Real Estate Exam practice
A properly drafted purchase agreement will include: a good faith estimate. a complete legal description of the property. the scope of authority being granted to the agents involved. a granting clause.
a complete legal description of the property.
A conventional loan generally has: a lower interest rate than an FHA loan. an adjustable interest rate for the first 15 years, and then a fixed interest rate. a due-on-sale clause. a higher loan-to-value ratio than a VA loan.
a due-on-sale clause (I think. Answer is not a lower interest rate)
The covenant of quiet enjoyment is the principle that relates to: title to real property. a lease. an entitlement found in the granting deed. a provision in the CC&Rs prohibiting excessive noise.
a lease (I think). Answer is not title to real property, or an entitlement found in the granting deed
An earnest money agreement is: a legally enforceable contract immediately upon the signature of the seller only. an option to buy which the purchaser may accept or reject. a legally enforceable contract immediately upon the seller's acceptance and communication of acceptance to the buyer. None of the above
a legally enforceable contract immediately upon the seller's acceptance and communication of acceptance to the buyer.
The doctrine of emblements refers to: the right of a homeowner to have one's property supported from beneath the land's surface. the right of an airline to occupy the space above a residential development. a tenant farmer's right to harvest a cultivated annual crop. the right of a commercial tenant to remove trade fixtures.
a tenant farmer's right to harvest a cultivated annual crop.
APR in lending practices represents: the interest amount indicated on the note. approximate percentage rate. appreciated percentage of return. all loan costs, direct or indirect, expressed as a percentage rate.
all loan costs, direct or indirect, expressed as a percentage rate.
A subordination clause: allows the trustor to pay off the debt at any time without penalty. permits the trustor to borrow additional funds without initiating a new loan. states that any future loans will be subordinate to the existing loan. allows the borrower to obtain a future loan that will take lien priority over the existing loan.
allows the borrower to obtain a future loan that will take lien priority over the existing loan.
Involuntary alienation occurs when: an interest in property is transferred against the will of an owner or without action by the owner through operation of law, natural processes, or adverse possession. a broker's license is suspended by the Real Estate Commissioner. a property owner conveys title to a purchaser. a property owner is forced to sell to a resident alien under fair housing laws.
an interest in property is transferred against the will of an owner or without action by the owner through operation of law, natural processes, or adverse possession.
An attorney-in-fact is best described as: any person having passed the bar examination. any individual having graduated from an accredited law school. a lawyer hired by a principal. any person authorized to represent another by the execution of a power of attorney.
any person authorized to represent another by the execution of a power of attorney.
An ALTA extended coverage policy of title insurance would: cover encroachments after the date of issuance. be limited to stated conditions of title as of the date of issuance. cover easements created during the term of the policy. protect against all encumbrances placed on the property after issuance.
be limited to stated conditions of title as of the date of issuance.
A tenant who is three months delinquent in rental payments can be legally removed by: constructive eviction. placing locks on the doors and reclaiming the property. bringing a court action for unlawful detainer. filing a lis pendens.
bringing a court action for unlawful detainer.
All of the following acts could result in license suspension or revocation, EXCEPT: conviction of the crime of forgery. advertising in the name of the salesperson only. accepting compensation from more than one party in a transaction without full disclosure to all parties. publishing a false statement, not known to be false, after making reasonable inquiry into the facts
publishing a false statement, not known to be false, after making reasonable inquiry into the facts
Under the Truth in Lending Act, the 3-day right of rescission begins: the first business day after loan application. the day the note is signed. the third day after the disclosure statement is delivered. the date the funds are disbursed.
the day the note is signed.
The Foreign Investment in Real Property Tax Act (FIRPTA) applies to: the proceeds on the sale of property owned in a foreign country. the purchase of real property by a foreigner. the purchase of property in a foreign country. the sale of real property by a non-resident alien.
the sale of real property by a non-resident alien.
