National Exam PS1

A buyer with a 20-year, $419,000 loan at a 4.25% interest rate has a monthly principal and interest payment totaling $2,594.59. If $1,483.95 is interest, how much is applied toward principal for that payment? A.$1,110.64 B. $1,246.10 C. $1,578.57 D. $1,780.75

A. $1110.64

Hamish makes an offer on a loft in the city for $424,900 with a 10% earnest money deposit. The seller agrees, so Hamish secures an 80% loan. He needs to set aside funds for the mortgage tax as part of his closing costs. The rate in his area is $0.115 per $100. Calculate the mortgage tax Hamish will pay. A. $390.91 B. $439.77 C. $488.64 D. $97.73

A. $390.91

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

An abandoned or otherwise unused commercial or industrial site that contains suspected contaminants is known as a what? A. A brownfield B. A Brown Zone C. A space that cannot be used D. A special use landfill

A. A brownfield

Which of these statements best represents what happens after a federal fair housing complaint is made? A. A fair housing specialist will review the complaint. B. An official housing discrimination complaint will be filed, and a fair housing specialist will be assigned to the case. C. FHEO will contact the alleged perpetrator to gather information. D. HUD will review the complaint to determine if it's valid.

A. A fair housing specialist will review the complaint.

Alluvion describes new deposits of land that are the result of what natural process? A. Accretion B. Erosion C. Exclusion D. Reliction

A. Accretion

Carlson presents a real estate purchase contract to his clients. Along with the contract are several supplemental documents attached to it. What are these called? A. Addendums B. Amendments C. Pro-rata D. Querries

A. Addendums

Which of these is NOT a likely features of a bridge loan? A. Amortized loan paid back over a period of no more than five years B. Interest-only loan C. Secured by the borrower's existing home D. Temporary, short-term loan

A. Amortized loan paid back over a period of no more than five years

Simon is looking for a facility for a large grocery distribution operation. He found two options, one of which is offering him a triple net lease, and the other an absolute net lease. Why is his attorney arguing against the latter? A. An absolute net lease has no legal defenses if Simon fails to pay. B. An absolute net lease will cost more in the long run. C. Simon will still be responsible for insurance in an absolute net lease. D. Simon will still be responsible for taxes with an absolute net lease.

A. An absolute net lease has no legal defenses if Simon fails to pay.

Two large local brokerage firms agreed to lower their commission rates to the same amount—approximately 1% less than any other firm in town. After extensive marketing of their new lower rate, these two firms began to see a big increase in the number of listings they received, costing their competitors substantial amounts of money. What about this situation makes it a per se antitrust violation? A. The agreement between the two firms B. The dollar amount the competitors lost C. The marketing efforts the two firms used D. The size of the two brokerage firms

A. The agreement between the two firms

Daniel had a great experience with his apartment and landlord until about three months ago, when the plumbing in the unit above started leaking into his apartment. The landlord keeps saying he'll fix it but hasn't, and now Daniel has mold growing on two walls. Daniel is moving out before his lease has expired. What does this scenario describe? A. Actual eviction B. Constructive eviction C. Mutual agreement D. Termination

B. Constructive eviction

Don and Becky realized too late that the contract they signed for the sale of their home didn't include any language about a rent-back if the home they're building isn't ready in time. What can their listing agent do? A. Create a contract addendum with the required language. B. Create a contract amendment with the required language. C. Create a counter-offer to present to the buyers. D. Terminate the contract on Becky and Don's behalf.

B. Create a contract amendment with the required language.

Darren and Natalie are first-time buyers who have decided to purchase a newly built townhouse. Their agent, Jenner, tells them that the builder must provide a one-year home warranty. Which of the following conditions is most likely true? A. Darren and Natalie are getting a USDA rural development loan. B. Darren and Natalie are using an FHA-insured loan. C. Darren and Natalie are using conventional financing. D. Darren and Natalie made an all-cash offer.

B. Darren and Natalie are using an FHA-insured loan.

Morgan has agreed to sell his home to Dierks, and they've signed a contract. Which of these actions changes the contract from executory to executed? A. Dierks delivered the earnest money to Morgan's broker. B. Dierks' lender funded the loan, and closing took place. C. Dierks's lender approved the mortgage loan. D. Morgan completed the inspection repairs that Dierks requested.

