Practice test questions
The five basic tests to determine whether an item is a fixture are:
1.Method of annexation 2. Adaptability of the item to land's use 3. Relationship to the parties 4. Intention of placing the item on land 5. Agreement of the parties.
In what year was the Americans with Disabilities Act made law?
1990
Residential security deposits must be returned within___ days of when the tenant vacates the property.
21
According to the EPA, at what level does radon become a health concern requiring mitigation?
4.0 picocuries per liter of air
Which percentage reflects the top debt-to-income ratio limit for qualified mortgages?
43%
How many hours of continuing education must a California licensee complete in order to renew a real estate license?
45 hours
How large is a section used in the rectangular survey system?
640 acres
Which of the following is most susceptible to a predatory lender?
A borrower with poor credit
What is slab on grade?
A foundation
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 periodic estate
What does a land surveyor produce?
A survey that includes a legal description and a survey sketch
Kenneth entered into a contract to sell his home to Valerie, who put down a $5,000 earnest money deposit. At the last minute, Valerie backed out of the deal, and Kenneth kept the earnest deposit. This is an example of ______.
Accepting liquidated damages *Kenneth kept the earnest money, which is known as accepting liquidated damages.
What's the term for a notice given directly to and received by a person?
Actual notice
express grant.
An easement created by express written language in a deed
The Gatlins' lender tells them they can afford a monthly payment of $1,830 on their new home loan. What interest rate are the Gatlins getting if this is an interest-only loan with a principal balance of $349,000?
Annual payment ÷ loan balance = interest rate. $1,830 x 12 to get the annual payment of $21,960. Then divide the annual payment by the loan amount: $21, 960 ÷ $349,000 = .0629, or 6.29%. Answer: 6.29%
Which of the following is a true statement about how adjustments are made in the sales comparison approach?
Appraisers adjust upward when a comparable is missing a feature found in the subject property
Ken, Barbie, and Skipper owned a property as a joint tenancy. When Skipper moved out of state, she sold her interest to Midge. Two years later, Ken died. How is the interest in the property divided?
Barbie owns two-thirds, and Midge owns one-third. *Joint tenancy includes the right of survivorship, so Ken's interest will pass to the other tenants. But because Midge bought in later than the others, she isn't considered a joint tenant. Ken's share will therefore pass entirely to Barbie.
Consuela is a real estate licensee, and she has three other licensees working under her supervision. What type of license does Consuela hold?
Broker
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. *An effectively written PPM sets expectations for how to conduct business. Properly implemented and enforced PPMs serve as proof of the effort made toward requiring agents to follow the firm's guidelines, potentially avoiding vicarious liability issues.
Which of the following features is most likely to be the cause of an adjustment to a comparable when preparing a CMA?
Busy street
Hank moved out of a rental house on the second of the month. How long until his landlord must refund the security deposit and/or provide an itemized list of deductions?
By the 23rd of the same month
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 ratio and 36% for the total DTI ratio. What's the maximum housing payment Gunther can afford?
Calculate the debt and housing ratios that buyers need to meet both lending ratios. While Gunther qualifies for a payment of $1,368 under the total DTI, he only qualifies for $1,064 under the housing ratio ($3,800 x 28%). Answer: $1,064
____is called the "silent killer" because it's odorless, tasteless, and deadly.
Carbon monoxide
A borrower's credit history and willingness and desire to repay a loan are elements of which C of credit?
Character
What are the three Cs of credit?
Character, capital, capacity
In a real estate transaction, which of the following is established when the parties enter into an agreement voluntarily with a full understanding of the contract terms?
Consent
What's the point from which elevation is measured?
Datum
What does a D&R stand for when issued by the state real estate commissioner?
Desist and Refrain The real estate commissioner issues a Desist and Refrain order when a subdivision developer is violating subdivision law in some way.
Gerard has been offered a 4% interest rate on a $300,000 mortgage. His monthly mortgage payment would run about $950 per month. He plans to pay $2,000 up front to drop his interest rate to 3.75% and his payment to $920 per month. What is this upfront charge called?
Discount point
A part of your property is used by the local utility company to maintain its power lines. What's this an example of?
