National Practice Exams
Esther is thinking of signing an exclusive right-to-sell agreement with broker Sully, but first she asks, "What kinds of things does this agreement cover?" How should Sully answer?
"It includes a description of the property you're selling and my obligations to you, such as my duty to assist in negotiations."
The Davises pay the annual property tax of $1,825 on their lake house every January. On a whim, they sell the lake house to the Bennets to buy a Winnebago and travel the country. Closing is set for July 31. Assumptions: Use the calendar year proration method; it's not a Leap year; the buyer owes everything for the day of closing. How much of the pre-paid property tax was the Davises' responsibility?
$1,055
Gunther's gross monthly income is $3,800, and he has no monthly debt payments. The lender's qualifying ratios are 28% for the housing DTI ratio, and 36% for the total DTI ratio. What's the maximum housing payment Gunther can afford?
$1,064
A borrower has a 30-year, $500,000 loan with an interest rate of 6.25%. His monthly principal and interest payment is $3,078.59. What's the total amount he'll pay back over the life of the loan?
$1,108,292.40
The Gomez family just moved into their dream home. They purchased the home for $264,985, and it appraised at $272,402. The assessment ratio for their area is 25%, and the tax rate for their area is 2.8%. What is their annual tax bill?
$1,907
Nico is buying a home for $625,000. His earnest money deposit is 8%. He wants to avoid private mortgage insurance (PMI) on his conventional loan, and he owes 5% in closing costs. How much money should he bring to closing?
$106,250
The gross income multiplier for an area is 12X. If the estimated annual rent is $10,000, what's the property's estimated value?
$120,000
Shelly's listing sold for $650,000. The total commission generated from the sale is 5%, of which Shelly's brokerage keeps half. Shelly has an agreement with her broker that she earns 90% of commission generated. How much will she be paid for this sale?
$14,625
Clint is interested in making an offer on a house with hardwood floors that will need to be replaced. The hallway is 18' x 6'. The kitchen is 20' x 30'. The living room is 25' x 45'. Two bedrooms are 12' x 16', and the master bedroom is 14' x 20'. If the cost of the flooring is $5.48 per square foot, and the cost of installation is $1.49 per square foot, how much can Clint plan to spend to replace the floors?
$17, 404.09
A property generates $30,000 in net operating income and has a 15% cap rate. Using the income approach, what is its value?
$200,000
Joaquin sold his house for $327,600. He bought it several years ago for $139,900 with a $100,000 loan. The loan balance when he sold it was $73,400. What was Joaquin's equity?
$254,200
Your seller client has an offer for $300,000. If the agreed-upon commission is 5%, what is net to seller before any other costs are taken into account?
$285,000
A buyer is purchasing a property for $400,000. His loan-to-value ratio is 80%. The lender also charges a one point loan origination fee. How much is the loan origination fee?
$3,200
Bob and Mary are financing $180,500 for a new home. Their lender will approve an interest rate of 5% if Bob and Mary pay two discount points at closing. How much will this cost them?
$3,610
A seller wants to break even after the broker's commission of 5% and loan balance of $300,000 are paid. At what price must the house sell?
$315,789
Almanzo is buying a horse farm for $695,000 and put down 15% in earnest money. His closing costs and down payment total $139,000. How much will he need to bring to closing?
$34,750
Kelly is purchasing a property that has an assessed value of $160,000. If the tax rate is 2.5%, what will Kelly likely pay annually in property taxes?
$4,000
What's the maximum per-email fine you can be charged if you violate the CAN-SPAM Act?
$41,484
The Walton family got a great deal on their new home. They bought it for $101,295, and it appraised at $187,000. Using an assessment ratio of 25%, what is the assessed value of their new home?
$46,750
Esme buys Steve's beach townhouse for $475,000. The transfer tax in the area is $2.00 for the first $1,000 and $0.10 for each additional $100. Calculate what Steve will pay for the transfer tax at closing.
$476
Lenore makes a 95% offer on a townhouse that's listed at $285,000 and includes an earnest money deposit for 10% of her offer, which the seller accepts. She brings to closing a cashier's check for $35,025 comprising the balance of her 20% down payment and closing costs. What's the amount of her total down payment?
$54,150
The purchase price of the home Leroy is buying is $300,000. He's putting $100,000 down and is paying three discount points. How much will this cost?
$6,000
You're working with a buyer who's purchasing a home appraised at $80,000. The buyer is obtaining a 90% loan, and the lender will charge a one point origination fee at closing. How much will the loan origination fee be?
$720
Joyce just closed on a condo for $366,900 and put down 20% to obtain an 80% loan and avoid having to pay for private mortgage insurance. How much equity does she have in her condo?
$73,380
If an apartment building is valued at $970,000 and has a capitalization rate of 9%, what is the net operating income?
$87,300
Gary has an 80% LTV loan on his new $318,000 townhome with an annual interest rate of 4.125%. What's his interest payment the first month?
