Real Estate Exam Preparation - Federal
An ad included a term that triggered full disclosure of loan terms. The ad stated _______________. 1. $10,000 down 2. 8% APR 3. Low down payment 4. Payments lesser than rent
1. $10,000 down
A property sold for $125,000, which was 25% more than the purchase price. The original purchase price was ________________. 1. $100,000 2. $93,750 3. $75,000 4. $31,250
1. $100,000
A couple bought a rental house for $195,000. It's assessed value was $180,000. If the tax rate is $1.50 per $100 of assessed value, what is the monthly contribution the lender will require for taxes? Round to the nearest cent. 1. $225.00 2. $2,700.00 3. $250.00 4. $3,000.00
1. $225.00
Which would have the most leverage? 1. $68,000 purchase with a 80% loan. 2. $83,000 purchase with a 1st mortgage for $30,000, a 2nd mortgage for $10,000, and a personal note for $7,000. 3. $93,000 purchase with a 1st mortgage for $50,000 and a 2nd mortgage for $20,000. 4. $103,000 purchase with cash.
1. $68,000 purchase with a 80% loan.
Upon the death of one of the principals to a contract, which type of contract will not terminate? 1. A fully executed Contract to Buy and Sell 2. An Exclusive Right-to-Sell Listing during the listing period 3. An Exclusive Right-to-Buy during the agency period 4. A fully executed Employment Contract with a broker
1. A fully executed Contract to Buy and Sell
Of the following transactions, which will result in the greatest net proceeds to the seller? 1. A sales price of $110,000 with a commission of 7% and closing costs of $1,280. 2. A sales price of $108,000 with a commission of 6% and closing costs of $1,308. 3. A sales price of $106,000 with a commission of 4% and closing costs of $820. 4. A sales price of $105,000 with a commission of 3% and closing costs of $980.
1. A sales price of $110,000 with a commission of 7% and closing costs of $1,280
On the Closing Disclosure, the buyer's property tax liability with show up as a ________________. 1. Buyer credit 2. Buyer debit 3. Seller credit 4. Seller debit
1. Buyer credit
Scenario A John and Mary Apton list their home for $152,000. There is an appurtenant easement to access a large lake which is deeded. A coal-fired power plant is slated to open 5 miles from the property next year. An Environmental Impact Statement is due on March 7. Agent Pacheco presents an offer to the Aptons. It is a land contract for $142,000 with an 8% interest rate due and payable in 10 years. It is accepted. The offer is contingent on the Environmental Impact results. Closing is for June 1. Taxes are $3,040, commission is 6.5% (buyer's agent commission is 2.8%), taxes and insurance are $675, and the recording fee is $25 The Environmental Impact Statement showed the value of the property would not be impacted. Use a banker's calendar. Seller is responsible for the day of closing. How does the HUD-1 reflect the buyer's tax liability? 1. Buyer debit $0 2. Buyer credit $3,040 3. Seller credit $3,040 4. Buyer debit $1,249
1. Buyer debit $0
The broker placed funds from his escrow account into his operating account and then used the money to take his client out to dinner. This is called ______________. 1. Conversion 2. Convergence 3. Stealing 4. Unethical
1. Conversion
A utility bill for $46.09 was due in advance on the 1st of March and not paid by the seller. At the closing on March 11, the proration would be shown as _________________. 1. Debit the seller $16.90; Debit the buyer $29.19 2. Debit the seller $14.87; Debit the buyer $31.22 3. Debit the seller $15.36; Debit the buyer $30.73 4. Debit the seller the full $46.09 as the bill is delinquent
1. Debit the seller $16.90; Debit the buyer $29.19
What relationship implies a position of trust and confidence? 1. Fiduciary 2. Transaction-Brokerage 3. Confidential 4. Principal
1. Fiduciary
Personal assets of an investor could be subject to a creditor's claim in which of the following circumstance? 1. General partnership 2. Syndicate 3. Real estate investment trust 4. Corporation
1. General partnership
In a residential property, lead poisoning would most likely NOT be caused by _____________. 1. Insulation 2. Paint chips 3. Ground soil 4. Pipes
1. Insulation
How do both a partially amortized loan and a balloon loan benefit the borrower? 1. Low monthly payments 2. All the payments are the same as the final payment 3. Both have low interest rates 4. Interest rates may not change during the duration of the loan
1. Low monthly payments
