National Exam Practice questions****
A buyer with a $350,000 loan has a monthly principal and interest payment of $2,102.36. If $1,801.23 is interest, what's the new principal balance after the first payment is applied? a. $340,987.46 b. $347,897.64 c. $348,198.77 d. $349,698.87
d. $349,698.87 If $1,801.23 of the $2,102.36 is interest, that leaves $301.13 for principal. Subtract $301.13 from $350,000 for a new principal balance of $349,698.87.
Rennie owns a 240-foot by 130-foot lot. How do you calculate the perimeter? a. Add the length and width and divide by two. b. Add two times the length to two times the width. c. Multiply 240 by 130. d. Multiply 240 by 130, then multiply by two.
b. Add two times the length to two times the width. The perimeter equals the sum of the lengths of each side of the shape (240 × 2) + (130 × 2).
What is a special flood hazard area? a. a basement b. An area where flood insurance is mandatory c. areas that have flooded in the last two years d. a sloped property
b. An area where flood insurance is mandatory This is an area in which the National Flood Insurance Program's floodplain management regulations must be enforced and where the purchase of flood insurance is mandatory.
Which of the following agreements gives you the sole right to represent a buyer? a. exclusive listing agreement b. exclusive right-to-list agreement c. Exclusive right-to-represent agreement d. Exclusive right-to-sell agreement
c. Exclusive right-to-represent agreement
A requirement that all property owners in a subdivision have a six-foot privacy fence surrounding their entire property is an example of a _______, a. deed b. doctrine of laches c. restrictive covenant d. setback
c. restrictive covenant
Water buildup, ice damming, and a fascia damaged by moisture are common ______ issues. a. chimney b. foundation c. roof d. window
c. roof
Clint is interested in making an offer on a house with hardwood floors that will need to be replaced. The hallway is 18' x 6'. The kitchen is 20' x 30'. The living room is 25' x 45'. Two bedrooms are 12' x 16', and the master bedroom is 14' x 20'. If the cost of the flooring is $5.48 per square foot, and the cost of installation is $1.49 per square foot, how much can Clint plan to spend to replace the floors? a. $13,683.56 b. $16,065.85 c. $16,309.80 d. $17,404.09
d. $17,404.09
Shelly's listing sold for $650,000. The total commission generated from the sale is 5%, of which Shelly's brokerage keeps half. Shelly has an agreement with her broker that she earns 90% of commission generated. How much will she be paid for this sale? a. $14,625 b. $16,250 c. $29,250 d. $32,500
a. $14,625 The total commission paid is $32,500 ($650,000 × .05). Half of this is paid to Shelly's brokerage ($16,250). Of that, Shelly gets 90% ($14,625).
Buyer Maria and seller Doug are closing on June 1. Maria's mortgage loan is $927.86, and $871.86 will go to interest in the first month. Maria will have to pre-pay interest for June using the 360-day proration method. If Doug owns the closing day, what Maria's prepaid interest cost be at closing? a. $842.74 b. $871.80 c. $896.97 d. $927.90
a. $842.74 Calculate the daily interest rate for 30 days ($871.86 ÷ 30 = $29.06). Because Doug owns the closing day, Maria will pre-pay interest for 29 days, June 2 - 30, so $842.74 ($29.06 x 29).
Which one of the following is an example of group boycotting? a. Acme Realty offers discounted services. Berringer Realty and Hawthorne Real Estate Group decide not to show any of Acme's listings and prohibit showings to Acme buyers to drive Acme out of business. b. Jamie purchases billboards in Peyton Heights and Crestview, but not in Sandlot Valley. c. Penny Printing produces business cards. Unhappy with the quality it received, Beta Brokerage has decided to no longer purchase their business cards from Penny Printing. d. Tara isn't happy with the service she received when placing ads in a local publication. She decides to no longer advertise with it.
a. Acme Realty offers discounted services. Berringer Realty and Hawthorne Real Estate Group decide not to show any of Acme's listings and prohibit showings to Acme buyers to drive Acme out of business.
Margot and Steve owned several rental properties at the time of their divorce. The divorce decree gave ownership to Margot in return for a cash payment by Steve. Fast forward six years, and Margot is ready to sell the properties. She soon discovers, though, that Steve's name is still on the title. What's her best course of action? a. Ask Steve to generate quit-claim deeds on the properties. b. file a suit to quiet title c. Show the title company a copy of the divorce decree granting her ownership. d. Take Steve back to court to force him to turn the properties over to her.
a. Ask Steve to generate quit-claim deeds on the properties.