$874.50
Phyllis bought a beach townhouse for $475,000 and put down $50,000 in earnest money. At closing, she paid $150,000, the balance of her intended down payment. The mortgage tax in the area is $.35 per $100 (or portion thereof). Calculate what Phyllis will pay for the mortgage tax.
$962.50
The Smithwicks, your buyer clients, obtained a 90% loan on their new $400,000 home. At closing, they paid $6,150 for points at closing. How many points did they pay?
1.71
As part of its penalty for violating antitrust law, Homes4Cheap, Inc. has been ordered to undergo court-ordered supervision. How long can this supervision last?
10 years
If a property's income value is $200,000 and it's earning a net operating income of $40,000, what is the cap rate?
20%
All lenders have different underwriting standards, but traditionally, the housing debt-to-income ratio has been ______%, with a total debt-to-income ratio of ______ %.
25 to 28; 33 to 36
A lot measuring three-fourths of an acre is for sale. How many square feet is this?
32,670
A property is 330 feet long by 100 feet wide. How many square feet is the property?
33,000
How many acres are in a parcel described as, "The NE 1/4 SW 1/4 Section 3, Township 4S, Range 2W of the 6th PM"?
40
How many feet are in a mile?
5280
Glenn is purchasing a home for $400,000. The property appraised at $415,000 and Glenn is financing $300,000. What's the loan-to-value ratio?
75%
Jane is purchasing a property for $310,000 and plans to finance $250,000. What is the loan-to-value ratio? (Round to the nearest percentage.)
81%
Margie needs to know the square footage for the first floor of the condo her client wants to make an offer on. The kitchen is 10 feet by 15 feet, the living/dining combo is 20 feet by 25 feet, and the office and sunroom are each 10 feet by 10 feet. What's the total square footage?
850 square feet
Sondra, a buyer, signs all the required mortgage documentation, promising to make all payments to her lender. Unfortunately, Sondra falls on hard times and misses multiple payments, and the bank has indicated that it is going to foreclose on her. The foreclosure proceedings are more difficult for the lender because Sondra holds the title to the land. What kind of state does Sondra live in?
A lien theory state
Rhonda and her husband filed for bankruptcy five years ago. They want to purchase a new house but don't have the best credit score. They've decided to buy the home using an FHA loan. Which of these is a true statement?
A minimum down payment of 3.5% is required.
Which of the following is an example of an easement?
A path providing neighborhood access to a pond cuts through part of Hillary's property.
Your seller clients have received an offer, and the buyer has included a pre-approval letter. Your clients are a little confused and think a pre-qualification letter is necessary. What's true regarding pre-approval and pre-qualification?
A pre-approval letter comes with lender verification of buyer-provided data and provides more assurance to the seller.
Jim decides to refinance his three-year-old mortgage with a loan balance of $300,000. He has to pay a fee of 5% of the loan amount to the original lender for paying off the mortgage early. What is this fee called?
A prepayment penalty
Mike relocated for work and learned that the region in which he planned to buy a home had many old underground mines. In fact, Mike might even need to purchase mine subsidence insurance. What might a home inspector flag for Mike if there are any concerns about undermining?
A sinkhole on the property
Which of the following is an example of constructive eviction?
A tenant moves out of the apartment after repeated unsuccessful requests to the landlord to repair the broken water heater.
Elaina and Allen just purchased a home using a deed of trust. Which of the following is most likely true about their home loan?
A trustee will hold (bare) title until the loan is paid
At what point must a listing agent disclose material facts to all parties involved in the transaction?
ASAP
Kenneth enters a contract to sell his home to Valerie, who puts down a $5,000 earnest money deposit. At the last minute, Valerie backs out of the deal. Kenneth keeps the earnest deposit. This is an example of ______.
Accepting liquidated damages
The MARIA acronym helps to identify the five tests of a fixture. In MARIA, what do the two As stand for?
Adaptability of item to land's use and agreement of the parties
Sherman, who owns property in a life estate, neglects the property, significantly diminishing its value. This is called ______.
An act of waste
Jeung gave her agent an earnest money check, and the seller accepted Jeung's offer. What will happen to the check now?
An escrow agent will hold the funds in a trust account until the agreement's terms are satisfied.
Demographics impact the housing market. Which of the following is a true statement?
An increase in the number of retirees in a given population would negatively impact the demand for large, single-family homes.
Casey signed a contract form offering a purchase price of $309,000 on Karen's home, and gave his agent a $5,000 earnest money deposit. Karen's out of town, though, and her agent can't reach her. At this point what does Casey have?
An offer
The Federal Trade Commission is concerned with all ad claims, but is most likely to be most concerned with ______.
Any ad that makes a health or safety claim or any claim that's difficult for the consumer to evaluate
How does the lender determine whether the property is worth the sales price?
