Real Estate Practice Examination 2 (some of the questions)

A borrower made the final payment on a mortgage loan to the bank. Regardless, the lender will still hold a lien on the mortgaged property until which document is recorded? A. A satisfaction B. A reconveyance C. A novation D. AN estoppel

A

A broker listed a parcel of raw land at an 8% commission. After the property was sold and settlement had occurred, the owner discovered that the broker had been listing similar properties in the area at a 6% commission rate. Based on this information, the A. broker has done nothing legally wrong B. broker can lose his license C. owner can cancel the transaction D. owner is entitled to a refund

A

A broker received a check for earnest money from the buyer and deposit it in an escrow or trust account to protect herself from charge of A. commingling B. novation C. conversion D. embezzlement

A

A building was sold for $260,000, with the buyer making a 10% down payment and financing the balance. The lender charged a 1% loan origination fee. What was the total fee paid to the lender? A. $2,340 B. $2,600 C. $26,000 D. 28,340

A

A couple entered into a purchased contract to buy a house for $184,500. They provide $4,000 as earnest money and obtained a new mortgage for $166,050. The purchase contract provides for March 15 settlement. The buyers and the sellers will probate the previous year's real estate taxes of $1,880, which have been prepaid by the seller. The buyers have additional closing cost of $4,250, and the sellers have other closing cost of $13,850. How much cash must the buyers bring to the settlement? A. $20,288 B. $23,042 C. $23,042 D. 24,188

A

A house is sold for $84,500 and the commission rate is 7%. If the commission is split 60/40 between the selling broker and the listing broker, respectively, and each broker splits his share of the commission evenly with his salesperson, how much will the listing salesperson receive from this sale? A. $1,183 B. $1,775 C. $2,366 D. $3,549

A

A man moved into an abandoned home, made extensive repairs, and installed cabinets in the kitchen for his convenience. When the owner discovered the occupancy, he had the man ejected. What is the status of the cabinets? A. the man cannot get the cabinets back B. the cabinets remain because they are trade fixture C. while the cabinets stay, the man is entitled to the value of the improvement D. the man can recover the cabinets if they can be removed without damaging the real estate

A

A man was given the personal right to cut through a woman's yard to reach the beach and has used this right throughout his life. Before the man dies, he sells this easement to his nephew. What type of interest does the nephew have in the woman's property? A. No interest B. Easement in gross C. Appurtenant easement D. Dominant Estate

A

All of the following situations are exemptions to the federal Fair Housing Act of 1968 EXCEPT A. the listing of a single-family residence where the listing broker does not advertise the property B. the restriction of noncommercial lodgings by a private club to members of the club C. the rental of a unit in an owner-occupied three-family dwelling D. the restriction of residency in a monastery

A

If the legal description of a property included the phrase "W1/2 of the NW1/4 of the NW1/4 of a section, how many acres are in the property? A. 20 B. 40 C. 160 D. 320

A

One important rule for a metes-and-bounds legal description is that A. the boundary must return to the point of beginning B. U.S. Geological Survey benchmarks must be used C. only natural monuments may be used D. no survey will be required

A

The hazardous substance that has created the biggest problem in schools and office buildings is A. asbestos B. lead-based paint C. radon D. mold

A

The owner of a large single-family home decided to sell it and move into a small apartment in a cooperative building. Under the cooperative from of ownership, she will A. become a stockholder in the corporation B. hold a fee simple interest in her unit C. receive a fixed-term lease for her unit D. have an undivided interest in the common element

A

The requirements of the Real Estate Settlement Procedures Act (RESPA) apply to any residential real estate transactions that involve A. a federally related mortgage loan B. those taking place in a state that has adopted RESPA C. any mortgage financing less than $100,000 D. any purchase price less than $100,000

A

What is steering? A. Leading prospective homeowners to or away from certain areas B. refusing to make loan to persons residing in certain areas C. a requirement to join a multiple listing service D. illegal setting commission rates

