National Real Estate Exam Practice Questions

Regulation Z applies to:

ALL REAL ESTATE credit transactions except for commercial loans. For non-real estate transactions, it covers up to $25,000.

A buyer is aware that the interest rates should go down over the nest few months. What type of loan should he get to enable him to buy now and take advantage of declining rates in the future?

ARM

How is earnest money recorded on the closing disclosure a. debit to the seller b. debit to the buyer c. credit to the seller d. credit to the buyer

Credit to the buyer

CERCLA is under the administration of:

EPA

What department of the government oversees the FHA insurance program?

HUD

What is a requirement of the CFPB

Lenders must provide borrowers with the LE form at the time of or within 3 business days of application

When did the second amendment of the Federal Fair Housing Act go into effect?

March 12, 1989

It has been found that mold can develop due to

air tight windows and doors found in newer construction

What type of mortgage loan would allow the property owner to borrow additional funds at future dates

an HELOC

Which of the following statements is true about the duties of an agent according to the common law of agency?

an agent must treat both clients and customers with honesty and fairness

A license holder has just attended a training seminar about technology in real estate and is excited about using social media with her clients. Which of the following statements about social media in real estate is NOT true?

an agent with permission to advertise a property on social media does not have to worry about protecting confidential information about the client

Which of the following would be most likely to hire a property manager?

an association

Which of the following statements about an easement is true?

an easement is a benefit to the dominant property owner

Your client is an investor who would like to have the right to purchase a commercial tract for $5 million for the next 6 months. What type of contract should he enter into with the seller?

an option contract

A man leaves his second wife a life estate in their home after which the property goes to his children from his first marriage. The children...

are remaindermen

Which of the following used in 1978 is both extremely hazardous and friable?

asbestos

Who must be notified to take money out of the trust account in a real estate transaction?

both buyer and seller

Which of the following properties would be the least desirable neighborhood?

brownfields

Which of the following facts about listed property must be disclosed

death due to structural defects

Which of the following is NOT an example of functional obsolescence?

deferred maintenance

What are the requirements/ criteria for real estate to have values?

demand, utility, scarcity, transferability

What is the difference between replacement cost and market value?

depreciation

A listing agent went to inspect a seller's property hoping to list it for sale. The seller told the listing agent that his neighbor's satellite dish trespasses on his property. This is an example of...

encroachment

A signed sales contract that has not yet gone to closing is...

executory

When does an offer become a contract?

When the offeree gives the offeror notice of the acceptance

An apartment building owner has renovated and modified several units to be handicapped accessible. Can he advertise this accommodation?

Yes

Which of the following is NOT an example of due diligence in a sales contract?

a broker completes a CMA for a buyer client prior to the buyer making an offer

The required distance between buildings and a federally protected endangered species wetlands is an example of...

a buffer zone

Which of the following closings would be covered by RESPA (1-4 residential family housing)

a condominium

A property manager is hired and signs a management agreement with the owner. At this time, the property manager is...

a general agent

A condo owner's policy will most likely cover the owner if

a guest slips in the kitchen

Which of the following is personal property?

a lease

According to the Statute of Frauds, which of the following leases must be in writing?

a lease for more than one year

Which of the following would not be eligible for a VA loan

a parent or sibling of a veteran

A landlord leased space in his new retail property to an inexperienced business person. Based on location and the type of business, the landlord believes it will be a great success. What type of lease can he enter into with the tenant that will allow the landlord to benefit from the tenant's success?

a percentage lease

Which of the following is unlikely to have a negative impact on seller's credit score?

a straight assumption

A condo complex has liability complex has liability insurance. This is least likely to cover

a units owner's carpet damaged by a broken water pipe

A developer decides to build a commercial property in the middle of a residential subdivision. What is required?

a variance

P, Q and R are joint tenants. P wants to sell the property, but Q and R do not. What can P do?

file a suit for partition

What should a buyer do to ensure that his is getting the best title to real property?