A city broker who is listing a farm with irrigation rights ________________. 1. May be participating above his level of competency 2. Must take a course in water law 3. Should take the listing but get advice from some one more 4. Must terminate the listing
1. May be participating above his level of competency
A church that operates housing for the elderly may restrict occupancy to members of the church if ______________. 1. Membership in the church is open to all persons 2. The units are to be rented, but not if they are being offered for sale 3. Both #1 and #2 are correct 4. Neither #1 nor #2 is correct
1. Membership in the church is open to all persons
Without checking the facts, a broker who is the seller's agent tells a buyer that the property taxes in a particular neighborhood are among the lowest in the area. The buyer relies on the broker's statement and makes an offer on a house in the neighborhood. Before closing, it is determined that the taxes are actually among the highest in the area. The buyer could seek to rescind the contract on the basis of _______________________. 1. Misrepresentation 2. Fraud 3. Puffery 4. Legality
1. Misrepresentation
Which of the following reports would be the most comprehensive appraisal report? 1. Narrative report 2. Uniform Residential Appraisal Report 3. Certified appraisal report 4. Short-form report
1. Narrative report
An oil and gas lease would be classified as __________________. 1. Personal property 2. An emblement 3. A remainder interest 4. A reversionary interest
1. Personal property
The purpose of laws that provide for property to escheat to the state or county when a landowner dies with no will and no heirs, _____________. 1. Prevent property from being ownerless 2. Prevent property from being misused 3. Prevent others from inheriting the property 4. Provide needed money to the government
1. Prevent property from being ownerless
Two brokers got together and decided to set their commission price. This agreement would be considered: 1. Price fixing 2. Blockbusting 3. Steering 4. Illegal
1. Price fixing
Usury laws ________________. 1. Protect the borrower 2. Protect the lender 3. Are illegal 4. Are unethical
1. Protect the borrower
An environmental impact statement typically describes the effects of a proposed project on factors such as ___________________. 1. Public health and safety 2. Economic growth 3. Financial opportunity 4. Transportation needs
1. Public health and safety
A __________________ is NOT recorded. 1. Purchase agreement 2. Easement 3. Deed 4. Mortgage
1. Purchase agreement
An attorney-in-fact violated fiduciary duty in ____________________. 1. Purchasing the principal's property 2. Leasing the principal's property to a 3rd party 3. Selling the principal's property 4. Placing a lien on the principal's property
1. Purchasing the principal's property
Under the 1988 Amendment to the Civil Rights Act of 1968, an apartment owner would be acting within the law by _________________. 1. Refusing to pay for modifications to an apartment that would allow a handicapped person the full enjoyment of the unit 2. Asking whether a renter has a handicap and attempting to determine its severity 3. Refusing to make reasonable accommodations in rules, policies, practices, or services to allow a handicapped person equal opportunity to use a dwelling 4. Refusing to rent to a person whose handicap is mental rather than physical
1. Refusing to pay for modifications to an apartment that would allow a handicapped person the full enjoyment of the unit
Federal Truth in Lending laws are also known as ________________. 1. Regulation Z 2. Home Mortgage Disclosure Act 3. Consumer Protection Act 4. Fair Housing Act
1. Regulation Z
A seller mentions to his agent that the previous owners of his property may have dumped hazardous waste on the site. Under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), who is liable for damages from the dumping prior to the sale of the property? 1. Seller 2. The previous owner 3. The buyer 4. The previous owner, the seller and the new owner
1. Seller
A competitive market analysis is MOST often used for _________________. 1. Setting a listing price 2. An appraisal 3. The future value f the property 4. Refinancing
1. Setting a listing price
Two lots of the same size are sold on a street. The lot on the corner sells for $20,000 more than the lot in the middle of the street. Which of the following characteristics MOST likely explains the difference? 1. Situs 2. Condition 3. Upgrades 4. Accessibility
