National Exam Sim 1
Which of the following is not a requirement for determining a fixture? a. Method of attachment b. Intention of parties c. Cost of Replacement d. Adaptation of object
C. Cost of replacement
A carpenter did work on a property but was NOT paid. What would his course of action be? Select one: a. A mechanic's lien b. A general lien c. A materialmen's lien d. A carpenter's lien
a. A mechanic's lien
What would be a likely buffer zone? Select one: a. A park between a high rise apartment building and high rise offices. b. A chemical plant that separates a large piece of land and a residential neighborhood. c. Two subdivisions separated by a small canal. d. A row of shrubs planted to keep an area quiet.
a. A park between a high rise apartment building and high rise offices.
The four elements of value are all EXCEPT: Select one: a. Age b. Demand c. Utility d. Scarcity
a. Age
An appraiser knows a properties square footage and the price per square foot. What appraisal method does he use? Select one: a. Cost b. Income c. Market Comparison d. Data
a. Cost
Which of the following would be the main priority of a property manager of an industrial complexes? Select one: a. Environmental concerns b. Solicitors c. Selling the property d. None of the above.
a. Environmental concerns
In a partially amortized loan with a balloon payment, when the balloon becomes due, what is the usual course of action? Select one: a. Extend the loan for another period (roll over). b. Requires that borrowers borrow more. c. Foreclose on the property. d. None of the above.
a. Extend the loan for another period (roll over).
A real estate salesperson MUST receive all commissions from the sale of property: Select one: a. From his or her principal broker b. From the selling agents principal broker c. Directly from the seller d. From his or her associate broker
a. From his or her principal broker
A broker goes into a listing appointment, loves the house and becomes interested in making an offer. She should: Select one: a. Immediately tell the seller she is interested in buying b. List the property below market value c. She cannot offer to buy it d. List the house but make an offer at the same time
a. Immediately tell the seller she is interested in buying
What happens to a salesperson's listings if he transfers to a new broker? Select one: a. Listing stays with old broker. b. Listing goes to new broker. c. Listing agreement is void. d. Listing agreement is voidable.
a. Listing stays with old broker.
An advantage of Private Mortgage Insurance is: Select one: a. Lower Down Payment b. Lower note for the borrower c. Lower interest rate d. Lower principal balance
a. Lower Down Payment
An offer is made to a seller. Prior to acceptance of the offer, the buyer finds another house he likes better and cheaper. The buyer: Select one: a. May withdraw the offer. b. May not make an offer on the second house until the first offer is rejected. c. Can make an offer on the second house without recourse from the first seller. d. Is bound by the terms of the original offer.
a. May withdraw the offer.
The term "oak tree" is used in the property description, it is most likely: Select one: a. Metes and Bounds b. Lot and Block c. Recorded Plat d. Government Survey System
a. Metes and Bounds
Broker shows a house and notices a leak, what does he do? Select one: a. Must disclose because it is a fact. b. Must disclose because of fiduciary relationship. c. Do not show the home anymore. d. The broker does not have to disclose the problem.
a. Must disclose because it is a fact.
An integrated private club refuses to rent to an African American Couple. Can they do this? Select one: a. No they cannot because no exception for race b. No they cannot because it is morally wrong c. Yes, the club is exempt as long as the decision is not made based on a protected clause d. Yes, they are a private club and can do whatever they want
a. No they cannot because no exception for race
When brokers agree to charge the same commission it is called: Select one: a. Price fixing b. Good business c. Fair trade practice d. Unfair claims and settlement practice
a. Price fixing
Counter-offer is a _____. Select one: a. Rejection b. Amendment c. Acceptance d. Enhancement
a. Rejection
An owner lists his house with a brokerage through a salesperson. Which would NOT terminate the listing? Select one: a. Salesperson dies. b. Broker dies. c. Seller dies. d. House burns to the ground.
a. Salesperson dies.
In a state that requires a property condition for disclosure, it should be filled out by: Select one: a. Seller b. Seller 1st then the agent to verify that it is correct c. Agent d. Broker
a. Seller
A disadvantage to a real estate as an investment is: Select one: a. Slow liquidity b. Appreciation c. Income d. Tax deductions
a. Slow liquidity
A salesperson has a listing agreement with a seller. The house has been shown by several salespersons including the salespersons broker. Which of the following is TRUE? Select one: a. The salesperson represents seller and the broker represents buyer. b. The broker and salesperson represent the seller. c. The broker and salesperson can not be involved in the same transaction. d. The broker represents both the buyer and seller.
a. The salesperson represents seller and the broker represents buyer.
