national real estate questions ( missed )
A general agency empowers the agent to: Select one: A. Transact matters of all types for the client B. Transact the client's affairs in a certain business C. Perform only specific acts for the client D. Perform any legal act for the client
Transact the client's affairs in a certain business
Bob the Bigot imposes a deed restriction on his property, which prohibits the sale of his home to anyone from France. Bob's deed restriction is: Select one: A. Voidable B. Void C. Enforceable D. Irrelevant
Void
When would the defeasance clause in a mortgage take effect? Select one: A. When the entire debt is repaid B. When the borrower misses a payment C. When the borrower sells the property for less than the amount of the existing loan D. When the property is destroyed by natural causes
When the entire debt is repaid
A joint tenant wants to sell his interest without consent from the other joint tenants. Can he do this? A. Yes, because each joint tenant may sell independently of the others B. Yes, because survivorship is present in joint tenancy C. No, because all co-owners must first agree to sever the tenancy D. No, because the unity of interest in a joint tenancy protects the other co-owners
Yes, because each joint tenant may sell independently of the others
Broker Marco was showing a tract of land with irregular boundaries. When asked about a boundary, Marco indicated that it ran from the edge of the stone wall to the creek. He knew that this was not exactly accurate, but it was pretty close to the actual line. After the buyer entered into contract, she was shown a survey which reflected the true boundary. Was Marco guilty of misrepresentation? Select one: A. No, verbal statements are not binding B. No, the buyer was responsible for having the property surveyed C. Yes, the broker was responsible for verifying the official records D. Yes, because he knew his statement was not completely accurate. Feedback
Yes, because he knew his statement was not completely accurate
Seller Corcoran is in very poor health and cannot work on his farm anymore. Corcoran's broker discloses this fact to prospective buyers. Has the broker done anything wrong? Select one: A. No, because it is a material fact B. No, so long as the farm sells at or above the list price C. Yes, because it is contrary to Corcoran's interest D. Yes, because Corcoran's status is protected by Federal Fair Housing Laws
Yes, because it is contrary to Corcoran's interest
A private homeowner is selling his property, but refuses to enter into a contract because the offerors are a black couple. Has the homeowner violated the law and, if so, which law? Select one: A. Yes, Title VIII of the 1968 Federal Fair Housing Act B. Yes, the Civil Rights Act of 1964 C. Yes, the Civil Rights Act of 1866 D. No, the owner is exempt from the law because he is selling his own property in his own name
Yes, the civil rights act of 1866
A property is valued using the income approach to valuation. If the capitalization rate remains the same, but the NOI increases, will the property value be affected? Select one: A. Yes, the property value will decrease B. No, the property value will remain the same C. Yes, the property value will increase D. There is not enough information to choose an answer
Yes, the property value will increase
A property was purchased for $125,000 with a down payment of $25,000. The current loan balance is $94,000 and the appraised value is $132,400. What is the owner's equity? Select one: A. $31,400 B. $37,400 C. $38,400 D. None of the above
Your answer is incorrect. (calculations for transactions) By definition, equity is the difference between the stated value of property and the debt directly associated with the property. In this case, the value is $132,400 and the debt is $94,000. Equity = $132,400 - $94,000 = $38,400 The correct answer is: $38,400
A lady buys a house for $25,000. In the years after her purchase, the value of her house appreciates 35%, then decreases 6.25% below this high point. What is the current value of the house if rounded to the nearest dollar? Select one: A. $31,641 B. $32,350 C. $36,251 D. $39,342
Your answer is incorrect. (calculations for valuation) To determine the highest value of the property, use the following calculations: Value = (1 x $25,000) + (0.35 x $25,000) = $25,000 + $8,750 = $33,750 As an alternative, one can also use the following shortcut: Value = 1.35 x $25,000 = $33,750 From there, we can calculate the later depreciation to reach the current value for the property: Depreciation = $33,750 x 0.0625 = $2,109.38 Current Value = $33,750 - $2109.38 = $31,640.62 Rounded to the nearest dollar, $31,641 is the current value of the property. The correct answer is: $31,641
The police power includes all of the following regulations EXCEPT: Select one: A. Zoning and building codes B. Condominium covenants, rules, and regulations C. Government land-use regulations D. Real estate licensing laws Feedback
Condominium covenants, rules, and regulations