Appraisal
Shannon doesn't understand why her agent wants her to add a contingency to her purchase offer. Her agent, Scott, explains that the property is in a transitional neighborhood, and it might be overpriced. What type of contingency is Scott recommending?
Appraisal
Ray purchased a new home and soon discovered an issue with one of the windows. He filed a claim with the warranty provider, but it was denied. After mediation, the issue still remains unresolved. What is the most common next step?
Arbitration
Which of the following would a home inspector note as a defect in a report, due to its link to lung cancer?
Asbestos tiles in a basement
There are many advantages to holding property within a trust. One of the most important advantages is that some trusts ______.
Avoid probate
Margot is looking for a 10-year loan with regular affordable monthly payments. In eight years, she'll inherit a good chunk of money from her grandmother and be able to pay off the remaining loan amount. What kind of loan might be best for Margot?
Balloon loan
Select the statement that's an example of illegal market allocation.
Based on licensee expertise, Uptown Homes agrees with Country Cottage Realty to focus exclusively on suburban, rather than rural, homes
The sales price, acquisition costs, and capital improvement costs (such as renovations or additions) of a property combine to make up what?
Basis
Why is a foreclosure more likely to have title issues than a non-foreclosure?
Borrowers who can't afford loan payments may have taken out other loans against the property.
What is the relationship between a policies and procedures manual and the broker's obligation to supervise agents?
Brokers who enforce policies and procedures outlined in an effective PPM have proof of efforts to properly train and supervise agents.
After switching careers, Alice just graduated from culinary school and is looking to purchase a house. Until she gets her feet wet with her new job, she knows the cost of living with her mortgage is going to be tight. Which mortgage might help her manage her expenses each month?
Budget
Which of the following might require an adjustment to be made to a comparable (competitive) when preparing a CMA?
Busy street
Which of the following is an action borrowers take to temporarily lower the interest rate on their mortgage loan?
Buydown
If you see sawdust that can't be explained, it's probably a sawdust-like material called frass created by ______.
Carpenter ants
What's another term for a trade fixture?
Chattel
Overall, how do company checklists assist with agent supervision and help to mitigate risk?
Checklists help ensure that agents and staff don't miss steps in a process.
Johannes must obtain a permit for a construction project that he is doing right next to a wetlands. Which federal law or regulation requires him to get the permit?
Clean Water Act
Property with ownership by more than one person is known as ______.
Co-ownership
Rhonda and Jade both consider themselves African-American, although Rhonda has much darker skin and hair than Jade. When Rhonda went to the Valley Falls apartment manager's office to request a rental application, she was told there were no vacancies. Jade went in a day later and received an application. This may be discrimination based on ______.
Color
In the sales comparison approach, which of these are selected and evaluated both quantitatively and qualitatively against the subject property?
Comparables
Which of these helps a licensee determine an appropriate listing price range?
Comparative market analysis
Margaret has received her Closing Disclosure from the lender. To best protect her interests, what should she do with it?
Compare it to the Loan Estimate.
Which economic principle is related to supply and demand?
Competition
______ is the principle that the more similar properties there are on the market, the lower the price will be driven.
Competition
Your buyer client, Percival, was pre-approved for the exact amount he needed to buy the home of his dreams, and he made an offer that was accepted by the seller. What's his next step?
Complete a loan application
Alice owned a double lot on the waterfront. She sold the lot to Ronesha and included a deed restriction prohibiting anything taller than a one-story building. Ronesha wants a three-story house. What should she do?
Conform to the deed restriction.
Raymond and Jean own a shoe store in a rented space in a suburban strip mall. They've decided to move to less expensive retail space, and so are packing up their inventory for the move. Their son Brandon helps them remove the wall-based shelving units, making sure not to damage the walls in the process. The shelving units are ________.
Considered trade fixtures
Which of these situations represents the illegal practice of blockbusting?
Corbin tells homeowners in Five Points that an impending influx of Asian immigrants will reduce property values.
Which approach to value measures the cost to produce a property, including land acquisition and construction costs?
Cost approach
With the cost approach to value, what is the reproduction cost?
Cost to build an exact replica of the subject, with the same materials and deficiencies
Which type of lender is a member-based cooperative that provides credit for auto loans and home loans, takes deposits, and offers savings vehicles and money markets?
Credit union
Danielle's friend, Joanna, is an agent. Danielle is considering listing her property and shares the details with Joanna. Joanna creates an MLS listing and places a sign in Danielle's yard. Danielle knows that Joanna will do a good job, so even though she hadn't actually agreed to let Joanna list the property, she permits her to start scheduling showings. Which of these is an example of ratification?
Danielle knows Joanna will do a good job, so she permits Joanna to start scheduling showings.
Buyers Tony and Sylvia know the postal address of the property they're purchasing but are wondering about the legal description of the property. Where is the most likely place to find the legal description?
Deed
When a property owner wishes to convey her property to a new owner, she will generally use a ______.
