Real Estate Practice Test Questions

Over how many years is a residential income-producing property depreciated?

27.5 years

Arizona landlord Roberto sent his former tenant, Brenda, an itemized list of the deductions he's taken from her security deposit, along with a check for the remaining deposit that's due to her. How long does Brenda have to dispute this list or the moneys taken from the security deposit before the list and amount due are considered valid and final?

60 days

Who or what entity directs the activities of credit unions?

A board of directors

What is true about a material fact that a licensee must disclose?

A material fact may have more or less effect on a buyer based on the buyer's needs and values.

Grace found herself in a breach of contract situation where the other party met some of the terms but not others. Grace thought it would cost a lot of time and money to sue, so she decided to accept the work that had been done and call it good. This is an example of ______.

Accepting partial performance

As an Arizona licensee, you can legally enter into an additional employment agreement with a represented party if that party signs the state-required acknowledgement and gets a liability release from the first licensee. What else is true about this situation?

Although it's legal, a civil suit is still possible.

What happens to the insured with an umbrella policy?

An umbrella policy doesn't kick in until the primary policy is exhausted.

The Appraiser Qualifications Board has set a minimum of 75 hours of appraiser education for which category of appraisers?

Appraiser trainee

The Federal Housing Administration's qualifying standards for a mortgage loan ______, but the mortgage insurance the FHA provides balances the risk for the lender.

Are somewhat less stringent than standards for conventional loans

Ruby's single-family home in an urban neighborhood was auctioned off at a trustee's sale. There was also a junior lien on the property for a home equity loan. Will Arizona's anti-deficiency statutes protect Ruby?

Arizona's statutes prohibit the lender from pursuing a deficiency judgment if the property is 2.5 acres or less with a single one- or two-family dwelling, so Ruby's foreclosure falls under this protection.

Which legislative act prohibits certain types of electronic communication?

CAN-SPAM

Cecilia has been awarded a judgment in court after suing Elijah for fraud. Elijah can't pay the $20,000 in damages. How long does Cecilia have from the time of the judgment to apply to the Arizona real estate recovery fund?

Claimants must begin legal proceedings against a licensee to win a judgment within five years of the incident, but after the judgment has been awarded, they have two years to try to get restitution from the offending licensee and file a claim to the recovery fund if the licensee can't pay.

Dean and Michael have an oral contract. Dean said he would sell Michael his bike in return for Michael's vinyl album collection. What does the record collection represent?

Consideration

Arizona lender Big Bank is foreclosing judicially on Ariana's property. The court will order ______ to seize and sell the property to repay the debt Ariana owes to the lender.

County Sheriff

A ______ is a method of conveying real property from one party to another.

Deed

Generally speaking, ______ liens have priority over others.

Earlier

Dawn owns a bungalow three miles from the city center. She rents it to Bob and Jan Siegel. Dawn is a ______.

In this scenario, Dawn is the lessor, and Bob and Jan are the lessees.

John is selling his rental property to Tony. Marcus represents John, and Meredith is working with Tony, though there is no agency relationship between them. In this scenario, who is/are the principal(s) in an agency relationship?

John

Which type of payment is made at the end of the term for a balloon mortgage?

Lump sum

Which person or entity works with many different lenders to find the best loan for the customer?

Mortgage broker

Areas with a clay-based soil can benefit from what type of drainfield alternative?

Mound System

Byron is an environmental engineer working for Smith Environmental Services, Inc. He's currently working on a site assessment for an old hospital. Byron just sent soil and water samples to the lab that Smith uses for all of its testing. Which phase of the assessment process is Byron currently in?

Phase II encompasses testing in order to verify site contamination.

In which of the following distressed property types has a foreclosure sale already happened, yet failed to produce a winning bidder?

REO

Which legal description method is regulated by the U.S. Department of the Interior's Bureau of Land Management?

Rectangular government survey

What is the name of the set of regulations used to enforce the Equal Credit Opportunity Act?

Regulation B

What information does Schedule B-1 of a title commitment provide?

Requirements that must met before a title policy will be issued

What act requires sellers, landlords, and their agents to disclose any known lead hazards in the home?

Residential Lead-Based Paint Hazard Reduction Act

The Housing and Community Development Act of 1974 added which protected class to federal fair housing law?

Sex

The Simpsons are buying a five-acre tract that has always been part of a larger parcel. When the owners of the large acreage decided to subdivide it, they needed to have a legal description created for the five-acre lot. What was used as the starting point for creating that legal description?

Survey

Short-term capital gains are taxed at a ______.

Taxpayers' marginal tax rate

What source of state law is a series of laws that are enacted by the state legislature and upheld by regulations?

The Arizona Revised Statutes

A real estate transaction has a closing date of August 5. The seller, who's responsible for closing costs up to and including the day of settlement, has not yet paid annual property taxes of $1,290. If proration is based on a statutory calendar, the buyer will be_______ on the closing statement.

The buyer will be credited $771, since $1,290 ÷ 360 = $3.58 daily rate. The buyer is responsible for August 6 through December 31, which is 4 months and 25 days under the statutory calendar, which equals $3.58 × 145 days = $519.10. So, $1,290 - $519.10 = the seller's share of $770.90, or $771 if rounded to the nearest whole dollar.

The capitalization process uses a capitalization rate, which is based on what?

The capitalization rate is based on the performance of comparable properties. It's the expected rate of return on an investment and can be calculated using the formula of: NOI ÷ V = R, or net operating income ÷ value = rate.

What title guarantees will Jody have if her property is deeded to her after a foreclosure?

The covenant of seisin

The distance between single-family residences in the new Desert Vista subdivision in Mesa is 30 feet. What is the distance known as in subdivision development terms?

The setback

How are Real Estate Advisory Board members compensated for their work on the board?

They don't receive any compensation for their work with the board.

What is the trustee's role when a deed of trust is used to secure property for a loan?

To hold legal title to the property on behalf of the beneficiary until the loan is repaid

Arizona creditors who hold a junior lien on a property in foreclosure have which one of these rights?

To reinstate the loan and take the position of the senior lien holder

Thaddeus submitted an offer to purchase Trinity's home with appraisal, loan, and inspection contingencies. He failed to meet one of the contingencies. Which of these is true?

Trinity has the option of either continuing with or terminating the contract.

An Arizona house was foreclosed on and sold at a trustee sale. The proceeds from the sale exceeded the loan amount, foreclosure process costs, and other liens secured by the property. The excess funds are given to the _____.

Trustor

When can voluntary alienation occur?

Voluntary alienation may occur through the sale or gift of property, or by naming a devisee in a will.

Elevation certificate

provides documented proof that all new buildings and improvements are properly elevated to minimize flood damage, thereby allowing homeowners to obtain flood insurance.

In Arizona, which of the following types of liens has the highest priority?

tax liens

Eminent Domain

the government's power to take private land for public use. An example is when private land is required for the building of a highway.