements D. Lease agreements

D. Lease agreements

Obviously, you can't lawfully convey something unless the parties agree on what's being conveyed. How is that determined? A. Acknowledgment B. Consideration C. Conveyance D. Legal description

D. Legal description

The landlord/owner is the _______ in a lease agreement. A. Leaser B. Leasing agent C. Lessee D. Lessor

D. Lessor

Which level of appraiser qualification in Colorado is limited to appraisals of one- to four-unit residential appraisals with specific transaction values? A. Ad Valorem Appraiser B. Certified General Appraiser C. Certified Residential Appraiser D. Licensed Appraiser

D. Licensed Appraiser

What attracts borrowers to adjustable rate mortgages? A. Balloon payment B. Convertible feature C. Initial cap D. Lower initial interest rate

D. Lower initial interest rate

Andrew Michaels has died and left a will. Before his heirs can inherit Andrew's vast estate, a legal process ensues to determine the will's validity and to ensure that it accurately reflects the deceased person's wishes. This is known as ____________. A. A lawsuit B. Heir litigation C. Indoctrination D. Probate

D. Probate

Tim and Tina Wells bought a home with absolutely beautiful perennial gardens in the back. The plantings were designed to bring birds, bees, and butterflies and to provide color for most of the year. When they did the final walkthrough, they were dismayed to see that many of the shrubs and flowering plants had been removed. They expected these plantings to be considered part of the real property because of the ________. A. Adaptation to the land B. Agreement of the parties C. Intention in placing the item D. Method of annexation

D. Method of annexation

Carla Ricardo has been offered her dream job in another state. She asks her current landlord to let her out of her lease early. The landlord agrees to do so, with no strings attached. Carla and her landlord have decided to terminate the contract through ______. A. Actual eviction B. Eviction C. Expiration D. Mutual agreement

D. Mutual agreement

Carla Ricardo has been offered her dream job in another state. She asks her current landlord to let her out of her lease early. The landlord agrees to do so, with no strings attached. Carla and her landlord have decided to terminate the contract through ______. A. Actual eviction B. Eviction C. Expiration D. Mutual agreement

D. Mutual agreement

Jan has been a model tenant, living in her apartment for almost five years when she lands her dream job in London. Because Joseph, her landlord, is so fond of her, he's accepted her six weeks' notice. It's the prime time of year for apartment rentals, so he releases her from her lease six months before it expires. The lease was terminated by _________. A. Abandonment B. Eviction C. Foreclosure D. Mutual agreement

D. Mutual agreement

Denise owns several homes that she rents out. She's just signed a lease with a new tenant and collected the tenant's security deposit. What is she required to do with the deposit? A. Denise has three business days in which to deposit the funds in an escrow account. B. Denise is required to hold the deposit in a separate interest-bearing account. C. Denise is required to keep the check uncashed in the tenant's file until the lease terminates. D. Nothing; Colorado law doesn't mandate how landlords handle security deposits.

D. Nothing; Colorado law doesn't mandate how landlords handle security deposits.

Anna and Cindy entered a contract to buy Jake's home. However, at the last minute, Cindy had a change of heart and wanted out of the deal. Anna asked another friend, Sally, if she wanted to take Cindy's place as a co-buyer of Jake's home. Everyone agreed to the substitution of Sally for Cindy on the contract. Of what is this an example? A. Assignment B. Fraud C. Mutual mistake D. Novation

D. Novation

Parker entered into a contract with seller Derrick to buy Derrick's home. Before finalizing the sale, Parker had a change of heart and decided to renounce all worldly possessions. He no longer wanted to buy Derrick's home, but his brother, Tom, agreed to take Parker's place as the buyer in the purchase contract. Of what is this an example? A. Assignment B. Fraud C. Misrepresentation D. Novation

D. Novation

Mary has a contract to buy her mother's house when her mother is finally ready to move to a senior living community. This way, the house stays in the family. After her mother finds a suitable senior apartment and moves, Mary writes a check for the agreed-upon amount, and her mother transfers the deed to Mary. What is happening in this scenario? A. Assignment B. Breach C. Novation D. Performance

