Barney Fletcher Practice Exam 1

A contract would be considered executed when: A. the deed has been delivered and accepted B. all contract terms have been satisfied C. the deed has been recorded D. the deed has been acknowledged

B. all contract terms have been satisfied

When a buyer receives an equitable title to a property, this entitles the buyer to: A. assume the seller's existing loan B. sue for specific performance C. receive a novation D. a non freehold estate

B. sue for specific performance

What could guarantee no encroachments and good title? A. assumption package B. title insurance policy C. survey D. termite inspection

B. title insurance policy

There was a home listed under an exclusive right to sell agreement. Another broker went to show the house without notifying the listing broker. Was this a violation of the license law? A. yes, because only the listing broker can show the property B. yes, because the selling broker must first contact the listing broker in order to show the property C. no, because the selling broker has an implied contract to show the property D. no, because under an exclusive right to sell listing, everyone is authorized to sell

B. yes, because the selling broker must first contact the listing broker in order to show the property

A lender packaged a number of loans to sell to investors. This is referred to as a type of interim financing called: A. blanket financing B. package financing C. warehouse financing D. discount financing

C. warehouse financing

Which of the following activities is NOT covered under the Fair Housing Law? A. mortgage lending activities B. real estate brokerage activities C. activities of real estate salespersons D. activities of an owner occupant of a duplex

D. activities of an owner occupant of a duplex

What type of loan is quickest for the buyer? A. conventional B. FHA C. VA D. assumption

D. assumption

Which of the following is NOT an appurtenance that belongs to and passes with the land? A. right B. privilege C. improvement D. reversion

D. reversion

Which of the following items would be an example of a latent defect? A. a leaky faucet B. a leaky roof during heavy rain C. a cracked mirror D. a house with an outhouse out back

B. a leaky roof during heavy rain

After taking the pre license class and passing the state exam, in applying for license, what type of documentation would be required? A. a Georgia's driver license B. a photo ID C. personal references D. letter about business background

B. a photo ID

A person increased the monthly mortgage payments to a lender with all the increases in payments being applied to the principal loan balance. Which of the following terms best describes this type of payment plan? A. partially amortized with a balloon B. growing equity mortgage C. straight note D. term loan

B. growing equity mortgage

$1,000 is paid for a 30 day option to buy. Which of the following BEST describes the listing agent's commission? A. it is earned at the time the option is entered into B. it is earned when the option is exercised C. the commission comes out of the $1,000 D. the commission is payable at the end of the 30 day option period

B. it is earned when the option is exercised

What type of foreclosure does a lien theory state provide? A. mortgage note B. judicial C. non judicial D. deficiency judgement

B. judicial

In an installment land contract, what type title did the seller retain? A. joint tenancy B. legal C. equitable D. tenancy in common

B. legal

A person invested $5,000 in a limited partnership. One of his concerns was the amount of his liability. Since he is one of the limited partners, can he be liable for more than his initial investment? A. no, because he is guaranteed a 25% return on his investment B. no, because he is only liable for his initial investment C. yes, because he is liable for three times the initial investment D. yes, because limited partners are responsible for a limited amount of all debts

B. no, because he is only liable for his initial investment

A property had 10 rental units. The leases had been signed after the mortgage was recorded on the public record. The property was later foreclosed on but the leases were not disturbed. Which of the following clauses must have been included in the mortgage? A. subrogation B. non disturbance C. defeasance D. exculpatory

B. non disturbance

The intent behind the Statute of Frauds is to: A. protect licensees from sellers who try and cheat licensees out of duly earned commissions B. put real estate transactions in writing C. protect the public from fraudulent actions by licensees D. prevent sellers from lying about property defects to prospective buyers

B. put real estate transactions in writing

A husband and wife filed for and received a divorce. The wife then tried to sell the property but the ex husband's name was still on the deed. Which of the following actions would be best in trying to remedy the situation? A. suit to partition B. quiet title suit C. lis pendens D. notice of lien

B. quiet title suit

A person owned a retail establishment. The seller was considering selling the retail business through a stock exchange. The seller contacted a salesperson about this idea. The salesperson should: A. contact the broker of the office and have the broker handle the transaction B. tell the seller to contact a securities agent regarding this sale C. contact an attorney to assist the salesperson in handling the sale D. handle the sale personally

B. tell the seller to contact a securities agent regarding this sale

The authorities are investigating a violation of the law by a licensee. Which could happen? A. the local association of Realtors could revoke or suspend his license B. the GREC could revoke or suspend his license C. the GREC could impose criminal penalties D. the Attorney General could impose criminal penalties

B. the GREC could revoke or suspend his license

In which of the following can a lender refuse to give a loan? A. the borrower is 80 years old and applying for a 40 year loan B. the borrowers do not have the required down payment C. a male borrower applying for a loan in an all female condo complex D. a baptist applying for a loan in a jewish community

B. the borrowers do not have the required down payment

A property was assessed at 25% of market value. The rate was $5 per $1,000. If the homeowner actually paid $150, what was the total value of the property? A. $30,000 B. $82,500 C. $120,000 D. $133,000