Which of the following types of property is not subject to capital gains treatment? A commercial building purchased by a business for use as its office A rental house held for investment purposes A house built by a builder for resale Raw land purchased on speculation
(I think) A rental house held for investment purposes. Answer is not raw land
Which of the following statements concerning real estate finance is true? A trust deed is a security instrument that creates a lien on a property to secure a debt. A promissory note secures a trust deed. A promissory note hypothecates the title to the property. The trust deed is the evidence of debt.
A trust deed is a security instrument that creates a lien on a property to secure a debt.
In a township, Section 10 is located where in relationship to Section 15? Directly south of Section 15 Directly north of Section 15 One section north and four sections west of Section 15 One section south and four sections east of Section 15
Directly north of section 15
A contract that does not result in a written or oral agreement, but from the actions of the parties involved, is an: express contract. implied contract. executed contract. None of the above
Implied contract
Which types of financing are synonymous? Portfolio Loans and Installment Loans Construction Loans and Bridge Loans Interim Financing and Construction Loans Take Out Loans and Junior Loans
Interim financing and construction loans
A plat must be submitted for final approval to the: Bureau of Land Management. Nevada Real Estate Division. Real Estate Commission. local governing body.
Local governing body
A lessee assigns all of his leasehold interest to another. That person becomes the landlord. sublessee. assignor. tenant
Sublessee
Ingress and egress are terms most commonly used when considering: a constructive eviction. an easement in gross. an easement appurtenant. a suit for quiet title.
an easement appurtenant.
An executed contract is one that: has been fully performed by both parties. has been rescinded. must be submitted to the court for clarification. has been signed and notarized.
has been fully performed by both parties.
A landlord has __________ to return a security deposit after a tenant moves out or to give a written explanation why it (or any part of it) was not returned. 7 days 60 days 14 days 30 days
30 days to return security deposit
Zoning ordinances generally cover such issues as: permitted uses of land. lot coverage limitations. required setbacks. All of the above
All of the above are covered by zoning ordinances
Which of the following is an encumbrance? Easement Deed restriction Lien All of the above
All of the above are encumbrances
The greatest ownership interest one can have in real property is a: fee simple absolute estate. life estate. fee simple defeasible estate. leasehold estate.
Fee simple absolute estate
When a person dies testate, the real property: escheats and is sold at an auction by the state. goes to the administrator. goes to his next of kin under the laws of succession. passes to beneficiaries as a devise.
Passes to beneficiaries as a devise
A type of ownership in real property that provides undivided interest but with no right of survivorship is known as: joint tenancy tenancy in common. tenancy by the entirety. a life estate.
Tenancy in common
Carol has been practicing real estate for 10 years. She recently passed the broker's exam and obtained her broker's license. She has decided to remain affiliated with Broker Don as a broker-salesperson. Under Nevada real estate license law, Broker Don's supervisory responsibility of Carol will: only be necessary if Carol seeks advice in a specialty area of real estate. no longer be required. remain the same as before she received her broker's license. be reduced because Carol will practice from her home office and retain her own files.
remain the same as before she received her broker's license.
An agent would be guilty of fraudulent misrepresentation when: the misrepresentation was based upon incorrect information given by the seller. the broker's claim that the property has the best view of the river was incorrect. the withholding of a material fact was meant to deceive and the buyer, acting upon the misrepresentation, entered into a purchase agreement. All of the above
the withholding of a material fact was meant to deceive and the buyer, acting upon the misrepresentation, entered into a purchase agreement.
A lease based in part on the gross income of the lessee is known as: a percentage lease. a month-to-month lease. a gross lease. a net lease.