D. Performance

An example of this type of leasehold estate is a month-to-month lease. A. Estate at sufferance B. Estate at will C. Estate for months D. Periodic estate

D. Periodic estate

Licensee Dionne pointed out to her buyer client the items in the house she was showing that would be considered real property. One of the key determinants, she explained, was whether the items were ______. A. Internal or external to the house B. Made of the same material as an interior or exterior wall C. Over or under a certain value D. Permanently affixed to the property

D. Permanently affixed to the property

To check the creditworthiness of a prospective tenant, the lease application typically requests ______. A. A credit score B. A resume C. Educational background D. Permission to run a credit report

D. Permission to run a credit report

A new development is going up just outside city limits, where the population is expected to grow significantly. The development will consist of commercial properties in one section near a main road, residential areas with single-family residences and multi-family condos, and a golf course at the center, with a border of single-family homes. What type of zoning is this an example of? A. Conforming B. Non-conforming C. Planned subdivision development D. Planned unit development

D. Planned unit development

Subdivision development is often guided by how the land is zoned, and also by the subdivision regulations set forth by the ______. A. County clerk B. Department of health C. Department of state D. Planning commission

D. Planning commission

Hannah is reviewing a lease application that concerns her. For which of these is Hannah allowed to reject the applicant? A. Being handicapped B. Having a mental disability C. Having children D. Poor credit

D. Poor credit

What's the best course of action when a Colorado seller will not be able to meet the inspection resolution deadline stated in the contract? A. Call the buyer's broker and ask for an extension of time. B. Don't worry, only the objection deadlines are important. C. Draft an inspection resolution and present it anyway. D. Prepare and present an Agreement to Amend/Extend the contract.

D. Prepare and present an Agreement to Amend/Extend the contract.

Which type of easement is acquired through years of use, with one person acquiring the permanent right to use another's property by doing so for an extended period of time? A. Easement appurtenant B. Easement by way of necessity C. Easement in gross D. Prescriptive easement

D. Prescriptive easement

What is the name of the FTC regulation that requires a landlord or property manager to obtain a tenant's written consent before sharing any information about the tenant with an unaffiliated third party? A. Don't tell B. Fair play C. Get it in writing D. Privacy rule

D. Privacy rule

The document that describes the loan amount and the terms for repaying and is attached to a security instrument is called the ______. A. Contract for deed B. Deed of trust C. Mortgage D. Promissory note

D. Promissory note

A property has just been foreclosed on. Which of the following describes the rules regarding lien priority? A. Junior and senior lien holders take priority and must prorate the amount they receive based on amount owed B. Largest liens are paid first, then in order of priority: property taxes, mechanic's liens, all others by date of filing C. Mechanic's liens take priority, with all others dependent on date filed. D. Property tax liens take priority, with all others following a "first in time" rule.

D. Property tax liens take priority, with all others following a "first in time" rule.

Which of these is a NOT a reason why agency disclosure is mandated? A. Before buyer representation came into being, buyers were often unaware that the agent they worked with actually represented the seller. B. Consumers may compromise their bargaining position if they're not aware how agency relationships work. C. Consumers often don't realize that the agency relationship guarantees that they benefit from the agent's fiduciary duties. D. Real estate transactions aren't covered by consumer protection laws; agency law and disclosures provide the only protections.

D. Real estate transactions aren't covered by consumer protection laws; agency law and disclosures provide the only protections.

Benjamin is interested in a piece of property but is curious about its exact legal description. What's one of the best ways to find this information? A. Ask neighbors where the property boundaries are. B. Look for the point of beginning. C. Look up the latitude and longitude coordinates of the property on Google Maps. D. Reference a previous property deed.