get a general warranty deed

In rental properties, increased demand can be the result of

high mortgage interest rates

What principle of value defines the most important factor for appraisal?

highest and best use

A licensed broker is advertising that he will perform a free appraisal if you contact him for a listing appointment. He is not in violation of the law...

if he is a licensed appraiser

A property owner has decided to do some landscaping work on his yard. He has planted a tree surrounded by some flowering shrubs. The tree and shrubs are an example of...

improvements

What approach would an appraiser most likely use to value a residential rent house in neighborhood where a majority of the homes are leased?

income approach

What is another name for Contract for Deed

installment contract

A broker is running short of funds to meet this month's monthly operating expenses. He places a client's earnest money deposit in his business account and uses it to pay is rent. After his next closing, he replaces the client's deposit in his trust account. The broker...

is guilty of conversion

A father gives his son a life estate on a property. The son leases the property. The tenant dies. What happens to the property?

it goes back to the son until he dies

Your client will be able to qualify for a property they wish to purchase in about 6 months, after they had an opportunity to reduce their consumer debt. They have found a property that they would like to purchase now. What type of agreement can they enter into with a seller that will allow them to occupy the property now and purchase it within the 6 months?

lease with an option to buy

A sales agent is showing a property. He trips in the house causes major damage to property of the owner. What type of insurance will cover this accident?

liability insurance

Which of the following would NOT be an operating expense included in the property manager's operating budget

mortgage payments

Prior to its amendments, the Civil Rights Act of 1968 prohibited discrimination based on...

national origin

Wetlands typically contain which of the following?

navigable waters

An agent working with immigrant buyers must be careful

not to steer the buyers to a neighborhood based on the language they speak

A sales agent just obtained a listing. The seller told the agent that she needs to sell the property because she is going through a divorce. What must the salesperson do

obtain the signatures of all owners on the listing agreement

Accurate record keeping is the responsibility of all the brokers. If a broker's computers are stolen what steps could have been taken to protect records?

offsite or cloud storage

A seller is attending the closing on his property. The title company has discovered an unsatisfied M&M lien on the property. Which of the following is the most likely reason for the lien?

plumbing work that was completed but never paid for

A listing agent is showing his listing to a buyer customer and notices a problem with the exterior of the property that he missed when he listed the property. What should he do?

point it out to the buyer as it is a material fact

Under what right can the government change property use from commercial to residential only?

police power

General liability insurance will

protect a company's assets if someone is injured on company property

A high rise condominium property is advertised as having the "Most beautiful view of the city". This ad is best described as

puffing

An investor has 15 rent houses. He has hired an agent to lease the houses. Which of the following actions by the agent would NOT be in violation of fair housing laws.

refusing to show the houses to anyone over 75 years old

After defaulting on a real estate loan, a borrower is able to pay off the loan prior to the foreclosure sale. This is called:

right of redemption

A property owner has a waterfront lot on a stream. He has the right to use the water from the stream. What is this right called?

riparian

A buyer has purchased a property and after closing the seller will continue to occupy the property. This is an example of...

sale and leaseback

If a person dies without a will, who receives their estate?

spouse and children

An unlicensed assistant gets a call from a listing owner with questions about a contract- what should the assistant do?

take the information to the listing broker

A licensee is representing a seller in a commercial transaction. The property is under contract and all contingencies have been met. The listing agent learns the State Department of Transportation has authorized the construction of an exit ramp to the interstate right behind the commercial property. The exit ramp will greatly increase the value of the seller's property. What should the agent do?

tell the seller and encourage the seller to complete the negotiated sale

A seller comes into the office to sign a contract. The seller is stumbling and smells of alcohol. How do you proceed?

tell the seller to leave and return another time

Ownership of the common areas of condominiums is most likely to be:

tenancy in common

A, B and C are joint tenants. C dies. B sells his share to D. What type of ownership do A and D have?

tenants in common

What is required of a loan servicer before foreclosing on a VA loan

the VA must be notified before the foreclosure

Excess money at a foreclosure sale goes to...

