Uniform practice test

If you own a building free and clear that is worth $115,000 and want an annual return of 12%, what net income is needed each month?

$1,150.

A couple bought a rental house for $195,000. Its assessed value was $180,000. If the tax rate is $1.50 per $100 of assessed value, what is the monthly contribution the lender will REQUIRE for taxes? Round to the nearest cent.

$225.00

A buyer wants to purchase a home priced at $100,000. The lender appraises the house at $90,000 and agrees to make an 80% loan-to-value loan. How much cash MUST the buyer put down to get the house?

$28,000.

The sellers have agreed to give the buyer a carpet allowance to replace the family room carpet. They will allow $19.95 per square yard for carpet plus $5 per square yard for pad and installation. If the family room is 22'6"x 15', how much will it cost the sellers (to the nearest cent)?

$935.63.

In an exclusive right-to-sell listing, an owner lists the property for sale with how many brokers?

One

If a building is non-conforming it is?

Outside the existing zoning code

An appraiser MUST be licensed or certified to handle Federally related work on residential property valued at more than

250,000$

The seller have agreed to give the buyers an allowance of 16.95 per sq yrd to retile the kitchen. If the kitchen is 10x14 ft how much will the cost the seller?

264$

The land description T3N, R4W Principal Meridian refers to what method of property description?

Rectangular survey.

Federal Truth-in-Lending laws are also known as

Regulation Z

If conditions for purchase are included in a deed and these conditions are violated, what is the penalty?

Return of the property to the original owner.

A seller mentions to his agent that the previous owners of his property may have dumped hazardous waste on the site. Under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), who is liable for damages from the dumping prior to the sale of the property?

Seller.

Two lots of the same size are sold on a street. The lot on the corner sells for $20,000 more than the lot in the middle of the street. Which of the following characteristics MOST likely explains the price difference?

Situs.

A home buyer is obtaining a fully amortized loan in the amount of $140,000. The savings and loan will give him the loan for 15 years at 5% or for 30 years at 6%. To the nearest cent, what is the difference between the monthly payments for these two loans? (BE SURE TO USE THE AMORTIZATION TABLE.)

267.40$

Which of the following is NOT usually prorated at closing?

Special tax assessments.

A buyer is getting a fully amortized loan for $220,000. The bank will give the buyer the loan for 15 years at 5 1⁄2% or for 30 years at 6 1⁄2%. To the nearest cent, what is the difference between the monthly payments for these two loans? (BE SURE TO USE THE AMORTIZATION TABLE.)

407.03$

On January 15, a seller paid $960 in annual property tax for the current calendar year. A buyer is purchasing the house with the closing set for March 1. What will be the seller's credit for the property taxes already paid if the buyer pays for the day of closing? Use a 360-day year and a 30-day month.

800$

Discrimination in the rental of rooms or apartments is permitted in all of the following except?

A six unit apartment building.

A broker supplies the financing for a project to build condominiums with the stipulation that he has the exclusive right to sell the completed condos. Which of the following BEST describes this relationship?

Agency coupled with an interest.

Which of the following BEST illustrates the concept and intent of a buffer zone?

Garden apartments located between a single-family residential neighborhood and a shopping center.

The escrow officer or closing agent MUST give information regarding the sales price and seller's social security number to

IRS

Which of the following approaches MOST reliably estimates the sales price of a single-family residence?

Market data.

what is the term used for the person or organization who acts as an intermediary for the purpose of obtaining financing?

Mortgage broker

For Federal income tax purposes, which of the following are costs of homeownership that may be deducted from gross income?

Mortgage loan interest, local property taxes, mortgage loan origination fees.

In most states, when a first mortgage is foreclosed and the property has been sold, junior liens?

No longer have any claim on the property

When preparing a market data estimate of value, which of the following categories of adjustment is NOT essential?

The original cost of the building.

A mentally disabled person who has been declared incompetent by a judge wishes to enter into a contract. Under what conditions can such a person do so?

The person appointed by the court to act for the disabled person must contract on his or her behalf.

Which of the following statements about discount points is FALSE?

They are computed as a percentage of the selling price.

A major reason for buying and owning a condominium rather than a detached single-family home is that

a condominium requires no maintenance.

A written agreement in which a purchaser agrees to buy and a seller agrees to sell is called

a contract.

A lawsuit for inverse condemnation may be brought by

a homeowner.

An escheat occurs when

a property owner dies without heirs or a valid will.