Citytown officials know that they have an abandoned factory site that has been identified for cleanup under CERCLA. When city officials tried to trace the ownership of the property, they found several shell corporations but can't determine which individual or corporate entity actually owns the property. What is a likely outcome of this situation? a. Citytown will apply to the CERCLA trust fund for cleanup costs. b. Citytown will bill the EPA for cleanup costs. c. Citytown will end up paying for cleanup d. The factory site won't be cleaned up and will sit empty.
a. Citytown will apply to the CERCLA trust fund for cleanup costs. CERCLA established a trust fund to finance both cleanup and enforcement actions. This fund is sometimes called the Superfund.
One of the following licensee's actions would constitute commingling. Which is it? a. Cynthia deposited her client's earnest money check into the firm's operating account. b. Jenson deposited his client's earnest money check into the firm's trust account. c. Jessica deposited her commission check into her brokerage firm's operating account. d. Sean withdrew funds from the firm's operating funds to pay the firm's office rent.
a. Cynthia deposited her client's earnest money check into the firm's operating account.
What must sellers provide prospective buyers of homes built prior to 1978, in addition to the federally required disclosure form? a. EPA lead safety pamphlet b. List of reputable home improvement contractors c. Verbal assurance that the home is lead-free before offering it for sale d. Written proof that the home is lead-free
a. EPA lead safety pamphlet Sellers must also provide a lead safety pamphlet to these prospective buyers.
Which of the following is an example of commingling? a. Mixing earnest money with personal funds b. mixing two earnest money deposits c. Paying licensee bonuses from forfeited escrow deposits d. Using escrow funds to pay business expenses
a. Mixing earnest money with personal funds
When a contract doesn't provide specific dates for when the terms need to be met, what should the parties assume regarding performance of the contract? a. Performance must take place within a "reasonable time." b. The contract will be done when all of the parties have met their obligations and not before. c. The courts will decide if the parties have met their respective contractual obligations. d. This contract provides an opportunity to sue for breach of contract.
a. Performance must take place within a "reasonable time." When no specific dates are provided, the parties should assume that performance of the contract must take place within a "reasonable time."
Sam grants Steve a license to hunt deer on his property. Which of the following statements about the license is true? a. Sam can revoke the license at any time. b. The license is a permanent privilege. c. the license is assignable d. The license is inheritable.
a. Sam can revoke the license at any time.
Sheila is unable to use her designated timeshare week this year. What will happen? a. She can exchange the week for another. b. She won't have to pay the annual maintenance fee this year. c. The owners association will reimburse her for the week. d. There is nothing she can do if she can't use the week.
a. She can exchange the week for another.
Which of these statements most accurately represents existing federal antitrust legislation? a. The Clayton Act supports the Sherman Antitrust Act's purpose of prohibiting monopolies by prohibiting mergers or acquisitions that would create a monopoly. b. The Federal Trade Commission Act established the Sherman and Clayton acts to prevent collusive activities that limit competition. c. The Federal Trade Commission Act prevents one large firm from acquiring another similar firm that would result in a restraint of trade. d. The Sherman Antitrust Act was passed to supplement the Clayton Act in an effort to prevent mergers that create monopolies.
a. The Clayton Act supports the Sherman Antitrust Act's purpose of prohibiting monopolies by prohibiting mergers or acquisitions that would create a monopoly. The Clayton Act of 1914 supports the Sherman Antitrust Act of 1890 by prohibiting mergers or acquisitions that would result in an unreasonable reduction in competition or the creation of monopolies.
Seller Gina feels awful that Martha, who was going to buy her property, lost her job. Gina decides to _________ Martha from the purchase contract. a. assign b. reform c. release d. rescind
c. release
What's the relationship between TILA, RESPA, and TRID? a. The Dodd-Frank Act requires that lenders use the TILA-RESPA Integrated Disclosures (TRID). b. TILA and RESPA require lenders to use TRID. c. TILA, RESPA, and TRID mandate the lender disclosures required for federally related transactions. d. TRID mandates the type of disclosures for TILA- and RESPA-related transactions.
a. The Dodd-Frank Act requires that lenders use the TILA-RESPA Integrated Disclosures (TRID).
