practice test questions for Prep EXAM
At a sales meeting you learn that one of your firm's listings must sell that week. "Get 'er sold!" your broker tells you. "The clients must move out in 40 days." You'd really like to get that sale. What can you tell prospective buyers? "I'd love to show you one of my firm's listings." "The negotiating power is all in your hands." "The seller is highly motivated." "The seller must sell this week."
"I'd love to show you one of my firm's listings."
Why would you ask investors about their experience?
To get a feel for how successful they may be at investing
A qualified mortgage may not include interest-only payments and balloon payments, or lender fees and points that total more than 3% of the loan because these are considered ______ in relation to the qualified mortgage.
Toxic loan features
Tammy ensures that a loan is compliant with federal and state requirements and lender's underwriting requirements. What roles does Tammy serve?
Underwriter
Malcolm loves his apartment, even though he's rarely there. His job in international development has him on the road for months at a time. He doesn't have to worry about missing out on his lease renewal, though, because he has ______. A freehold estate An estate at will An estate for years A periodic estate
periodic estate a peridoc estate renews automatically at the end of each period specificed in the lease agreement
Sharilyn's business and adjacent businesses are arranged in a neat row. Customers enjoy the open-air walkways when they visit her business and others. In which commercial space is Sharilyn's business likely located? Office building Office park Regional shopping center Strip mall
strip mall
What's the homeownership percentage for non-Hispanic white households?
70%
ARELLO guidelines specify that when there is a material change to the listing status of one of your properties advertised online, you need to update the status within ________ of the material change.
72 hours
Which phase of the investment cycle is best known for write-offs and, depending on the project, tax credits? Acquisition Ownership Reversion Sale
Acquisition The acquisition phase has tax write-offs (e.g., for points) and possibly also offers tax credits.
Which of the following is typically used for purposes other than a prospective listing or sale? Appraisal AVM BPO CMA
BPO.. A BPO is typically used for purposes other than a prospective listing or sale.
Which deed type may come with or without covenants of warranty? Bargain and sale Full covenant and warranty Quitclaim Referee's
Bargain and sale
To comply with advertising rules, you must include all of the following details on your ads.
Broker's name and contact information
Gene and Alex bought a property that backed up to a neighborhood park. The previous owner mentioned that ever since the park was built eight years ago, the next door neighbor who works at the park has cut through the yard to get to the park rather than going around via the streets, which saves about half a mile. What kind of easement is this? Easement by prescription Easement in gross Express easement Visible easement
Easement by prescription Easements by prescription are created through continuous, exclusive, and long-term use of another's property without actual permission.
In which of the following types of contracts does one or more of the contract's terms still need to be completed?
Executory contract
Which homeowners policy is used for mobile homeowners?
HO-7
If there is a non-payment of premium, what can happen? If payment is received within 15 days of a cancellation notice being sent, it cannot be canceled. If payment is received within 30 days of a cancellation notice being sent, it cannot be canceled. It cannot be canceled. It is automatically canceled and the coverage is lost.
If payment is received within 15 days of a cancellation notice being sent, it cannot be canceled.
When the property is financed, who is named as an additional insured entity on the homeowner's insurance policy?
Lender
If a taxpayer who has a business in their home or who uses a portion of their home for their business wants a deduction on their income tax, they should _____________.
Multiply $5 against the square footage of the home used for business purposes
Which of these is generally a commercial property manager's responsibility, but not a residential property manager's responsibility?
Negotiating leases
Augustine wants to move to a different area of town. He doesn't have a car; he prefers to walk or take public transportation everywhere. He's looking for housing near the subway. Communities designed and developed around access to public transportation are known as what?.. look up tod, nod for
TOD
What happens when a municipality completes an "in rem" foreclosure?
The municipality obtains title to the property.
