Exam Questions CE-SHOP
What is 800 divided by 30%?
2,666.66
Tom is an Arizona homeowner who had a judgment lien levied against him, but the Arizona Homestead Exemption will allow him to exempt part of his primary residence from seizure for payment of debts. What is the maximum amount Arizona homeowners can exempt?
250,000 for an individual or married couple
Select the statement that accurately reflects the type of deed used for the transfer.
A deed of trust conveys real estate to a trustee for the beneficiary named in the deed.
You're a builder who wants to follow the national standards for measuring the square footage of a home you've built. Which of the following areas do you include?
A master Suite
Bethany's Arizona house was being sold by her estate executor after her death. Kiersten's real estate broker presented Kiersten's offer on the house through an electronic contracting system. The estate's executor accepted the offer by signing electronically. The executor subsequently refused to abide by the contract, and Kiersten is suing to enforce the contract. Which of these statements is true?
A properly executed electronic contract is as enforceable as a similar paper contract.
Which of the following would constitute a violation of fair housing laws?
A property owner tells an Asian family there are no apartments available to rent when there are several; the property owner doesn't like the way Asian cuisine smells when it's being cooked, so he doesn't want any Asian tenants.
In Arizona, it is illegal to sell subdivided property units until _______.
A public report has been issued.
Who usually performs the tasks of a closing agent?
Attorney, title company representative, or real estate broker
Which of the following statements regarding Broker record retention is true?
Brokers must maintain every transactional document, including the earnest money receipts, for five years.
Daniel has several properties listed around town. He receives a call from a prospective buyer who is very interested in one of the properties and wants to schedule a showing. What should Daniel do?
Disclose his agency relationship with the seller to the prospective buyer.
Which type of agent is an escrow officer?
Limited agent
Your client Rory's house is under contract for $530,000. Rory's mortgage payoff is $309,000, and he'll pay 5% commission. Not accounting for any other expenses, what will Rory net from the sale of his home?
$194,500 ( 530,000 X .95) =503,500 ( 503,500 - 309,000) = 194,500
The Arizona Registrar of Contractors has found Darren guilty for the third time of contracting without a license and has levied penalties against him. If each violation has been assigned the maximum fine amount, what is the maximum Darren will be fined?
$2,500, plus an 83% surcharge
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?
$4,025 (115,000 x 0.035) = $4,025
Tiffany, an investor, wants to net 12% profit after paying a brokerage commission of 7%. If her original purchase price was $349,000, what's the minimum offer she can accept? Round to nearest whole dollar.
$420,301
Frank owns a property on which there is walkway to the beach shared by his neighbors on either side. What is Frank's property?
(Servient estate)
Which of the following would be considered a foreign person according to FIRPTA?
A company incorporated in France with regional development offices in the U.S.
What is the best describes a tenant's right to quiet enjoyment?
A tenant has the right to enjoy lawful use of the property without being dispossessed or trespassed upon, even by the landlord.
In relation to a 1031 exchange, which of these represents "boot?"
Any cash funds the investor receives from the sale proceeds of a 1031 property. Cash funds an investor receives from the sale proceeds of a 1031 property are referred to as boot, and boot is taxable.
What's a record?
Anything that is documented as part of business
Which of the following documents is an example of a promissory note?
Borrower Keesha just signed a document that states that she pledges to pay back her mortgage loan of $310,000.
You have a listing agreement with Sam. Because of this, what is Sam's relationship to you?
Client
What's the term for an extended period of time during which banks experience more withdrawals than deposits?
Disintermediation
Which of the following is true about effluent in Arizona?
Effluent is treated to varying degrees of cleanliness, depending on how it will be reused.
Which type of deed conveys real property from a decedent's estate to a buyer?
Executor's deed
In general, what is the term for a person who's been placed in a position of loyalty and trust?
Fiduciary
If you send a certified five-day pay or quit notice to a tenant who is behind on rent payments, when can you consider the letter to have arrived?
Five days from the date it was mailed. If the notice is sent by registered or certified mail, then the tenant is considered to have received the notice five days after it was mailed.
Which of the following Arizona residential sales contract provisions is used to identify which items are to remain with the property?
Fixtures and personal property
What may happen if a property lies in a designated floodplain?
Flood insurance may be required. So lenders can protect their investment.
In the consideration of real property and personal property, severance is ______
In the consideration of real property and personal property, severance is ______
Which of the following would used to describe an item that is both a fixture and real property?
In-ground
Which act prevents the fraudulent sale of property sight unseen through the regulation of land sales across state lines?
Interstate Land Sales Full Disclosure Act
What are accrued expense items?
Items to be divided proportionately between the buyer and seller that the seller owes
Related to purchase contracts, which of these is FALSE?
Joey can write a purchase contract without identifying himself or anyone else as the buyer.
What does a void contract lack that makes it void?