You're explaining to your client that using electronic documents and signatures simplifies the home buying process. Your client is skeptical about these signatures. You describe the Uniform Electronic Transactions Act (UETA) and tell your client ______. a. The UETA gives electronic signatures the same legal weight as "wet" signatures b. The UETA provides a guarantee that electronic signatures will hold up in court c. The UETA requires states to permit electronic signatures on all real estate-related documents d. UETA takes precedence over state laws
a. The UETA gives electronic signatures the same legal weight as "wet" signatures
Which of these statements accurately represents one of the required elements in a deed? a. The deed includes an act of conveyance. b. The grantee must be legally competent. c. the grantee must be of legal age d. The grantee must sign the deed and provide consideration.
a. The deed includes an act of conveyance. The grantor is the seller; the grantee is the buyer. The grantor must sign the deed, be of legal capacity, and be positively identified. The deed must include an act of conveyance.
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
Allen and Lewis are friends who each recently purchased real estate. Allen purchased a patio home in a small town an hour from the city, while Lewis purchased a condo in a really hot area near the city center. Although they paid similar amounts for their properties, Lewis' condo is worth much more two years later. Which economic characteristic does this demonstrate? a. area preference b. improvements c. permanence d. scarcity
a. area preference Just remember the mantra "location, location, location!" A property's value is largely dependent on where it is and the desirability of that location.
Who typically performs an appraisal? a. certified appraiser b. inspector c. real estate licensee d. tax accessor
a. certified appraiser
The Baxters are looking at a $425,000 home. They have $90,000 in savings to use as a down payment. What loan type(s) would likely be the best option for them? a. conventional b. FHA c. FHA, VA, or conventional d. VA
a. conventional A $90,000 down payment would be a little more than 20% down ($90,000 ÷ $425,000 = 0.212, or 21.2%). The Baxters should qualify for a conventional loan with that much to put down on the home, and will avoid having to buy mortgage insurance.
What are the two types of physical depreciation? a. curable and incurable b. Economic and material c. internal and external d. Qualitative and quantitative
a. curable and incurable Two types of physical depreciation are curable and incurable depreciation.
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
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?" a. demand b. scarcity c. transferability d. utility
a. demand
The Graysons just closed on their new home. They move in tomorrow. What type of contract do the Graysons have? a. executed b. executory c. option d. unilateral
a. executed
Seller Jason is giving listing agent Rebecca a tour of his house and pointing out all the features, even the spot in the attic where a previous owner's ghost likes to come back and visit. Jason asks Rebecca if buyers should be told about this. Which response is best? a. "All states require sellers to disclose any undesirable feature of a house, which includes ghosts." b. "The presence of spirits stigmatizes the property. Many states don't consider this a material fact requiring disclosure, but this is my first ghost encounter, so I'll check our laws." c. "We can tell prospective buyers that the property comes with a roommate." d. "You can't mention this, because it would be a fair housing violation."
b. "The presence of spirits stigmatizes the property. Many states don't consider this a material fact requiring disclosure, but this is my first ghost encounter, so I'll check our laws."
If Hal sold his client's listing for $230,000, but it appraised at $200,000 and the buyers agreed to put the extra $30,000 down, what will Hal's commission be if he charged 5%? a. $10,000 b. $11,500 c. $13,500 d. $16,000
b. $11,500 Sales price x commission rate = commission. $230,000 × 5% = $11,500.
Alexandra sells her house to Clark for $178,000. They negotiate to split the transfer tax, which has a rate of $0.33 per $100. What do they each pay to cover the transfer tax? a. $29.37 b. $293.70 c. $58.74 d. $587.40
b. $293.70 The total transfer tax is $587.40 ($178,000 x .0033), so they each pay $293.70 ($587.40 ÷ 2).
What information about a property is the licensee required to disclose to potential buyers? a. Any known or assumed information about a property b. Any material, adverse information that the licensee has actual knowledge of concerning the physical condition of the property c. Only information that the seller wants the licensee to share with prospective buyers d. Only information that would make the property sell more quickly
b. Any material, adverse information that the licensee has actual knowledge of concerning the physical condition of the property A licensee is required to disclose any material, adverse information that the licensee has actual knowledge of concerning the physical condition of the property.
