Real Estate Final Exam

Borrowers in New York who wish to refinance are subject to which regulation? A. Lenders cannot refinance a home unless the new loan provides a real benefit to the borrower. B. Lenders cannot refinance their own high-cost home loans. C. Regulation 2B D. Regulation T

A

Broker Alex learns that his friend Joann is frustrated with the broker who listed her home. Alex encourages Joann to break her existing agency agreement and sign with him instead. This violation is an example of ______. A. Contractual interference B. Failure to disclose an agency relationship C. Making a substantial and willful misrepresentation D. Performing services that would qualify as practice of law

A

Chastity specializes in working with investors. Why might she attend a tax foreclosure auctions? A. To get property leads B. To increase her hourly billings C. To meet other licensees D. To network

A

For an antitrust violation to occur, which element must be present? A. Agreement B. Coercion C. Cohesion D. Commission

A

In New York, If a licensee is found to have engaged in blockbusting, who may issue a non-solicitation order? A. New York Secretary of State B. NYS Attorney General C. NYS Department of Housing D. NYS Department of Human Rights

A

In a real estate transaction, who may a licensee represent? A. A client B. A client or customer C. A customer D. A principal or customer

A

Jasper has a new listing, and he appoints Esther as his sub-agent. Esther brings Julie, a buyer customer, to the transaction, and Julie buys Jasper's listing. What's true about the agency relationships in this situation? A. Esther owes her loyalty to the seller. B. Jasper is the sub-agent to Esther. C. Jasper is the sub-agent to the seller. D. Julie is the sub-agent to Jasper.

A

Keeping an area dry and keeping the air circulating can ______. A. Help prevent mold B. Increase mold C. Kill mold D. Remove mold

A

Norris is marketing a commercial space to investors. He'll want to provide this information, especially ______. A. Cash flow analysis and projections B. Estimate for rehabbing the property C. Former list price vs. sale price D. Recent upgrades

A

Real property ownership may offer significant tax advantages. Which one of the following is a potential advantage? A. Depreciation B. Insurance expenses C. Taxable gains D. Transfer tax

A

The secondary mortgage market is comprised of _________________________. A. FNMA, GNMA, FHLMC, and lending institutions that buy loans from other lenders B. Lending institutions that lend directly to consumers C. Savings and loans, thrifts, and credit unions D. The VA and the FHA

A

Under what circumstances is the seller obligated to pay the listing agent a commission if the agent is working under an exclusive agency agreement? A. If any agent secures the buyer B. If anyone secures the buyer C. If the listing agent secures the buyer D. If the seller, another agent, or a listing agent secures the buyer

A

What happens to a joint tenant's share of property when the joint tenant dies? A. The joint tenant's interest goes to the remaining joint tenants. If only one joint tenant is left, that joint tenant owns the property in severalty. B. The property must be sold, with the proceeds from the joint tenant's share distributed to heirs. C. The tenancy remains, but the joint tenant's interest passes to heirs. D. The tenancy terminates, and the joint tenant's share goes to the state.

A

What should you do if your buyer client, Steve, says he doesn't want to have a professional inspection? A. Ask Steve to sign a waiver B. Hire an inspector yourself C. Perform the inspection yourself D. Refuse to work with Steve

A

What went into effect in 2009 as an addendum to carbon monoxide regulations? A. Amanda's Law B. CO2 Law C. Megan's Law D. Smoke and CO2 Law

A

When assessing taxes, the percentage of market value (or full market value) is called ___________. A. Level of assessment or LOA B. Market value index C. Property value index D. Residential assessment ratio or RAR

A

Which document allows a prospective buyer the right to reserve a specific unit, which may or may not be under construction? A. Letter of intent B. Letter of interest C. Letter to purchase D. Letter to reserve

A

Which of the following is an example of positive misrepresentation? A. An agent knowingly made a false statement that caused harm. B. An agent made an unintentional error that resulted in a positive outcome. C. An inadvertent error occurred. D. It results in a positive outcome.

A

Which of the following is paid in cash (or check) up-front by the buyer? A. Down payment B. Insurance C. Taxes D. Utilities

A

Which of these is an example of illegal market allocation? A. Based on licensee expertise, Uptown Homes agrees with Country Cottage Realty to focus exclusively on suburban, rather than rural, homes. B. Christopher's brokerage firm decides to focus on listings in the $350,000 to $475,000 price range. C. Lamborn Realty Group and Your Choice Real Estate each discuss with their licensees where the most lucrative deals can be found. D. Three licensees in Jonathan's firm agree to focus on the specific neighborhoods in which they live so they're more knowledgeable about listings in those areas.

