National only practice exam

A broker sells a property receiving $8,400 by charging a 6% commission. what was the sale price?

$140,000 -

Carpeting costs were $19.95 per square yard plus an extra $5.00 per square yard for padding. If a room measured 22.5' by 15', what would be the total cost to install the carpet?

$935.63 -22.5` x 15' = 337.50 square feet / 9 = 37.50 square yards x $24.95 = $935.63

Who does a salesperson owe loyalty to?

Broker - The salesperson owes loyalty to the broker.

a seller lists with Broker X. Broker Y sells the property. To whom does the seller owe a commission?

Broker X - The seller would pay the listing agent who would then in turn pay the selling agent .

A trespass of an improvement is which of the following?

Encroachment - An improvement that crosses a property line is an encroachment.

Which of the following duties BEST describes the duty of a property manager to the owner?

Fiduciary - a property manager is generally considered to be a general agent for the owner, thus owing the owner fiduciary responsibility

a property managers two main objectives are to maintain the value of the property and:

Generate and produce income from the property - A property manager job is to produce the best income for the property being managd.

AN agent wanting to represent both sides of a transaction and be a dual agent would need to:

Have written consent from both parties. -dual agency requires written informed consent of all parties.

Private land uses are normally dictated by:

Private deed covenants - Deed restrictions or covenants are placed by private parties( normally developers) dictating uses of the property. example - certain types of roofs and fences.

A listing agent is showing the listed property to a prospective buyer. The buyer tells the listing agent that a favorable zoning is coming with regard to the listed property. What should the listing agent do?

Tell the seller because of the fiduciary obligation to the seller - An agent owes full disclosure to a client.

A seller and buyer enter into a sales contract on a property. the seller breaches the agreement causing the buyer to sue for specific performance. if the buyer wins this lawsuit, the seller will have to:

follow through with the original contract - Specific performance is court action to force completing. if the court orders this, the seller must complete the original agreement.

In foreclosure, after the mortgage and all other debts are paid, to whom would the excess go?

The owner who was foreclosed upon. - The property is sold and the proceeds are used to pay debts.

Which statement would be true regarding a deed?

The purpose of a deed is to convey title -The deed is the instrument used to convey title from seller to buyer

What is the purpose of a private deed restriction?

To control permitted uses of the property

In doing a survey, monuments are sometimes used:

To legally describe a piece of real estate - Monuments ( a stake, well, boulder, etc) are used in the metes and bounds description and are used in giving a legal description.

A contract where one party is bound to perform but the other party is not would be referred to as:

Uni-Lateral - A uni-lateral contract is a one way promise- a promise for an action. One party is bound but the other is not.

which of the following statements BEST describes the usual legal effect of a contract signed between and adult and a minor?

Voidable by minor - It is voidable by the injured party(minor). we assume the minor is extremely susceptible to being taken advantage of by an adult. Therefore, the adult is bound, the minor may void it.

a person builds on ground that is leased from a land owner. which of the following statements would be correct concerning the situation?

When the lease expires, the land owner would own the building - A person can build a building on leased ground, however, when the lease expires, any improvements made would now belong to the land owner.

Is it normally legal for an agent to be a dual agent representing both buyer and seller in a real estate transaction?

Yes, as long as all parties agree - A person can be a dual agent if informed consent is given by all parties right up in front.

CERCLA would normally apply to which of the following situations?

a residential property with a buried oil tank. - CERCLA (comprehensive Environmental response, compensation and liability act) deals with prohibiting of dumping hazardous waste on property.

A mortgage provision that gives the lender the right to call the balance due upon cause ( such as non-payment) is called:

acceleration - Acceleration is called a "default" clause; usually for non-payment.

The payment on a graduated payment mortgage usually has gradual increases:

and then levels out for the remainder of the term. - Payments usually graduate for the first few years and then level out.

a developer would like to restrict the usage of the land in a particular development. he would do this through a :

Convenant in the deed - A deed covenant or deed restriction is used by private parties to restrict certain land uses, such as certain types of fences

When a contract is signed between a buyer and a seller, the buyer is known to have received equitable title upon the happening of which of the following events?

signing of the agreement by the buyer and seller - Equitable title is the right to get title in the future.

A buyer purchased a house obtaining a new loan with a 70 to 30 loan to value ratio. The annual interest rate was 9 3/4%. The first month's interest was $583.33. What was the sale price of the house?

102,564 - $583.33 (int/mo) X 12 months = $6,999.96 (int/yr) / 9.75% = $71,794.46 (loan); $71,794.46 (loan) / 70% = $102,563.52

A buyer was going to take over on a seller's existing loan as part of the real estate transaction. The lender, however, was going to change the interest rate on the buyer to the prevailing current rate. In order for the lender to do this, there must have been what type of clause in the mortgage?

Alienation - An alienation or due on sale clause in a mortgage allows a lender to call the loan due and payable when the property is sold or raise the interest rate as is the case here

a salesperson flagrantly misrepresents something in the sale of a property . which of the following statements would be true?

Any party to the contract could sue the salesperson if damages occur because of the misrepresentation -

Which of the following acts would be permitted under the 1968 federal fair housing act?

Not renting a house to someone because they have poor credit history. - Credit is a valid reason for refusing a tenant.

The government telling people how to use their property in order to protect the public would be an example of:

Police power - Police power deals with keeping things in order, such as zoning laws.

A property that has an easement crossing it is called:

Servient tenement - a servient tenement is the land burdened by the easement.

An offer to purchase contract was contingent upon the buyer receiving a loan. The buyer was not able to obtain financing. The buyer informed both the seller and the broker of the loan denial. Which of the following statements is true?

The broker must return the earnest money to the buyer - If a mortgage contingency clause is part of a contract, then the earnest money should be returned to the buyer if the buyer cannot qualify for a loan.

An 80% loan to value ratio means that the loan amount will be based on 80% of:

The contract price or appraisal whichever is lower

An agent is working with a married couple in the purchase of a home. the couple asks the agent how they should take title to the property. the agent should say:

see an attorney - Any issues about how to take title should be referred to an attorney.

Converting real property into personal property would be called a(n);

severance - a severance is going from real property to personal property, such as cutting down a tree.