B. Dierks' lender funded the loan, and closing took place.

The cost approach method Burt used before investing in his new community was highly dependent on his depreciation estimates. As they begin building the homes they realize the guest bedroom in each has a point of entry that prospective buyers do not like in the layout of the house. The depreciation of this design defect is ______. A. External depreciation B. Functional obsolescence C. Physical depreciation D. Reoccurring depreciation

B. Functional obsolescence

In order to protect your commission, which of the following must you do 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. Get it in writing.

Ginnie's Aunt Becca listed the old family mansion with Ginnie. Ginnie put it on the market for Becca, but then she and her cousins talked with Becca and decided they wanted to keep the property in the family. What's the best way to terminate the agreement? A. Becca should revoke the listing. B. Ginnie and Becca can mutually agree to terminate the agreement. C. Ginnie should renounce the listing. D. They should wait for the listing to expire.

B. Ginnie and Becca can mutually agree to terminate the agreement

Which of these is the best definition of real estate? A. Everything that's not real property B. Land, plus all things permanently attached to it naturally or artificially C. Real property, plus all of the interests, benefits, and rights included in ownership C. The earth's surface extending downward to the center of the earth and upward to infinity, including permanently attached natural objects

B. Land, plus all things permanently attached to it naturally or artificially

What's the price at which a willing buyer and a willing seller would strike a deal given normal market conditions? A. Insured value B. Market value C. Valuation D. Value in use

B. Market value

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

B. Mechanic's

Which of these is an example of bulk zoning? A. Greenville developers must adhere to specific design parameters for construction within the city's downtown area. B. Misty Falls restricts building any structure within 15 feet of a roadway. C. Oak City developers must include subdivision open space proportionate to the overall development acreage. D. Rushton city council members approved the location of a light industrial building within a currently-zoned agricultural area.

B. Misty Falls restricts building any structure within 15 feet of a roadway.

Claire rents 1,100 square feet of office space in a new professional building. Her rent payment includes insurance and property taxes, but she pays separately for some operating expenses. What kind of lease does Claire have? A. Full-service lease B. Modified gross lease C. Percentage lease D. Triple-net lease

B. Modified gross lease

Elaine owns a home on a flag lot behind James. Her easement for a common driveway runs through James's property. What kind of ownership rights does Elaine have of the driveway that runs through James's property? A. Absolute B. Non-possessory C. Possessory D. Temporary

B. Non-possessory

Four brokerage firms operate in the same small city as Jackson's firm. All the firms charge approximately the same listing commission and pay approximately the same cooperating commission to the selling broker. The commission splits within each firm are also similar. Is this an antitrust violation? Why or why not? A. No. The similarities between commission rates may be suspect, but the similarity between commission splits doesn't matter. B. Not necessarily. The fact that the firms' commission rates and splits are similar doesn't necessarily mean they agreed to fix those values. C. Yes. The fact that the firm's commission rates and splits are so similar is a restraint of trade. D. Yes. The firms' internal commission splits can be the same, but they can't all charge the same commission rate.

B. Not necessarily. The fact that the firms' commission rates and splits are similar doesn't necessarily mean they agreed to fix those values.

Duke's client has asked him for advice on a legal matter. Based on the duty of reasonable skill and care, what should Duke do? A. Give the client the best advice he can based on personal experience. B. Refer his client to an attorney. C. Research the question online and give his client advice based on what he finds. D. Talk to an attorney and relay the information to his client.

B. Refer his client to an attorney.

If your clients are in a competitive bidding situation and want to include multiple contingencies in their offer, what should you say to them? A. "Contingencies kill deals." B. "Great idea. This will help our offer stand out." C. "Let's evaluate which contingencies matter most to you and consider omitting the rest." D. "To be competitive, you should remove all contingencies."