A percentage lease
Cindy has just paid $460,000 for a building that will bring her a 9.75% return on her investment. What is the building's annual net income? $34,965 $36,750 $41,220 $44,850
$44,850
Unlicensed assistants may do which of the following: 1 Gather information for a CMA 2 Send out mailers for the broker they are employed by 3 Conduct telemarketing to schedule appointments in order to seek clients 4 Follow up with a buyer-client's lender at the request of the broker they are employed by 1, 2 and 4 only 1 and 2 only 1 only All of the above
1 and 2 only
Generally, a deed that is not acknowledged: 1 is effective between the parties to transfer title. 2 will be accepted for recordation by the county clerk. Both 1 and 2 1 only 2 only Neither 1 nor 2
1 only - effective between parties
Which of the following are necessary to prove that a misrepresentation constituted a fraud? 1 The person making the misrepresentation knew that the statement was false and made the statement with the intent to deceive the other party. 2 The statement was regarding a material fact. 3 The party to whom the misrepresentation was made acted upon it to his detriment. 4 The statement was in writing. 2, 3, 4 only 1, 2, 4 only 1, 3, 4 only 1, 2, 3 only
1, 2, 3 only
Which of the following are included in the bundle of rights of real property ownership? 1 The right to tax and escheat to the state 2 The right to lease 3 The right to devise 1 only 2 and 3 only 2 only 3 only
2 and 3 only
A chattel mortgage is a lien on: 1 real property. 2 personal property. 2 only 1 only Both 1 and 2 Neither 1 nor 2
2 only- personal property
How many sections are in a township? 6 24 36 43,560
36
Martha pays $3,250 per month to the bank on an interest only loan. The interest rate is 7.5% per year. What is the amount of her loan? $243,750 $325,000 $433,333 $520,000
520k
Jerry purchased a single family lot measuring 90' x 120'. The city requires a 20' setback on the front, a 15' setback along the sides, and a 10' setback at the back of the lot. What is the size house Jerry can build? 2,450 sq. ft. 3,200 sq. ft. 5,400 sq. ft. 5,460 sq. ft.
5400 sq ft
Sherry is selling a lot for $72,000. Her adjusted basis in the property is $56,000. In addition to paying $2,500 in closing costs, she will be responsible for a 6% commission. For federal income tax purposes, what is the gain Sherry will realize in this transaction? $6,820 $9,180 $16,000 $22,820
9180
A rectangular parcel of land that measures 2350' x 1780' should be advertised as containing how many acres? 792 acres 54 acres 146 acres 96 acres
96 acres
Jack Norris, a builder, is purchasing a 75-lot residential subdivision that he plans to build upon and the resell the homes to the public. What kind of mortgage will Jack be seeking in order to finance the project? A package mortgage A project mortgage A blanket mortgage An open end mortgage
A blanket mortgage
Which of the following is not covered by the Fair Housing Act? A duplex listed with a real estate broker in which one of the units is occupied by the seller An eight-unit multi-family dwelling A commercial property A vacant lot zoned for residential construction
A commercial property
A broker representing a buyer in the purchase of a condominium should ensure that the buyer receive a copy of the: CC&Rs. latest financial statement. bylaws. All of the above
A condo buyer should get a copy of all of the above
A real estate licensee could be subject to disciplinary action under the real estate law for: failing to disclose a material fact to a principal. false advertising. failing to put a definite termination date in an exclusive listing agreement. All of the above
A licensee could be disciplined for all of the above
Which of the following properties would an appraiser be justified in relying on the cost method to determine market value? A vacant lot that possesses undeveloped value A 40-year-old Pueblo-style house A newly constructed church of contemporary design A farm located just outside of town
A newly constructed church of contemporary design
The clause in a mortgage, contract, or trust deed that allows the lender to call the entire unpaid balance due upon default is called the: balloon payment clause. defeasance clause. cancellation clause. acceleration clause.
Acceleration clause
Real property includes: anything incidental or appurtenant to the land. land. a volume of space to the center of the earth and a reasonable distance into the atmosphere. All of the above
All of the above are real property
Special assessments differ from real property taxes in that a special assessment is: levied to pay for a specific improvement. levied against only those properties that benefit from the improvement. a one-time tax levied only when a property is benefited by a public improvement. All of the above
All of the above are reasons special assessments differ from real property taxes
Features such as beautiful landscaping, water views, and a nearby park that increase the value of residential property are known as: residuals. amenities. factors. tangible assets.
Amenities
A telephone company is given the non-revocable use of land across the rear portion of each lot in a subdivision. This is known as: an easement appurtenant. a license. a prescriptive easement. an easement in gross.
