Missed Questions - Real Estate Exam
A rental property has a return rate of 8%. The monthly net rental is $600. What is the market value of the property?
$90,000
Which is NOT a fiduciary duty?
Achievement
Bill has an annual income of $67,500 and his wife, Jane has a monthly income of $3,200. If a lender is using a 28% ratio, what is the maximum monthly payment Bill and Jane can afford?
$2,471
If a seller has a $94,000 first mortgage and a $25,000 second mortgage and agrees to sell for $155,000 with a $22,500 cash down payment, what is the equity in the home?
$36,000
If the loan value is 80%, and the property was appraised at $86,500 and sold for $88,000, how much would the purchaser be permitted to borrow?
$69,200
If a sales deposit is tendered by a buyer directly to the listing broker instead of the selling broker, which of the following is a correct statement?
The listing broker shall assume the escrow duty
Which of the following must a broker disclose on his website?
The name that the broker's license was issued under
A person who receives title to real property through a last will and testament is called a
Devisee
Just one day prior to a foreclosure sale, the homeowner pays the bank all past-due payments, late charges, attorney fees, etc. The homeowner saves the property under the right called
Equitable Right of Redemption
What type of agency relationship exists when a broker manages real property for the owner?
General
What type of deed would a buyer of real property prefer?
General Warranty Deed
Upon completing all educational licensing requirements and passing the salesperson's license exam, what activities is an individual qualifed to be involved in?
Sell property owned by the individual
The rule that says a buyer will not pay more for a property than a comparable substitute is the rule of
Substitution
To compute the real property tax on a parcel of land, multiply the
actual mills by the rate of mills
Plottage
when the property is joined to increase value.
When one party lets the other parties know, before the time limit of performance, that the one party is not going to perform as agreed, the action is called
anticipatory repudiation
How would a developer/builder typically finance a development?
blanket
What scenario best describes the process of novation?
buyer and seller agree to substitute a new contract for a previous one
The agreement whereby a broker is entitled to be paid a commission by a buyer is a(n)
buyer-broker contract
What would cause termination of a real estate contract?
completion
The rule that says a property maintains its value best when the surrounding properties are similar in size, style, and function is the rule of
conformity
The essential elements of a real estate contract include offer, acceptance, valuable consideration, and
contractual capacity
Net income best describes
income after expenses
While determining the net operating income of an investment property, an appraiser will not take into account
interest expense
As an agent is showing a house to a customer, the agent notices a large vertical crack in the basement wall. What is the agent's duty?
nothing
A seller tells an agent, "Get me $100,000 for my house, and you can keep anything over that amount." What type of listing is this?
net listing
Capitalization rate refers to the
rate of return used by investors
The owner of an undivided interest in land, with no rights of survivorship, would be considered
tenancy in common
A wife and husband may not hold title to their home as
tenants at will
Jack buys Don's property, which is subject to a mortgage. After five years of payment, Jack defaults and misses a payment. What is the appropriate remedy for the original mortgagor?
the mortgagor has no recourse as there was no assumption
Carla is a broker moving from Florida to Ohio. Before leaving, Carla has the boxes containing old client files from a year ago shredded and disposed of. Carla
has likely violated the law
What insulating material was pumped into houses until its ban in the 1970s?
urea-formaldehyde insulation
If an application for promotional real estate is rejected by the Pennsylvania Real Estate Commission, how much time is provided to the applicant to request a hearing before the commission?
20 Days
The listing price of a house is $139,900. You bought if for the listing price plus 10% and sold it for the listing price. What percent of loss did you have?
9%
An authorized power of the Real Estate Commission is to:
Administer and enforce the laws that govern the conduct of licensees
An agent has entered a written agreement with a buyer to search for a home, that also has a beginning date and an ending date. What agreement would be used?
Buyer-Broker Agreement
In title theory states, what clause is unique to the mortgage?
Defeasance
A broker acting as a transaction licensee would violate the license law by doing which of the following?