A person has fee simple ownership of a unit in a multi-story building. She is also required to pay property taxes on that unit. Which type of common interest ownership could the owner have? Select one: A. Proprietary lease B. Cooperative ownership C. Condominium ownership D. Joint tenancy in the common area
Condominium ownership
Which of the following is required for a contract to be valid? Select one: A. Must be written B. Property description C. Consideration D. All of the above
Consideration
S&Ls primarily make: Select one: A. Government backed loans B. Commercial loans C. Conventional loans D. Both A and B
Conventional loans
The purpose of a recording act is to: Select one: A. Ensure title is marketable B. Raise revenue C. Create a local public record D. Protect property owners
Create a local public record
The state decides to widen a highway. It will be necessary to use six feet of private property on each side. The state's power to take this property is derived from: A. Police power B. Zoning power C. Condemnation proceedings D. None of the above
D. None of the above
Which of the following circumstances will not terminate an agency by operation of law? Select one: A. Destruction of the property B. Discharge of the broker by the principal C. Death of the principal D. Death of the broker
Discharge of the broker by the principal
If a seller deposits the deed with an escrow agent, but dies before it is delivered to the purchaser, the transfer of title becomes effective on the date the deed was deposited into escrow due to the: Select one: A. Party's consent B. Law of contracts C. Parole evidence rule D. Doctrine of relation-back
Doctrine of relation-back
Which of the following actions is NOT a form of steering? Select one: A. Excluding Hispanic Americans from a Caucasian community B. Attempting to attract only Puerto Ricans into a Puerto Rican neighborhood C. Encouraging Caucasians to sell by saying that African Americans are moving into the neighborhood D. Efforts to keep Asian Americans out of a Caucasian neighborhood
Encouraging Caucasians to sell by saying that African Americans are moving into the neighborhood
If an owner of real estate dies, leaves no will, and has no heirs, the property will revert to the government through a process known as: Select one: A. Eminent domain B. Reversion C. Escheat D. Inverse condemnation Feedback
Escheat
What would NOT terminate an agency agreement by operation of the parties? Mutual consent B. Renunciation C. Revocation D. Expiration of time
Expiration of time
The owner of a fee simple absolute estate leaves a will, which only specifies that he will leave a life estate to one party and a remainder estate to another. Upon the death of the life tenant, the remainderman could have a: Select one: A. Fee simple estate B. Life estate C. Leasehold estate D. Fee simple determinable estate
Fee simple estate
One property has lower taxes, new fixtures, and conforms to the style of other properties in the neighborhood. Another nearby property does NOT have any of these benefits. The latter property would have: Select one: A. Economic desirability B. Functional desirability C. Economic obsolescence D. Functional obsolescence
Functional obsolescence
Mr. Gregory is selling his house and puts a "FOR SALE BY OWNER" sign in the yard. Salesperson Gary calls, identifies himself, and asks for the key to show the property. Mr. Gregory agrees. What would best describe the relationship between Mr. Gregory and Gary? Select one: A. Mr. Gregory is Gary's principal B. Gary is Mr. Gregory's agent C. Gary's broker is the agent of Mr. Gregory for a reasonable time D. No agency relationship exists
Gary's broker is the agent of Mr. Gregory for a reasonable time
Under RESPA, the Settlement Costs Booklet informs borrowers of: Select one: A. All the payments expected to be deposited into the escrow account B. The actual fees and services will be provided C. Whether the lender expects someone else to service the loan D. How to get the best possible mortgage and tips on homeownership
How to get the best possible mortgage and tips on homeownership
Which of the following is most likely to render a contract void? Select one: A. Fraud in the inducement B. Mutual mistake C. Illegal purpose D. All of the above
Illegal purpose
In relation to the Closing Disclosure Form, which situation would not trigger an additional 3 day waiting period before settlement? Select one: A. Increasing the APR B. Increasing the loan amount C. Switching to a different type of loan D. Adding a pre-payment penalty to the loan
Increasing the loan amount
A property owner tells the broker that his property is structurally sound, but the broker later discovers that there are termites on the property. The broker must: Select one: A. Inform the seller and all prospective buyers B. Contact a pest control company C. Encourage the seller to remedy the problem D. All of the above
Inform the seller and all prospective buyers