Deed
Shirley's lender discharged the mortgage lien on Shirley's property after processing her final payment. Which clause requires the lender to take this action?
Defeasance
Which mortgage clause requires the lender to discharge the mortgage lien once the borrower has paid in full?
Defeasance
Mario lives in a state that requires an abstract of title for property conveyance. The chain of title is broken approximately 50 years prior to the current date. Which of these properly identifies the status of Mario's title?
Depending on his state's laws, Mario may have marketable title.
Which fiduciary duty is missing in the following string: loyalty, care, obedience, confidentiality, accounting, and ______.
Disclosure
The Truth in Lending Act requires lenders to make certain ______ to consumers.
Disclosures
The Amarals are purchasing the house of their dreams and have plans to stay in it for at least the next three decades while they pay back their conventional 30-year loan. Their primary focus, over the life of the loan, is to reduce their payments as much as possible. What is something that could help them achieve this?
Discount points
What's the role of the mortgage contingency in a sales contract?
Documents the type of and timeline for financing, and outlines what to do if financing falls through
Residents of Tinytown have been complaining to town officials that the village-like character of their town is being affected by the medium-rise condos that developers are building on the edge of town. In response, local government officials rezoned the areas on the edges of town as parklands. What type of zoning is this?
Downzoning
A complete marketing campaign that includes the use of 'Choose Your Neighbor' letters in conjunction with an MLS listing, for sale signs, and advertisements in several newspapers is _____.
Effective
Which written statement will be used to consider ways to minimize a project's negative impact on the environment?
Environmental impact statement
Ted is in foreclosure but has some equity in his property. An investor suggests that Ted enter into a sales contract with him for a substantially higher price than the investor would actually be paying. The investor pockets the cash and allow the house to be foreclosed on. What sort of scheme is this?
Equity skimming
A buyer, hoping to beat out all other offers, included a clause in the offer that reads, "Buyer to beat all competing offers by $1,000 up to a price of $700,000. Seller to provide copies of competing offer to buyer on acceptance." What type of offer is this an example of?
Escalator
Elvin owns 150 acres of prime hunting land. Every year he has requests from private groups who would like to use his land for a day or two during hunting season. Some years he grants these requests, but this year he's decided to only use it personally and when with friends. Which right in the bundle of rights says that he can say no to these requests?
Exclusion
The Graysons just closed on their new home. They move in tomorrow. What type of contract do the Graysons have?
Executed
Lydia put the minimum 3.5% down on her $210,000 home. She'll have to pay a mortgage insurance premium (MIP). What type of loan does Lydia have?
FHA
What is the secondary mortgage market made up of?
Fannie Mae, Ginnie Mae, Freddie Mac, Farmer Mac, and lending institutions that buy loans from other lenders
Which act created the Office of Fair Housing and Equal Opportunity under the Department of Housing and Urban Development?
Federal Fair Housing Act of 1968
Local authorities lack police power over which of the following?
Federal government construction projects
The Crows gave their son, Gibson, the family property, so long as he doesn't join his friend's rock band. If he joins the band, the property goes back to them. What type of estate is this?
Fee simple determinable
Roxanne just finished making a buyer presentation to Fred and Regina Jones. Now that they understand the difference between being customers and being clients, they're anxious to be represented. What is one of Roxanne's duties to them as their buyer's agent?
Finding properties to show Fred and Regina
After he missed several payments, Eli's lender sent him a delinquency notice. He tried to make the payments, but continued to miss additional payments. His lender sent him a notice of default, and eventually seized and sold his property after he failed to repay them. What process did Eli experience?
Foreclosure
You need to perform a sales comparison for your clients. Comparable A's adjusted sales price is $277,000. Comparable B's adjusted sales price is $255,000. How might you use this data to determine a list price range for the clients' home?
Give more weight to the list price on the comparable that's most similar to the property.
What does the income approach to value rely on when valuing properties that are five or more units?
Gross income multiplier
Brandon is interested in purchasing a piece of property, but before doing so, he'd like to verify the accuracy of the legal description. Which of these options will accomplish this?
Having a survey conducted
Wendell just listed Barb's home. Barb told him that there weren't any easements on the property, and Wendell hasn't seen a copy of the survey. What is Wendell's responsibility relative to the disclosure of any easements?
He only needs to disclose easements if they're known.
Gladys and her husband, Ralph, owned their home as joint tenants. After Ralph died, Gladys owned the home in severalty. When she dies, which of these will happen to her home?
Her heirs, as described in her will or according to state law, will receive the property.
Sonya's lease expired, but she hasn't yet moved out. Walt has started eviction proceedings. Sonya is considered a ______.
Holdover tenant
Marta and Kim are so excited—Marta received a prestigious fellowship, and she'll be studying in Spain for a year! Kim is taking a leave of absence from her job to come with her. They don't want their home in a gated community to sit empty, so they'd like to rent it out for the year. What might prohibit them from doing so?