Legality
Which of the following incidents would NOT require a licensee to notify the Arizona Department of Real Estate?
Loan Application
What Are MBS (Mortgage Backed Securities)
Mortgages that are pooled together and sold to investors on the secondary mortgage market.
Which of the following is the basis for the Clear Cooperation policy?
NAR Code of Ethics. The Clear Cooperation policy is founded on NAR Code of Ethics principles.
Which occupancy type is eligible for a VA loan?
Owner-Occupied. Borrowers must certify that they will occupy the residence purchased with the VA loan.
Which of the following outstanding issues could an abstract of title reveal?
Owners, property liens, taxes, and easements. Owners, property liens, taxes, and easements are all a part of the abstract of title. It is advisable to have this reviewed by an attorney so there's no surprises.
ophie only has 15% to put down on her new home. What might the lender require in order for Sophie to obtain conventional financing?
Private mortgage insurance
Which type of pest may make mud tubes—tunnels that run along the walls—or shed tiny wings?
Termites. These are indications of termite infestation.
When a lender has a lien on a property via a mortgage, what rights does the lender hold?
The right to foreclose. But the lender does not carry rights of possession or control.
During a home inspection, if a soil sample is taken near an underground oil tank and the soil is contaminated, who is responsible for the clean-up and tank's decommissioning?
The seller
Are landowners ever permitted to use their property for a purpose inconsistent with zoning ordinances?
Yes, a variance or special use permit may be allowed.
Which of the following is a quality of a marketable title?
(It allows the owner to mortgage the property.) When landowners have marketable titles, they can mortgage their land.
A strip mall valued at $850,000 has a $67,500 annual net operating income. What is the capitalization rate for the strip mall?
7.9% The cap rate formula is: net operating income ÷ value = rate (I ÷ V = R). So $67,500 ÷ $850,000 = .079 or 7.9%. This formula can work in reverse as well: value (purchase price) × cap rate = net operating income (V × R = I).
Greg has referred several prospective tenants to the property manager of the apartment complex in which he lives. How might Greg be compensated for his services?
A $150 rent credit for each referred tenant
What's the definition of a marketable title?
A title that is clear and free of encumbrances
Arizona's Groundwater Management Act of 1980? GMA Helps with what?
Adoption of stricter drinking water quality standards. Creation of active management areas. The Assured Water Supply Program. The GMA is concerned with water conservation and storage. Another branch of the state government deals with water quality.
onathon set up an advertising campaign to promote Whispering Pines timeshare sales. The commissioner requested copies of the advertising material. What must the advertising include to be in compliance?
An accurate representation of the property's material facts according to the public report, and drawings of proposed improvements if the project is still being developed.
What is a proration?
An amount apportioned according to use. Prorations at closing are amounts apportioned according to use and include items such as property taxes and homeowners association assessments.
What type of measurement is used to describe the size of a two-dimensional shape?
Area
You're the listing agent representing Stacey, the seller. Barb is a potential buyer who's made an offer through her agent, Daniel. Who are the third parties in this transaction?
Barb and Daniel
Who performs escrow and closing services?
Closing agent
Which factor influences property value and addresses questions such as, "What's the market like?" and "Are there more buyers than sellers, or vice versa?"
Demand
A buyer, hoping to beat out all other offers, included a clause in the offer that reads, "Buyer to beat all competing offers by $1,000 up to a price of $700,000. Seller to provide copies of competing offer to buyer on acceptance." What type of offer is this?
Escalator Offer
Janice wanted to sell her townhome, and her neighbor was considering buying it. She wanted to put it on the market while she waited to find out if her neighbor was going to buy. In order to receive the best possible representation but avoid paying a commission if her neighbor buys the property, which type of listing agreement would best suit Janice's needs?
Exclusive agency
In which of the following types of contracts does one or more of the contract's terms still need to be completed?
Executory contract
Which type of estate gives the owner condition-free interest in a property? This type of estate conveys the highest possible interest.
Fee simple absolute
Katy's home that was listed for sale was destroyed by fire. Under which of these methods will her listing agreement terminate?
Force of law. The listing agreement in this situation will terminate based on force of law (destruction of property).
Which statement most accurately describes the role and function of Ginnie Mae in the secondary mortgage market?
Ginnie Mae insures MBSs made up of government-insured or -guaranteed loans. MBS Mortgage Backed Securities
Jenelle is an Arizona listing broker who's working with Adam, a New Mexico broker who has a buyer client for Jenelle's listing. Which of the following activities is Adam allowed to perform in Arizona?
He can't conduct any real estate activities, including marketing, negotiating, or placing signs.
If a licensee requires outside intervention to collect his legitimately earned compensation from his employing broker, he would do so in court, and he would need to prove that ______.
He held an active license at the time of the transaction.
You should never advise buyer and seller clients to pay contractors ______.
In cash
Which of the following is a violation of Arizona license laws?