D. Reference a previous property deed.

Which term is defined as the increase in the amount of land by the permanent and gradual withdrawal of water? A. Accretion B. Alluvion C. Erosion D. Reliction

D. Reliction

Sarah is a property manager who needs to determine the amount of coverage for property insurance for her owner/client. If she uses the cost to purchase the property today as the basis, she would be using the __________method. A. Blanket coverage B. Cash value C. Depreciation D. Replacement Cost

D. Replacement cost

Which zoning type is used solely for developing home? A. Mixed-use development B. Office residence district C. Planned use development D. Residence district

D. Residence district

What type of interest involves the property ownership going back to the original owner at the end of the life estate? A. Dual ownership B. Pur autre vie C. Remainder interest D. Reversionary interest

D. Reversionary interest

Your client wants a spacious yard on which to plant multiple gardens. You think you've found the perfect property for her. What should you do to find out if there are any documented easements attached to the property that might impact your client's gardening goals? A. Ask around the neighborhood. B. Ask the current owners. C. Check the tax map of the area. D. Run a property title search.

D. Run a property title search.

Which approach to finding property value is most commonly used when appraising singlefamily homes for lending purposes? A. Cost approach B. Income capitalization approach C. Mortgage approach D. Sales comparison approach

D. Sales comparison approach

The number of houses sold over a period of time is reflected in what? A. Inventory rates B. New building permits C. Price levels D. Sales volume

D. Sales volume

Rachel loves convenience. As you can imagine, she was thrilled when she was able to finance her mortgage through the same institution where she deposits her payroll checks. Which of these most likely financed Rachel's mortgage? A. Insurance company B. Investment group C. Mortgage broker D. Savings and loan

D. Savings and loan

Annette really wants to move to San Francisco, but she's unsure whether she'll be able to afford to live there. Housing is very expensive because there simply is no room to build any new housing units. Which economic characteristic does this reflect? A. Area preference B. Improvements C. Permanence D. Scarcity

D. Scarcity

What's a good way to learn the property management side of real estate? A. Flip properties using your own money B. Ignore the tenants' complaints C. Manage properties on the side without telling your broker D. Seek a mentor's advice

D. Seek a mentor's advice

Frank owns a property on which there is walkway to the beach shared by his neighbors on either side. What is Frank's property? A. Dominant estate B. Gross estate C. Prescriptive estate D. Servient estate

D. Servient estate

Ted's seller client is adamant that she'll be uprooting and taking most of the fruit trees in the backyard when she sells her home. Ted makes a note to himself that he'll need to include the ______ of the trees in the comments for his listing. A. Abatement B. Annexation C. Defenestration D. Severance

D. Severance

The Housing and Community Development Act of 1974 added which protected class to federal fair housing law? A. Color B. Disability C. Religion D. Sex

D. Sex

The Housing and Community Development Act of 1974 added which protected class to federal fair housing law? A. Color B. Disability C. Religion D. Sex

D. Sex

Gretchen receives a call from a prospective employer wanting information on one of her tenants. In accordance with the FTC privacy rule, Gretchen can do which of the following? A. Ask the caller to submit his request in writing to her. B. Explain to the prospective employer that she cannot give out her tenant's information. C. Report the prospective employer to the authorities for attempting to solicit personal information. D. Share information about her tenant with the prospective employer without her tenant's written consent.

D. Share information about her tenant with the prospective employer without her tenant's written consent.

Examples of real property include which of the following? A. Above-ground pool and pool accessories B. Bathroom mirror hanging on a hook C. Photos and wall hangings D. Shelves attached to the wall with brackets

D. Shelves attached to the wall with brackets

If a seller wishes to sell Colorado property for less than what's owed to a lienholder, what form should be used? A. Addendum for Backup Contract B. Foreclosure Permission Form C. Lender Acceptance Addendum D. Short Sale Addendum

D. Short Sale Addendum

Nellie and Victor own a suburban ranch home and fell behind on paying their property taxes when Victor lost his job last year. Victor is working again, but they still haven't saved enough to pay their back taxes. They're worried that the county may begin foreclosure proceedings. What type of lien is this? A. Attachment B. General C. Special assessment D. Specific

D. Specific

Krista is obtaining a loan to buy a home. Her loan agreement consists of one document called a note and one called a deed of trust. What's the role of the note? A. Conveys legal title to the property to the lender B. Describes the home requiring the loan C. Lists the names of the mortgagor and mortgagee D. States who owes money to whom, how much, and how it will be repaid