What's the term for a charge that either party has to pay at closing? Balance Credit Debit Mortgage
debit
Familial status includes families with children under age 18 living with parents or a legal custodian, people securing the custody of children, and what other group of people? Children of alcoholics Children of drug abusers Elderly grandparents living with family members Pregnant women
pregnant woman
Which of the following describes a group of elected officials whose mission is to preserve order in the community and the health, safety and welfare of its citizens? Downtown Business Association Planning Board Town Council Zoning Board of Appeals
town council The Town Council is a group of elected officials whose mission is to preserve order in the community and the health, safety and welfare of its citizens.
Display shelves installed by a business owner in a rented building are a good example of ______. Leased premises Real estate Real property Trade fixtures
trade fixtures
A buyer has a 15-year, $250,000 loan with a 5.5% interest rate. How much of the first monthly payment is interest? $1,145.83 $13,750.28 $1,388.89 $916.67
$1,145.83 ($250,000 x 0.055) ÷ 12 = $1,145.83
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 $3,600 $4,000 $800
$3200 An 80% LTV ratio means the buyer is financing 80% of the purchase price. Eighty percent of the purchase price is $320,000, and one point, or 1%, of this amount is $3,200.
In how many states is undisclosed dual agency legal?
0
What is the average gross leasable square feet for a super-regional shopping center?
1.2 million
What is a mill rate?
1/10 of a cent
The manufacturer of soundproofing, decorative material, shingles, and siding with asbestos was outlawed in which decade?
1970s
Alex would like to earn a broker license. To do so, he must be at least ________ years old.
20
Your buyer client Heather just signed a purchase agreement for a $520,000 home. The LTVR is 60%. How much is Heather putting down on the purchase?
208,000 (multiply by 40%)
What percentage of a worker's income must come from production in order for the worker to qualify as an independent contractor?
90%
Which of the following best describes a tenant's right to quiet enjoyment? A tenant has the right to enjoy lawful use of the property as long as she does not disturb the peace of other residents in the area. A tenant has the right to enjoy lawful use of the property unless the other residents in the area disturb his peace, in which case he has the right to break his lease agreement without consequence. A tenant has the right to enjoy lawful use of the property without being dispossessed or trespassed upon, even by the landlord. The landlord is responsible for ensuring that noise is kept at a level that permits all tenants to enjoy their own respective units, free from unacceptable noise levels.
A tenant has the right to enjoy lawful use of the property without being dispossessed or trespassed upon, even by the landlord.
FAR, or floor-to-area ratio, includes ______. All of the habitable structures on a lot All structures, including habitable structures and parking structures, but not parking lots None of the habitable structures on a lot The area within parking lots or parking structures
All of the habitable structures on a lot
Which one of the following could apply to closing costs for an investment property? Amortized over 17 years Amortized over the life of the loan Never deductible in the year they're paid Subtracted from the cost basis
Amortized over the life of the loan
What is static risk?
An insurable business risk that includes insuring for accident liability, fire, theft, and vandalism
What type of policy insures a home and contents against the perils in the HO-1 and other additional perils, such as falling objects, weight of ice, snow, sleet, and damage from water or steam discharge? Basic policy Broad form policy Comprehensive form policy Special form policy
Broad form policy
Title VIII of which law prohibits discrimination in the sale, rental, and financing of housing? Civil Rights Act of 1866 Civil Rights Act of 1968 Equal Credit Opportunity Act of 1974 Housing and Community Development Act of 1974
Civil Rights Act of 1968
Which loans involve increased risk for the lender and therefore usually come with a higher rate? Construction Land contract Reverse Shared equity
Construction Construction loans involve increased risk because the lender is lending on what's being built and not what's already built. If the builder flaked, the lender would be left with an unfinished building.
Which law or regulation requires supervision by the broker to include regular, frequent and consistent guidance, instruction, and oversight? 1986 New York Independent Contractor Law DOS Regulation 175.21 Internal Revenue Code Section 3508 (a) (b) Sarbanes-Oxley Act
DOS Regulation 175.21
Taxpayers who own a first and second home can _______. Deduct all of the interest paid on debt not to exceed $1.1 million for both the first and second homes combined Deduct property taxes on the first home only Deduct property taxes on the second home only Include a home equity loan—up to $500,000—if total debt does not exceed $1.5 million for all debt on both homes combined
Deduct all of the interest paid on debt not to exceed $1.1 million for both the first and second homes combined
Kurt bought a vacant lot in a development that was 85% completed. When he started working with the builder to lay out where the house and driveway would be, they found he would need an easement because his driveway would spill over onto the adjacent lot by a few feet. Kurt owns the _______ estate or tenement. Dominant Gross Prescriptive Servient
Dominant The dominant estate (or tenement) is the one that receives the benefit from the other owner, also called the servient estate.