A

Which type of antitrust violation involves two or more businesses conspiring against another business? A. Group boycotting B. Market allocation C. Price fixing D. Tie-in arrangement

A

CCIM, SIOR, CPM, BOMA and ISCS are accreditation programs for licensees who represent ______ investors. A. Commercial B. Conglomerate C. First-time D. Foreign

A.

A buyer's offer calls you with a great offer for your seller client. What is the best next step? A. Accept the offer on behalf of your seller client. B. Get the offer in writing. C. Present a verbal counter-offer to the buyer. D. Review the offer verbally to save time.

B

A property manager is authorized to perform all of the duties related to the property on whose behalf? A. The lender's B. The owner's C. The state's D. The tenant's

B

Bart is an independent contractor. Which of these does his managing broker have the right to do? A. Control the number of hours that Bart works each day B. Define the results he wants Bart to achieve, but not direct how Bart does his work C. Make Bart do his work in a particular order D. Require Bart to work at a specific location

B

Easements are a type of encumbrance that can affect a property. Which of the following is true about easements? A. Easements are always permanent. B. Easements are often established by a written agreement between the parties. C. Easements are rights one party acquires to use another party's land, usually for one day. D. Easements require the property owner's express permission.

B

If there are questions regarding the exact property description, which of the following is recommended? A. Have the property appraised. B. Have the property surveyed. C. Purchase a new title insurance policy. D. Request a new certificate of occupancy.

B

Mary Jane owns a building in which electrical service is supplied to the entire building through a utility-owned meter, and the cost of the service is shared among the building's tenants. What type of system does she have? A. Direct B. Master C. Monometer D. Submeter

B

May a buyer's agent change the cooperative agent fee in an offer to a seller? A. No, because agents may not make changes to contracts—this would be practicing law without a license. B. No, because that would be interfering with the contract between the seller and listing agent. C. Yes, because commission rates are always negotiable. D. Yes, because this is a non-material item to the contract.

B

To compute the tax rate, each taxing authority takes the total funds required for the upcoming fiscal year and ____________________. A. Adds the total assessments of all real estate within the taxing authority's jurisdiction from the total funds B. Divides them by the total assessments of all real estate within the taxing authority's jurisdiction C. Multiplies them by the total assessments of all real estate within the taxing authority's jurisdiction D. Subtracts the total assessments of all real estate within the taxing authority's jurisdiction from the total funds

B

What information can potential criminals use to find you or know when you are home? A. Your list of contacts B. Your location information C. Your privacy tools D. Your profile photo

B

What is a gaseous compound used in refrigeration cleaning solvents, Styrofoam, and aerosol propellants? A. Carbon Monoxide (CO2) B. Chlorofluorocarbons (CFCs) C. Mold D. Radon

B

When a borrower first obtains a mortgage, which portion of PITI receives most of the mortgage payment? A. Insurance B. Interest C. Principal D. Taxes

B

When a buyer purchases a cooperative unit to live in, what types of shares are owned? A. Cooperative shares B. Sold shares C. Sponsor shares D. Unsold shares

B

When does express agency exist? A. When agency is implied B. When a written or spoken agreement is in place C. When the parties act as if they are in an agency relationship D. When the parties are in a hurry

B

Which of the following bears the weight of the building? A. Crawl space B. Footing C. Joists D. Site prep

B

Which of the following is a percentage of market value and is the amount of property value to which the tax rate is applied? A. Ad valorem B. Assessed value C. In rem D. Special assessment

B

Which of the following is a private agreement that impacts the use of the land? A. Assessment B. Deed restriction C. Encroachment D. Encumbrance

B

Which of the following is the term used for the authorization for how tax funds are spent and collected? A. Ad valorem basis B. Appropriation C. Assessment D. Tax levy

B

Which of the following is true about easements appurtenant? A. Easements appurtenant are not legal. B. The easement owner may release the easement if it is no longer needed. C. The easement remains even if the easement owner abandons the easement. D. They expire automatically after 10 years of use.