Homeowner regulations
Prior to the ______, there was no legal protection for women who endured sexual harassment from landlords and sellers when they attempted to obtain housing.
Housing and Community Development Act of 1974
Related to reasonable accommodation of being allowed to have an assistance animal, which statement is true?
If the disability for which the tenant is making the request is obvious, the landlord may not ask why it is needed
Christy found a property that was for sale by owner and made an offer. The seller accepted Christy's offer, but neither of them knew how to proceed. Zelda helped Christy complete the necessary purchase documents and walked her through the process. What kind of agency has been created?
Implied agency
Which of the following scenarios accurately describes the similarities between an open listing and an exclusive agency listing?
In both types of listings, the seller won't owe a commission if she finds the buyer herself
Which of the following would be a description used for real property?
In-ground
Which physical characteristic of land addresses the concept that while improvements may deteriorate over time, the land itself cannot be destroyed?
Indestructability
It's the licensee's responsibility to know how and when taxes and real estate ______.
Interact
What's the purpose of title insurance?
It protects the buyer against loss resulting from previously unreported title defects.
Widget Corporation just bought land on which it plans to build a new manufacturing facility. How is the land owned?
It's owned as an estate in severalty.
What's one benefit of a rural development loan?
Its optional longer term means a lower monthly payment.
Charles is selling his property to Seth. Charles is financing part of the transaction for Seth, who will make payments to Charles while Charles retains the property title. What's this an example of?
Land contract
Who does the subprime market cater to?
Less creditworthy borrowers
At what level are budgeting, site plan review, and building codes controlled?
Local
When the lender gathers all kinds of information about the borrower's assets, debts, income, employment history, and pulls their credit report, the buyer is ___________________.
Making application for a loan
John is considering purchasing an office building and is trying to determine whether or not it's a good investment. The methods of income approach he may use when estimating the value are all of the following EXCEPT for which?
Market or sales comparison
What's the price at which a willing buyer and a willing seller would strike a deal, given normal market conditions?
Market value
Edna leased her house to Joan with a right of first refusal. Edna's cousin, who knows that she needs liquid assets, just offered her $250,000 for the house. What does Joan have to do if she wants to buy the house?
Match the offer on the table
The Bransons have a conventional loan for which they were required to obtain private mortgage insurance. Their local real estate market has been going like gangbusters, and their house is now appraised at twice their loan balance! Will their PMI be automatically cancelled?
Maybe, but they'll have to petition their lender
Most often, what's the first course of action for disputed home warranty claims?
Mediation
Which of these situations does the Americans with Disabilities Act address?
Meridian Apartments provides a gym and pool area for residents, but it's not accessible to residents who use wheelchairs.
When Shauna looked at the legal description of the property she was interested in purchasing, she read the following: "Beginning at the corner of State Route 61 and Hallowell Road, north for 314 feet, then southwest for 193 feet." In this description, what does "north for 314 feet" represent?
Metes
"Beginning at a stake and stones about 30 feet from the center of the brook that runs across the road Southwesterly from the dwelling house of the late Bethany Smith ..." is an example of what type of legal description?
Metes and bounds
Which legal description method uses compass headings and directions?
Metes and bounds
Claire rents 1,100 square feet of office space in a new professional building. Her rent payment includes all utilities and property taxes, but she pays separately for custodial services. What kind of lease does Claire have?
Modified gross lease
Which clause in the listing agreement gives the listing broker the authority and obligates the broker to market the property to other brokers?
Multiple listing clause
Which of the following actions poses the greatest risk for your brokerage?
Not penalizing staff who don't follow policies or procedures
What is the key difference between the assignment and novation of a contract?
Novation releases the original party from all obligations while assignment does not.
Which agency is charged with enforcing fair housing laws and holding all parties accountable for compliance with these laws and regulations?
Office of Fair Housing and Equal Opportunity
Who can enforce an option contract?
Only the optionee
Which type of buyer agency may limit the amount of representation but offers the flexibility to work with multiple agents?
Open agency
Patsy's home has been on the market for five weeks. Currently, two brokers have buyers getting ready to make offers. If Patsy accepts one of those offers, the corresponding broker will be the only one to earn a commission. What type of listing does Patsy have?
Open listing
Under which types of agency agreement may a buyer and agent operate?
Open, exclusive right to represent, and exclusive agency
In what way is a townhome similar to a single-family detached home?
Ownership includes both the structure and the land.
Which type of listing can help a real estate professional determine how quickly a home in a given price range received an accepted offer?
Pending
Tyra owns a nail salon that's located in a strip mall. Her rent every month includes $1,800 base rent and 10% of her gross sales. What kind of lease does Tyra have?
Percentage
Mary has a contract to buy her mother's house when her mother is finally ready to move to a senior living community. This way the house stays in the family. After her mother finds a suitable senior apartment and moves, Mary writes a check for the agreed-upon amount and her mother transfers the deed to Mary. What is happening in this scenario?