1. Situs
Which of the following rights is considered personal property? 1. Tenant rights 2. Air rights 3. Water rights 4. Mineral rights
1. Tenant rights
A realty firm just entered into an agreement to represent a home builder in the sale of a new subdivision. The firm has located several potential buyers and five homes have been sold to purchasers that the firm's agents have contacted. The realty firm has an agency relationship with ______________. 1. The builder 2. The buyers 3. The sellers 4. All of the above
1. The builder
Life estate per autre vie is terminated by __________________. 1. The death of the person whose existence is the measuring life 2. The death of the grantee 3. The death of the grantor 4. Sale of the property
1. The death of the person whose existence is the measuring life
Freddie Mac mortgage activities are primarily involved in ______________. 1. The secondary mortgage market 2. RESPA enforcements 3. Direct loans for low-income home buyers 4. Enforcement of the Foreign Investment in Real Property Tax Act
1. The secondary mortgage market
A valid contract would be unenforceable because of ______________. 1. The statute of limitations 2. The absence of consideration 3. A death 4. Lack of disclosure form
1. The statute of limitations
Although states make specific laws governing water rights and the rights for land that borders water, most states generally follow one of two basic doctrines regarding water rights. Under the doctrine of prior appropriation, either riparian and littoral rights are automatically conveyed with property or all water rights are controlled by the state. The doctrine of prior appropriation is MOST likely to be followed in states where ______________. 1. Water is scarce 2. Water is abundant 3. Water rights run with the land 4. Crops are grown
1. Water is scarce
Can the seller offer the listing agent a $500 bonus after closing? 1. Yes, but it has to be made out to the brokerage. 2. No, referral fees are not legal. 3. No, bonuses are not legal. 4. Yes, but it must be less than $500.
1. Yes, but it has to be made out to the brokerage.
The last monthly interest payment on a mortgage was $825.77. If the interest rate was 7.2%, what was the balance due on the principal? 1. $158,730 2. $137,628 3. $118,764 4. $131,741
2. $137,628
Kevin is preparing a Comparative Market Analysis (CMA) on a commercial net leased office property that has 100% occupancy and income of $67,000, with expenses of $22,000 and a management fee of 5% of the gross income. The property is assessed by the municipality at $425,000. If Kevin considers a 9% rate of return to be reasonable for this income property, what would Kevin recommend as a listing price? 1. $744,444 2. $462,778 3. $500,000 4. $597,000
2. $462,778
The only form of conveyance in which the grantor specifically disclaims both warranties of title and ownership is ________________. 1. A special warranty deed 2. A quit claim deed 3. A grant deed 4. Any legal deed
2. A quit claim deed
____________________ are areas in a condominium project where all owners share an undivided interest and full possession. 1. Community areas 2. Common elements 3. Coop areas 4. Common interest
2. Common elements
Upon execution by both parties of a contract to purchase real estate, the buyer's interest is legally considered to be _____________. 1. Exclusive 2. Equitable 3. Expressed 4. Essential
2. Equitable
Ownership of common stock in a corporation ________________________. 1. Gives an interest classified as real property 2. Gives an interest classified as personal property 3. Comes with no voting rights 4. Limits an investor's liability to $100,000
2. Gives an interest classified as personal property
A salesperson may be compensated for real estate services by ________________. 1. The seller 2. His or her employing broker 3. A cooperating broker 4. Another broker in the office
2. His or her employing broker
There was a murder in the yard of one of your listings last year. Should you disclose this to potential buyers, and why? 1. Yes, state laws require the disclosure 2. In most states, Fiduciary Duty of Confidentiality precludes you from disclosing non-material facts (however some states do require disclosure). 3. No, Illegal acts need not be disclosed. 4. Yes, This is a material fact under full disclosure contract requirements.
2. In most states, Fiduciary Duty of Confidentiality precludes you from disclosing non-material facts (however some states do require disclosure).