Disclosing that the buyer will agree to financing terms other than those offered
Upon arrival, the listing agent dealing with an elderly lady realizes she would be happy receiving an offer for much less than market value. The agent decides to make a cash offer for the list price the seller chose. The agent then sells the property for market value. What duty has the agent breached?
Disclosure
When a salesperson is working with a buyer client who enters into a contract to purchase a time-share interest in real estate, the salesperson should inform the buyer client that:
He/she has the right to cancel the contract within five days from the date the buyer and seller signed the contract
At the closing table, for a broker to claim an earned fee for selling a seller client's property, he/she:
Needs a valid listing agreement stating the amount of the fee
According to license law, when advertising a property, a complete description of the property, including price and address is:
Not required in a broker advertisement
In a co-brokerage transaction, a salesperson receives an earnest money deposit check from a purchaser along with an offer to purchase on a listed property. The salesperson is required to:
Submit the check to the appropriate broker in accordance with the terms of the agreement of sale
A salesperson is interested in purchasing a property that is currently listed with his employing broker. The salesperson thinks that this property has much potential and would make a great investment. What should the salesperson do?
Tell the owner in writing that he is interested in purchasing the property
When counseling sellers/clients, an agent should NOT
Prepare a market analysis that shows a high price for the property, because one never can tell what a buyer might pay
When a broker enters into an exclusive right-to-sell listing agreement with a seller client, the agreement binds the broker to do which of the following?
Provide full fiduciary duties to the seller
A licensed salesperson is offering one of her personally owned investment properties for sale. When advertising the property, all of the following are false except:
The licensee must disclose her status as a licensee if the property is not listed with a real estate company
With regards to operation of a real estate office, which of the following is not true?
The office may not be located in a private residence
A broker wishes to conduct real estate business under a business name. All of the following are false except:
When using the business name, the broker must always represent the business name exactly as it appears on the license
The Consumer Notice must be given to every consumer of real estate services:
Whenever a substantive meeting occurs
How many acres are there in a piece of land legally described as the N 1/2 of the NW 1/4 of the SE 1/4?
20 Acres
The mortgagor is the
Borrower
Which instrument would be used by a trustor?
Deed of Trust
When using the cost approach to appraise a property, the appraiser is most likely working for the
Insurance Company
The leasehold estate with a specified termination date best describes a(n)
estate for years
Julie wants to maximize her chances of getting paid on a property she is about to list. What type of listing agreement gives her maximum protection?
exclusive right to sell listing
The Smiths are purchasing a completely furnished cottage on a lake. They have obtained a deed of trust loan to cover the price of the property, including all furnishings and appliances. This type of financing is called a(n)
package deed of trust
Which clause allows a broker to sue for a commission if the owner waits until expiration of the listing to contract with a buyer to purchase without the broker?
protection
Cindy Agent wishes to leave her company, ABC Real Estate, owned by Bob Broker. She currently has three sales pending and four active listings. What will happen to these?
the active listings belong to Bob, and Cindy will be paid for pending sales as per her contract with the office
Replacement of a building best describes building
the functional equivalent of the original structure
Building codes can be enforced by
the issuance of permits
Assemblage
the joining of several parcels of land.
A property manager of a retail complex sells the property to a customer procured by the property manager himself. The property manager does not execute an agency disclosure document. Which best describes the situation?
the property manager must execute a disclosure statement
Which is a requirement for a valid deed?
there must be words of conveyance
If it is the policy of the broker to prohibit non-management-level licensee dual agency, what CANNOT happen?
A buyer's agent can also represent the seller in the same transaction
Which of the following is permitted by Pennsylvania License Law?
A salesperson candidate engaging in the activities for which a license is required only after she has been issued a license by the state
In regards to a broker escrowing funds in a real estate transaction, which of the following is true?