Which of these situations represents the illegal practice of blockbusting? a. Celia, a licensee, distributed a flyer in several neighborhoods, claiming that gentrification of those neighborhoods will increase property values. b. Corbin tells homeowners in Five Points that an impending influx of Asian immigrants will reduce property values. c. Estelle, a broker, warns potential clients about the upcoming zoning change in a neighborhood that is currently zoned as residential. d. Kian, a mortgage broker, refuses to underwrite mortgage applications from applicants who are Hispanic or Asian.
b. Corbin tells homeowners in Five Points that an impending influx of Asian immigrants will reduce property values.
Which of the following is a common problem with roof shingles? a. clean fascia b. Discoloration or curling c. soffit without holes d. water buildup and ice damming
b. Discoloration or curling Discolored or curling shingles mean roof repairs may be needed soon.
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
What information does the Loan Estimate NOT provide to buyers under required disclosures law? a. estimated closing costs b. Final closing costs c. loan fees d. loan payment schedule
b. Final closing costs
What can brokerages do to ensure licensees use technology properly? a. Forbid new technology from being used for marketing and communication. b. Have a solid policies and procedures manual in place. c. Review all communications sent between licensees and consumers. d. track internet and phone usage
b. Have a solid policies and procedures manual in place.
In order to protect your commission, which of the following is a best practice regarding a listing agreement? a. file it with the county clerk b. get it in writing c. Have it notarized. d. Use a form created by the National Association of REALTORS®.
b. Have it notarized.
When the Sidells moved into their new home in Shady Acres, they were given a copy of a covenant document that listed restrictions on roofing, siding, fencing, and other visual components on their property. This type of covenant is likely enforced by what entity? a. building codes officer b. Homeowners' association c. municipal police force d. zoning board
b. Homeowners' association
Sunshine Surveyors Inc. created a lot and block survey for a new residential development, Happy Acres. The first thing the surveyor did when he surveyed the new neighborhood was to reference what type of description? a. map b. Metes and bounds description c. monument d. plat book
b. Metes and bounds description The lot and block system always begins with one of two types of land descriptions as a reference point: either a metes and bounds description or an rectangular government survey system (RGSS) description.
A closing agent has several duties to perform both before and after the closing. Which of the following is a task the closing agent must complete after the closing? a. obtain title insurance b. Pay the existing loan off c. perform a title search d. prepare a closing statement
b. Pay the existing loan off The title search, closing statement preparation, and title insurance purchase must all be completed prior to closing. After closing, the closing agent makes arrangements to pay off the seller's existing loan with the proceeds from the buyer. "We're recorded and funded" is music to a licensee's ears.
Which of these tasks that Jenna performs does NOT represent the fiduciary duty of accounting? a. She avoids commingling trust funds with her firm's operating funds. b. She discloses the terms of the listing agent's compensation to her client. c. She meticulously manages all her clients' transactional paperwork. d. She properly records the earnest money her buyer client gave her.
b. She discloses the terms of the listing agent's compensation to her client. The fiduciary duty of accounting means that the licensee properly handles all funds, paperwork, and property.
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. Home equity lines of credit aren't subject to TRID disclosures, so Trinity's lender isn't obligated to provide a Closing Disclosure, though other disclosure forms may be required.
Rhonda hasn't paid her HOA dues in two years. Her attorney recently informed her that her state grants HOA-related liens a super lien status. What does this mean? a. The HOA can collect twice the amount of the money that she owes. b. The HOA lien takes priority over all other liens. c. The HOA must involve an administrative law judge in order to collect. d. The lien can be attached to both her real and personal property.
b. The HOA lien takes priority over all other liens. Super lien status means that the lien is granted higher priority than all other liens, including mortgages, deeds of trust, or property taxes.
Walt and Ginger were informed by their landlord that their option to purchase the bungalow they're renting has just been terminated. Which of the following things that can occur is likely to terminate an option to purchase? a. ginger put up new curtains b. They sublet the bungalow for a month without permission. c. They went on vacation and left the house empty for 12 days. d. Walt lost his job
b. They sublet the bungalow for a month without permission.
Which of the following statements is true about government loans? a. They originate in the secondary market. b. They're insured or guaranteed by a government agency. c. They're serviced by the U.S. Department of the Treasury. d. They're underwritten by the Federal Reserve.
b. They're insured or guaranteed by a government agency. Government loans are insured by the FHA, guaranteed by the VA, or provided by the USDA, all of which are government agencies.