Which act attempted to eliminate discrimination caused by blockbusting, steering, and redlining? Civil Rights Act of 1866 Fair Housing Act of 1968 Housing Discrimination Act of 1974 HUD Act of 1961
Fair Housing Act of 1968
Which of the following is an accounting of the costs to develop, financing costs, taxes, and whether the community will accept this development in this location? Environmental impact statement Feasibility study Land use application ROI analysis
Feasible Study
Stu is buying Freddie's property. What must occur for the transfer of title to take place? Freddie and Stu must sign the deed. Freddie must intend to convey the property to Stu. Stu must convey the deed. Stu must sign the deed.
Freddie must intend to convey the property to Stu. The seller (grantor) must deliver a marketable title. The grantee isn't required to sign.
______ means that a building is unusable for today's needs. Some of these will be curable defects and some will be incurable.
Functional obsolescence
Rhonda and Oliver bought an old schoolhouse with the hope of transforming it into a residence. They owned the property as joint tenants. After Oliver died, how did Rhonda own the building? As a joint tenant with rights of survivorship As a tenant in common with Oliver's heirs In severalty In trust
In severalty When there are only two joint tenants, the death of one dissolves the joint tenancy. Rhonda is now the sole owner of an estate in severalty.
Once a taxpayer has received an unfavorable decision from SCAR, what can be done? Initiate an Article 78 proceeding. Initiate a tax certiorari proceeding. Refile the grievance with the BAR. This is the end of the line; all appeals are exhausted.
Initiate an Article 78 proceeding.
In the eyes of a lender, when financing a residence, what advantage does an investor have over owner-occupied borrowers? Investors always pay cash. Investors are less of a risk. Investors can use rental income to qualify. Investors maintain their property better.
Investors can use rental income to qualify.
Which of these is the best definition of real estate?
Land, plus all things permanently attached to it naturally or artificially
In any given property, where will you most likely find the highest radon levels?
Lowest level (basement)
In New York, which lien must be renewed annually to be enforceable?
Mechanic's This lien must be renewed annually to be valid. A lender's rights do not require renewal, and a court-ordered lien does not require annual renewal.
Putting a halt to new development until more schools can be built is a _________. Grievance Moratorium Special use permit Variance
Moratorium
Following all of the client's lawful instructions describes which fiduciary duty?
Obedience
Which of the following is an accurate description of plumbing?
One part brings the water in, one part sends it away, and the two parts never meet.
Jurisdiction tax rates and assessed value are used to calculate what?
Property taxes
Under the Environmental Conservation Law, which of the following wetland activities is exempt from permit requirements?
Pruning trees and vegetation
Conrad just closed on the house he's buying to fix up. Why should he follow up to be sure the deed has been recorded? He can't legally make any improvements to the property until the deed is recorded. He doesn't legally own the house until that occurs. Recording provides actual notice that he owns the property. Recording provides constructive notice that he owns the property.
Recording provides constructive notice that he owns the property.
When a mortgage holder is released from liability for a mortgage, it's also called ______________.
Satisfaction of mortgage
Madeline works for a single-agency firm. If she wants to represent both the buyer and seller in a transaction, what must she do? She can't do this at her firm. She may act as a designated agent for one client and a representative agent for the other. She should get informed consent from both sides to represent them. She should have her broker act as a dual agent, and she can be a single agent for each party.
She can't do this at her firm.
Under what policy name is Homeowners 4 (HO-4) known?
Tenants or cooperative owner policy (rental insurance)
How is commission handled if a seller has an open listing agreement and receives an offer from a buyer who is operating under an exclusive buyer agency agreement? Both parties must sign a dual agency agreement. No commission is owed. The buyer owes the buyer agent commission. The seller or buyer owes the buyer agent commission.