D. States who owes money to whom, how much, and how it will be repaid

Regina has defaulted on the terms of her mortgage, and now her lender has foreclosed. The property was sold at a sheriff's sale three months ago. Regina suddenly learns that she has inherited a great deal of money. She wants her property back. Under a judicial foreclosure, what right might allow her to buy her property from the winner of the foreclosure auction? A. Equitable right of redemption B. Mortgagor right of redemption C. Power of sale D. Statutory right of redemption

D. Statutory right of redemption

Which of the following is the least specific method for describing a property? A. Lot and block description B. Metes and bounds description C. Rectangular government survey system description D. Street address

D. Street address

What well-known economic principle says that a property's value is determined by what it would cost to purchase a similar property? A. Conforming value B. Regression C. Similar cost principle D. Substitution

D. Substitution

You know a property's effective gross income and its operating expenses. How would you calculate the net operating income? A. Add income to tax deductions. B. Multiply annual return by .05 of the property's value. C. Multiply monthly income by 12. D. Subtract operating expenses from effective gross income.

D. Subtract operating expenses from effective gross income.

Under AIR, there are limits to the actions licensees may take to avoid influencing the appraiser's value. What are licensees NOT allowed to do? A. Ask an appraiser to consider additional, appropriate property information. B. Ask an appraiser to correct errors in an appraisal report. C. Ask for more detail or an explanation of the appraiser's value determination. D. Suggest additional business be contingent upon the appraiser's value determination for a current property.

D. Suggest additional business be contingent upon the appraiser's value determination for a current property.

Property managers spend a good deal of their time overseeing and managing others: maintenance people, staff, contractors, and sometimes even tenants. To be effective in this area, a property manager needs to have what type of skills? A. Architectural B. Leasing C. Purchasing D. Supervisory

D. Supervisory

The economic principle that tells us that when supply goes up, price goes down is commonly referred to as what? A. Conformity B. Price dropping C. Regression D. Supply and demand

D. Supply and demand

A professional, on-site measurement of the lot lines and dimensions of a property is known as a (n) ______. A. Abstract B. Appraisal C. Inspection D. Survey

D. Survey

Tenant Janine called landlord Tanya to report that one of the large stones supporting the bottom step of the entry staircase had fallen off. Tanya came by and simply placed the stone back into its slot. It seemed to be sturdy enough for the time being. Unfortunately, the step didn't hold for long and another tenant, Ann, was injured. According to Colorado law, who is liable for the Ann's injury? A. Ann B. Janine C. No one D. Tanya

D. Tanya

You've signed a Colorado exclusive right to sell agreement with a seller. As you're putting the for sale sign on her front lawn, a car pulls up. The driver starts peppering you with questions about the house and telling you about his housing needs. What should you do? A. Ask him if he's been pre-approved for a loan and, if so, the maximum loan amount. B. Ask him more about his needs and budget to determine whether he seems like a good candidate for the house. C. Offer to help him write up a contract. This might be your quickest sale yet! D. Tell him you represent the seller and provide him with the appropriate disclosure form.

D. Tell him you represent the seller and provide him with the appropriate disclosure form.

Which of the following describes a tenancy for years? A. Tenancy after the lawful authority has expired, after which the landlord may evict B. Tenancy for an unknown period of time, with either party permitted to terminate the lease by giving notice C. Tenancy for a specified period of time that automatically renews itself for the same length of time unless one party terminates D. Tenancy of definite duration that terminates automatically and is inheritable

D. Tenancy of definite duration that terminates automatically and is inheritable

You're working out a deal with a possible commercial tenant. The tenant has asked you to build out eight cubicles in the space to fit her needs. What type of maintenance will you be performing? A. Corrective B. Custodial C. Preventive D. Tenant improvements

D. Tenant improvements

The umbrella organization that's authorized by Congress to develop and oversee the standards and requirements real estate appraisers must follow is called ______. A. Appraisal Qualifications B. Board Appraisal Subcommittee C. FIRREA D. The Appraisal Foundation