C. "Let's evaluate which contingencies matter most to you and consider omitting the rest."

Alistair bought a townhouse for $285,900. He got a 90% loan and the lender charged him 3-1/2 discount points. How much did Alistair pay in discount points? A. $1,000.65 B. $10,006.50 C. $9,005.85 D. $9,585.00

C. $9,005.85

The Smithwicks, your buyer clients, obtained a 90% loan on their new $400,000 home. At closing, they paid $6,150 for points at closing. How many points did they pay? A. .017 B. .02 C. 1.71 D. 1.8

C. 1.71

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.

Jared, a seller, has found his own buyer and wants to terminate his exclusive right-to-sell listing agreement with Sue, his listing broker. Can he do so without penalty? A. No, because listing agreements may not be terminated until they expire. B. No, because sellers may not sell their own listings. C. No, because the listing agreement is contractually binding. D. No, because this would be a conflict of interest.

C. No, because the listing agreement is contractually binding.

Ken, Dale, and James were brothers who owned more than 100 acres as tenants in common. The relationship between Ken and James disintegrated, and so James initiated a lawsuit. The end result was that the court gave each brother a designated set of acres to own. What did the court grant? A. Bifurcation B. Parcel C. Partition D. Severalty

C. Partition

Which type of listing can help a real estate professional determine how quickly a home in a given price range received an accepted offer? A. Expired B. Foreclosed C. Pending D. Withdrawn

C. Pending

Rohit bought 31 acres of undeveloped and mostly forested land. He is planning a weekend with friends where they'll camp on the property while scouting good locations to place a cabin. Which right in the bundle of rights allows Rohit to do the camping weekend on undeveloped land? A. Disposition B. Exclusion C. Possession D. Power

C. Possession

When representing the seller, what duty do you owe a buyer? A. Advise the buyer on negotiating a better price. B. Pre-qualify the buyer before presenting their offer to your seller. C. Present offers from the buyer to your seller. D. Recommend the buyer obtain a property inspection.

C. Present offers from the buyer to your seller.

What factors directly affect an adjustable rate mortgage? A. Amortization tables, index, and rate B. Index, tax basis, and margin C. Rate, index, and margin D. Rate, loan-to-value ratio, and index

C. Rate, index, and margin

A homeowner has converted two rooms in his home to a rental unit. What does the "Mrs. Murphy" exemption permit him to do? A. Advertise for a tenant of a specific race. B. Move out of the property and rent both portions of it, relying on the "Mrs. Murphy" exemption to permit renting only to single females. C. Refuse to rent to a female tenant. D. Use the services of a real estate professional to advertise for a male tenant.

C. Refuse to rent to a female tenant.

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. Reversionary

C. Remainderman

Jayne was tired of waiting for her subcontractor to get his part of the deal done. The agreed-upon deadlines came and went, and Jayne lost money waiting for the subcontractor to come through. She decided that if the subcontractor weren't going to honor his commitments, neither was she, so Jayne consulted with her attorney and then terminated the contract. This is an example of ______. A. Accepting partial performance B. Mutually rescinding the contract C. Rescinding the contract unilaterally D. Suing for damages

C. Rescinding the contract unilaterally

What's the term for a requirement that all property owners in a subdivision have a six-foot privacy fence surrounding their entire property? A. Deed B. Doctrine of laches C. Restrictive covenant D. Setback

C. Restrictive covenant

Stan and Margo want to redevelop an old industrial site in order to create a microbrewery and event space. However, an environmental review found that hazardous chemicals were once used on site, and there is a possibility they will be released during redevelopment. Stan and Margo may not be liable for cleanup, under what federal law? A. CERCLA B. EIS C. SARA D. Wetlands Conservation Act

C. SARA

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.

Patsy's home had been on the market for five weeks, and two brokers had buyers who were ready to make offers. If Patsy accepted one of those offers, the corresponding broker would be the only one to earn a commission. What type of listing does this describe? A. Exclusive agency B. Exclusive right to sell C. Net listing D. Open listing

D. Open listing

Sue Ellen has a contract to buy Roger's house, which she has always admired, when Roger decides he's ready to move to a senior living community. After Roger finds a suitable senior apartment and moves, Sue Ellen writes a check for the agreed-upon amount, and Roger transfers the deed to her. What is happening in this scenario? A. Assignment B. Breach C. Novation D. Performance