the borrower

A buyer's agent has accidentally forwarded confidential information about his buyer's financial background to the listing agent. What is true?

the buyer's agent is guilty of negligence and the listing agent must disclose the information to the seller

A zoning ordinance would affect which of the following?

the concentration of housing in a residential area

An underage college student signs a lease, then discloses his age to the landlord. What is true?

the contract is voidable at the minor's option

A buyer and seller have negotiated a contract on the seller's property with a closing set for June 14th, time is of the essence. On June 12th the listing agent calls the buyer's agent and tells him the seller will be unable to close on the 14th. The seller can close on the 16th. At this time, what is true?

the contract is voidable by the buyer

Which covenant in a deed guarantees that the owners will not suffer or be disturbed by any claims on the property?

the covenant of quiet enjoyment

A property manager notices that the building stucco needs repair. He notifies the landlord and recommends a contractor. The landlord uses the contractor who does not do a good job. The new stucco leaks and mold grows. The tenant becomes ill from the mold. Who is responsible?

the landlord

A mobility impaired tenant has leased an apartment in a complex with unassigned parking. He has requested an assigned reserved space near to his unit. What is true?

the landlord must provide an assigned reserved space for the tenant near to the tenant's unit

Which of the following statements about lead is NOT true?

the property owner must remediate the presence of lead

A tenant is aware that his lease will expire at the end of the month. He has begun to disassemble his display cabinets and shelves. Which of the following statements about this is true

the tenant can take these as they are trade fixtures

Tenants have signed a 3 year lease on a property. In the second year the owner dies and his heirs inherit the property. They give the tenants notice to vacate. What is true?

the tenants can stay until the end of the lease

A couple purchased a condominium. The complex has an exercise room for all residents. The couple does not use the exercise room and does not want to pay the monthly fee for the use of the facility. What can they do to avoid this fee?

they must pay the fee as they have a tenancy in common interest in all common areas

What is the purpose of a property management trust account?

to hold tenant security deposits

The main purpose of Regulation Z is

to notify borrowers of the true cost of credit

An agent is accused of discrimination. What will HUD do...

try mediation followed by a lawsuit if mediation fails

When does the buyer under contract for deed get title to the property?

when the final loan payment is made

Economic life is defined as

years of depriciation

Mark purchased a home for $150,000 He had an 80% LTV. He has paid off $42,000 of his purchase mortgage. He is selling the house for $179,000. How much equity does he have?

$101,000

A seller has received $225,000 for the sale of his home. This represents a 20% profit. What did he pay for the house when he purchased it?

$187,500

If an appraiser uses the cost approach to determine the value of a two story building 128 x 97 at $120/sq. ft, with $10,000 in depreciation and a $27,500 lot, what is the value of the property?

$2,997,340

A developer has 2,178,000 sq.ft of property. He sells 80% of it for $5,000 an acre. What is the total sale price?

$200,000

A seller wants to net $185,000 on the sale of his property. He must pay a loan balance of $180,530 and closing costs at $10,000. The commission to the listing broker will be 6%. What is the lowest price the property can sell for to accomplish this?

$399,500

A property is listed for $399,500. It sells for $396,000. The negotiated commission is 6% and will be split evenly between the selling broker and the listing broker. The selling broker pays his sales associates 60% of the broker's commission. How much does the selling broker earn?

$4,752

Maria is planning to buy a house for $200,000. The lender has indicated that he will charge 3 points plus an origination point. Maria is considering the difference between an 80% LTV and a 75% LTV. How much will she save on points if she chooses the 75% LTV?

$400

A lead paint disclosure is required for all properties built before

1978

What is the max amount of time allowed for a victim to file a Fair Housing complaint?

24 months

A seller must keep a copy of the lead paint disclosure he provided to the buyer for

3 years

An office space is 24 feet long and 27 feet wide with 9-ft ceilings. The owner wants to carpet the office. How many square yards of carpet does he need?

72