When estimating the value of a 20-year old house, an appraiser would place the greatest emphasis on: Select one: A. Market data approach B. Income approach C. Capitalization approach D. Both B and C
Market data approach
Which of the following facts could cause an otherwise valid contract to be void and invalid? Select one: A. Misrepresentation by one of the parties B. Intoxication C. Mutual, unintentional, and material mistake in fact D. All of the above
Misrepresentation by one of the parties
Who represents the buyer in the traditional real estate transaction? Select one: A. Listing broker B. Selling broker C. Selling salesperson D. No one
No One
Jon obtains option contract for Joan's house. On the last day of the option period, Jon finds another house and declines to exercise his right. Jon then requests that Joan return his previous payment. Must Joan comply? Select one: A. Yes, because Jon failed to exercise his right B. No, unless Jon and Joan agreed in the option contract C. Yes, because Joan would otherwise be unjustly enriched D. No, unless the contract is otherwise invalid
No, Unless the contract is otherwise invalid
Susan and Sally enter into a buyer-broker agreement. However, Sally subsequently falls on hard times. Susan gets nervous and terminates the agreement. Is Susan in breach? Select one: A. Yes, if Sally is the broker B. No, so long as Sally takes no action C. No, if Sally filed for bankruptcy D. Yes, if both parties agreed
No, if sally filed for bankruptcy
Harry hires David to be his buyer-broker. However, a few days later, Harry spots a property for sale while driving home from work. He falls in love with the property and makes the purchase without David's assistance. Two days later, David demands a commission. Is Harry required to pay a commission to David? Select one: A. Yes, because the agreement was in force when Harry bought the property B. Yes, so long as there is an exclusive agency buyer agreement C. No, because David was the procuring cause in the sale D. No, so long as the agreement was not an exclusive buyer agreement
No, so long as the agreement was not an exclusive buyer agreement
An appraiser is estimating the value of a house. The sellers want to list for $370,000 since it has 4 bedrooms, 3 bathrooms, and a pool. A comparable property recently sold for $350,000 (with 3 bedrooms, 3 bathrooms, and a sun room). In the adjustment process, the appraiser estimates that an extra bedroom is worth $45,000, the pool is worth $4,000, and the sun room is worth $17,000. What is the adjusted sales price of the subject property? Select one: A. $338,000 B. $382,000 C. $402,000 D. None of the above Feedback
None of the above
Susan has a listing agreement with Tom to sell his house and an adjoining lot. Susan sells Tom's house to Pete. Before closing, Susan also negotiates a valid option contract with Pete for Tom's adjoining lot, which is listed at $150,000. When will Susan earn her commission on the adjoining lot? Select one: A. When the sale on the home closes B. When the option period expires C. Upon Tom's acceptance of Pete's offer of the option D. None of the above
None of the above
A couple buys a furnished home by assuming the existing loan. Which of the following papers would the settlement attorney NOT have to prepare? Select one: A. Note B. Bill of sale C. Assumption papers D. Warranty deed
Note
A salesperson listed a property where a murder recently occurred. If the salesperson shows the property without advising potential buyers of the murders, the salesperson would be guilty of:Select one: A. Fraud B. Misrepresentation C. Puffery D. Nothing
Nothing
Agency relationships include all of the following duties, EXCEPT: Select one: A. Obedience B. Notice C. Confidentiality D. Accounting
Notice
A listing agreement will automatically terminate: Select one: A. If the selling agent changes brokers B. On the date specified in the listing agreement C. If the owner abandons the property D. All of the above
On the date specified in the listing agreement
What is the difference between an easement and a deed restriction? Select one: A. One can "run with the land" and the other cannot B. One controls the use and the other controls the access C. One is created in a deed and the other is not D. Both must be in writing
One controls the use and the other controls the access
Which of the following is the BEST example of a unilateral contract? Select one: A. Lease B. Option C. Real estate contract for sale D. Listing agreement
Option
A mortgage that includes both real and personal property is a(n): Select one: A. Blanket mortgage B. Open mortgage C. Chattel mortgage D. Package mortgage Feedback
Package mortgage
Which of the following statements is true? Select one: A. Physical life is generally longer than economic life B. Physical life is generally shorter than economic life C. Physical and economic life are generally the same D. It is impossible to tell
Physical life is generally longer then economic life