D. The Appraisal Foundation

You're working with a buyer to make an offer on a foreclosed property in Colorado. Which contract form do you use to write up the offer? A. The commercial version of the Contract to Buy and Sell Real Estate B. The Contract to Buy and Sell Real Estate (Residential) C. The Contract to Buy and Sell Real Estate (Residential), including an addendum to provide foreclosure disclosures D. The Contract to Buy and Sell Real Estate specific to foreclosure sales

D. The Contract to Buy and Sell Real Estate specific to foreclosure sales

Which of the following best describes the purpose of a sales contract? A. To identify the buyer's agent/buyer agency relationship's terms B. To identify the landlord/tenant relationship's terms C. To identify the listing agent/buyer agency relationship's terms D. To identify the terms of a real estate sales transaction between the seller and the buyer

D. To identify the terms of a real estate sales transaction between the seller and the buyer

Which of these statements accurately describes finance- and housing-related legislation? A. As a stipulation of the Housing and Community Development Act, lenders must offer reasons when rejecting loan applications and must respond to all applications within 30 days. B. The Americans with Disabilities Act added familial status and disability (both physical and mental) to the existing protected classes. C. The Equal Credit Opportunity Act of 1974 required lenders to provide consumers with equal access to credit and prohibited credit discrimination based on just the three protected classes of race, color, or national origin. D. The Fair Housing Act of 1968 prohibited discrimination in the sale, rental, and financing of housing based on race, color, religion, or national origin.

D. The Fair Housing Act of 1968 prohibited discrimination in the sale, rental, and financing of housing based on race, color, religion, or national origin.

Based on the doctrine of prior appropriation, which governs the use of surface water in Colorado, how are water rights assigned? A. Court decrees determine who may use the water. B. Junior water rights take precedence over senior water rights. C. Landowners choose how to appropriate the surface water on their property. D. The first user to divert the water for beneficial use has the senior water right.

D. The first user to divert the water for beneficial use has the senior water right.

Your client is considering two separate investments. One has a low capitalization rate, and the other has a high capitalization rate. Which of the following is a true statement? A. The investment with the higher capitalization rate involves less risk. B. The investment with the higher capitalization rate will be valued higher. C. The investment with the lower capitalization rate involves more risk. D. The investment with the lower capitalization rate will be valued higher.

D. The investment with the lower capitalization rate will be valued higher.

Your client is considering two separate investments. One has a low capitalization rate, and the other has a high capitalization rate. Which of the following is a true statement? A. The investment with the higher capitalization rate involves less risk. B. The investment with the higher capitalization rate will be valued higher. C. The investment with the lower capitalization rate involves more risk. D. The investment with the lower capitalization rate will be valued higher.

D. The investment with the lower capitalization rate will be valued higher.

What's used to calculate the loan-to-value ratio? A. Appraised value B. Down payment C. Sales price D. The lower of the sales price or appraised value

D. The lower of the sales price or appraised value

Return on investment is another name for what? A. Capitalization rate B. Capital recapture C. Dividends D. The profit made from an investment

D. The profit made from an investment

How are creditors or lien holders paid during a foreclosure process? A. Lien holders are given a referee's deed to the property. B. Tax refunds are disbursed after supplying a foreclosure affidavit to the court. C. The property is portioned among the lien holders to have or to sell. D. The property is sold at auction and lien holders are paid from the proceeds of the sale.

D. The property is sold at auction and lien holders are paid from the proceeds of the sale.

What's loan-to-value ratio? A. A line of credit that the borrower can use to make improvements on a property B. A way to lower the interest rate on a loan C. The most secure type of loan D. The ratio of the amount of a loan to the value of the property

D. The ratio of the amount of a loan to the value of the property

In a typical transaction, which of these title defects is unlikely to cause a problem for the buyer? A. A faulty survey B. An unrecorded lien C. A past error in recording title transfer D. The seller's existing mortgage

D. The seller's existing mortgage

Seller Jamison is closing on his property with buyer Conrad. Jamison paid the current year's property taxes already. Is this a prepaid or accrued expense, and how will it be represented on the settlement statement? A. The taxes are an accrued expense, and will appear as a buyer credit and a seller debit. B. The taxes are an accrued expense, and will appear as a buyer debit and a seller credit. C. The taxes are a prepaid expense, and will appear as a buyer credit and a seller debit. D. The taxes are a prepaid expense, and will appear as a buyer debit and a seller credit.