A lender would MOST likely rely on which of the following approaches to value when underwriting a mortgage on an apartment complex? 1. Direct sales comparison 2. Income 3. Replacement 4. Investmen
2. Income
Seller Joe has agreed to sell his property to Buyer Don. Joe is providing the financing and Don will make installment payments but will be permitted to move in. After ten years, Don will need to pay the balance on the loan to the seller and will get title. This is known as a __________________. 1. Scam contract 2. Land contract 3. Option contract 4. Illegal contract
2. Land contract
Which of the following lenders uses his or her own funds to fund loans that will be sold in the secondary mortgage market? 1. Mortgage broker 2. Mortgage banker 3. Department of Veterans Affairs 4. Fannie Mae
2. Mortgage banker
Compensation to a broker for property management services is normally based on a _______________. 1. Percentage of net income 2. Percentage of gross income 3. Flat fee 4. Minimum fee and kickbacks from suppliers
2. Percentage of gross income
A buyer entered into a contract to purchase a home through a salesperson. Before closing, the buyer asked the salesperson if he could enter the residence and paint as well as fix minor repairs. The salesperson should ______________. 1. Refuse the request 2. Relay the request to the owner 3. Only allow this work if the buyer purchases homeowner's insurance 4. Relay the request to the employing broker
2. Relay the request to the owner
Scenario F Joan and Dave Farson of Springfield sign a listing agreement with broker Ann for a 3 month period. They agree to list their home for $335,000. They list the refrigerator and washer and dryer as exclusions. The property is encumbered by an easement allowing access to the home behind. Taxes for last year in the amount of $2,656 have been paid on Jan 25. The Avilla's agent presents a contract for $332,000 which is accepted. Closing is scheduled for August 15. The Farsons agree to a nonrefundable escrow of $3,000 for the buyers. If they do not vacate the property by August 15, they agree to pay the buyers $55 for every day after that. Closing is rescheduled for August 18. The Avilla's father will be inspecting the property. The buyer's intention is to operate a day care on the property and they do not yet know if this will be allowed by local zoning laws. Use a 365 day calendar, actual days in the month. Seller is responsible for the day of closing. How does the HUD-1 reflect the seller's tax liability? 1. Seller debit $2,656; Buyer credit $2,656 2. Seller debit $1,673; Buyer credit $1,673 3. Buyer debit $2,156; Broker credit $0 4. Buyer credit $2,656; Broker credit $0
2. Seller debit $1,673; Buyer credit $1,673
Betty is selling her home and a title defect is found from the previous owner. Betty is not responsible so she has a ______________ deed. 1. General Warranty 2. Special Warranty 3. Quit claim 4. Grant
2. Special Warranty
At the time of listing, the seller tells the listing agent they are moving because the neighbor has loud parties every weekend. The agent should _____________. 1. Answer truthfully about the parties if asked about noise 2. Tell all potential buyers about the parties 3. Advise prospective purchasers to contact the neighbors 4. Advise the seller to list the noise issue on the property disclosure form
2. Tell all potential buyers about the parties
Just prior to closing the buyer noticed a broken window that his inspector missed. What recourse does the buyer have? 1. He should insist that the seller fix the window 2. The buyer has no recourse since the inspection resolution has passed 3. The buyer should ask the inspector to pay for the fix 4. The buyer should terminate the contract
2. The buyer has no recourse since the inspection resolution has passed
When using a quitclaim deed _____________. 1. Only partial interest is transferred 2. The grantor makes no promise that the property is free of any liens 3. It guarantees that the property is free of debt 4. It guarantees that no one else claims to own the property
2. The grantor makes no promise that the property is free of any liens
The most favorable thing about a VA loan is that _________________. 1. VA loans have a low down payment and low interest rate 2. VA loans guaranty gives the veteran favorable financing terms because the lender is protected from loss 3. VA appraisals are less stringent 4. Both #1 and #2 are correct
2. VA loans guaranty gives the veteran favorable financing terms because the lender is protected from loss