The Federal Fair Housing Law is intended to protect the public from all of the following actions, EXCEPT: Select one: A. Blockbusting B. Price fixing C. Steering D. Redlining
Price fixing
Quincy sold a piece of property to Ralph, and transferred title through a quitclaim deed. Later, a court determined that Quincy did not own the property. Which of the following statements is true in this situation? Select one: A. Ralph owns the property because the court action happened after the transfer of title B. Ralph has no interest in the property C. Ralph has a good claim against Quincy for misrepresentation D. Both B and C
Ralph has no interest in the property
Desmond the Developer owns a 30-acre tract of land along a major river. He plans to build a river front community in this location. However, before applying for his building permit, Desmond realizes that the zoning has changed to prohibit residential development. Desmond will likely: Select one: A. Receive compensation if he sues on a theory of inverse condemnation B. Receive no compensation because the regulation is not pervasive C. Receive just compensation following condemnation D. Receive compensation only if the zoning change is for a public purpose
Receive no compensation because the regulation is not pervasive
Which of the following practices would most likely deteriorate the economic status of a neighborhood? Select one: A. Redlining B. Steering C. Overdevelopment of property D. Bulk zoning
Redlining
If there is a breach to a valid real estate sales contract, what remedy is available to the non-breaching party? Select one: A. Rescission B. Specific performance and monetary damages C. Punitive damages D. Both A and B
Rescission
When a property sells, who pays to record a satisfaction or release of the existing deed of trust? Select one: A. Buyer B. Seller C. Lender D. Broker Feedback
Seller
Federal Fair Housing Laws do NOT provide protection on the basis of: Select one: A. Gender B. Handicap C. Sexual preferance D. Single parenthood
Sexual preference
If a buyer defaults on a valid sales contract, which performance remedy is available to the seller? Select one: A. Specific performance B. Monetary damages C. Liquidated damages D. Both A and B
Specific performance
The maximum interest rate charged for a home mortgage is most likely to be determined by which of the following?Select one: A. Federal law B. State law C. Federal Home Loan Bank Board D. Federal Reserve
State law
A Hispanic family asks to see homes in the $125,000 to $140,000 price range. The broker only showed them property in integrated areas of the community, though there were appropriately priced homes in all-white areas of town. The broker is guilty of: Select one: A. Steering B. Blockbusting C. Gentrification D. Nothing, because the family did not specifically request to see the homes in all-white areas
Steering
Which of the following items is NOT essential to a valid sales contract? Select one: A. Competent parties B. Termination date C. Consideration D. All of the above are essential Feedback
Termination date
In a real estate transaction, which of the following facts MUST an agent disclose to his principal? Select one: A. That a minority is moving into the area B. The average commission C. That the buyer intends to violate deed restrictions D. That the buyer has had previous credit problems Feedback
That the buyer has had previous credit problems
Enforcement of the Fair Housing Law of 1968 is the primary responsibility of: Select one: A. The Federal Housing Administration B. The Federal Department of Housing and Urban Development C. The Federal National Mortgage Association D. The Government National Mortgage Association
The Federal Department of Housing and Urban Development
All of the following statements about the impossibility defense must be true, EXCEPT: Select one: A. At least one party is excused from performance B. At least one party cannot legally perform as agreed C. The contract could be rescinded, pursuant to a rescission agreement D. Neither party is liable for damages
The contract could be rescinded, pursuant to a rescission agreement
The vendee is: Select one: A. The one who buys or offers to buy B. The one who sells or offers to sell C. The one who lends or offers to lend money D. The one who borrows or offers to borrow money
The one who buys or offers to buy
A purchaser submits an offer to a seller, with the condition that the property be financed by a conventional loan at no more than 1% interest. If the seller agrees, but such financing cannot be obtained, which of the following is true? Select one: A. The purchaser loses his deposit, but is relieved of further liability B. The seller is obligated to return the deposit plus interest C. The seller is obligated to return the buyer's deposit D. The purchaser loses his deposit and the seller is entitled to specific performance
The seller is obligated to return the buyer's deposit