A broker lists a property, with a listing contract allowing sub agency and dual agency. One of the broker's salespersons shows the property. The salesperson would be classified as

a subagent of the seller.

The day after a broker's listing on a house expired, it was listed with another broker and offered in the MLS. Several days later, a third licensee called the first broker and asked for the key to show the home. The broker should inform the caller that

he is no longer the listing agent.

an example of a fiduciary relationship is one which exists between the· listing broker and

her client.

Thewas forced to terminate. The termination was the result of real estate contract for a specific property for use as an unlicensed whiskey sales operation

impossibility of performance.

Earnest money should be deposited into a trust account

in a timely manner, according to state laws.

the purpose of usury laws is to regulate

interest rates charged by lenders.

The gross rent multiplier for a single-family home is calculated by dividing the sales price of the property by

its gross monthly rent

A will has been drawn up leaving the family homestead to the owners' granddaughter. Once that has been done, the owners may

make any changes they wish through a codicil or a later will.

When a property owner uses his home as collateral for a loan and creates a lien in favor of the lender, title is held by the

mortgagor.

An adjustable rate loan should include all of the following elements EXCEPT

negative amortization

Too much leverage may result in

negative cash flow

A couple signed a lease on an apartment for a period of 1 year. The lease does NOT contain an automatic renewal clause. The couple plans to move out at the end of the lease rather than renew it. How much notice MUST they give to comply with the lease term?

no notice required

At the time of harvest, crops that require annual planting are generally considered to be

personal property.

According to the Truth-in-Lending Act, if any "trigger terms" are used in an ad, all of the following disclosures MUST appear in the ad EXCEPT the

prepayment penalties and rebates.

A deed restriction is applicable to the activities of

present and future owners

Which of the following events would Automatically cancel a listing agreement?

property owners death

An Environmental Impact Statement (EIS)

protects the impact on the environment of a proposed project.

The purpose of requiring an earnest money deposit in a real estate sales contract is to

provide evidence of the buyer's intention to carry out the contract.

The statement of "this property has the most beautiful views in the neighborhood" is an example of

puffing

The the document used in a real estate sale that establishes the legal rights of the buyer and seller is

purchase contract.

Antitrust laws prohibit competing brokers from all of the following EXCEPT

receiving compensation from both the buyer and the seller.

The Department of Housing and Urban Development estimates that most private homes built before 1978 contain potentially dangerous levels of lead. Because of this, some Federal agencies, such as FHA,

require the buyer to acknowledge disclosure of the presence of any known lead paint.

A competitive market analysis is MOST often used for

setting a listing price.

When a principal authorizes an agent to perform a particular act or transaction, it is an example of a

special agency

A competitive market analysis takes into consideration

square footage of the subject property.

When someone has living heirs but dies without leaving a will, the estate is distributed according to the

statute of descent.

A minority couple come to a salesperson looking for a house. The salesperson has some properties for which the couple qualify but avoids showing or mentioning these listings. Instead, the salesperson shows only properties in low-priced and integrated neighborhoods. This practice is known as

steering.

All of the following are methods to calculate the reproduction or replacement cost of a building EXCEPT the

straight-line method.

TheThe buyer's agent who is drawing up the contract should buyer wants to make the purchase offer contingent on a complex mortgage arrangement.

suggest the buyer ask a lawyer to furnish the wording.

At the time of listing, the seller tells the listing agent they are moving because the neighbor has loud parties every weekend. The agent should

tell potential buyers about the parties.

A broker, acting as agent for the seller, presents an offer to buy from the broker's former college roommate. The broker knows that the buyer will increase the amount of the offer if the seller turns down the offer. When presenting the offer, the broker should

tell the seller that the buyer will pay more.

A seller tells the listing agent that her home was treated for termites 10 years ago, so there are no termites now. Before listing the property, the agent should

tell the seller to disclose the termite treatment on the property disclosure.

a tenant rented an apartment, signing 15 month lease after the lease expired the tenant paid 1 month rent and got receipt what kind of leasehold does the tenant have?

tenancy at will

Tenants are still in their rental property even though their lease has expired. The landlord has given them written notice to quit and refused to accept rent. They are

tenants at sufferance.

A distinguishing characteristic of owning property by land trust is that

the identity of the legal owner is kept confidential.

The real estate broker who is listing a house for sale should personally verify

the number of square feet in the building.