Performance
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
Whose role is it to develop the comprehensive master plan?
Planning board members
Parcels of land are valued at $50,000 each. However, when two of the parcels are joined, they are valued at $120,000. What economic principle is at work here?
Plottage
Clay and Myra just bought a home. Based on where they are in the property ownership life cycle, which tax-related item is likely to be of the most concern to them?
Points deduction
Sandra and Dwight are neighbors who share a common driveway, but the driveway is on Dwight's property. What kind of ownership rights does Dwight have of the driveway?
Possessory
Leigh Ann's co-worker, Carly, is interested in buying a house. Leigh Ann shows Carly how to look for properties online and runs some CMAs for Carly. When Carly finds a property she likes and asks Leigh Ann to help her make the offer, Leigh Ann decides she should ratify the implied agreement with Carly. What are Leigh Ann's options for accepting an agency relationship after the fact?
Prepare an agency agreement or continue to assist Carly with the purchase.
When representing the seller, what duty do you owe a buyer?
Present offers from the buyer to your seller.
According to the U.S. Department of Justice, which type of antitrust violation is an agreement between competitors to eliminate discounts to all customers or certain types of customers?
Price fixing
Hal and Sara own a 212-acre farm. Their property is landlocked but they have permitted water rights to use the stream located six miles away for irrigation purposes. What kind of water rights do they hold?
Prior appropriation
Your neighbors build a high-quality addition to their home, increasing its value compared to your own home's value. Because of this, you notice a bump in your property value. Which economic principle is at work here?
Progression
What's a typical prepaid item that will go into a seller's credit column and a buyer's debit column on a closing statement?
Property taxes
Which of the following situations may result in inverse condemnation?
Property values decrease because adjacent property was rezoned
The buyer you're working with doesn't want to enter into an agency relationship. However, the buyer begins to rely more and more on your advice and, indeed, implied agency has begun! You could have avoided this issue by providing appropriate disclosures, but now that you've created implied agency, what should you do?
Ratify the implied agreement by getting a signed agency agreement.
Who typically prepares a CMA or a BPO?
Real estate licensee
Kristin has been unable to make her mortgage payments. Her property went to auction, but the lender didn't accept the high bid. What stage of the foreclosure process is this property now in?
Real estate owned
Richard is interested in purchasing some rural land and included outbuildings. When reviewing the legal description, he sees the name of a principal meridian. What type of legal description is this?
Rectangular government survey
A rundown home, overgrown with weeds and in desperate need of repairs, is driving down property values on the block. What economic principle is at work here?
Regression
Seller Gina feels awful that Martha, who was going to buy her property, lost her job. Gina decides to ______ Martha from the purchase contract.
Release
Victor's family has always owned this particular lake house. When he was little, he remembers the "beach" being no more than four feet wide before the waterline. Now Victor brings his own children to the lake house, but the beach is almost seven feet wide. What natural process could explain the beach being bigger?
Reliction
Upon a life estate holder's death, the estate either reverts to the original owner or to another person the original owner has named, known as a ______.
Remainderman
Which of the following is a buyer's agent's task or duty?
Representing the buyer's interests
Bob signed a contract to purchase Ingrid's apartment building. Bob decided he didn't want to be a landlord, and Ingrid decided she didn't want to sell and move to Maui. They mutually agreed to cancel the contract and Ingrid returns Bob's earnest money. This is referred to as ______.
Rescission
Any agreement between competing firms that restricts trade, discourages competition, or ______ is a violation of antitrust law.
Restricts choices for consumers
Kyle owns six acres of land with 400 feet of river frontage. He wants to build a beach along the river bank to make it easier to swim in the river. He can do this because as the owner of river frontage, he has ________ rights.
Riparian
Annette really wants to move to San Francisco, but she's unsure whether she'll be able to afford to live there. Housing is very expensive because there simply is no room to build any new housing units. Which economic characteristic does this reflect?
Scarcity
Gina is in the county assessor's office looking at the maps of her county. She sees several areas that are one mile square, or 640 acres each. What are these areas?
Sections
Ari owned an acreage in a rural area. He sold a small portion of it to a neighbor in an informal transaction. There's no record of the sale or change of ownership. A developer has offered Ari several million dollars for the entire acreage, and Ari eagerly accepts the offer. What covenant is Ari in danger of violating?
Seisin
In full seller disclosure states, whose responsibility is it to complete the seller disclosure form which will be reviewed by prospective buyers?
Seller
In states where full disclosure isn't required, whose responsibility is it to disclose any items required by law and respond honestly to any questions about the property's condition?
Seller
An easement dictates that property owner A gives the right to property owner B to use a portion of the property. Which term describes property A?
Servient estate
If the private individual owner doesn't own more than three single-family homes at one time, which exemption from the Fair Housing Act could apply?