Tristan's offer has been signed by all parties and delivered back to the seller. This means that ______ has occurred. a. acceptance b. binding acceptance c. notarization d. personal delivery
b. binding acceptance Binding acceptance happens when a signed contract is delivered according to the delivery procedures and deadline outlined in the contract.
Which of the following loans may require compliance with Appraiser Independence Requirements? a. commercial b. conventional c. FHA d. VA
b. conventional AIR may apply to conventional loans used to purchase a single-family dwelling of one to four units. Federally insured or guaranteed loans (such as FHA or VA or commercial loans) are exempt.
State usury laws are typically not applicable to what type of lending? a. consumer loans b. credit cards c. Loans from private lenders d. personal loans
b. credit cards Credit cards, retail installment contracts, and consumer leases are typically exempt from usury laws.
Which of the following is a tactic used by a predatory lender? a. Charging minorities lower interest rates b. encouraging debt c. refusing to loan to minorities d. Selling mortgages on the secondary market
b. encouraging debt Predatory lenders take advantage of consumer naiveté to increase their debt while financing risky loans.
Jenner purchased his first home, to which he'll have access forever, as far as he knows. Jenner owns a(n) ______. a. estate for years b. freehold estate c. leasehold estate d. ownership estate
b. freehold estate A freehold estate implies ownership for an unlimited amount of time—the "free" refers to the ownership agreement being free of an end date.
Why is proof of ownership required when transferring real property? a. It places the new owner's name on the deed. b. it provides evidence that the title is marketable c. It provides proof that property taxes have been paid for the property. d. it verifies the property address
b. it provides evidence that the title is marketable Proof of ownership is required to ensure that the title is marketable.
Andrea and Jim were planning to list their home with Cheryl, but just let her know they no longer wish to work with her. When Cheryl mentioned that listing agreements are legally binding, Andrea and Jim reminded her that their agreement is not legally binding. What would be the reason for this? a. it wasn't notarized b. jim didn't sign it c. They changed their minds about the asking price. d. They want to list it for 90 days, not 60.
b. jim didn't sign it
A mortgage is a legally binding document that creates a lien on a piece of property and gives the lender the right to foreclose on the property if the borrower defaults. Who or what entity is considered the mortgagee? a. borrower b. lender c. loan d. property
b. lender The lender holds the mortgage on the property, so the lender is the mortgagee.
Subdivision regulations imposed by developers in an effort to maintain control of the development of the subdivision are an example of ______. a. eminent domain b. private land use control c. Profit limitations d. taxation
b. private land use control
Trudy loved her new neighbors. The investor couple bought every available house on Trudy's block and was working hard to renovate them and increase their value. Trudy decided that she'd sit back, relax, and let her property's value go up, too, thanks to _______. a. competition b. progression c. regression d. substitution
b. progression
Along with property ownership, rights are granted to use the land's physical components. Which right allows a property owner to use or sell the underground resources, such as natural gas and minerals? a. air b. sub-surface c. surface d. water
b. sub-surface
What does the "T" in PITI stand for? a. tariff b. taxes c. term d. territory
b. taxes
A buyer with a $250,000 loan has a monthly principal and interest payment of $2,042.71. If $1,145.83 is interest, what is the new principal balance after the first payment is applied? a. $247,957.29 b. $248,854.17 c. $249,103.12 d. $250,000.10
c. $249,103.12 If $1,145.83 of the total payment is interest, that leaves $896.88 to be applied to principal: $250,000 - $896.88 = $249,103.12.
Jared has a 70/30 split with his brokerage firm, and his firm has a 50/50 split with cooperating brokerages. Last month, he was paid $12,239.50 in commissions from his home sales, which totaled $538,000. What is Jared's brokerage's commission rate? a. 2.3% b. 3.8% c. 6.5% d. 7.6%
c. 6.5% Jared was paid $12,239.50, which is 70% of the amount paid to his broker as commission. That makes his firm's commission $12,239.50 ÷ .70 = $17,485. Multiply that by two for the total commission the firm grossed, since it's shared 50/50 with a cooperating brokerage (the brokerage that brings the buyer to the sale), giving you $34,970. Then divide by the total sales amount for the brokerage's commission rate: $34,970 ÷ $538,000 = 0.065, or 6.5%.