B

Which of the following would have first priority in the event of a foreclosure? A. Mechanic's lien B. Real property tax lien C. Special assessments D. Special assessments, then remaining liens in the order of filing

B

Which of these situations do licensees commonly encounter when working with sellers? A. Sellers who are eager to reduce the price of their home when the market dictates B. Sellers who are unwilling to recognize the market value of their home C. Sellers who believe they'll get better service by paying a higher commission D. Sellers who refuse to negotiate with buyers

B

You're working with an investor who wants you to find properties in disrepair so he can quickly make repairs and sell the property for a profit. This is ______. A. A buy-and-hold strategy B. A legal flipping strategy C. An illegal flipping strategy D. A wholesaler strategy

B

Your builder client, Jeffrey, is building a subdivision. HUD require his walkways to be built ___________. A. out of brick B. to each house, to facilities within the development and either through or around the subdivision C. with drain tiles D. within one year of developing the subdivision

B

Which one of the following statements regarding depreciation schedules is true? A. Both commercial and residential income-producing properties are depreciated according to the same schedule. B. Commercial income-producing properties are depreciated longer (39 years) than residential income-producing properties (27.5 years) are. C. Residential income-producing properties are depreciated longer (39 years) than commercial income-producing properties (27.5 years) are. D. You cannot depreciate income-producing properties.

B.

A(n) _______ is an independent contractor who's an employee by statute for certain employment tax purposes. An example is a food delivery driver who's paid on commission. A. Common law employee B. Independent contractor C. Statutory employee D. Statutory non-employee

C

As required by the statute of frauds, every deed must have which of the following? A. An oral conveyance B. A reverse annuity clause and a notary signature C. A written conveyance and specific elements D. Notary's signature

C

At its most basic level, which type of antitrust violation is a conspiracy between business competitors to set their prices to buy or sell goods or services at a certain price point? A. Group boycotting B. Market allocation C. Price fixing D. Tie-in arrangement

C

For which of the following properties is the cost approach most likely to be used? A. Condominium B. Cooperative C. Movie theater D. Single-family residence built in the 1910s

C

From a real estate professional's point of view, what's the purpose of qualifying buyers? A. To determine the buyer's readiness to buy B. To determine whether the buyer is has enough money to pay you a good commission C. To learn if you have anything in common with the buyer D. To see if the buyer can provide you with an appropriate advance fee

C

If step one for the borrower is a pre-qualification letter and step two is applying for the loan, what's step three? A. Making required repairs to the property B. Ordering the appraisal C. Securing loan pre-approval D. Signing the paperwork at closing

C

In a transfer of ownership in real property, who conveys the title? A. Conveyee B. Grantee C. Grantor D. Title clerk

C

Maury, a landlord, has decided to sell Elm Street Apartments. As you know, sale of the property does not affect the lease of the tenant. What are Maury's legal obligations to the current tenants? A. Maury must return all security deposits to the tenants within 48 hours of closing. B. Maury must return all security deposits to the tenants within 48 hours of the notification. C. Maury must transfer all security deposits to the new landlord within five days of closing, or return the funds to the tenants. D. Maury must transfer the security deposits to the new landlord within 30 days of closing

C

New licensee Cara wants to avoid accidentally engaging in unauthorized practice of law when she's helping clients fill in contracts. What's the best way for her to do this? A. Ask her family attorney to review all of her contracts at the end of each year B. Have her broker write all of her contracts for her C. Only use standard, fill-in-the-blank contract forms, as recommended by her broker D. Tell her clients that she isn't a lawyer, so they should probably get one

C

Pam is a new real estate licensee who must receive a high level of supervision. Even with the supervisory requirement, the Internal Revenue Service allows Pam to be classified as an ______. A. Agent B. Employee C. Independent contractor D. Unlicensed assistant

C

Personal interest most often conflicts with what fiduciary duty? A. Accounting B. Confidentiality C. Loyalty D. Reasonable skill and care

C

Phil, who is a wholesaler, is ready to sell a property. What will his sales strategy be? A. Hold the property for two years to get the tax benefits, then sell B. List it on the MLS at market rate C. Sell directly to other investors D. Wait for the market to have an upswing and sell for a large profit

C

The ECOA Valuations Rule requires disclosure of valuation data to the buyers who pay for the appraisal. Which of the following is included in the new rule? A. Its sole purpose was to allow borrowers to contest appraisals they felt were too low. B. Lenders can opt to use certified appraisers. C. No drive-by appraisals are allowed. D. The rule requires the buyer receive a copy of their appraisal on the day of closing.