C. $120,000 $150 divided by .5% = $30,000. $30,000 divided by 25% = a total value of $120,000

A property had a land value of $40,000, a 2,000 square feet structure with a rebuilding cost of $70 per square foot, depreciation of $5,000 due to functional obsolescence and $1,500 due to physical depreciation. What would be the estimate of value for this property using the cost approach? A. $133,500 B. $140,000 C. $173,500 D. $180,000

C. $173,500 2,000 sf x $70 = $140,000. $140,000 - $5,000 - $1,500 = $133,500. $133,500 + $40,000 = $173,500

A property with a market value of $7,000 was assessed at 96% of value. The tax rate was 63 mills. What were the annual taxes? A. $43 B. $44 C. $423 D. $441

C. $423 $7,000 x 96% = $6,720. $6,720 x 6.3% = $423.36

Which of the following items would result in a transfer of real estate through court action? A. police power B. constructive notice C. deed recordation D. eminent domain

D. eminent domain

Which is NOT true about a mechanic's lien? A. it can be filed for the value of the cost of the improvement B. it must be filed within a specified time period C. it would have to be enforced by the court D. its priority rights are determined by the date of recording

D. its priority rights are determined by the date of recording

Sam, a FSBO, advertises his property for sale by saying "for sale to cuban buyers only." May he advertise in this manner? A. yes, as long as he does not own more than two homes at once and there is not a real estate firm involved in the transaction B. no, no one can ever discriminate on race according to Jones v. Mayer C. yes, any FSBO is exempt from Federal Fair Housing Laws D. no, individuals are not exempt from discriminating in advertising

D. no, individuals are not exempt from discriminating in advertising

The Real Estate Research, Education and Recovery Fund may only make payments based on judgements to: A. brokers B. salespeople C. the commissioner D. non licensees

D. non licensees

A seller sold their house to a buyer and allowed the buyer to assume the seller's loan. Which of the following would give the seller the best protection regarding this situation? A. deed of reconveyance B. estoppel certificate C. mortgage release D. novation

D. novation

Which of the following items would be considered a fixed cost in a property management budget? A. repair of roof B. utilities C. replacement of furnace D. real estate taxes

D. real estate taxes

Two brokers got into a fight over a commission. They appealed to the GREC to get it settled. What will the GREC do? A. report it to the Attorney General who will notify the GREC as to the correct actions to take B. report it to the local association of Realtors who will notify the GREC the correct actions to take C. the GREC will only seek to negotiate the problem if asked by the brokers in writing D. the GREC will NOT get involved in any commission disputes between licensees

D. the GREC will NOT get involved in any commission disputes between licensees

Which of the following is the BEST definition of a buy down loan? A. when the buyer obtains a second mortgage, in order to lower the amount of the first mortgage on the new home B. the buyer submits a large earnest deposit to encourage the seller to accept a lower offer C. it lowers the interest rate between the 6th and 10th years D. the buyer pays a front end payment to lower the interest rate on the loan in order to qualify

D. the buyer pays a front end payment to lower the interest rate on the loan in order to qualify

An appraiser who was considering the effective age of a property with the chronological age would usually accept each of the following statements EXCEPT: A. the effective age may be less than the chronological age B. improvement with new materials could decrease the effective age C. modernizing or maintaining the building could decrease the effective age D. the effective age is usually greater than the chronological age

D. the effective age is usually greater than the chronological age

A property had several different encumbrances recorded against it. Which of the following factors would indicate which would be paid off first? A. date of acknowledgement B. amount of the lien C. whether it was a voluntary or involuntary lien D. type of lien

D. type of lien

ABC developers advertise, "For rent to anyone including those who are handicapped." May they advertise in this manner? A. no, this is a violation of Federal Fair Housing Laws B. no, this discriminates against the handicapped C. yes, it is exclusive to those who are handicapped D. yes, it is inclusive of everyone including the handicapped

D. yes, it is inclusive of everyone including the handicapped

Which would NOT be used in the capitalization approach? A. gross income B. operating expenses C. reproduction cost D. allowance for vacancy

C. reproduction cost

A cooperative would take title to property under which of the following categories? A. tenants in common B. joint tenancy C. severalty D. tenancy by the entireties

C. severalty

A loan for which of the following would NOT fall under Regulation Z? A. residential home B. a loan involving discount points C. shoe store in a commercial shopping strip D. a duplex

C. shoe store in a commercial shopping strip

When an FHA 203B loan is obtained, which generally happens? A. an FHA appraiser appraises the property B. there is a maximum of 20 years allowed for the loan term C. FHA will guarantee a maximum of $27,500 in case of default D. FHA loans will normally allow the buyer to obtain a 2nd mortgage to cover the down payment

A. an FHA appraiser appraises the property

A corporation set up a business to do office rental services. Which of the following acts could the members do without a real estate license? A. handle the leasing of its own property B. lease other companies' properties C. procure tenants for other owners D. receive referral fees from brokers but no actual commissions

A. handle the leasing of its own property

Which of the following statements is true about the Federal National Mortgage Association ( FNMA)? A. it sells bonds to raise money to buy notes B. it makes loans to low income borrowers C. it is a government corporation D. it is an agency of HUD