Inducing a party to modify/break an existing real estate employment agreement for personal gain
Which offer would be the most appealing to a seller?
It depends on the seller's needs and motivations. The first principle of evaluating multiple offers is this: The appeal of any offer comes down to the seller's needs and motivations.
Payment history, age of accounts, credit usage rate, and inquiries are factors considered in calculating a credit score. Which of the following is also considered?
Length of credit history
Tonia is buying a new home. She has a down payment of $30,000 and will obtain a $250,000 mortgage from a local bank to make up the remainder of the purchase price. What is this an example of?
Leveraging
Which of the following statements about licensee compensation in Arizona is true?
Licensees may only receive compensation for real estate services through their own employing broker.
A title officer will perform a title search in order to ______.
Make sure there are no clouds on the title
If a change must be made to un-subdivided land after a public report has been issued, what must the owner do?
Notify the commissioner.
Which of the following is prohibited under federal fair housing laws?
Offering different terms, conditions, or privileges based on protected class status
Which agency is charged with enforcing fair housing laws and holding all parties accountable for compliance with these laws and regulations?
Office of Fair Housing and Equal Opportunity
What's the name of the clause included in a finance instrument that requires the lender to release a portion of the property from the lien when a part of the debt has been paid?
Partial release. This is a partial release clause that is typically used by developers who need to sell lots in a new subdivision.
Which of the following business entities may apply for an employing broker's license in Arizona?
Partnership
What's the property manager's primary function?
Produce the greatest net return for the owner.
Over the life span of owning a home, homeowners may be able to take advantage of what tax benefits?
Property tax deduction
What does an Arizona homeowner lose when choosing to use deed in lieu of foreclosure?
Protection from deficiency judgment
Which of these fits the description of the abandonment remedy?
Rats drove Willard out of his apartment.
Non-trust funds, as long as they're not commingled with trust funds, are not bound by
Real estate laws
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?
Reference a previous property deed.
Which of the following is a significant drawback to an FHA loan as compared to conventional financing?
Required mortgage insurance must remain in place for the life of the loan.
Marsha leases a ranch house in a bedroom community. When the owner decided to sell the house, Marsha was given the opportunity to purchase it but declined. What does Marsha have?
Right of first refusal
Which of the following individuals would NOT be qualified to serve as a Real Estate Advisory Board member in Arizona?
Ronan retired several years ago after working for a multi-family residential rental brokerage for over a decade. Why? Members on the Real Estate Advisory Board must have been engaged in practicing real estate for at least five years immediately preceding an appointment.
Sam grants Steve a license to hunt deer on his property. Which of the following statements about the license is true?
Sam can revoke the license at any time.
Velma accepted Rigli's offer on her acreage. The offer's contingent on Rigli's sale of his current home. She accepted the offer on the condition that she can continue to actively market her property. What's likely to happen if Velma gets a non-contingent offer on her property?
She'll give Rigli a set amount of time to remove the contingency (usually 24 hours).
n reference to a real estate transaction, which of these terms does NOT refer to the process in which title is actually conveyed and proceeds disbursed?
Standard terms used to describe the process whereby title is transferred and funds are disbursed include closing, settlement, and consummation: Not Termination
On which principle of value is the sales comparison approach based?
Substitution. The sales comparison approach is based on the principle of substitution. It compares similar properties to the subject property and makes adjustments to determine value based on the sales price of the comparables.
Your buyer client just got an estimate from an unlicensed handyman for work she wants done on her home after closing. What advice would you give her?
Suggest she get a minimum of three estimates for the work.
Kenneth plans to shop around for his mortgage loan to be sure he's getting the best interest rate and terms. What lender-provided document outlines loan rates and fees so he can make comparisons?
The Loan Estimate permits Kenneth to comparison shop. The Loan Estimate, issued three days after loan application, permits borrowers to compare loan terms between various lenders and loan programs.
In a seller agency relationship, to which party does the licensee owe undivided loyalty?
The Seller
For tax years 2018 to 2025, a borrower can write off the interest on a home equity loan only if ______.
The funds are used to buy, build, or improve the home that secures the loan
Which of these steps does an Arizona lender take after borrower default on a loan secured by a mortgage?
The lender accelerates the loan and files a court action requesting foreclosure.
What piece of information must ALWAYS be included in Arizona real estate advertisements?
The licensees' and brokerage's names
What is a loss payee?
The party to whom the claim from a loss is to be paid
New water claims can't be made on Colorado River water because ______.
The water is federally regulated and isn't managed under the doctrine of prior appropriation.
Landlord William has sold an apartment complex to Christina. What happens to those tenants' security deposits?
They go to Christina, who is now responsible for them.
What is the minimum number of estimates that buyers and sellers should get from contractors for work they want done on their home?
Three
A jewelry store is relocating from a mall to a free-standing building and is pulling all of its display cases out of the storefront. These cases belong to the jewelry store because they are ______.
Trade fixtures