Which of the following deed phrases most likely indicates an intent to transfer a defeasible fee? 1. "To Mary for as long as she shall live, then to the City of Boulder" 2. "To Mary for as long as John shall live." 3. "To Mary and her heirs as long as liquor is not served on the premises" 4. "To Mary subject to restrictions of record"
3. "To Mary and her heirs as long as liquor is not served on the premises"
On-street parking was made illegal in front and on the side of a small office building complex. Rents declined $1,000.00 per month. Assuming a capitalization rate of 8%, the building suffered a decline in value of ______________________. 1. $8,000.00 2. $64,000.00 3. $150,000.00 4. $96,000.00
3. $150,000.00
'A' purchased a property for $175,000.00. 'A' wishes to sell the property. If the total selling costs will equal 11% of the sales price, how much will the property have to appreciate in value for 'A' to break even? 1. $19,612 2. $20,311 3. $21,629 4. $23,730
3. $21,629
A property valued at $72,000 has an assessed value of 50%. If the mill rate is 6 mills, what is the tax? 1. $1,800 2. $18,000 3. $216 4. $2,160
3. $216
Scenario A John and Mary Apton list their home for $152,000. There is an appurtenant easement to access a large lake which is deeded. A coal fired power plant is slated to open 5 miles from the property next year. An Environmental Impact Statement is due on March 7. Agent Pacheco presents an offer to the Aptons. It is a land contract for $142,000 with an 8% interest rate due and payable in 10 years. It is accepted. The offer is contingent on the environmental impact results. Closing is for June 1. Taxes are $3040, commission is 6.5%, (buyer's agent commission is 2.8%), taxes and insurance are $675, recording fee is $25 The environmental impact statement showed the value of the property would not be impacted. Use a banker's calendar. Seller is responsible for the day of closing. With the information given in the scenario, what costs will the buyer need to bring to closing? 1. $5951 ($3040/360 x 151= 1275 + 2.8% x $142,000 = $3976 + $675, + $25) 2. $4,676 (2.8% x $142,000, 675 25) 3. $700 ($675, $25) 4. $3740 ($3040 + $675, + $25)
3. $700 ($675, $25)
An owner listed the same property with 3 separate agents. The owner gave an Exclusive Right-to-Sell Listing to broker A, an Exclusive Agency/Brokerage Listing to broker B, and an Open Listing to broker C. Broker C sold the house and collected a commission while the other listings were still in effect. What are the rights of 'A' and 'B' as to a commission? 1. 'A' and 'B' both are entitled to a split of the commission from 'C'. 2. 'A' and 'B' are entitled to a second commission to be split between them 3. 'A' and 'B' are each entitled to a full commission 4. 'A' and 'B' are not entitled to any commission
3. 'A' and 'B' are each entitled to a full commission
The parcel of land you are viewing is 3 acres. The front of the square lot is 450 feet wide. What is the depth? 1. 98.6 feet 2. 390.4 feet 3. 290.4 feet 4. 96.8 feet
3. 290.4 feet
Of the following, which would be considered equivalent to an annuity by an owner? 1. Productive farmland 2. A residence free and clear 3. A long-term ground lease 4. Vacant land in the path of progress
3. A long-term ground lease
Under the Truth-in-Lending Act, which of the following items MUST be noted in a disclosure statement? 1. The mortgagee's title insurance fees 2. The mortgage recording fees 3. Any mortgage prepayment penalties 4. Any attorney's fee for mortgage preparation
3. Any mortgage prepayment penalties
A monthly amortized loan payment differs from the prior month's payment in that the prior month's payment _______________. 1. Was a greater amount 2. Applied more money to principal 3. Applied more money to interest 4. Was a lesser amount
3. Applied more money to interest
A lawsuit for inverse condemnation may be brought _________________. 1. To seek compensation due to eminent domain proceedings 2. By the government 3. By a homeowner 4. If no compensation was given
3. By a homeowner
A potential seller wants you to list his luxury penthouse and informs you that there is also a storage unit above the penthouse that comes with the unit....how can you be sure it is part of the property before marketing the property? 1. By just the seller's word 2. Check the deed 3. Check the HOA docs 4. Check the title company
3. Check the HOA docs
A buyer is obtaining a new private loan with a principal amount of $250,000.00 at 9%. Closing takes place on April 15. The interest due will appear on the worksheet as ____________. 1. Debit $62.50 to seller, and credit buyer $62.50 2. Debit $937.50 to seller, and credit buyer $937.50 3. Debit $937.50 to buyer, and credit broker $937.50 4. Debit $62.50 to buyer, and credit broker $62.50
3. Debit $937.50 to buyer, and credit broker $937.50