Charging a higher interest rate than the law allows is called: Select one: a. Usury b. Finance c. Mortgage d. Equity
a. Usury
What is an example of puffing? Select one: a. "This property is expected to increase by 25% over the next 10 years." b. "This house has the best view of the lake." c. "The children in this neighborhood have the highest SAT scores in the city." d. "There is no crime in this neighborhood."
b. "This house has the best view of the lake."
There is a developer that has 100 acres. 10% is for recreation and 2% is for roads and drainage. He wants to sell one acre lots for $32,000. What is his gross income? Select one: a. $384,000 b. $2,816,000 c. $3,136,000 d. $3,200,000
b. $2,816,000
Two people are looking to purchase a home with a mortgage payment of $900 per month. The lender requires the mortgage payment be no more than 25% or their gross income. How much do they need to make in order to afford the home? Select one: a. $2,250 b. $3,600 c. $5,000 d. $7,200
b. $3,600
A buyer wanted to purchase a property at a price indicated by the income approach.The gross income on the property was $6,000/month. The net income was $4,000/month. The loan rate was 5% and the capitalization rate was 7%. What was the price the buyer was willing to pay? Select one: a. $57,142 b. $685,714 c. $960,000 d. $1,028,571
b. $685,714
A company wishes to build a 20,000 square foot building on a lot that needs to be four times the size of the building. What is the minimum acreage lot they need? Select one: a. 1 b. 2 c. 4 d. 8
b. 2
A "partnership in commendam" is also known as: Select one: a. A general partnership b. A limited partnership c. A specific partnership d. A limited liability company
b. A limited partnership
The lender required the entire balance be paid at once because a property was sold. This was because of the: Select one: a. Assumption clause b. Alienation clause c. Pay in full clause d. Defeasance clause
b. Alienation clause
How can you put stop on a contract that would NOT harm the buyer? Select one: a. Escape Clause b. Contingency c. Escalator Clause d. Right of First Refusal
b. Contingency
Evidence of ownership is provided by: Select one: a. Option b. Deed c. Mortgage d. Purchase agreement
b. Deed
A borrower gets a 30 year loan where the payments stay the same and include P&I. They have a: Select one: a. Partially amortized loan b. Fully amortized Loan c. Term Loan d. Adjustable rate
b. Fully amortized Loan
Two unrelated people buy property together. They want to make sure that if one dies the other gets the rest of the property. How should they acquire the title? Select one: a. Tenancy in common b. Joint Tenancy c. Tenancy in the entities d. Quiet Title Action
b. Joint Tenancy
What is not an essential element of contract? Select one: a. Acknowledgement b. Legal Objective c. Consideration d. Capacity
b. Legal Objective
A Key disadvantage to being overly leveraged is? Select one: a. Negative Cash Flow b. Liquidity c. Positive Cash Flow d. Liability
b. Liquidity
A key disadvantage to being overly leveraged is: Select one: a. Negative cash flow. b. Liquidity c. Positive cash flow. d. Liability
b. Liquidity
An elderly couple applies for a loan and believes it is a fixed interest rate. the mortgage banker issues a loan with an adjustable rate. This is: Select one: a. Relining b. Predatory Lending c. Blockbusting d. Steering
b. Predatory Lending
Another name for an owner in a listing is: Select one: a. Customer b. Principal c. Agent d. Sub-agent
b. Principal
A broker is showing buyers a home. The sellers say the neighbors added an addition on their home and that it may have extended on to the sellers property. What should the broker do? Select one: a. Go measure the property to verify b. Request the buyer to get a survey c. Go ask the neighbors and verify d. Write an exception in the contract
b. Request the buyer to get a survey
A person discovers that the amount they owe on their house is more than the value of their property. What is their best solution? Select one: a. Forclosure b. Short Sale c. Quit Claim d. Bond for Deed
b. Short Sale
What legal concept dictates that contracts should be in writing? Select one: a. Appropriation b. Statute of frauds c. Escheat d. Statute of writing
b. Statute of frauds
A salesperson submitted two good offers on a property to his seller/client. While the seller was considering those offers, the agent received another for $2,000 less. What should the agent do? Select one: a. Tell buyer's agent that buyer must offer at least $2,000 more. b. Submit the offer. c. Does not have to submit because it's not in seller's best interest. d. Hold it until agent sees if others have been rejected.
b. Submit the offer.