As a property manager, the broker is not required to hold rents received for a lessor in escrow
A broker has heard that an individual is thinking about selling her property. Two times per week for the last month, the broker has solicited the prospective seller to list the property for sale. The real estate commission would view this form of advertising and solicitation:
As a violation on the basis of harassment
A counteroffer constitutes a
Change
The taking of private property for public use is called
Condemnation
When the appraiser looks at the home Sandy just purchased, he notices it has a fireplace and the comparable homes do not. He makes a $3,000 upward adjustment on his sales comparison approach worksheet. The $3,000 adjustment is based on what appraisal principle?
Contribution
What approach to value would be most appropriate when appraising a vacant factory?
Cost Approach
The subject property is next to a sewage treatment plant. What could this situation be causing?
Economic obsolescence
An agency agreement that allows the sellers to procure the buyer and forgo paying the broker a commission best describes a(n)
Exclusive Agency
If, after changing employing brokers, the salesperson does not receive his new license within 30 days, the salesperson:
Is responsible for notifying the commission he have not received the license
In what type of installment agreement does the buyer make payments for the right to possession, but does NOT receive the title until most or all of the terms have been met?
Land Contract
Marc enters into an agreement to buy Sam's house. Two weeks later, Marc celebrates his 18th birthday. If this agreement can be voided by one of the parties, which party could void it?
Marc
When a real estate broker represents the seller as an agent, the broker:
Must deliver faithful service to the seller
When changing employment from one broker to another, the salesperson's new license will be issued by the real state commission:
Once the new broker acknowledges the employment change
A salesperson has received a very attractive offer to work with a competing firm and wishes to immediately change employing brokers. The salesperson:
Should accept the offer, as the new broker will notify the real estate commission of the change
The exclusive right-to-sell listing agreement between the broker and the seller stipulates that:
The broker will use his/her best efforts to find a ready, willing and able purchaser
A broker may legally collect commissions from both the seller and the buyer when:
The buyer and seller provide prior knowledge by written informed consent
What power does the government exercise when it takes private property for public use?
eminent domain
A salesperson has listed a property for $175,000. A few days later, at an open house, a potential buyer asks the salesperson what other houses have sold for in the last 4 months. The salesperson shares the comparable market analysis prepared when the property was listed. The analysis indicates a property much like the salesperson's new listing had sold for the highest price in the neighborhood, at $165,000. In this case
The salesperson should not have disclosed this information, and has created a conflict of interest
A salesperson fails to renew his license and it expires in the middle of a difficult real estate transaction. Which of the following statements is accurate?
There is no grace period, and the salesperson may not complete this transaction
site
a piece of land that has been enhanced and is ready for a structure.
RESPA does NOT
allow lenders to charge undisclosed fees
Situs
an area of preference, which can attribute value.
The act of the government taking private property for public use with just compensation is
condemnation
Seller and buyer entered into an instrument of conveyance in which the buyer immediately received legal title. Which instrument would have been used by the parties?
deed
n the state where Bob lives, someone who receives a loan from a lender must transfer his property to the bank's holding company while the loan is outstanding. The document used to accomplish this is a(n)
deed of trust
Which would NOT result from the exercise of police power?
developer's restrictive covenants
A lender who receives a mortgage contract as security on a mortgage loan is known as the
mortgagee
Constructive fraud is also known as
negligent misrepresentation
A farm was zoned agricultural in 1859 and has been handed down from lineal descendent to lineal descendant. In 1939, the government zoned the entire region to be used for commercial development. The farm still exists today. How is this possible?
nonconforming use
Which is a holder in due course?
one who acquires a negotiable instrument in good faith and for consideration
What is assessment value?
value the property taxes are based on
When does an agent working for the seller have a fiduciary duty to the buyer?
when the agent is legally acting as a dual agent
Ann, a salesperson, is contacted by a buyer who wants to write an offer on a property previously viewed with an agent from another firm. When Ann asks the buyer why he did not ask the agent who showed him the property to write the offer, the buyer discloses that the first agent who showed him the house seemed to be intoxicated when showing the property. Ann suggests the buyer may want to choose another agent from that firm to represent them, but the buyers indicate the agent was the broker. Ann should
write the offer and represent the buyer