A prospective buyer made an offer to purchase a property. The owner responded with a counteroffer. While the buyer was reviewing the counteroffer, the owner received a better offer. The owner can accept the second offer if

the owner withdraws the counteroffer before it is accepted.

MOST closed real estate transactions should be reported to the IRS. REQUIRED information includes seller name(s) and social security number(s) and

the sale price.

A broker has brought a ready, willing, and able buyer to a seller. In MOST listing contracts, the broker has earned his commission when

the seller accepts the offer.

A charge of violation of Federal Fair Housing laws can be heard by an administrative law judge within the Department of Housing and Urban Development (HUD) or by a Federal district court judge in Federal court. The advantage of a Federal court hearing to the complaining party is that

there is no dollar limit on damages paid.

Errors and Omissions insurance covers the broker for

unintentional misrepresentations.

A company agrees to lease a property to be used as a gambling casino. State laws prohibit gambling. This particular contract would be legally defined as

void.

Although states make specific laws governing water rights and the rights in land that borders water, most states generally follow one of two basic doctrines regarding water rights. Either riparian and littoral rights are automatically conveyed with property, or all water rights are controlled by the state under the doctrine of prior appropriation. The doctrine of prior appropriation is MOST likely to be followed in states where

water is scarce.

The terms "littoral," "riparian," and "appropriative" refer to

water rights

if a borrower can afford to make monthly principal and interest payments of 1,000$ and the lender will make a 30 yr loan at 8-12% how large a loan can the buyer afford?

130,000$

Which of the following may be considered prima facie evidence of discrimination by a broker?

Failure to display the equal housing opportunity poster at the broker's place of business.

Prospective buyers made an offer on a property. The seller did NOT accept, but made a counteroffer. The prospective buyers signed the counteroffer and the real estate agent delivered their acceptance to the seller. In the interim, the same buyers had found another house that they liked better and made an offer on it, which was accepted. Which of the following is TRUE?

Both contracts are valid.

Which of the following is NOT a consideration in the definition of market value?

Buyer and seller must agree to appraised value.

All but one of the following are true regarding an agreement of sale

Buyer pays the conveyance tax twice

A judgement has been properly recorded. Any subsequent purchaser, whether they have actually examined the record or not, have been given?

Constructive notice

The buyer is assuming a mortgage presently on the property in the amount of $110,000. What is the adjustment made at closing?

Credit buyer $110,000; debit seller $110,000.

At the closing on June 16, the buyer is assuming a mortgage presently on the property, on which the monthly interest charge is currently $600. The seller has made the payment due on June 1. Assuming a VA mortgage, what is the adjustment made at closing?

Debit seller $300; credit buyer $300.

An agent shows a home to a couple and mentions that it has a lovely fireplace in the living room. After buying the home, the buyers and agent discover that the brick fireplace is just a decorative fireplace and is not "wood burning." Which of the following would BEST protect the agent from financial loss?

E & O coverage

The amount of commission to be paid is

agreed upon by the seller and agent on the contract.

A managing broker can be held responsible for

all real estate activities of salespersons.

A sales person lists a property with a contract that allows for subagency and dual agency. The salesperson is?

an agent to the broker a subagent to the principal

The FHA most like

an insurance company

Ownership of common stock in a corporation gives

an interest that is classified as personal property.

A contract has been drawn which obliges the sellers to convey title to their land to the buyers if the buyers come up with $22,000 on or before December 31st. This is called

an option contract

A homeowner has negotiated with a neighbor to obtain the permanent right to pass over the northern part of the neighbor's land to gain access to the river. He pays the neighbor $9,000 for the right of access and receives a deed. This is an easement

appurtenant.

When one of the parties to an agreement fails to perform one of its conditions, that contract is deemed to be

breached.

What type of map is MOST useful for describing the terrain of a very hilly lot?

contour map

Depreciation is calculated based on the

cost of the building only.

A borrower has defaulted on the mortgage. The mortgage contains an acceleration clause. This permits the lender to

demand immediate payment of the entire note.

An equal housing opportunity notice MUST be

displayed in the brokerage office.

A commercial property lost value because a recently constructed highway moved traffic away from the property. This is an example of

economic or external obsolescence.

A property owner died, having willed his real property to his two daughters. There is still a chance that they could lose the land for a variety of reasons, but it CANNOT be taken through

escheat

a landlord may legally refuse to rent to a prospective tenant if the tenant

has ever been convicted of selling illegal drugs.