If a licensee represents the lessee, they represent the: Select one: a. Landlord b. Tenant c. Owner d. Broker
b. Tenant
A buyer and seller have entered into a valid contract. Which of the following would have NO legal effect on the contract? Select one: a. The buyer is unable to qualify for the loan because interest rates increase after contract ratification. b. The seller dies prior to closing. c. The state condemns the property for environmental reasons. d. The lender, holding the current mortgage, forecloses.
b. The seller dies prior to closing.
A Broker introduces an unconventional business model into the market and is very successful. The other brokers decide not to show any of the new broker's listings. which of the following is true? Select one: a. this is a RESPA violation b. This is a violation of the Sherman Anti-Trust Act c. This is a violation of state license law d. No violation has occurred
b. This is a violation of the Sherman Anti-Trust Act
Radon can be detected in a home by: Select one: a. It's distinct smell. b. Through testing only. c. Discoloration on walls and floors. d. Cracks in a home's foundation.
b. Through testing only.
A home is valued at $103,000. Property in the city is assessed at 80% of its value and the local tax rate is $3.60 per $100. What is the amount of the owner's monthly taxes? Select one: a. $824 b. $2,966.40 c. $247.20 d. None of the above.
c. $247.20
A person purchases a $500,000 building. The mortgage company escrows three percent for taxes. How much is needed to hold three months in reserve? Select one: a. $500 b. $1,250 c. $3,750 d. $15,000
c. $3,750
A real estate agent notices that a person is signing for another on a contract. The agent should: Select one: a. Refuse to accept the contract. b. Call the sheriff. c. Ask if they have authority to sign. d. Initial next to the signature as a witness.
c. Ask if they have authority to sign.
A buyer who wants a property and has the money to buy it best defines: Select one: a. Transferability b. Scarcity c. Demand d. Utility
c. Demand
A salesperson is talking with the seller of a house he has listed at the open house. The agent's sister shows up and wants to make an offer. The agent should: Select one: a. Turn over the sale to another agent. b. Regard her as a 3rd party and write up the offer. c. Disclose the relationship. d. Refuse to write the offer.
c. Disclose the relationship.
An agency relationship representing the seller must be entered into through: Select one: a. Implied agreement b. Oral agreement c. Expressed agreement
c. Expressed agreement
A buyer makes an "irrevocable offer." After giving it to his agent he changes his mind and wishes to withdraw it. He may get out of this offer . . . . Select one: a. Within 3 business days b. Within 48 hours c. If his agent has not delivered it yet. d. Within 5 business days
c. If his agent has not delivered it yet.
For a valid deed: Select one: a. Recorded b. Date must be attached c. In writing d. Amount must be written
c. In writing
A gas that is colorless, odorless and causes certain types of cancer is: Select one: a. Formaldehyde b. Carbon Monoxide c. Radon d. Mold
c. Radon
What best describes a buffer zone? a. Office park in between 2 residential subdivisions. b. A warehouse in between a single family subdivision and a park. c. Residential subdivision, garden home, commercial property. d. None of the above.
c. Residential subdivision, garden home, commercial property.
Deed restrictions may NOT: Select one: a. Restrict the size of a building. b. Be terminated by a quitclaim deed executed by the necessary parties. c. Restrict occupancy on the basis of national origin. d. Be enforced by means of a court injunction.
c. Restrict occupancy on the basis of national origin.
You are the listing agent who do you represent? Select one: a. Broker b. Buyer c. Seller d. Title Company
c. Seller
The only way a person can will their property after they die is: Select one: a. Joint Tenancy b. Tenancy by the entireties c. Tenancy in common d. Forced heirship
c. Tenancy in common
When does a purchase agreement become a valid contract? Select one: a. When agreement is signed, notarized and recorded. b. When agreement is signed and dated. c. When all parties have signed and been notified of the signing of the other party. d. When agreement is signed and notarized.
c. When all parties have signed and been notified of the signing of the other party.
Easements are discovered through: a. Actual notice b. Constructive notice c. Survey d. Appraisal
c. survey
A property was listed at $125,000 and sold for $120,000 with the buyers getting an 80% loan. If two points were charged, how much did the buyers have to pay? Select one: a. $1,860 b. $2,400 c. $2,500 d. $1,920
d. $1,920
A buyer is purchasing a house for $165,000 at 7%. How many years does the loan need to be amortized in order to afford a note less than $1,100 per month? Select one: a. 15 b. 20 c. 25 d. 30
d. 30
An agent tells a prospective buyer that a new highway off ramp is to be built next to the land within the next 6 months. The buyer pruchases the land and the ramp is never built. This is an example of: Select one: a. Puffing b. An honest error c. Salesmanship d. A material misrepresentation
d. A material misrepresentation
A seller contracted 3 brokers and asked each to suggest the listing price for his property. Broker A said $78,000, Broker B said $79,000 and Broker C said $91,000. The seller listed with Broker C and the house later sold for $76,000. Broker C is guilty of violating which of his or her agency responsibilities? Select one: a. Loyalty b. Reasonable care c. Disclosure d. Accountability
d. Accountability
In a contract for deed title transfers: Select one: a. After half of payments are made. b. When recorded. c. When buyer takes possession of property. d. After last payment is made to seller.