Which of these is an example of agency coupled with interest? a. A listing agent agrees to accept a commission of 2.5% upon sale of the property. b. A listing agent agrees to split the commission on the sale of a property with a cooperating agent who brings the buyer to the table. c. An agent foregoes buyer agent commission, provided the purchasing developer gives the agent the listings on the developed lots. d. An agent is interested a property the agent has listed.
c. An agent foregoes buyer agent commission, provided the purchasing developer gives the agent the listings on the developed lots. Agency coupled with interest means the agent holds an estate (or interest) in a property that is the subject of the agency relationship. Forgoing commission now in turn for listings down the road is an example.
Joshua just got a copy of the preliminary report from his title company and is surprised to see that there's a mechanic's lien against his property. What does he have to do to clear this lien? a. Ask the company that filed the mechanic's lien to execute a quit claim deed. b. file a suit to a quiet title c. Pay the bill that resulted in the mechanic's lien. d. Sue the company that filed the mechanic's lien for failing to notify him.
c. Pay the bill that resulted in the mechanic's lien.
Parcels of land are valued at $50,000 each. However, when two of the parcels are joined, they are valued at $120,000. What economic principle is at work here? a. anticipation b. contribution c. Plottage d. progression
c. Plottage Plottage is an increase in property value when two neighboring parcels of land are joined together.
As a licensee, when questions arise that are outside of your scope of expertise, what should you do? a. Give some advice, even if you aren't sure. b. Pretend to be an expert in that field. c. Refer clients and customers to a competent professional in that field. d. Tell them not to ask so many questions.
c. Refer clients and customers to a competent professional in that field.
Upon a life estate holder's death, the estate either reverts to the original owner or to another person the original owner has named, known as a ______. a. backup b. holder-in-waiting c. Remainderman d. revisionary
c. Remainderman
The legal description of the project, easements that run with the land, and street and traffic patterns are all under consideration when a local planning board ______. a. Calculates the developer's project application fee b. Considers granting a special use permit to a developer c. Reviews a developer's project plat d. Reviews the zoning for a developer's project
c. Reviews a developer's project plat
Which amendment to CERCLA says that "innocent landowners" aren't responsible for clean-up of hazardous contamination? a. Environmental Responsibility Amendment b. Hazardous Contamination Amendment c. Superfunds Amendments and Reauthorization Act d. The Fair Housing Act
c. Superfunds Amendments and Reauthorization Act The Superfund Amendments and Reauthorization Act, or SARA, says that innocent landowners aren't responsible for clean-up of hazardous contamination.
Select the statement that correctly exemplifies the covenant term. a. The covenant against encumbrances is the grantor's guarantee that he or she owns the property being conveyed. b. The covenant for further assurances assures the grantee that there are no undisclosed encumbrances on the property. c. The covenant of quiet enjoyment promises that the grantee won't be disturbed by a title defect the grantor passes on. d. The covenant of warranty promises that the grantor has the capacity to convey title.
c. The covenant of quiet enjoyment promises that the grantee won't be disturbed by a title defect the grantor passes on.
Stan is a home inspector who's evaluating a home for potential buyers. He pointed out that neither of the two bathrooms had vent fans installed. Why is this a potential problem that will be noted on the inspection report? a. Bathroom fans can mitigate lead paint particles. b. Bathroom fans vent radon to the exterior of the home. c. The lack of air circulation in a moist room can lead to mold growth. d. Unseemly smells located that close to the kitchen are a problem.
c. The lack of air circulation in a moist room can lead to mold growth.
Real estate professionals handle many documents related to real estate transactions. Which one of the items listed below is one of the most important in detecting mortgage fraud? a. agency disclosures b. buyer representation agreement c. The original sales agreement and any addenda d. the title
c. The original sales agreement and any addenda The original sales agreement and any addenda to that agreement must be accurate. They should clearly identify the property and all parties to the transaction.
Can police power ever be used in a way that restricts citizens' freedom? a. No, that's beyond the scope of police power. b. Yes, but only when the citizen has committed a crime. c. Yes, if it's for the public good. d. Yes, that's the purpose of police power.
c. Yes, if it's for the public good. While it's not the intent of police power, personal rights are sometimes sacrificed in the name of the public good.
You represent a seller as a listing agent. Do you owe any duties to buyer agents? a. no, you owe no duties b. Only if the agent works in your office c. Yes, the duty to cooperate on showings d. Yes, the same duties you owe to the seller
c. Yes, the duty to cooperate on showings You owe buyer agents (or seller agents, if you're working with the buyer) the duty to cooperate on showings as well as honesty and fairness.