A. it sells bonds to raise money to buy notes

A lender had a loan to value ratio of 97% on the first $25,000 of a sales price and 95% on the balance. If the sales price was $68,000, what was the down payment? A. $2,000 B. $2,900 C. $4,200 D. $5,440

B. $2,900 $25,000 x 97% = $24,250. $68,000 - $25,000 = $43,000. $43,000 x 95% = $40,850. $24,250 + $40,850 = $65,100. The price of $68,000 - $65,100 = a down payment of $2,900

An 18 year straight note had a total of $27,000 in interest over the term. The interest rate was 10% and loan was 75% of the sales price. What was the sales price? A. $15,000 B. $20,000 C. $23,850 D. $28,000

B. $20,000 $27,000 divided by 18 = $1,500 interest per year. $1,500 divided by 10% = $15,000 divided by 75% = $20,000 price

A loan with a balance of $21,000 prior to the June 1 payment was figured with interest at 11% annually and monthly principal and interest payments of $571.80. There was a 1% pre payment penalty. The owner paid the June 1 payment and then paid off the balance of the loan. What was the pre payment penalty? A. $204 B. $206 C. $210 D. $215

B. $206 $21,000 x 11% = $2,310 divided by 12 = $192.50. $571.80 - $192.50 = $379.30. $21,000 loan - $379.30 = a loan balance of $20,620.70. $20,620.70 x 1% = $206

An $84,000 loan at 10% annual interest had principal and interest payments of $737.16 per month. How much of the second month's payment would be applied to principal? A. $37.16 B. $37.47 C. $699.69 D. $700.00

B. $37.47 $84,000 x 10% = $8,400. $8,400 divided by 12 = $700. $737.16 - $700.00 = $37.47

A buyer put 20% down on the purchase of a house. The lender required the buyer to pay two discount points in order to obtain a loan. The buyer paid $1,000 for the discount points. What was the purchase price of the house? A. $50,000 B. $62,500 C. $75,000 D. $87,000

B. $62,500 $1,000 divided by 2% = $50,000. The buyer putting down 20% means the loan must have been at 80% of the purchase price. $50,000 divided by 80% = $62,500

A buyer borrowed $1,500 to purchase a hot tub. If the agreement between the parties was for the total principal and interest to be repaid in a single payment, what was the interest rate on the loan if the payment was $1,695? A. 11.3% B. 11.5% C. 13.0% D. 15.0%

C. 13.0% $1,695 - $1,500 = $195. $195 divided by $1,500 = interest rate of 13%

From a lender's point of view, which is the riskiest type of loan? A. conventional B. purchase money C. construction D. wraparound

C. construction

A well maintained home in an area of run down homes would be an example of: A. physical depreciation B. functional obsolescence C. external obsolescence D. reproduction cost

C. external obsolescence

A salesperson was showing one of the broker's listings to some buyers. The prospective buyers told the salesperson they thought the zoning of the property had been changed and the property was worth much more than the seller was asking. What should the salesperson do? A. buy the property personally because of the possible profit B. have the buyers make an offer for the list price C. inform the seller immediately in order to adjust the price D. have another person purchase the property, then transfer title to the broker

C. inform the seller immediately in order to adjust the price

Someone sells real estate for another for a fee without a license. What could the GREC do in this case? A. revoke the license B. file criminal penalties against the violator C. issue a cease and desist order and impose a fine up to $1,000 a day D. ask the Attorney General for a restraining order to stop the person from acting as a licensee

C. issue a cease and desist order and impose a fine up to $1,000 a day

A sale-leaseback converts a fee simple estate to a(n): A. easement by necessity B. fee simple defeasible estate C. less than freehold estate D. life estate

C. less than freehold estate

An agent was working with a buyer. The agent explained agency to the buyer and presented the buyer with an agency disclosure form as part of a sales contract for the buyer to sign. However, the buyer refused to sign. What should the agent do? A. refuse to work with the buyer B. inform the seller of the situation C. make a note and give it to the broker to be kept in the files D. refer the buyer to another agent

C. make a note and give it to the broker to be kept in the files

Q agreed in writing to give a neighbor the piece of land between the rose bush and the neighbor's property line. The transfer was to take place within 6 months. After the 6 months period had passed, Q refused to transfer the property. Would the neighbor have any recourse? A. yes, if the agreement was in writing, it would be enforceable B. yes, since the Statute of Frauds had been violated, the agreement would be enforceable C. no, as there was no consideration given, the agreement was not enforceable D. no, as the 6 month period had elapsed, the agreement was not enforceable

C. no, as there was no consideration given, the agreement was not enforceable

When emerging patterns of urban land use are occurring that would allow for the elimination of residential sideboards but require the density to remain the same, we see an example of a(n): A. horizontal land development B. integrated land development C. planned unit development D. exceptional land use

C. planned unit development

Georgia's law that is focused on deceptive advertising is: A. an anti trust law B. Regulation Z C. UDTPA (Uniform Deceptive Trade Practices Act) D. FBPA (Fair Business Practices Act)

D. FBPA (Fair Business Practices Act)