An easement in gross
A listing agreement that promises to pay the listing agent a commission unless the owner sells the property themselves is known as: an open listing. an exclusive agency listing. an exclusive right to sell listing. a net listing.
An exclusive agency listing
To take title in severalty, one must be purchasing: the property with a spouse. more than one parcel. an apartment complex. as the sole owner.
As the sole owner
Larry has transferred his leasehold estate to Joe. Larry has used the process of __________ to transfer his rights to Joe. assignment sublease surrender abandonment
Assignment
A township consists of A 16 square miles. B 23,040 acres. Both A and B A only B only Neither A nor B
B only - 23040 acres in a township
George is selling his trade fixtures along with the building. Which of the following instruments will be used to convey title to the trade fixtures? Bill of sale Warranty Deed Chattel real Package Deed
Bill of sale
Which of the following statements about counter-offers are true? 1 A counter-offer is a rejection of the first offer, and becomes a new offer. 2 Any change made by the seller, however slight -such as moving the date of closing from one day to the next, creates a counter-offer. 2 only 1 only Both 1 and 2 Neither 1 nor 2
Both 1 and 2 are true
An agency relationship can be created by: A estoppel. B ordainment. C ratification. B only A only A, B, and C Both A and C
Both A and C
The Federal National Mortgage Association (Fannie Mae) functions in the secondary mortgage market to: buy mortgages originated by other lending institutions. purchase and service federally guaranteed loans exclusively. decrease the liquidity of lending institutions during periods of tight money. buy government guaranteed debentures at market interest rates.
Buy mortgages originated by other lending institutions
Most contingencies in a real estate contract are inserted for the benefit of the: buyer. seller. escrow officer. real estate broker.
Buyer
What effect on value is typically the result of a homogeneous community? Causes values to decrease Builds an inherent instability into real estate values Causes values to increase Causes real estate values to be stable
Causes real estate values to be stable
A holder of a leasehold estate is said to have: a life estate. a remainder estate. an estate of inheritance. chattel real (i.e., no ownership interest).
Chattel real
Documents that have been recorded and are part of the public record are available to be examined by the public. A buyer is still considered to have received __________ , legally held to know all about any other recorded interests on the property, even if he or she has failed to inspect the public records. legal notice actual notice constructive notice public notice
Constructive notice
An appraiser, in valuing the addition of a swimming pool that cost $43,000 six months ago, has attributed an increase in value to the property of $25,000. He has arrived at this figure under the principle of: anticipation. substitution. competition. contribution.
Contribution
The turning over of land by a developer for public use is called: dedication. subordination. escalation. condemnation.
Dedication
Which type of tenancy creates a freehold estate? Estate for years Estate in sufferance Estate at will Estate in fee
Estate in fee
Which of the following is NOT a party to a trust deed? Grantee Beneficiary Trustee Trustor
Grantee
Mr. Snook sold his fee simple estate to Mr. Dunn, but kept a life estate in the property based upon his own life and remained in possession. Mr. Snook then sold his interest to Mr. Britt and gave possession to Mr. Britt. When Mr. Dunn heard of the sale, he demanded possession of the property. Who is entitled to possession? The property escheats to the state. Mr. Britt, who may possess the property until Mr. Snook dies. Mr. Snook, since the life estate was based on his life. Mr. Dunn, since the sale to Mr. Britt cancelled the life estate.
Mr. Britt, who may possess the property until Mr. Snook dies.
Certain economic principles are of considerable importance in the valuation of real estate. The principle, "No prudent man would pay more for a product than that for which he could buy a reasonable duplicate, allowing for no undue delay" is known as the: principle of conformity. principle of competition. principle of substitution. principle of balance.
Principle of substitution
An easement appurtenant to real property can be terminated by all of the following EXCEPT: prescription by the servient owner. release by the dominant tenement owner. merger of both the servient and dominant parcels. revocation by the servient owner.