_______________ is the theory governing water rights in many states, which holds that the right to divert the un-appropriated waters of any natural stream (surface or underground) to beneficial use shall never be denied. 1. Doctrine of Water Law 2. Doctrine of Acquisition 3. Doctrine of Prior Appropriation 4. Doctrine of Diversion
3. Doctrine of Prior Appropriation
When dealing with asbestos in the home or office, ________________ is often a safer and better solution. 1. Removal 2. Abatement 3. Encapsulation 4. Mitigation
3. Encapsulation
Items that were formerly personal property but are now regarded as real property would be described as ________________. 1. Emblements 2. Fructus industrials 3. Fixtures 4. Trade fixtures
3. Fixtures
A low loan-to-value ratio usually means ________________. 1. Low equity for the seller 2. A higher risk of foreclosure 3. High equity for the buyer 4. The appraised value is low
3. High equity for the buyer
Which of the following statements regarding licensees that work for a brokerage firm is FALSE? 1. Licensees usually pay their own taxes and insurance 2. Licensees must report any earned commissions to the IRS 3. Licensees are responsible for the actions of the personal assistants 4. Licensees may sign a contract with the employing broker
3. Licensees are responsible for the actions of the personal assistants
Building ordinances may specify and regulate _____________________. 1. Land use 2. Zoning 3. Materials used in plumbing 4. Easements
3. Materials used in plumbing
A real estate agent is holding an open house for one of the other brokers at his office. A couple comes in and they have several questions, which he answers, and tells them he will get back with the answers to the questions he did not know. 1. Implied agency was created 2. Express agency was created 3. No agency was created 4. He is now their agent
3. No agency was created
A broker's authority under a listing contract includes _________________. 1. The right to sign a contract on behalf of the seller 2. Any act performed in the owner's best interest 3. Only the authority granted or implied 4. The customary authority of a general agent
3. Only the authority granted or implied
The distinction between a gross lease and a net lease involves ______________. 1. The size of the rented property 2. The number of units included 3. Only the tenant's payments of rent versus sharing the owner's costs 4. Established lease period versus no termination date
3. Only the tenant's payments of rent versus sharing the owner's costs
An easement appurtenant _______________. 1. is not tied to the land 2. Would go away if the neighbor sold the property 3. Remains with the property and transfers by deed 4. Is a prescriptive easement
3. Remains with the property and transfers by deed
Scenario A John and Mary Apton list their home for $152,000. There is an appurtenant easement to access a large lake which is deeded. A coal-fired power plant is slated to open 5 miles from the property next year. An Environmental Impact Statement is due on March 7. Agent Pacheco presents an offer to the Aptons. It is a land contract for $142,000 with an 8% interest rate due and payable in 10 years. It is accepted. The offer is contingent on the Environmental Impact results. Closing is for June 1. Taxes are $3,040, commission is 6.5% (buyer's agent commission is 2.8%), taxes and insurance are $675, and the recording fee is $25. The Environmental Impact Statement showed the value of the property would not be impacted. Use a banker's calendar. Seller is responsible for the day of closing. How does the HUD-1 reflect the seller's tax liability? 1. Seller debit $3,040; Buyer credit $3,040 2. Seller debit $1,266; Buyer credit $1,266 3. Seller debit $1,275; Buyer credit $1,275 4. Buyer Credit $3,040; Broker credit $0
3. Seller debit $1,275; Buyer credit $1,275
To convey an entire property, a deed must convey __________________. 1. An accurate description of the house 2. All improvements 3. The legal description of the land 4. All of the above
3. The legal description of the land
Which of the following events would automatically cancel a listing agreement? 1. The broker's death 2. The managing broker's death 3. The property owner's death 4. A fire on the property
3. The property owner's death
The buyer is protected from being forced to carry out the terms of the contract by checking which appropriate box on the Purchase Contract? 1. Liquidated Damages 2. Specific Performance 3. There is no box for the buyer to check that states he or she does not have to carry out the terms of the contract. 4. The seller's right to specific performance is not addressed in this contract.