D. The taxes are a prepaid expense, and will appear as a buyer debit and a seller credit.

What is the 95% rule as it relates to tax-deferred exchanges? A. The combined fair market value of the property (or properties) being exchanged into cannot be more than 95% of the relinquished property. B. The fair market value of the relinquished property must be 95% more than the property (or properties) being exchanged. C. The total value of the property being sold is at least 95% of the value of the profit to be made on the property (or properties) being exchanged. D. The total value of the property (or properties) being exchanged is at least 95% of the value of the property being sold.

D. The total value of the property (or properties) being exchanged is at least 95% of the value of the property being sold.

An office property manager has responsibility for which area? A. Determining and collecting assessments for capital expenditures and maintenance B. Negotiating residential leases C. Planning the construction of large projects, such as shopping centers, apartment buildings, and industrial parks D. Thinking about how much build out or change to the design, floor plan, and power requirements a tenant will require

D. Thinking about how much build out or change to the design, floor plan, and power requirements a tenant will require

Ralph is a landlord who owns several apartment buildings. Which of these actions does the federal Fair Housing Act prohibit Ralph from taking? A. Establishing a "no pets" policy for one of his apartment buildings B. Evicting a female tenant who's found to be distributing illegal drugs C. Refusing to show, sell, or rent property to smokers D. Threatening to evict a couple because they filed a complaint of harassment against him

D. Threatening to evict a couple because they filed a complaint of harassment against him

How is the concept "time is of the essence" reflected in Colorado's Contract to Buy and Sell Real Estate? A. Through a disclaimer at the top of the contract that notes, "Time is of the essence" and through an additional contract provision. B. Through an acknowledgment checkbox in the signature blocks C. Through a separate addendum to the contract. D. Through a specific contract provision noting that time is of the essence.

D. Through a specific contract provision noting that time is of the essence.

What's the purpose of the Short Sale Addendum? A. To discourage buyers with a loan contingency from making an offer. B. To enable the seller to avoid paying a commission to the listing agent. C. To facilitate a speedy transaction. D. To notify potential buyers that the sale of the property is contingent upon the lienholder's consent and approval.

D. To notify potential buyers that the sale of the property is contingent upon the lienholder's consent and approval.

A jewelry store is relocating from a mall to a free-standing building and is pulling all of the display cases out of the storefront. These cases belong to the jewelry store because they are ______. A. Franchise fixtures B. Improvements C. Jewelry fixtures D. Trade fixtures

D. Trade fixtures

The introduction of a development into an area can impact ____________, which, in turn, can have an effect on local businesses. A. Area visitors B. Market demographics C. Neighboring housing prices D. Traffic patterns

D. Traffic patterns

Eminent domain and condemnation occur when the ______ of land is involuntary. A. Re-survey B. Rezoning C. Survey D. Transfer

D. Transfer

How long must a taxpayer have lived in a home in order to claim a capital gain exclusion? A. One of the preceding two years B. The previous year only C. Three of the preceding five years D. Two of the preceding five years

D. Two of the preceding five years

What is a reliable, national source of vacancy rate data? A. Department of Commerce B. Department of Housing and Urban Development C. Office of Fair Housing D. U.S. Census Bureau

D. U.S. Census Bureau

What entity sets the standards for the appraisal report? A. Appraisal Ethics Association B. FIRREA C. State real estate license law D. USPAP

D. USPAP

What standards do appraisers follow? A. Appraisal bylaws B. License law C. NAR Rules of Ethics D. Uniform Standards of Professional Appraisal Practice

D. Uniform Standards of Professional Appraisal Practice

The __________ of real estate markets makes it impossible to generalize the impact events in other areas will have on real estate values. A. Immobility B. Indestructibility C. Slowness of response D. Uniqueness