Single-family housing sold or rented without the use of a broker
Ned represents Sofia in the sale of her townhome. Luciana represents Sofia's buyer, Arturo. What is Sofia's relationship to Luciana?
Sofia is Luciana's customer.
Which of the following could be a clue that a property was formerly a waste disposal site?
Soft spots, mounds, and discolored soil
What's a consumer?
Someone who uses or purchases a product or service
Jerry and Simon signed a contract so that Jerry could purchase all of Simon's restaurant equipment for one price after Simon closes his restaurant next month. The contract contains a provision that states Jerry has one year from the purchase date to file a suit relative to the purchase. After the year is up, Jerry forfeits the right. What kind of contract clause is this?
Statute of limitations
What's the term for the illegal practice of nudging buyers away from or toward a specific area based on the presence or absence of protected class members?
Steering
Which of these terms is used to describe when a new occupant lives in a rental unit and pays rent to the previous tenant, who is still under contract with the landlord?
Sublease
This economic principle says that a property's value is determined by what it would cost to purchase a similar property.
Substitution
Along with property ownership, rights are granted to use the land's physical components. Which right allows a property owner to use or sell the underground resources, such as natural gas and minerals?
Subsurface
Betty hires a contractor to replace her gutters. Within days, the gutters leak and flood her basement. She complains to the contractor, who replaces the gutters again. The next time it rains, the gutters leak and flood Betty's basement a second time. Frustrated, Betty decides to file a lawsuit against the contractor in an attempt to recover the money she's lost. This is an example of ______.
Suing for damages and breach of contract
Brent and Kathy recently bought a property in a gated community. While doing some landscaping they noticed that their neighbor's shed seems to be over the lot line and on their property. What should they consult to determine if the shed is an encroachment?
Survey
What's TRID?
TILA-RESPA Integrated Disclosures
A community that undertakes a comprehensive master plan is ______.
Taking the first step in urban planning
Once Greg and Caitlin were married, they decided to purchase a home together. The most likely form of co-ownership under which they would make this purchase is ________.
Tenancy by the entirety
Eva, Stella, and Lynn own a vacation home two blocks from the beach. Sadly, Stella passed away this winter, and so when summer arrives Eva and Lynn will be sharing the home with Stella's nephew Drew, to whom Stella willed her share of the property. What type of ownership is this?
Tenancy in common
Which type of pest may make mud tubes—tunnels that run along your walls—or shed tiny wings?
Termites
Prakesh and Jean have always wanted to renovate an old home. They found a Victorian that hasn't been lived in for years and are considering making an offer. Their agent warns them that the property as it stands now may not be insurable. Which of the following might make it uninsurable?
The 100-year-old wiring
Which of these is a TRUE statement regarding truth in advertising violation penalties?
The Federal Trade Commission determines the severity of the penalty based on the severity of the violation.
Rhonda hasn't paid her HOA dues in two years. Her attorney recently informed her that her state grants HOA-related liens a super lien status. What does this mean?
The HOA will be paid before any other liens, even a property tax lien.
The two real estate firms in one small town, Vineyard Realty and Homestead Homes, agree to charge the same commission rate to avoid clients selecting a firm based simply on price. What specific federal legislation prohibits this?
The Sherman Antitrust Act of 1890
A "Homes for Sale" magazine contains the following ad: "One-bedroom condo. Corner unit with beautiful ocean views. Financing available, 5.25% APR." Which of these statements is true?
The ad is in compliance with TILA because providing the APR doesn't trigger the required disclosure of all credit terms.
A seller tells his agent that he has to sell his house quickly because of a divorce proceeding and that he's willing to accept less than his list price. His agent tells a buyer that the seller will accept as much as $10,000 less than the list price. Which of these is true?
The agent has breached his duty of confidentiality to his client.
with her insurance company, she was shocked to learn her insurance policy didn't fully cover what she paid for the property. How does the insurance company determine the replacement value of her home?
The amount it would cost to completely replace her home
When an area uses its zoning powers, what must be followed?
The area's comprehensive plan
When might an additional provision be needed in an agreement of sale?
The buyer requests terms of sale that aren't part of the standard contract.
Marketo Building Designs is selling the air rights above its office building. The lot is 450 feet by 350 feet. How would you determine the air lot height in order to calculate the area?
The city or other governing authority establishes the air lot's height.
Tom and Martha live in a neighborhood where lawn ornaments are prohibited. They want to put up a nativity scene at Christmas and argue that the covenant doesn't apply to temporary decorations but only to permanent ones. Their homeowner's association disagrees. Which entity enforces subdivision covenants?
The civil court system
All of the homes on Elm Street are currently on septic systems. However, the county plans to extend the sewer lines to Elm Street within the next two years. What's the biggest reason why it's important for your buyers to know this?
The county will likely impose an installation fee on Elm Street residents to cover the costs.
Select the statement that correctly exemplifies the covenant term.
The covenant of quiet enjoyment promises that the grantee won't be disturbed by a title defect the grantor passes on.