Easement
What type of lien is defined as an involuntary lien placed on all of the property received by a deceased person's heirs?
Estate/inheritance lien
What must be included on the subdivisions map?
Existing and proposed easements and utility locations
Goldie and Kurt are looking at purchasing their first home. Their credit history is a little shaky and they don't have enough money saved to put down 20%. What type of loan seems most appropriate?
FHA
Local authorities lack police power over which of the following?
Federal government construction projects
Another closing appointment is approaching. These clients are purchasing a $160,000 home. If they have a down payment of 25% and the bank charges two points at closing, how much are they paying in points?
First find the loan amount: $160,000 × .75 = $120,000. From there, multiply the loan amount by two points, or 2%: $120,000 × 0.02 = $2,400 Answer: $2,400
What is the longest time (with extensions) a developer can have to file a final map after receiving tentative map approval?
Five years
Which structural component is described as "the concrete base that supports the foundation of a building"?
Footing
What type of heating system uses a furnace to heat cool air and transports the warm air via ducts?
Forced air system
What are constructed on top of footings?
Foundation walls
When a land trust expires, the trustee must either extend the trust term or sell the real estate and ______.
Give the proceeds to the beneficiary
Which property is exempt from the FIRREA federal appraisal guidelines?
If the property's value is $400,000 or less, it is exempt from federal appraisal requirements.
Barb has six months left on her lease when the house is sold in foreclosure. The buyer is planning to move in, which may happen how soon?
In 90 days
What does the parol evidence rule state?
In most cases, a written agreement is the final and comprehensive expression of the parties' agreement. It generally prohibits introducing oral or written evidence that contradicts that agreement.
What is done to a landfill that is put out of commission?
It is capped.
What's inverse condemnation?
It occurs when government actions deprive a property owner of the value of the property without offering just compensation.
Which form of real property ownership (for owners other than married couples) means there's equal ownership shares with undivided possession rights?
Joint tenancy
Which of the following is NOT one of the five basics tests that courts use to determine whether an item is a fixture or personal property?
Legally permissible use
Property owners who live on or next to water have certain rights. An example of one of these rights includes ______.
Littoral
Any given property, where will you most likely find the highest radon levels?
Lowest level *Because radon comes from the soil, the lowest level of a house will likely contain the highest concentration of radon.
Which is the price a lender believes the property will bring at a foreclosure sale?
Mortgage value
How do you calculate the area for a rectangular room?
Multiply the length of two opposite sides.
How are real estate-related prorations usually calculated?
On a 360- or 365-day basis
An adjustable rate mortgage has an initial interest rate of 5%. When the first interest rate adjustment date arrives, the rate can be adjusted a maximum of 1%. At all subsequent adjustment dates, the interest rate can be adjusted a maximum of 2%. The highest rate of interest that may be charged at any given time is 9%. What does the 2% rate represent?
Periodic cap
Which of the following is a type of pipe often used in construction?
Polymerized Vinyl Chloride
To make a complaint with the Department of Fair Employment and Housing, the complainant must first complete what form?
Pre-complaint inquiry
Which document is issued by the state real estate commissioner to help protect purchasers of subdivision plots?
Public report
Where would you likely find blanket insulation?
Rafters
Rachel loves convenience. As you can imagine, she was thrilled when she was able to finance her mortgage through the same institution where she deposits her payroll checks. Which of these most likely financed Rachel's mortgage?
Savings and loan
Elisa agreed to list Simone's house for sale. After the listing contract was signed, Simone lost her job, and her father, George, offered to help Simone by paying Elisa's listing commission. The buyer's agent, Carl, also reduced his commission. Who is Elisa's client?
Simone *The only person that Elisa has signed an agency agreement with is Simone, so Simone is her only client.
Which of the following plumbing elements in a dwelling should be vented?
Sink, toilet, tub, and washing machine
Who is responsible for providing maps of earthquake fault zones in California?
State geologist
What's the first step an appraiser will perform when conducting an appraisal?
State the problem.
In which form of co-ownership is a person's ownership inheritable?
Tenancy in common
What does a lot release provision require?
That a portion of the loan be repaid when each lot is sold
Candace and Phil Tolson listed their home for sale with Trent Richards, the broker for Richards Homes. Sadly, Trent became incapacitated due to a car accident. What's the status of the listing agreement?