D. Performance

What's the best definition of real property? A. Artificial attachments to land that include things such as fencing, buildings, and walkways B. Earth, soil, and air C. Land, plus all things permanently attached to it naturally or artificially D. Real estate, plus all of the interests, benefits, and rights included in ownership

D. Real estate, plus all of the interests, benefits, and rights included in ownership.

Kristin has been unable to make her mortgage payments. Her property went to auction but the lender didn't accept the high bid. What stage of the foreclosure process is this property now in? A. Eviction B. Foreclosure C. Pre-foreclosure D. Real estate-owned

D. Real estate-owned

A landlord refuses to show or rent an apartment to someone who is not Christian or Jewish. What type of discrimination is this? A. Disability discrimination B. Familial status discrimination C. Racial discrimination D. Religious discrimination

D. Religious discrimination

If a buyer makes an offer that the seller finds lacking, which of the following actions is the seller most likely to take? A. Ask the seller's agent to talk with the buyer's agent. B. Call the buyer to negotiate better terms. C. Increase the asking price. D. Respond with a written counter-offer.

D. Respond with a written counter-offer.

Greta is working with agent Brandon to sell some property. Nelson represents the buyer, Rigby. Of these four parties, who will pay the earnest money? A. Brandon B. Greta C. Nelson D. Rigby

D. Rigby

According to the process appraisers follow, what action is taken first upon being assigned a property for appraisal? A. Determine the highest and best use. B. Gather and analyze data. C. Identify the data that's needed. D. State the problem.

D. State the problem.

Margot has fallen in love with a three-bedroom, 2,500-square-foot property in her friend's neighborhood. It's listed for $400,000. However, just down the street, another three-bedroom, 2,400-square-foot home very similar to the one Margot loves was just listed for $350,000. Margot and her agent immediately make an offer on the second property. Which economic principle is at work here? A. Anticipation B. Conformity C. Progression D. Substitution

D. Substitution

Which economic principle says that a property's value is determined by what it would cost to purchase a similar property? A. Anticipation B. Competition C. Contribution D. Substitution

D. Substitution

Marcus listed his property with Home Sweet Home Realty and one of its listing agents, Ron Savage. About a month later, Ron filed for bankruptcy. Which of the following statements about this situation is true? A. Bankruptcy has no impact on agency agreements. B. Marcus can choose whether or not to continue the listing agreement with Ron. C. The agency agreement is terminated because the agent filed for bankruptcy. D. The agency agreement only terminates if the broker or the principal declares bankruptcy.

D. The agency agreement only terminates if the broker or the principal declares bankruptcy.

Your 15-year-old son just signed a contract joining a health club, which costs $50 a month. Which of the following best describes this contract? A. The contract is missing a legal object. B. The contract is missing offer and acceptance. C. The contract is void. D. The contract is voidable.

D. The contract is voidable.

Which of these is NOT one of the ways in which an agency relationship may be terminated without penalty for either the agent or the principal? A. Delaney signed a buyer's representation agreement with Martha. After Delaney made an offer on a house, she changed her mind and terminated the agency agreement. B. Martha listed Sonja's home for sale. Martha helped Sonja negotiate an offer and performed the other tasks required of her. The closing has taken place. C. Phyllis listed her home with Brad. Brad put the property on the MLS, but Phyllis hasn't heard from him in more than two months. D. Richard listed Ole's ski chalet for sale. Two weeks later, an avalanche destroyed the property.

A. Delaney signed a buyer's representation agreement with Martha. After Delaney made an offer on a house, she changed her mind and terminated the agency agreement.

Home inspector Murray is explaining to first-time buyers what he looks for during a home inspection. What is his primary goal? A. Document health and safety issues that may affect both the cost and enjoyment of the home. B. Estimate how much cosmetic upgrades may cost the buyers. C. Verify lot lines and acreage calculations. D. Verify the presence of any easements or encroachment on the property.

A. Document health and safety issues that may affect both the cost and enjoyment of the home.

When interest rates are ______, buyers are often priced out of the market. A. High B. Low C. Steady D. Variable

A. High

Simon recently passed away. He owned title to his property in severalty, as a fee simple absolute estate. What will happen to his property? A. His heirs, as described in his will or the state law of descent, will get the property. B. His property will transfer to a colleague. C. The property will have no owner and must be sold at auction. D. The property will revert to a remainderman.