Janice is selling her property and Tim wants to assume her loan. If a due-on-sale clause exists in Janice's mortgage, ______.
The entire loan balance may be due at once and Tim won't be able to assume
What happens after a foreclosure if there isn't enough money from the sale to pay off all of the lien holders against a property?
The former owner might owe a debt to lien holders who aren't fully paid.
Which of these would void a deed intended to convey property?
The grantor is not mentally competent.
Quad City National Bank has several REO properties on its books. Why does the bank own these properties?
The properties went through the foreclosure process and didn't sell at auction.
Your buyer clients have access to property tax information for each listing that you've given them. Why are they asking you about county tax assessment schedules?
The property taxes may change drastically after reassessment.
In a buyer agency relationship, what relationship does the seller have to the licensee?
The seller is the licensee's customer.
Which of these guarantees is offered by a general warranty deed but not a special warranty deed?
The seller will defend against all claims against the property's title.
Which of the following is true about tie-in arrangements?
They're an antitrust violation.
Monica meets a colleague from another firm, Kate, for lunch, and discovers that a former seller client, Reuben, is now Kate's buyer customer. Kate represents the seller in this new transaction. Monica tells Kate, "You know Reuben inherited a bunch of money right before he sold his house, right?" Which of these statements is true?
This is a breach of confidentiality because confidentiality survives forever.
In order for her house to accommodate her inability to hear, Angela has made a request for the house to be equipped with a doorbell that also alerts occupants with a flashing light. Which statement is correct.
This is likely to be considered a reasonable accommodation, and Angela should be permitted to install it at her own expense
Which of these is an example of antitrust violations common to real estate?
Tie-in arrangements, market allocation agreements, and group boycotting
Gail was supposed to close on her new home by the end of May, but she kept asking the sellers if they could push the closing back. Soon the summer was over and she still hadn't closed. Gail was guilty of not adhering to which aspect of the contract?
Time is of the essence
What's the purpose of a chain of title?
To establish history of past ownership
What forms the boundaries of a township?
Township lines and range lines
When using the sales comparison approach to value a property, all of these are categories of adjustments except ______.
Types of obsolescence
The ______ can offer direct loans to farmers and ranchers. The loans are funded by congressional appropriation.
USDA Farm Service Agency
What property feature could lead to soil contamination?
Underground storage tanks
Your client, Darnell, is interested in buying a rental property that has current tenants. He plans to rent the property to friends the month after he buys it. Which of the following statements is true and could affect Darnell's decision to buy the property?
Unless stated otherwise in the lease, the existing tenants usually have the right to retain possession of a property, even if it's sold during their lease term.
If the responsible parties refuse to clean up hazardous contamination, the EPA can hire its own contractors and seek damages in court for ______.
Up to three times the actual clean-up costs
What's a good policy a buyer's agent should employ regarding contingencies?
Use contingencies judiciously to protect the clients and the deal.
Which of these can be defined as a lender charging a borrower more than the highest allowable interest rate?
Usury
What's the capitalization formula used in the income approach?
Value = income divided by rate of capitalization
Warren signed a contract with the Samsons for the sale of property he didn't own. What type of contract is this?
Void
Sylvia, 15, and her neighbor, Marge, 24, agree that Sylvia will babysit Marge's toddler for the summer for $10 an hour. What type of contract is this?
Voidable
Which of these might bring a charge of illegal steering against a licensee?
When working with single female clients, Cassandra is careful to promote properties in neighborhoods she considers safe.
Sondra thinks the new business contract she's signed with her business partner is valid. Both parties are legally competent, the purpose is a business transaction so it's a legal purpose, an offer was made and accepted, and a fee has been negotiated and documented. Which essential element of a valid contract has Sondra not yet considered?
Whether consent was voluntary
Corinne, an escrow agent, is preparing for the Thomas/Trenton closing in four days. Which of these documents will Corinne prepare?
Working with the lender, she'll prepare the settlement statement, which details the costs the buyer and seller will have at closing.
Julian and Clara want to leave their real estate holdings to their children. If at all possible, they'd like those holdings to avoid the probate process after they're deceased. Their attorney recommends a land trust. Is there a type of trust they could establish that would avoid probate?
Yes, a living trust would avoid probate
Paul and Blake are touring an open house when they notice that the glass on the sliding patio door is very foggy. Is this a concern, and why?
Yes, this is a sign of a leaky seal which reduces efficiency.
You've listed a 1918 Craftsman with some significant foundation issues—so significant that the buyers walked away after the inspection. They provided you and your sellers with a copy of the inspection report, which also points out some wiring concerns. At today's open house, a prospective buyer asks to see a copy of any inspections done on the property. What should your response be?
You should disclose any adverse material facts, but you don't have to provide the report.
Jennifer is the owner of the single-family residence in which she resides. How long can she take to depreciate her property?
Zero years (personal residences cannot be depreciated)