Prudence just finished paying off the debt on her loan, so the lender released the property's title to her. What clause in her mortgage stipulates this? a. acceleration b. alienation c. defeasance d. due on sale
c. defeasance The defeasance clause orders the lender (or the trustee, if a deed of trust secures the loan) to immediately release full title to the property to the borrower once the loan is paid in full.
Stan and Emile are arguing over their shared lot line, since Stan thinks that Emile planted a privet hedge on Stan's property. Stan filed a civil legal action against Emile. What will the court use to determine the actual lot line? a. aerial photographs b. Affidavit from surveyor c. legal descriptions of both parties d. Testimony from long-time neighbors
c. legal descriptions of both parties Recorded legal descriptions, often in conjunction with a survey or surveyor's opinion of what the legal description indicates, may be used to determine ownership boundaries.
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
Which group ensures that community growth is controlled and orderly? a. HOA b. master commission c. planning board d. Zoning board of appeals
c. planning board The planning board ensures that community growth is controlled and orderly. It is also responsible for developing the master plan, which includes budgeting for long-term projects.
The government's authority at all levels to ensure the health, safety and welfare of its citizens, which includes the control of public land use is the definition of ______. a. condemnation b. eminent domain c. police power d. Sovereignty
c. police power
Your buyer client, Max, just signed a purchase agreement for a $520,000 home. He has a 60% LTV ratio, and his lender's charging a 1.5% loan origination fee. What loan origination fee can Max expect to pay at closing? a. $2,200 b. $3,120 c. $4,200 d. $4,680
d. $4,680 A 60% LTV ratio means that Max is financing 60% of his purchase of $520,000, which equals $312,000 ($520,000 x 0.60). The loan origination fee is 1.5% of the financed amount: $312,000 x 0.015 = $4,680.
Phyllis bought a beach townhouse for $475,000 and put down $50,000 in earnest money. At closing, she paid $150,000, the balance of her intended down payment. The mortgage tax in the area is $.35 per $100 (or portion thereof). Calculate what Phyllis will pay for the mortgage tax. a. $1,137.50 b. $1,662.50 c. $700 d. $962.50
d. $962.50
Recently retired Admiral Bongo and his wife, Lucy, contact you. They want you to help them purchase their dream house now that he's retired, but one that has the necessary accommodations for the admiral's disability. They also confide in you that they don't have a lot of money saved up for a down payment. Which type of financing may work best for them? a. A conventional loan combined with a seller carry back. b. A conventional loan using the admiral's retirement money as a down payment. c. An FHA 203(k) loan to fix their new home up. d. A VA loan, which requires no down payment.
d. A VA loan, which requires no down payment.
Which of these examples describes a prepayment penalty? a. A fee the government charges the lender if the borrower pays off a loan before its intended time b. A fee the lender charges for servicing a loan c. A loan origination fee charged to the borrower d. A monetary penalty imposed on a borrower for paying off a loan before its intended time
d. A monetary penalty imposed on a borrower for paying off a loan before its intended time
The Federal Trade Commission is concerned with all ad claims but is most likely to be most concerned with ______. a. Ads for products that don't offer any specific value to consumers b. Ads making exaggerated claims most reasonable consumers wouldn't believe c. Any ad that is demonstrably false d. Any ad that makes a health or safety claim or any claim that's difficult for the consumer to evaluate
d. Any ad that makes a health or safety claim or any claim that's difficult for the consumer to evaluate
Layla, a licensee, has had a few casual meetings with a potential client, Marcus. Marcus has told Layla the type of home and locations he's interested in. Layla has mentioned a few homes that she thinks Marcus might be interested in. Although Layla hasn't said that she will continue to look for homes for Marcus, Marcus believes she'll do just that. Which of these statements about this situation is correct? a. Because Layla doesn't know if Marcus is working with another agent, she's just inadvertently created a dual agency situation. b. Because Layla has performed some agency tasks for Marcus, she has an express agency agreement with him. c. Layla and Marcus have no agency agreement, either express or implied, until Layla begins showing Marcus homes. d. Layla's actions may have created an implied agency agreement with Marcus.
d. Layla's actions may have created an implied agency agreement with Marcus.