A

Which of the following occurrences is NOT a violation of the Real Estate Settlement Procedures Act (RESPA)? A. Recommending a particular lender to a buyer B. Accepting a kickback on a loan subject to RESPA requirement C. Requiring the use of a particular title insurance company D. Accepting a fee or charging for services that were not performed

A

With regard to offer and acceptance, which statement is TRUE? A. a counteroffer is a rejection of the original offer B. A counteroffer cannot be withdrawn prior to acceptance C. An offer cannot be withdrawn prior to acceptance D. A counteroffer cannot be countered

A

A borrower's real estate loan documents indicate that if she sells her property, she must immediately pay her lender in full. This clause is called A. an acceleration clause B. an alienation clause C. a subordination clause D. a habendum clause

B

A broker took a listing and later discovered that a client had previously been declared incompetent by the court. The listing is now A. unaffected because the broker was acting in good faith as the owner's agent. B. of no value to the broker because the contract is void. C. the basis for recovery of a commission D. renegotiable between the broker and the client

B

A man willed his estate as follows: 54% to his wife, 18% to his daughter, 16% to his son, and the remainder to his church. If the church received $79,000, how much did the daughter receive? A. $105,333 B. $118,500 C. $355,500 D. $658,333

B

A young college graduate is applying for a mortgage loan in order to buy a condominium unit. While in college, she was consistently late making credit card and car payments. She also tended to run over the credit limit on two credit cards and was frequently charged penalty fees. She is now starting a new job at an annual salary of $80,000, with good chances for future advancement. Her parents have agreed to provide a $20,000 down payment on the property. The lender is offering a 15-year loan at 8% with 20% down payment. This is an example of a A. predatory loan B. subprime loan C. low-doc loan D. FICO loan

B

An estate or tenancy for years is a tenancy A. with the consent of the landlord B. that expires on a specific date C. created by the death of the owner D. created by a testator

B

Capitalization rates are A. determined by the gross rent multiplier B. the rates of return that a property will produce C. mathematical values determined by the sales prices D. determined by the amount of depreciation in properties

B

Fannie Mae and Ginnie Mae are both A. involved as primary market lender B. involved in the secondary market C. federal agencies D. privately owned entities

B

If a home that originally cost $142,500 three years ago is now valued at 127% of its original cost, what is the current market value? A. $142,627 B. $180,975 C. $195,205 D. $384,750

B

In the deed of conveyance, the seller's only guarantee was that the property was not encumbered during the time he owned it, except as noted in the deed. The type of deed used in this transaction was a A. general warranty deed B. special warranty deed C. bargain and sale deed D. quitclaim deed

B

The Civil Rights Act of 1866 prohibits in all cases discrimination baed upon a person's A. sex B. race C. religion D. familial status

B

What will it cost to put new carpeting in a den measuring 15 feet by 20 feet if the cost if the carpeting is $6.95 per square yard and the cost of laying it is an additional $250? A. $232 B. $482 C. $610 D. $2,335

B

Which statement regarding adverse possession is TRUE? A. the person taking possession of the property must do so with the consent of the owner of the property B. occupancy of the property by the person taking possession must be continuous over a specific period of time C. the person taking possession of the property must compensate the owner at the end of the adverse possession period D. the person taking possession of the property can never end up as the legal owner

B

An individual seeking to be excused from the dictates of a zoning ordinance should request a A. building permit B. certificate of alternate usage C. variance D. certificate of nonconforming use

C

Assuming that the listing broker and the seller broker in a transaction split their commission equally, what was the sales price of the property if the commission rate was 6.5% and the listing broker received $2,593.50? A. $39,900 B. $56,200 C. $79,800 D. $88,400

C

If a house was sold for $140,000 and the buyer obtained an FHA-insured mortgage loan for $138,500, how much money is paid in discount pints if the lender charged four points? A. $1,385 B. $1,400 C. $5,540 D. $5,600

C

If the landlord of an apartment building breaches a lease with a tenant and the tenant's unit becomes uninhabitable, which event is the MOST likely result? A. Suit for possession B. tenancy at sufferance C. constructive eviction D. covenant of quiet enjoyment

C

In an option to purchase real estate, the optionee A. must purchase the property but may do so at any time within the option period. B. is limited to a refund of the option consideration if the option is exercised C. has no obligation to purchase the property during the option period D. cannot obtain third-party financing on property until after the option has expired.