A. His heirs, as described in his will or the state law of descent, will get the property.

The Perfect Home brokerage firm was found guilty of running deceptive ads. The Federal Trade Commission might require all of the following EXCEPT ______. A. Letters of apology to all affected consumers B. New ads to correct previous misinformation C. Notification to consumers about deceptive ad claims D. Specific disclosures to consumers

A. Letters of apology to all affected consumers

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).

Which of the following is a potential disadvantage for a buyer who enters into a lease with an option to buy contract? A. The buyer/lessee could lose any funds credited to the purchase price if he breaches the lease's terms. B. The buyer/lessee has to pay higher federal capital gains taxes if purchasing a property through a lease with an option to buy transaction. C. The buyer/lessee has to wait until the property owner is ready to sell the property before he can take possession of it. D. The buyer/lessee is unlikely to qualify for a regular mortgage if he decides to move or buy another property later.

A. The buyer/lessee could lose any funds credited to the purchase price if he breaches the lease's terms.

When does offer and acceptance occur? A. When one party makes an offer, and the other party signs it and returns to the original party B. When one party makes an offer on a property, and the other party turns it down C. When one party makes an offer to a second party, and the second party makes a counter-offer D. When one party signs a contract voluntarily with full understanding of the terms

A. When one party makes an offer, and the other party signs it and returns to the original party

You're representing Crystal in the purchase of a house. Crystal has a trust fund and can easily afford the house on which she's made an offer. Which of the following statements is true? A. Your duty of confidentiality to your client dictates that you not disclose your client's financial situation to the seller. B. Your duty of disclosure to customers and third parties requires that you disclose Crystal's financial status to the seller. C. Your duty of honesty and fairness to customers dictates that you must share with the seller Crystal's ability to pay more for the property than she offered. D. Your duty of working in your client's best interests means you should be showing her properties that are in a higher price range since she can afford it.

A. Your duty of confidentiality to your client dictates that you not disclose your client's financial situation to the seller.

Your seller wants to net $100,000 after the 5% commission is paid. Assuming no closing costs, at what price does the home need to sell for the seller to net this amount? A. $105,163.16 B. $105,263.16 C. $105,363.16 D. $105,463.16

B. $105,263.16

A buyer is purchasing a property for $500,000. His lender's loan-to-value ratio is 90%. How much is the buyer financing? A. $400,000 B. $450,000 C. $50,000 D. $500,000

B. $450,000

You're working with a buyer who's purchasing a home that appraised at $80,000. The buyer is obtaining a 90% loan, and the lender will charge a one-point origination fee at closing. How much will the loan origination fee be? A. $712 B. $720 C. $728 D. $800

B. $720

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

B. 75%

A former client has filed a formal complaint against Ajit, claiming he failed to properly disclose a material fact that the seller didn't disclose. Which of these statements about Ajit's liability is true? A. Ajit is only responsible for disclosing adverse material facts. B. Ajit may be liable if he operates in a state that requires licensees to make a reasonable effort to discover adverse material facts. C. The claim has no base because the seller didn't disclose the information. D. The claim is likely to be dismissed if Ajit operates in a non-full disclosure state.

B. Ajit may be liable if he operates in a state that requires licensees to make a reasonable effort to discover adverse material facts.

Buyer Daphne and seller Kurt signed a sales contract with a definite closing date of May 15. Daphne then learned that she needed to move the closing date to June 15. What document should she use to make this change? A. Addendum B. Amendment C. Annotation D. Appendix

B. Amendment

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

Tracy is looking in the MLS and sees a listing marked "REO." Which of these statements regarding REOs is correct? A. An REO property is one that the lender is trying to help the owner sell before beginning foreclosure proceedings. B. Banks acquire REOs through failed foreclosure sales or deed in lieu of foreclosure actions. C. REOs are properties that the lender has given permission to sell for less than the loan amount. D. REOs refer to investment properties a bank owns.