Which statement about lead-related health problems is true? a. lead can be traced to senioritis b. Lead causes blindness upon contact with the eyes. c. Lead is associated with coronary heart disease. d. Lead may cause behavioral problems, learning disabilities, seizures, and, in extreme cases, death.
d. Lead may cause behavioral problems, learning disabilities, seizures, and, in extreme cases, death.
Evan bought into a housing cooperative that's focused on cultural exchange. Each month the co-op residents have dinner meetings and share food and culture from their respective regions. When Evan made his purchase, he received a proprietary lease for his unit. What else did he receive? a. contract of mortgage b. deed c. plat maps d. Shares in the cooperative corporation
d. Shares in the cooperative corporation Purchasing a co-op is not purchasing real property. Co-op owners hold shares in the cooperative corporation, which becomes personal property. They also receive a proprietary lease that allows them to use the property.
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. These taxes have already been paid, so they are a prepaid item. They'll appear as a buyer debit and seller credit at closing.
Why does the closing agent review the purchase contract? a. to check for contract errors b. To ensure that all contract signatures are in place c. To ensure that both parties are protected by clauses in the contract d. To gather closing-related information agreed to in the contract
d. To gather closing-related information agreed to in the contract The closing agent uses the purchase contract to be sure that the closing process and prorations follow the parties' wishes as agreed to in the contract.
The benefits of a home warranty for buyers are clear. Why might sellers want to offer a home warranty to buyers? a. To allow the buyer the option to customize features of the home. b. To allow the buyer to customize certain items. c. To keep from having to buy new appliances before putting the home on the market. d. To protect themselves from any claims after closing.
d. To protect themselves from any claims after closing.
Your client is purchasing a single-family home with a conventional loan. The listing price is $410,000. Does this situation require a licensed or certified appraiser? a. It may be required, depending on in which state the property is located. b. it's at the seller's discretion c. no, its not required d. Yes, it's required.
d. Yes, it's required. Under FIRREA, minimum federal requirements stipulate that when a financed property is worth more than $400,000 a licensed or certified appraiser is required.
Savvy's buyer client made an offer on a property but is having second thoughts. Savvy tells her client that she'll ask the seller's agent for an extension on the inspection period "to gather more bids," and use that time to look at other properties to avoid losing out on the current property. Savvy's client found a property she liked better, so they made an offer. The offer was accepted, so Savvy contacted the first property's agent to terminate that offer. Is this wrong? a. No, she acted in her client's best interest. b. No, she fulfilled her duty of loyalty to her client. c. yes, she broke a contract d. Yes, she did not treat the other party honestly, or act in good faith.
d. Yes, she did not treat the other party honestly, or act in good faith.
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 Development Act of 1974 added sex as a protected class, which helped prevent discrimination and sexual harassment for individuals seeking housing.
Gary's new seller client is concerned about privacy and doesn't want her listing posted on the MLS. Gary explains to her the potential impact this will have on marketing her property, but the client remains adamant. Gary doesn't list the property on the MLS. What fiduciary duty is at play? a. the duty of confidentiality b. the duty of disclosure c. the duty of loyalty d. the duty of obedience
d. the duty of obedience
Jacqueline found a ready, willing, and able buyer for her client's condo, with a sales price of $20,000 more than the asking price. However, the appraisal came in just under the asking price. Which number will the lender use to calculate the loan-to-value ratio? a. a middle point between the two numbers b. A weighted average based on the sales price, appraisal amount, and recent sales c. The larger number, as a buyer has already been found d. the smaller number
d. the smaller number
An agent is trying to build up business for a friend's mortgage company. She offers to charge a lower commission rate to clients who use her friend's mortgage company for their financing. What's this an example of? a. group boycotting b. market allocation c. price fixing d. tie-in arrangement
d. tie-in arrangement Tie-in arrangements are antitrust violations that involve predicating one service on the consumer's business with a recommended company.
What type of estate involves a piece of real estate that's owned by multiple unrelated individuals who, in addition to their ownership rights, each hold the right to occupy the dwelling unit in one- to two-week intervals during the year? a. apartment b. leasehold c. lifetime d. timeshare
d. timeshare
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 This is a use variance. In contrast, an applicant for a special use permit doesn't have to show hardship. He must simply show that the proposed use meets the conditions already contained in the ordinance (e.g., change in setback).
If a contract is for an illegal purpose, it's ______. a. enforceable b. legal c. valid d. void
d. void