d. After last payment is made to seller.
Which of the following statements is TRUE regarding the acceptance of offers? Select one: a. Revocable offers are considered accepted only upon receipt by the offeree, but irrevocable offers are accepted as soon as they are signed and transmitted by the offeror. b. Once the offeror transmits the revocable offer it is binding on the offeree, but the irrevocable offer is binding in the offeror only after the offeree receives it. c. All offers are considered accepted when signed by the offeree, providing the date and time of the signing are noted on the contract. d. An irrevocable offer is not considered accepted until a signed offer is received by the offeror, but a revocable offer is considered accepted when a signed offer is transmitted by the offeree.
d. An irrevocable offer is not considered accepted until a signed offer is received by the offeror, but a revocable offer is considered accepted when a signed offer is transmitted by the offeree.
A listing agreement will automatically terminate: Select one: a. If the listing broker goes bankrupt. b. On the date specified in the listing agreement. c. If the seller dies prior to receiving an offer. d. Any of the above.
d. Any of the above.
Which of the following would least likely be used in a comparative market data approach appraisal? Select one: a. Adjustments b. Square footage c. Comparables d. Capitalization rate
d. Capitalization rate
The method of appraising when having to figure the reproduction or replacement cost: Select one: a. Market Data b. Metes and Bounds c. Rectangular Survey d. Cost Approach
d. Cost Approach
A listing agreement may be terminated by: Select one: a. The seller b. The selling broker c. The salesperson who obtained the listing d. Death of the Broker
d. Death of the Broker
In order to be valid a deed MUST be: Select one: a. Recorded. b. Notarized and witnessed. c. Signed by grantor and grantee. d. Delivered and accepted.
d. Delivered and accepted.
Which of the following is not a characteristic of radon gas? Select one: a. It is a cancer causing agent. b. It is a result of decaying of natural radioactive elements. c. It is odorless. d. It is used in building materials.
d. It is used in building materials.
An agent shows a house that has 9x9 black and white tiles built in 1964. What is the agent obligation? Select one: a. Notify the party it may have asbestos b. The agent has no obligation c. The agent only has to notify the lender d. Let them know the house was built prior to 1978 and they may want to get it tested for led based paint
d. Let them know the house was built prior to 1978 and they may want to get it tested for led based paint
When scouting locations for a client who is interested in opening a coffee shop what do you look for? Select one: a. Places with low density b. Places with a lot of traffic c. Places that have great topography d. Places with high disposable income
d. Places with high disposable income
A reverse annuity mortgage (RAM) is best for: Select one: a. Couples with a low income to debt ratio. b. FHA buyers c. 1st time homebuyers. d. Retired people on fixed incomes.
d. Retired people on fixed incomes.
The main benefit to a buyer working with a designated agent, rather than with a dual agent is that: Select one: a. Both agents are members of the same firm. b. The broker will assist the designated agent. c. The broker remains in a dual agency relationship. d. The designated agent will be able to advise and represent they buyer's best interest.
d. The designated agent will be able to advise and represent they buyer's best interest.
An a/c is put in a house. The increased value in the home is determined by: Select one: a. Price of a/c but not cost of installation. b. Price and installation of the a/c c. Cost of installation but not the price of the a/c. d. The difference between houses with a/c and those without a/c.
d. The difference between houses with a/c and those without a/c.
A listing agreement MUST contain all of the following information EXCEPT: Select one: a. The signature of the owner of the property. b. The percentage or amount of the commission. c. The expiration date. d. The net amount that the seller will receive.
d. The net amount that the seller will receive.
When may a broker reject offers or counter offers on behalf of a client? Select one: a. Never; this type of action is punishable by suspension or revocation. b. Only after closing, on weekends, and/or holidays. c. At any time, if it is in the best interest of the client. d. When the client is not available and grants authority to the listing broker.
d. When the client is not available and grants authority to the listing broker.