C

The amount of money that a seller will make on a transaction after closing expenses and brokerage fees are paid is called ______. A. Commission B. Net to buyer C. Net to seller D. Purchase price

C

The formula for net to seller is sales price x (100% - _______). A. Commission rate B. Loan amount C. Market value D. Sales price

C

The sponsor of a condominium project must submit the offering plan to the Attorney General for approval. The sponsor also appoints the board of mangers as well as the managing agent for the condominium owners. At what point must the sponsor relinquish control of the board of managers? A. Once 25 percent of units are sold, the "sponsor" gives up control of the board of managers, and the board will be self-managed B. Once 33 percent of units are sold, the "sponsor" gives up control of the board of managers, and the board will be self-managed C. Once 50 percent of units are sold, the "sponsor" gives up control of the board of managers, and the board will be self-managed D. Once 75 percent of units are sold, the "sponsor" gives up control of the board of managers, and the board will be self-managed

C

To have a clear idea of what you want to achieve in a transaction, what should you focus on? A. The brokerage B. The commission C. The outcome D. The relevance

C

What does liability insurance cover? A. Anyone injured on the property because of the negligence of the owner's family B. Anyone injured on the property because of the neighbor's negligence C. Anyone, other than the insured, who is injured on the property because of the owner's negligence D. The homeowner and immediate family only if injured on the premises

C

What is a capital gain? A. Adjusted basis minus the sales price B. Sales price divided by the adjusted basis C. Sales price minus the adjusted basis D. Sales price plus the adjusted basis

C

When you create fictitious scenarios of danger and determine strategies to get out, talk your way out, or fight back for each one, you are ________. A. Being silly B. Imagining things that will never happen C. Practicing strategies for getting to safety D. Wasting your valuable time

C

Which agency upholds federal, state and local public health laws, regulating drinking water safety, septic system approval and certain waste water treatment approval? A. City council B. Conservation Advisory Councils/Wetlands Commission C. Department of Health D. Planning department

C

Which of the following closing activities occurs on the day of closing? A. A pre-approval letter is provided to the seller. B. A preliminary title report is issued. C. Funds are transferred. D. The buyer receives loan approval.

C

Which of the following is a non-ownership interest in land by someone other than the owner that gives that person the right to access or use the property? A. Adverse possession B. Driveway C. Easement D. Encumbrance

C

Which of the following is a right included with real property? A. Contamination B. Encroachment C. Exclusion D. Hazardous acts

C

Which of the following is a true statement about cooperatives? A. A cooperative is a fee simple type of ownership. B. A cooperative is a joint venture with shareholders, formed for their benefit and governed by the developer. C. All cooperatives have specific criteria for residents. D. Unlike a condominium, the cooperative corporation does not own the land, buildings, and all rights and interests in the corporation.

C

Which of the following is the probable sales price of a property if the property were sold under normal market conditions? A. Ad valorem B. Assessed value C. Market value D. Special assessment

C

Which of the following occurs when a property owner dies without having a will in place, and no heirs or creditors can be found? A. Eminent domain B. Encroachment C. Escheat D. Estoppel

C

Who should ensure that all deadlines are met, all contingencies are cleared, and all paperwork is fully executed and delivered before closing? A. Buyer's attorney B. Client C. Licensees and their clients D. Seller's attorney

C

Your assistant, Brady, often answers client questions about offers and negotiation. What do we know about Brady? A. He is a very helpful assistant who goes the extra mile. B. He must be at least 20 years old. C. He must be licensed for this to be legal. D. He must have had a least two years of experience in real estate.

C

A lease with option to buy is a good home buying solution for some buyers. Which of these statements about a lease with option to buy is FALSE? A. An option to buy is an offer to allow a buyer to purchase property at a later date. B. Buyers usually pay a fee for an option, which may be lost if they decide not to exercise the option. C. In an option to buy, part of each month's lease payment may apply toward the purchase. D. Option agreements usually don't include a termination date.

D

Article 36-A of the New York General Business Law enables a homeowner to cancel a home improvement contract up to _____ days after signing it. A. 10 B. 30 C. Five D. Three

D

Complete this formula: Net to seller = ______ x (100% - commission rate) A. Closing costs B. Commission rate C. Market value D. Sales price

D

If you work for a property management company that manages property for more than one owner, what must you have in order to collect rent and perform other real estate functions? A. A certificate in property management B. A degree in business administration C. A degree in real estate D. A real estate license

D

Liz listed her property with an agreement end date of May 31. The property went under contract on May 12, and the buyer's earnest money was deposited on May 13. Based on the home inspection results, the buyer legally terminated the contract on May 20. When did the listing agreement between Liz and the listing broker officially terminate? A. May 12 B. May 13 C. May 20 D. May 31

D

Recording a document makes it a matter of ______. A. Closing B. Conveyance C. Fact D. Public record

D

The components that make up a borrower's mortgage payment can best be remembered using which acronym? A. CIIA B. DUST C. OLD CAR D. PITI

D

This homeowners policy, commonly known as rental insurance, provides coverage to tenants for the loss of personal property. A. HO-1 B. HO-2 C. HO-3 D. HO-4

D

Two designated agents, Mitch and Mickey, represent the buyer and seller in a single transaction, respectively. What else do you know about the agency situation? A. Mitch and Mickey are from different brokerages; both of their brokers are dual agents. B. Mitch and Mickey are from different brokerages, but both of their brokers are single agents. C. Mitch and Mickey are from the same brokerage; their broker is a designated agent. D. Mitch and Mickey are from the same brokerage; their broker is a dual agent.