B. Banks acquire REOs through failed foreclosure sales or deed in lieu of foreclosure actions.

Johannes must obtain a permit for a construction project that is located right next to a wetlands. Which federal law or regulation requires him to get the permit? A. Army Corps Construction Regulations B. Clean Water Act C. Coastal Zone Management Act D. Rivers and Harbors Act

B. Clean Water Act The Clean Water Act protects wetlands and other waterways.

A "homes for sale" magazine contains the following ad: "One-bedroom condo. Corner unit with beautiful ocean views. Financing available, 5.25% APR." Which of these statements is true? A. The ad is in compliance with TILA because condominiums aren't covered under Regulation Z. B. The ad is in compliance with TILA because providing the APR doesn't trigger the required disclosure of all credit terms. C. The ad is not in compliance because TILA requires all financing terms to be stated if the APR is stated. D. The ad is not in compliance with TILA because it mentions financing without including all of the terms of the financing.

B. The ad is in compliance with TILA because providing the APR doesn't trigger the required disclosure of all credit terms.

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.

What's the purpose of a buyer representation agreement? A. To disclose brokerage relationship options to consumers B. To establish an exclusive agent/buyer relationship C. To limit the duties a licensee may perform for a consumer D. To register an agency as a real estate brokerage firm

B. To establish an exclusive agent/buyer relationship

When does a transfer tax become payable? A. 30 days after recording of the deed B. Upon recording of the deed C. When an offer to buy is made D. When the inspection report is complete

B. Upon recording of the deed

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

C. Derrick

Donald and Martina decided to purchase a newly built home, and their agent, Ed, recommended that they get a professional home inspection done. The couple tells Ed that they thought inspections were only for older homes. How should Ed respond to that? A. Ed needs to inform his clients that home inspections are most important for newer properties. B. Ed should let them know that lenders for new construction loans require inspections. C. Ed should remind them that every dwelling, no matter the age or size, should have a home inspection. D. Ed should tell him that he doesn't trust the builder.

C. Ed should remind them that every dwelling, no matter the age or size, should have a home inspection.

A good loan officer should do all of the following except for which one? A. Be available to answer questions. B. Educate clients. C. Encourage clients to sign quickly. D. Put clients at ease.

C. Encourage clients to sign quickly.

Thad received multiple offers on his property and is reviewing them with his agent Nora. All of the offers have at least one contingency. Nora recommends that they reject the second offer, because it has a contingency that's generally the most risky. Which contingency is that? A. Appraisal B. Financing C. Home sale D. Inspection

C. Home sale

Georgina is an escrow agent who's holding funds for several transactions. Which of these statements about how she'll disburse these funds is true? A. If the transaction closes, Georgina will disburse the earnest money to the listing broker as part of his commission. B. If the transaction closes, she'll refund the earnest money to the buyer, since the buyer brings the full amount necessary for the down payment and loan costs to closing. C. If the transaction doesn't close, Georgina will disburse the earnest money as instructed by the parties or according to state law. D. If the transaction doesn't close, Georgina will refund the earnest money to the buyer.

C. If the transaction doesn't close, Georgina will disburse the earnest money as instructed by the parties or according to state law.

Ashish is purchasing a bank-owned property. His real estate agent tells him the bank is offering insurable, not marketable, title. What does this mean to Ashish? A. An insurable title has uncurable title defects, so Ashish should terminate his contract. B. Insurable title carries a higher standard of assurance than marketable title, so Ashish shouldn't be concerned. C. Insurable title is one that may have known defects but is still insurable. Ashish should carefully review the title policy. D. The title company will include any easements or other title defects as exceptions on the policy, which is a concern for Ashish.

C. Insurable title is one that may have known defects but is still insurable. Ashish should carefully review the title policy.

What's the purpose of a firewall? A. It backs up your files to an external hard drive. B. It encrypts your email. C. It prevents hackers from infecting your system with viruses, worms, and malware. D. It stores logins and passwords.