Revocation by the servient owner
The easiest and most accurate way for an appraiser to calculate the estimated current market value of a residential property is by the: cost approach. replacement value approach. sales comparison approach. income approach.
Sales comparison approach
The instrument of record to show that a mortgage is paid in full is a: Quitclaim Real Statement. Satisfaction of Mortgage. Deed Real Statement. Estoppel Certificate.
Satisfaction of mortgage
Despite having already signed a written contract of sale, Smith, the seller, refuses to complete the sale to Jones. One possible remedy available to Jones is: action to quiet title. specific performance. foreclosure. rescission.
Specific performance
The term tenancy refers to: the interest a lessor has in a property. an inclination to do something. the interest or title a lessee or owner has in a property. a property used for investment purposes.
The interest or title a lessee or owner has in a property (I think). Answer is not the interest a lessor has in a property.
Property taxes create a lien on property that is: only superior to first mortgages. inferior to all other encumbrances. a general lien. superior to all mortgages.
Superior to all mortgages (I think. answer is not a general lien)
If taxes on real property in Nevada become delinquent and remain unpaid, they constitute an involuntary lien on the property that is: inferior to all voluntary liens. inferior to a mechanics lien. superior only to liens recorded after the tax lien. superior to all other liens.
Superior to all other liens
Who has the authority to revoke a Nevada real estate license? The Real Estate Commission The Nevada Real Estate Division The state Attorney General The National Association of REALTORS® if the licensee is a member
The Real Estate Commission
Under RESPA Section 9, the responsibility and right for selecting a title company rests with the: the buyer. the seller. the broker. both the buyer and the seller.
The buyer (I think. Answer is not both buyer and seller)
Which one of the following is not a violation of the Real Estate Settlement Procedures Act (RESPA)? Kickbacks The buyer requiring the use of a specific lender Unearned fees The seller requiring the use of a particular title insurance company
The buyer requiring the use of a specific lender (I think? Answer is not kickbacks or unearned fees)
The market data approach is used by an appraiser to determine the estimated cost of replacement. building value less depreciation of the land. rate of anticipated appreciation. value of vacant land.
Value of vacant land
A special permit that would allow a land use that normally would be in violation with current zoning is called: a non-conforming use. an amendment. a plan modification. a variance.
Variance
Sandra Jones and Julie Gray enter into a contract. When signing the contract, Sandra does not know that a court had recently declared Julie incompetent. What is the legal status of this contract? Voidable at the option of Julie. Enforceable because Julie failed to advise Sandra of her incapacity prior to entering into the contract. Illegal. Void.
Void
The best deed a grantee can receive, which gives the grantee the best possibly protection, is the: quitclaim deed. grant deed. bargain and sale deed. warranty deed.
Warranty deed
A life estate permits the life tenant to do all of the following EXCEPT: lease it on a five year lease. will it to another. take out a mortgage on the property. All of the above
Will it to another
The Federal Reserve System normally affects the supply of money in the economy by all of the following EXCEPT: buying and selling bonds. changing reserve requirements. adjusting the discount rate. buying or selling gold on the international market.
buying or selling gold on the international market.
All of the following are required for adverse possession EXCEPT: hostile to the true owner's title. it must be under a claim of right or color of title. open and notorious use. confrontation with the owner.
confrontation with the owner
Under FIRPTA: escrow agents must notify the Department of Immigration if a purchaser of real property is a foreign investor. a resident alien cannot buy or sell real property. escrow agents are required to withhold 15% of a foreign seller's net proceeds and send it to the IRS. escrow agents must notify the broker if a principal is a foreigner.
escrow agents are required to withhold 15% of a foreign seller's net proceeds and send it to the IRS
According to Nevada real estate law, a real estate broker, as an agent, must follow the lawful instructions of their principal, account for all funds received by or on behalf of a principal, and put the interest of the principal above all others. These responsibilities are elements of an agent's: fiduciary duty owed to their client. authorization under NRS 645. written contract with the principal. willingness to work for a commission.
fiduciary duty owed to their client.