The seller or buyer owes the buyer agent commission.
How are mortgage interest, taxes, insurance, and other similar expenses prorated?
These are usually prorated based on a 360-day statutory year (30 days × 12 months).
Stacy has gone into default on her mortgage. Her lender is demanding that the entire loan balance be paid in full. Which mortgage clause permits her lender to do this? Acceleration Alienation Defeasance Due-on-sale
acceleration
When the transaction involves a condominium or a co-op, a seller must bring certain fees up to date. This includes __________. Assessments Buyer's loan origination fees Condo/co-op usury trust fund fees Inspection costs
assessments
Which kind of well is similar to dug wells because it is usually cased and has a bottom that may be screened? Bored Drilled Driven Jetted
bored
Terry purchases a property. The deed includes a description of an easement given to the neighboring property. This is an easement created by ______. Condemnation Express grant Implication of law Prescription
express grant
The risk that is directly related to leverage is called ______ risk.
financial
The doctrine of "use it or lose it" is known as the doctrine of ______. Eminent domain Escheat Laches Taking
laches
Which type of commercial property offers general merchandise and fashion, and is typically enclosed with inward-facing stores connected by a common walkway? Factory outlet Mall Neighborhood center Strip mall
mall
A couple of licensees you know from different firms are tired of competing with one another for the same listings. You overhear them saying, "You take the north side of town and I'll take the south, so we aren't stepping on each other's toes." You stop their conversation to tell them they're committing an antitrust violation. Which one is it?
market allotcation
Where would you likely find blanket insulation? Basement Bedrooms Crawl space Rafters
rafters
A discount point equals 1% of the _______.
the loan amount
Nadia wants to invest in a neighborhood shopping center. What size trade area can she plan to service?
3 mile
Among the following individuals, who would need to provide a judgment of conviction to the Department of State (DOS) within five days after conviction? A broker convicted of a misdemeanor A broker who gets a speeding ticket An associate broker who settles a divorce case in which real property is involved in the settlement A salesperson convicted as a sex offender
A salesperson convicted as a sex offender
What are building specifications? A blueprint A survey A written narrative of the building plan The building plan
A written narrative of the building plan
Which of the following statements about insulation is true? Blanket insulation comes in fiberglass rolls. Loose fill insulation is no longer used due to concerns about formaldehyde. Vermiculite and perlite are examples of blanket insulation. Wallboard insulation often comes in 15.5-inch widths to fit between framing members.
Blanket insulation comes in fiberglass rolls.
Which of these is a type of gap financing that's used temporarily until the consumer can obtain permanent financing? Balloon payment Blanket mortgage Bridge loan Wrap-around mortgage
Bridge loan A bridge loan is a temporary (usually 90-day) loan that provides funds in addition to an existing loan until permanent financing can be obtained. It's often used by buyers who've not yet sold their prior property.
Ned represents Sofia in the sale of her townhome. Luciana represents Sofia's buyer, Arturo. What is Luciana's responsibility to Sofia? Assist Sofia in the performance of tasks that Sofia needs to accomplish in order to get to a successful closing. Contact the tax assessor's office for an estimate of the real property taxes. Disclose that the buyer is a registered sex offender. Disclose that the buyer will not have the funds for the down payment unless he sells his current home.
Disclose that the buyer will not have the funds for the down payment unless he sells his current home.
Which of the following is a true statement about deducting interest on mortgages taken out in tax years between 2018 and 2025? Interest on the first $500,000 of mortgage debt is deductible for married couples filing jointly or $375,000 for married couples filing separately. Interest on the first $750,000 of mortgage debt is deductible for married couples filing jointly or $375,000 for married couples filing separately. The loan can be used for purchase or making improvements, as well as for other purposes. The loan cannot be for more than the borrower's most recent year's salary.