A buyer enters into a sales contract with a seller. Which of the following facts could make the sales contract voidable? Select one: A. The buyer provides no earnest money deposit B. The seller, being illiterate, signed the agreement with an "X" C. The seller was under the influence of alcohol when the contract was signed D. The seller dies after executing the contract, but before closing
The seller was under the influence of alcohol when the contract was signed
For closed real estate transactions, a report must be filed with the IRS on form 1099-S. Required information includes the seller's name, social security number, and: Select one: A. The buyer's name and social security number B. The selling price of the property C. The name of a mortgage lender D. A description of the property
The selling price of the property
To be legally binding, a real estate sales contract MUST contain a: Select one: A. List of personal property B. Commission to be paid to the broker C. Property Description D. All of the above
property description
When a contract is breached, the injured party may: Select one: A. Not sue for monetary damages B. Not sue for specific damages C. Rescind the contract bilaterally D. Rescind the contract unilaterally
rescind the contract unilaterally
A lender requires that three months of interest be held in a reserve account for all new construction loans. If a $860,000 loan is made at 8.5% interest, how much interest will the lender require for the reserve account? Select one: A. $6,091 B. $7,310 C. $13,401 D. $18,275
Your answer is incorrect. (general math concepts) Calculate the interest amounts as follows: Annual interest = $860,000 x 0.085 = $73,100 Monthly Interest = $73,100 / 12 = $6,091.67 Reserve amount = $6,091.67 x 3 = $18,275.01 Rounded to the nearest dollar, the lender will require $18,275 in the reserve account. The correct answer is: $18,275
How can an agency relationship be created? Select one: A. In writing B. Implicitly C. Orally D. All of the above
all of the above
To have any legal affect, plats drawn from the lot, block, and subdivision method must: Select one: A. Include a plat B. Be pre-approved by the country or city before recordation C. Be recorded D. All of the above Feedback
all of the above
Which type of listing agreement allows the seller to sell his property and NOT have to pay a commission, but assures the broker a commission if anyone else (other than the owner) sells the property? Select one: A. An open listing B. An exclusive agency listing C. A special listing D. An exclusive right-to-sell listing
an exclusive agency listing
When may a counteroffer be withdrawn? Select one: A. Within 24 hours after acceptance B. Within 36 hours after acceptance C. At any time before acceptance D. At any time before closing Feedback
at any time before acceptance
When the grantor's tax is calculated, how does the tax amount appear on the settlement sheet? Select one: A. Debit the buyer; credit the seller B. Debit the seller; credit the buyer C. Credit the seller only D. Debit the seller only Feedback
debit the seller only
Jane decides to update the bathrooms before selling her home. By renovating the outdated bathroom fixtures, she has actually increased the value of her home. The outdated fixtures are an example of: Select one: A. Physical obsolescence -- curable B. Physical obsolescence -- incurable C. Functional obsolescence -- curable D. Functional obsolescence -- incurable
functional obsolescence -- curable
All of the following terms are economic characteristics of land, except: Select one: A. Assemblage B. Scarcity C. Immobility D. Improvements
immobility
Which of the following statements must be true of an industrial park? Select one: A. It is surrounded by a buffer B. It is zoned industrial C. It is leased from a developer D. Both A and B Feedback
it is zoned industrial
A local government changed the zoning for a large parcel of property. As a result, the property decreased in value. The government: Select one: A. Must compensate the owners for the loss B. Must compensate the owners for the entire value of the property C. Need not compensate the owners at all D. Need not compensate the owners unless they contest
must not compensate the owners at all
What is the covenant in a deed where a grantor guarantees that no one has any other interest that might disturb the grantee's possession? Select one: A. The covenant of further assurances B. The covenant against encumbrances C. The covenant of quiet enjoyment D. The covenant of seisin
the covenant of quiet enjoyment
Which of the following statements is true about state-chartered S&Ls? Select one: A. They only make conventional loans B. They may obtain FDIC insurance C. The must obtain FDIC insurance D. They only make government backed loans
they may obtain FDIC insurance
A unilateral contract arises: Select one: A. When the offeror signs the contract B. Upon completion of the requested act C. When the offeree signs the contract D. After a reasonable period of time
upon completion of the requested act
Which pair is the most appropriate means of estimating value? Select one: A. Bob's house -- Cost approach B. The Raymond Civic Center -- Income approach C. Rookie Apartments -- Market data approach D. Valley View Mall - Income approach