Broker Jones has just been chosen by the Nevada Association of REALTORS® as Broker of the Year. During her acceptance speech, Jones was asked what she felt was the largest contributing factor to her brokerage's financial success. Jones candidly replied that the largest contributing factor had been the establishment of a 5% commission listing policy for all her licensees.Broker Jones: violated real estate law by inducing other brokers to boycott brokerages who charge 6% commission on listings. has violated antitrust laws. should not disclose her most potent marketing tool to the competition. may share this information with fellow brokers, as long as no member of the public was present at the award ceremony.
has violated antitrust laws.
An Asian couple walked into Best Properties Real Estate and requested to see a specific house in a neighborhood that was known to have a significant number of Asian families. A licensee can lawfully assume the prospect is: unable to qualify for a loan in a different neighborhood. interested in a house in a minority neighborhood. a member of the Fair Housing Commission and should refuse to show the prospect any houses without further information. interested in a particular house because of its price, architectural style, or other amenities.
interested in a particular house because of its price, architectural style, or other amenities.
The most common method of establishing deed restrictions in a new subdivision is by: recording the restrictions with the County Recorder's Office with a reference to said recording in the deed for each buyer. providing notice of the restriction in the purchase and sale agreement. publishing the restrictions in a newspaper of general circulation. including the restrictions in the RED Administrator's final public report.
recording the restrictions with the County Recorder's Office with a reference to said recording in the deed for each buyer.
When compared to FHA loans, conventional loans: require higher down payments are guaranteed by the federal government require lower down payments. offer lower rates of interest.
require higher down payments
A real estate broker may authorize an unlicensed sales assistant to: review purchase agreements. enter into listing agreements with sellers. schedule appointments with home inspectors. solicit borrowers for loans.
schedule appointments with home inspectors.
When a seller is transferring fee simple title to real property the seller must: sign the deed conveying title to the buyer. receive permission from the beneficiary to convey title. All of the above
sign the deed conveying title to the buyer. (I think. Answer is not all of the above)
The Real Estate Settlement Procedures Act (RESPA) provides: a secondary market for mortgage loans. that real estate advertisements must include the annual percentage rate, including all charges. that real estate syndicates must obey "blue-sky" laws. that the mortgagor must be given an estimate of the closing costs before the time of closing.
that the mortgagor must be given an estimate of the closing costs before the time of closing.
The most significant difference between financing with a mortgage and financing with a trust deed is: a trust deed cannot be foreclosed. the length of time for repayment of the loan. the type of property used as security. the amount of time needed to complete foreclosure proceedings.
the amount of time needed to complete foreclosure proceedings.
Linda owned a parcel that was 120 ft. wide, which abutted Frontage Road by 250 ft. deep. She subdivided the parcel into two lots 120 ft. by 125 ft., and sold the front property to Henry, reserving an access easement in the deed for the rear parcel. Linda did nothing with the rear property for 20 years, after which she decided to construct her house. Henry had constructed a house after he purchased the front parcel, lived on the parcel for 20 years, and now claims that the easement is invalid. If Henry filed a lawsuit, the court would find the easement: invalid because of nonuse for 20 years. invalid because Linda could not grant herself an easement. valid because easements created by deed do not terminate. invalid because Linda failed to put in the deed that the easement would not be used for an indeterminate period.
valid because easements created by deed do not terminate.
Broker Billings received multiple offers on seller Sam's residence. Billings reviewed the offers and selected the one that had the quickest closing date, as he knew Sam was eager to close on the property. Sam, relieved to receive an offer with a 20-day closing, accepted the offer even though it was $5,000 below the listing price. Billings then communicated Sam's acceptance to the offeror and notified the other brokers that there was an accepted offer, but that he would be willing to present any offers rewritten as back up offers.Broker Billings: has acted within the scope of his authority as Sam's agent. is guilty of making false promises to the other offerors by suggesting they rewrite their offers as back up offers. acted appropriately because the offer with the quickest closing was in the best interest of Sam. violated real estate law by not presenting all offers for Sam's consideration.
violated real estate law by not presenting all offers for Sam's consideration.