Interest on the first $750,000 of mortgage debt is deductible for married couples filing jointly or $375,000 for married couples filing separatel
Avery, who holds a life estate with remainder interests, dies without heirs. When this happens, what happens to the property? It passes in accordance with Avery's will. It passes in accordance with intestate succession laws. It passes to the state through the process of escheat. It reverts automatically to the person holding the remainder interest.
It reverts automatically to the person holding the remainder interest.
When lead is present, what rule covers remodeling of the property? Lead Removal, Repair, and Paint (RRP) Rule Lead Removal, Repair, and Renovation (RRR) Rule Lead Renovation, Repair, and Painting (RRP) Rule Lead Repair, Replace, and Painting (RRP) Rule
Lead Renovation, Repair, and Painting (RRP) Rule
What's a possible effect of ongoing litigation on condo sales transactions?
Lenders won't lend on properties involved in litigation.
When a lawsuit is filed, a _______ is often created and filed, as well, which provides the public with a notice that a judgment may be forthcoming that could affect the property's title. Easement Eminent domain Encroachment Lis pendens
Lis pendens
Mardee represented condo owner Carol, and they signed an exclusive agency listing agreement. If Carol found her own buyer, would she owe Mardee a commission? No, because Carol is not a real estate licensee. No, because Carol procured the buyer. Yes, because they have an exclusive agency listing agreement. Yes, but she only owes the listing commission.
No, because Carol procured the buyer. It's easy to confuse the types of listing agreements. With exclusive agency, the seller retains the right to sell the property and not pay a commission. Exclusive right to sell agreements guarantee payment to the listing agent no matter who brings the buyer.
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
Which act prohibits the payment of kickbacks between settlement service providers?
RESPA
If the land is described as "N ¼ NW ½ Section 4, Township Bailey," what type of legal description is being used? Lot and block Metes and bounds Monument system Rectangular survey system
Rectangular survey system Rectangular survey system descriptions reference a section within a township.
One benefit to landscaping is that it ______.
Reduces soil erosion
Which of the following is TRUE regarding septic tanks in New York? For well or sewer construction outside DOH guidelines, a design plan drafted by a homeowner must be submitted to the DOH for approval. Septic tanks must be located at least 25 feet from a well, and an absorption field must be at least 50 feet from a well. The Department of Environmental Conservation must approve septic plans for buildings that process more than 1,000 gallons a day. The DOH doesn't allow absorption trenches if the soil and site conditions allow seepage pits.
The Department of Environmental Conservation must approve septic plans for buildings that process more than 1,000 gallons a day.
Which of these guarantees is offered by a general warranty deed but not a special warranty deed? The property is free of debt or other claims taken on by the grantor during the ownership period. The seller is legally allowed to sell the property. The seller owns the property (title). The seller will defend against all claims against the property's title.
The seller will defend against all claims against the property's title.
Which of the following is a type of loose-fill insulation? Batting Fiberglass roll Vermiculite Wallboard
Vermiculite
Joaquim analyzed a potential opportunity and determined that if he invested $250,000 in the commercial property, he'd likely see a return of 12% on this investment. After several years, Joaquim is seeing a measly 2% return. What type of risk did he fall victim to? Business risk Capital risk Financial risk Leverage risk
business risk
What type of notice results from publicly recording a title transfer? Actual notice Attorney notice Constructive notice Proper notice
constructive notice
Two large local brokerage firms agreed to lower their commission rates to the same amount—approximately 1% less than any other firm in town. After extensive marketing of their new lower rate, these two firms began to see a big increase in the number of listings they received, costing their competitors substantial amounts of money. What about this situation makes it a per se antitrust violation? The agreement between the two firms The dollar amount the competitors lost The marketing efforts the two firms used The size of the two brokerage firms
the agreement between the two firms
Jarod is the property manager of a community shopping center. How many anchor tenants does the center have? Four One Three Two
two Community shopping centers are typically designed around two anchor tenants: a national department or variety store and a locally prominent department store or supermarket.
Julian is glad that the property owner at the townhouse community he manages established a substantial capital reserve budget for unexpected expenses, like the new roofs needed after a hail storm. What are these types of expenses called? Fixed Operating Stable Variable
variable