C

The monthly rent on a warehouse is set at $1 per cubic yard. If the warehouse is 36 feet by 200 feet by 12 feet high, what is the annual rent? A. $3,200 B. $9,600 C. $38,400 D. $115,200

C

The rescission provision of the Truth in Leading Act (regulation Z) apply to A. business financing B. construction lending C. consumer credit D. real estate loans

C

The type of loan where the monthly payment may increase or decrease in each adjustment period depending on fluctuations in a selected economic indicator is A. a growing-equity mortgage B. a shared-appreciation mortgage C. an adjustable-rate mortgage D. a graduated-payment mortgage

C

Which statement regarding underground storage tanks is TRUE? A. A leaking unground storage tank only affects the property on which it is located. B. A landowner will not be held responsible if the underground tank was already in place prior to the purchase if the property. C. landowners can be held responsible for clean up costs plus all damages D. an underground storage tank is automatically covered by the Superfund

C

A broker would NOT have to prove that he was the procuring cause under which of the following types of listing agreements? A. Net listing B. Open listing C. Exclusive-agency listing D. Exclusive-right-to-sell listing

D

A property manager is LEAST likely to A. handle new leases B. arrange for repairs and improvements C. resolve tenant disputes as to property use D. prepare depreciation schedules for tax purposes

D

A veteran wants to refinance his home mortgage loan with a new VA-guaranteed loan. The lender is willing but insists on three and a half discount points. In this situation, the veteran A. can refinance with a VA-guaranteed loan, provided that there are no discount points B. can refinance with a VA-guaranteed loan, provided that the discount point do not exceed two C. will not be required to pay a funding fee D. can proceed with the refinance loan and pay the discount point

D

An example of external obsolescense is A. numerous pillar supporting the ceiling in a store B. roof leaks making premises unusable and therefore unrentable C. an older structure with massive cornices D. vacant and abandoned building in the area

D

Discount point on a real estate loan are a potential cost to either the seller or the buyer. Such points are A. set by the FHA and the VA for their loan programs B. charged only on conventional loans C. limited by government regulations D. prepaid interest to the lender

D

In the appraisal of a building constructed in 1930s, the MOST difficult part of the cost approach to value is A. estimating changes in material cost B. obtaining 1930s building codes C. estimating changes in labor costs D. estimating accrued depreciation

D

On the settlement statement, the cost of the lender's title insurance policy that is required for a new mortgage loan is usually a A. credit to the seller B. credit to the buyer C. debit to the seller D. debit to the buyer

D

The definition of market value includes all of the following EXCEPT A. buyer and seller are typically motivated B. both parties are well informed C. a reasonable time is allowed for exposure in the open marker D. the sales price is affected by creative financing or sales concessions

D

The difference between a general lien and a specific lien is that a A. general lien cannot be enforced in a court, while a specific lien can B. specific lien is held by only one person, while a general lien is held by two or more people C. general lien is a lien against personal property, while a specific lien is a lien against real estate D. specific lien is a lien against a certain parcel of real estate, while a general lien covers all of the debtor's property.

D

When placed in a printed advertisement, which phrase complies with the requirement of the Truth in Lending Act (regulation Z) with regard to interest rates? A. 10% interest B. 10% annual percent C. 10% annual interest D. 10% annual percentage rate

D

When the buyer signs a purchase offer and the seller accepts it, the buyer acquires in the property an immediate interest called A. legal title B. statutory title C. defeasible title D. equitable title

D

Which document is always available when searching the public record? A. encroachment B. rights of parties in possession C. rights of mechanics who have recently done work D. recorded mortgage

D