C. It prevents hackers from infecting your system with viruses, worms, and malware.

It's 12,280 feet from Missy's house to the nearest coffee shop. Approximately how far is this? A. Just over a mile B. Just over half a mile C. Just over two miles D. Just under a mile

C. Just over two miles

Which of the following could be a sign of a plumbing problem? A. Copper pipes B. Cracks in the basement wall C. Low water pressure D. Rotting around the soffit

C. Low water pressure

Which of these is NOT an example of a group boycott? A. Acme Realty offers discounted services. Berringer Realty and Hawthorne Real Estate Group decide not to show any of Acme's listings and to prohibit showings to Acme buyers so they can drive Acme out of business. B. Deb, a licensee, is unhappy with the marketing materials a local company produced. She shares her concerns with Irving, a colleague, and they agree to avoid doing business with this company—and to share the news with other colleagues. C. Sean and the associated brokers in his firm agree to purchase their marketing materials from a single supplier so they get a quantity discount. D. Several brokerages in a certain area agree to stop running advertisements in a local publication.

C. Sean and the associated brokers in his firm agree to purchase their marketing materials from a single supplier so they get a quantity discount.

Jean is a licensee for At Home Realty. She chooses her own schedule, sets her own sales goals, and is compensated based on commission. She must complete three training courses each quarter and the required number of CE hours to maintain her license. She must belong to the local REALTORS® association. The firm doesn't pay for employment taxes for Jean. She receives no insurance or other benefits. Which of these factors might cause the IRS to classify Jean as an employee instead of an IC? A. She must belong to the local REALTORS® association. B. She must take a required number of continuing education hours. C. She must take three training classes through the firm. D. She receives no benefits from the firm.

C. She must take three training classes through the firm.

Which statement about radon testing is true? A. It can only be performed by a licensed professional. B. It is not necessary. C. Test kits are available for purchase. D. Test kits are not available to the general public.

C. Test kits are available for purchase.

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.

Alex's client doesn't want prospective buyers to track dirt and mud throughout her clean home. She asks Alex to place a box of booties by the front door with a sign asking visitors to wear the booties while viewing the home. Alex does as his client instructs—no questions asked. What fiduciary duty is this an example of? A. The duty of accounting B. The duty of loyalty C. The duty of obedience D. The duty of reasonable skill and care

C. The duty of obedience

Gus has applied for a home equity line of credit from his federally insured bank so that he can make some renovations to his kitchen. The same bank is his lender for his home mortgage. Will this loan be subject to Real Estate Settlement Procedures Act requirements? A. No, because Gus won't be using a real estate professional. B. No, because there's no transfer of title involved. C. Yes, because RESPA applies to any residential loan transaction from a federally insured financial institution, including equity lines of credit. D. Yes, because the bank is also the lender for his home mortgage. If he'd used a different lender, RESPA would not apply.

C. Yes, because RESPA applies to any residential loan transaction from a federally insured financial institution, including equity lines of credit.

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

Joyce just closed on a condo for $366,900 and put down 20% to obtain an 80% loan and avoid having to pay for private mortgage insurance. How much equity does she have in her condo? A. $146,760 B. $220,140 C. $293,520 D. $73,380

D. $73,380

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

D. Department of Housing and Urban Development

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? A. Bad B. Dynamic C. Elevator D. Escalator

D. Escalator

Prior to a certain act's existence, there was no legal protection for women who endured sexual harassment from landlords and sellers when they attempted to obtain housing. What's this act called? A. Civil Rights Act of 1866 B. Fair Housing Amendments Act of 1988 C. Federal Fair Housing Act of 1968 D. Housing and Community Development Act of 1974

D. Housing and Community Development Act of 1974

Which one of the following actions would result in the legal termination of an agency agreement? A. The client wants the seller to make improvements to the property. B. The client wants to attach an addendum to the sales contract. C. There's an unexpected death in the agent's family. D. The term specified in the agency agreement expired.

D. The term specified in the agency agreement expired.

What's providing legal advice to a client considered? A. A good habit B. Going above and beyond C. Great customer service D. The unauthorized practice of law

D. The unauthorized practice of law

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

D. To provide the estimated closing costs for Lawrence's loan

Which of these was enacted to give electronic signatures, records, and contracts legal recognition equal to that of paper records and signatures? A. Federal Real Estate License Act B. Statute of frauds C. Statute of limitations D. Uniform Electronic Transactions Act

D. Uniform Electronic Transactions Act