3. There is no box for the buyer to check that states he or she does not have to carry out the terms of the contract.
A broker associate is listing a home with 2,000 square feet of living area on an improved building site. The owner insists that the listing price reflect a value of $95.00 per square foot of living area, $54,000.00 for the building site, and include a 5% sales commission. The broker should list the real property for ________________. 1. $270,000.00 2. $237,142.00 3. $256,200.00 4. $256,842.00
4. $256,842.00
An owner was in default on a mortgage payment. The lender could call the entire loan balance due if the loan contained a(n) _________________. 1. Due-on-sale clause 2. "Or more" clause 3. Defeasance clause 4. Acceleration clause
4. Acceleration clause
A school is planning on a renovation and found that asbestos exists in the ceiling tile. Which of the following statements is NOT CORRECT? 1. Asbestos can pose a hazard to students, teachers, and school employees when it is disturbed 2. Asbestos is a health threat when it becomes airborne and therefore breathable 3. Asbestos is an environmental hazard 4. Asbestos must be removed
4. Asbestos must be removed
A FSBO seller and buyer agree to terms on a contract to purchase. The buyer then finds a structural defect during his inspection, and cancels the contract. The FSBO seller makes cosmetic repairs to cover the damage, and lists the property with Agent M and informs him of the defect. Buyer C buys the home, and does not perform an inspection. Only after closing and moving into the home does buyer C discover the material defect. Who is liable? 1. Agent M is liable to buyer C. 2. Only the seller would be liable to buyer C. 3. Buyer C has no recourse because he did not perform an inspection! 4. Both the FSBO seller and Agent M are liable.
4. Both the FSBO seller and Agent M are liable.
A gate that has been unlocked for over 10 years is suddenly locked, and the adjacent owners can no longer get to their only available source of drinking water. An appeal to the court would be for an easement ___________________. 1. Appurtenant 2. In gross 3. By necessity 4. By prescription
4. By prescription
Why was the Jones vs. Mayer decision of 1968 important? 1. It added discrimination based on gender to the list of prohibited types of discrimination covered by Fair Housing laws. 2. It added discrimination based on age to the list of prohibited types of discrimination covered by Fair Housing laws. 3. It added discrimination based on creed to the list of prohibited types of discrimination covered by Fair Housing laws. 4. By upholding the Civil Rights act of 1866, the Supreme Court removed all exceptions to racial discrimination in housing.
4. By upholding the Civil Rights act of 1866, the Supreme Court removed all exceptions to racial discrimination in housing.
A deed restriction is best described as a(n) ______________. 1. General lien 2. Specific lien 3. Constructive lien 4. Encumbrance
4. Encumbrance
The lender who granted a construction loan to a builder would provide the builder with the final payment upon ________________. 1. Receipt of a final inspection of the premises 2. Notice of completion 3. Receipt of the deed 4. Expiration of the mechanic's lien period
4. Expiration of the mechanic's lien period
The deed with the most warranties, providing the greatest protection to the buyer, is a ___________________. 1. Quitclaim deed 2. Special warranty deed 3. General purpose deed 4. General warranty deed
4. General warranty deed
The FHA functions MOST like a(n) ______________. 1. Mortgage company 2. Bank 3. Brokerage firm 4. Insurance company
4. Insurance company
A loan which requires the borrower to pay interest only until the maturity date (or due date) and to pay the entire principal on the maturity date is called a _______________ loan. 1. Illegal 2. Term 3. Balloon 4. Interest only
4. Interest only
Which material fact about a property need not be disclosed? 1. Property is in a flood zone 2. Remediated meth lab 3. Sump pump replaced 4. Latent radon gas
4. Latent radon gas
The IRS code provides for tax deferred exchanges only of __________. 1. Residential property 2. Commercial property 3. Urban property 4. Like kind property
4. Like kind property
Leverage is considered to be which of the following processes? 1. Using accelerated depreciation to shelter income from taxes 2. Leasing in order to increase working capital 3. Paying cash for all large purchases 4. Purchasing property with a value far greater than the down payment
4. Purchasing property with a value far greater than the down payment
The responsibility for providing lead-based paint disclosure to the buyer rests with the ______________. 1. Seller 2. Seller's broker 3. Buyer broker 4. Seller & both brokers
4. Seller & both brokers
Two brokers from different companies have gotten together to discuss what commission they will charge. This is prohibited by ______________. 1. RESPA 2. Equal Credit Opportunity Act 3. Truth-In-Lending 4. The Sherman Anti-Trust Act
4. The Sherman Anti-Trust Act
A salesperson would NOT be obligated to inform which of the following individuals of the fiduciary responsibilities of the brokerage firm under the law of agency? 1. Sub-Agents 2. Buyers' agents 3. The salesperson's licensed sales staff 4. The buyer's lender
4. The buyer's lenderThe last monthly interest payment on a mortgage was $825.77. If the interest rate was 7.2%, what was the balance due on the principal?