valley view mall - income approach
Under a contract of sale, the seller is most likely to be the: Select one: A. Offeror B. Vendor C. Grantee D. Vendee Feedback
vendor
John Doe is trying to rent a bedroom in his house. A Latin American applies and is told by the owner (Doe), "I will only rent to a Caucasian." Which law has John violated, if any? Select one: A. 1968 Fair Housing Law B. Civil Rights Act of 1988 C. Civil Rights Act of 1964 D. None of the above
1968 Fair Housing Law
Agnes decides to impose a restrictive covenant (a negative covenant or deed restriction) that will apply to any future owners of the property she currently possesses. Agnes must have: Select one: A. A lease B. A fee simple estate C. An easement D. Either A or B
A fee simple estate
A restrictive covenant would most likely be enforced by: Select one: A. A neighbor B. A zoning official C. A police officer D. A judge
A judge
Zorba owns property and gladly allows his friend, Young, to use it. To best protect Zorba's interest, he should give Young: A. An easement in gross B. A right of way C. An appurtenant easement D. A license
A license
Which of the following persons would likely NOT be an agent? Select one: A. A real estate salesperson handling referrals only B. A property manager employed by the owner C. A person working for a multiple listing service D. A person holding a power of attorney
A person working for a multiple listing service
When the grantor of a deed swears that he is conveying title of his own free will, this action is referred to as: Select one: A. Execution B. Acknowledgment C. Novation D. Authentication Feedback
Acknowledgment
An individual, appointed by the court to handle the affairs of someone who died intestate, is exempt from the State of Order's License Law. This person is called a(n): Select one: A. Executor B. Testator C. Administrator D. Trustee
Administrator
Building codes: Select one: A. Could be based on national standards B. Are enforced locally C. Involve a certificate of occupancy D. All of the above
All of the above
The difference between an employee and an independent contractor depends on: Select one: A. Scope of work B. Degree of supervision C. Who pays insurance D. All of the above
All of the above
Which of the following could be an enforceable deed restriction? Select one: A. Exterior design B. Building size C. Limitations on the height of trees D. All of the above Feedback
All of the above
A broker wants to be compensated if anyone else sells his listed property during the listing period. What type of listing should the broker acquire? Select one: A. An exclusive right-to-sell listing B. An open listing C. An exclusive agency listing D. A net listing
An exclusive right-to- sell listing
A legal land description must: Select one: A. Be sufficient to identify the property B. Carry the measurements to the nearest inch C. Show the area of the land being described D. Contain an informal reference
Be sufficient to identify the property
Restrictive (negative) covenants cannot: Select one: A. Be based on aesthetic considerations alone B. Restrict the owner's lawful use of the land C. Be enforced over zoning ordinance, unless they are less restrictive than the zoning ordinance D. Be too broad
Be too broad
All of the following situations are examples of downzoning, except: Select one: A. From single family dwellings to multi-unit apartments B. From agricultural use to single-family dwellings C. From single-family dwellings to a conversation area D. Both A and B
Both A and B
Deed restrictions apply to: Select one: A. Current owners B. Subsequent owners C. All property owners in a neighborhood D. Both A and B Feedback
Both A and B
Who pays excise taxes? Select one: A. Grantor B. Grantee C. Broker D. Both A and B
Both A and B
The government's right to take private property for public improvements is subject to all of the following requirements, except: Select one: A. The ownership interest held by the current owner B. Public purpose C. Economically profitable uses of the land by the owner D. Both A and C
Both A and C
Zelda wants to move into a subdivision with her giraffe. Which of the following items will best determine whether she can keep her giraffe on the property? Select one: A. The Constitution B. Zoning ordinances C. Deed restrictions D. Both B and C Feedback
Both B and C
Which regulations are designed to control density and over-crowding? Select one: A. Buffer zoning B. A master plan C. Spot zoning D. Bulk zoning
Bulk zoning
A property has been appraised, exposed to the market for a reasonable length of time. It finally sells. Who determines the market value of the property? Select one: A. Lender B. Buyer C. Appraiser D. Seller
Buyer
Real property can be changed into personal property: Select one: A. By the right of appropriation B. By severance C. By the law of capture D. Never, because land is indestructible
By severance