D

What are PCBs? A. A chemical compound that occurs naturally in the environment B. A substance resulting from the decay of uranium C. A substance that grows due to moisture problems D. Chemical compounds used in cooling and insulating, mainly in electrical transformers

D

What is the purpose of the agency disclosure? A. To define the terms of a listing agreement or exclusive buyer agency agreement B. To define the terms of the listing agreement C. To explain the contractual obligations the consumer has toward the agent D. To explain the duties agents owe to consumers and agents

D

What type of agency relationship exists if an agent from ABC Realty represents a buyer and the seller is affiliated with Net Realty? A. Designated B. Dual C. Open D. Single

D

What's the intent of the expense stop in a lease escalation clause? A. It decreases lease payments when operating expenses decrease. B. It decreases lease payments when operating expenses exceed a certain threshold. C. It increases lease payments each time operating expenses increase. D. It increases lease payments when operating expenses exceed a certain threshold.

D

When may informed consent for dual agency be obtained? A. After the fact only B. As the situation arises only C. Before the fact, as the situation arises, or after the fact D. Before the fact, or as the situation arises

D

Which individual takes a look at a potential borrower's application and verifies things like their employment and financial information, then analyzes their credit report as well as the appraisal report on the property? A. Appraiser B. Credit auditor C. Mortgage loan originator D. Underwriter

D

Which of the following describes a claim or charge against a property by someone other than the property's owner? A. Credit B. Debit C. Encumbrance D. Lien

D

Which of the following is a good example of how to identify your clients? A. Asking them their name B. Asking them their name and address C. Having them complete a survey about their housing needs D. Taking a copy of their driver's license

D

Which of the following is the first wooden member of the structure from the ground up that is used as the nailing surface for the floor system? A. Beam B. Girder C. Rafter D. Sill plate

D

Which of the following is true about VA loans? A. A 3.5% down payment is required. B. No funding fee applies. C. The VA guarantees 100% of home loan amount. D. The VA guarantees 25% of the home loan amount.

D

Which of the following may be used to defer paying taxes when there is an almost immediate repurchase of what's called a "like-kind" property? A. Capital gain exclusion B. Depreciation C. Reverse annuity D. Tax-deferred exchange

D

Which of these is a colorless, odorless, radioactive gas that is released when uranium decays? A. Carbon monoxide B. Chlorofluorocarbons C. Polychlorinated biphenyls D. Radon

D

With certain exceptions, generally in New York, how must properties within an assessing unit be assessed? A. At different percentages of market value B. Based on a class system C. On a case by case basis D. Using the same percentage rate

D

With regard to contingencies, what responsibility does licensee Wanda have when representing buyers? A. She should avoid contingencies altogether because they tend to put sellers off. B. She should maximize the number of contingencies used to avoid being sued. C. She should use a standard set of contingencies with each buyer. D. She should use contingencies judiciously to protect her clients and the deal.

D

Your client, Lee, a foreign investor, is selling his property and learns a 15% withholding of the sales price will be imposed. Why is this? A. This is a penalty that applies if the property is sold within two years of purchase. B. This is required when a foreign seller has a poor credit history. C. This is to cover brokerage fees and additional expenses. D. This is to make sure he doesn't leave the country without paying his taxes.

D

Your clients, the Samsons, ask you to provide them with an appraisal in order to determine a list price for their property. Since you're not an appraiser, what should you do? A. Provide them with a CMA and don't insult them by correcting them. B. Provide them with an appraisal using the Uniform Standard Appraisal Form. C. Tell them you're not an appraiser, but can provide them with a comparative market analysis, which is essentially the same thing. D. Tell them you're not an appraiser, but you can provide them with a comparative market analysis, which can be useful for determining an appropriate list price.

D

______ conveys the emotional content of words. Angry, disrespectful, or inappropriate words directed at you may be indicators of a threat. A. Eye contact B. Fidgeting C. Sweating D. Vocal tone

D