D. Uniqueness

Which physical characteristic of land addresses the concept that land isn't interchangeable and one piece of land isn't exactly like another? A. Immobility B. Indestructibility C. Permanence of investment D. Uniqueness

D. Uniqueness

Blake is allowed to use his property in a way that's prohibited under current zoning ordinances, because those ordinances would cause undue hardship for him. What gives him this permission? A. Area variance B. Moratorium C. Special use permit D. Use variance

D. Use variance

Damien and Sandy bought a lot with a condemned house. They want to tear it down and build a duplex, so that they can live on one side and rent out the other. Unfortunately, the property is zoned single-family residential. If they can make a case for economic hardship, they may apply for and be granted a ________. A. Area variance B. Moratorium C. Special use permit D. Use variance

D. Use variance

Which factor that influences value considers the property's function? A. Demand B. Scarcity C. Transferability D. Utility

D. Utility

Which of these is something property managers should protect their tenants from? A. Landscape crews B. Rent increases C. Taxes D. Vandalism

D. Vandalism

Julian is glad that the property owner at the townhouse community he manages established a substantial capital reserve budget for unexpected expenses, like the new roofs needed after a hail storm. What are these types of expenses called? A. Fixed B. Operating C. Stable D. Variable

D. Variable

What does the USA PATRIOT Act require property managers and apartment owners to do with regard to tenants? A. Install hidden cameras in apartments that are rented to people of foreign descent. B. Keep a file on each tenant and report any suspicious activity. C. Search each tenants' apartment. D. Verify the citizenship of tenants.

D. Verify the citizenship of tenants.

Hope's mortgage created a lien against the property she purchased with the mortgage. What kind of lien is this? A. General B. Special assessment C. Vendor's D. Voluntary

D. Voluntary

Which form of alienation occurs with the owner's consent? A. Consensual B. Granting C. Involuntary D. Voluntary

D. Voluntary

A lender and a borrower sign a mortgage agreement, placing a(n) ______ lien against the borrower's home. A. Involuntary and general B. Involuntary and specific C. Voluntary and general D. Voluntary and specific

D. Voluntary and specific

Prior to the closing, one final inspection should take place. This is also known as the final what? A. Loan commitment B. Secondary home inspection C. Title commitment D. Walk-through

D. Walk-through

What do the property tax section check boxes on the Colorado Contract to Buy and Sell allow the parties to indicate? A. How property taxes will be prorated B. How special taxes will be prorated C. Whether or not previous years' taxes are to paid out of closing proceeds D. Whether property tax calculations are to be based on the most recent tax bill or the current mill levy

D. Whether property tax calculations are to be based on the most recent tax bill or the current mill levy

In a case of lease abandonment, what's the landlord's responsibility? A. A landlord may pursue the former tenant for unpaid rent, but may not rent the vacant property until the situation has been resolved. B. Nothing. The tenant abandoned the property. The landlord may legally charge rent until the natural lease expiration. C. The landlord must find another tenant within 10 days and may not pursue the former tenant for unpaid rent. D. While the former tenant is financially responsible for any unpaid rent, the landlord is responsible for attempting to find another tenant.

D. While the former tenant is financially responsible for any unpaid rent, the landlord is responsible for attempting to find another tenant.

Nesta works as a salaried on-site property manager for the owner of a 58-unit apartment complex. On a typical day, she'll collect rent from current tenants, assign work to other employees, show units to prospective tenants, and negotiate leases with applicants who've passed the application process. Is Nesta required to have a real estate license? A. No, because she's a salaried employee. B. No, because she works on site. C. Yes, she assigns work to other employees, so she must be licensed as an employing broker. D. Yes, she's performing real estate activities requiring a license, such as negotiating leases.

D. Yes, she's performing real estate activities requiring a license, such as negotiating leases.

A sole proprietor is a familiar business model. If you practice real estate as a sole proprietor, which of the following is a true statement? A. You are on a salary. B. You cannot be held liable for your actions. C. You have a partner. D. You're an independent contractor.

D. You're an independent contractor.

What type of police power allows cities to identify specific uses for an area? A. Condemnation B. Eminent domain C. Escheat D. Zoning

D. Zoning