The agreement terminates by operation of law. *Because the broker has become incapacitated, the listing agreement terminates by operation of law.
A client terminates a listing agreement before its expiration date. What happens now?
The client may owe a commission anyway.
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 it An assumption may trigger a due-on-sale clause, making the entire loan balance due at once.
Jacqueline found a ready, willing, and able buyer for her client's condo, with a sales price of $20,000 more than the asking price. However, the appraisal came in just under the asking price. Which number will the lender use to calculate the loan-to-value ratio?
The smaller number
What does the parol evidence rule say about contracts?
The terms agreed to in a written contract are the only terms relating to that contract. *The parol evidence rules states that only in limited cases may extraneous evidence be presented to dispute the terms of a signed, written contract.
What would happen if you bought a house and later found out that there were unpaid liens against the property?
The unpaid liens could trigger a foreclosure on your property.
You're measuring the square footage of a single-family home you've just built. What national requirements apply to your measurements?
There are no national requirements.
You are working on a CMA for your new listing. The seller has indicated that he really wants to list his home for $400,000 or more. Which of the following would indicate that price may be too high?
There were three expired listings priced between $400,000 and $425,000.
Limited liability companies and limited liability partnerships are favorable forms of business because ______.
They don't require a general partner.
Why may a developer have to pay impact fees?
To address the burden on existing infrastructure caused by the development
A seller wants to net $10,000 after the broker's commission of 6% and a loan balance of $250,000 are paid. For how much does the property need to sell?
To calculate this, start with 100% minus a 6% commission, which is 94% or .94. Take $250,000 plus $10,000 and divide this amount by .94. Answer: $276,596
How are sections and townships related to one another, relative to the rectangular government survey system?
Townships are divided into sections.
What is traditional planning?
Under traditional planning, specialists with different areas of expertise worked separately and focused on designing "their" areas. EX: When the planning board gets together, Carl focuses on commercial aspects, Renee focuses on residential areas, and Arthur focuses on agricultural spaces—all without any insight from one another.
The Richards family farm is located on a 10-acre parcel of land, which is very rare in their area. However, the house is rundown and in need of many repairs. Most buyers in the area are looking for a move-in-ready home, which means they would need to either look elsewhere or wait several months for the home to be renovated. Which factor is most negatively impacting the value of the Richards' property?
Utility *Although large parcels in the area are scarce, buyers are unwilling to buy and wait to live in a property that needs significant repairs, which is affecting the value.
Which governmental department guarantees VA loans?
VA
How long after a project begins must a contractor give the owner preliminary notice of their right to file a mechanic's lien in California?
Within 20 days
How long after a notice of cessation or completion is filed can a contractor file a mechanics lien?
Within 60 days
If Jan is using the designation GRI (Graduate of the Real Estate Institute), but she has not paid her annual membership dues, is this a violation?
Yes, because it is dishonest *The use of any certification that is not in place is a violation. Failure to pay dues causes a lapse in membership.
California couple Tim and Roxanne own a condo as community property. When Tim stops paying his credit card debt, can the creditor put a lien on their condo?
Yes. A lien may be placed on community property for a debt owed by one of the co-owners.
With regard to zoning, inverse condemnation is related to
a loss of value due to downzoning of adjacent property.
The covenant of warranty
assures that the grantor will warrant and defend the title against the lawful claims of others.
To be considered a manufactured home, the property must...
be transported in one or more units, be built on a permanent chassis, consist of no more than two dwellings, and have been constructed after 1976.
Unpaid balances on a HELOC are similar in the eyes of a lender to?
debt incurred on a credit card.
Legal descriptions appear in...
deeds, mortgages, leases, offers to purchase, tax rolls, county records, and title insurance policies.
An item that would most likely be considered a fixture because of agreement between buyer and seller is _____
draperies
A real property tax lien is placed against property owners who...
have not paid their property taxes.
Depreciation is limited to
investment properties Improvements can be depreciated; land itself cannot.
What is a discount point?
is an up front charge to make up for the difference between the rate the borrower is receiving and the rate the lender normally requires.
The periodic cap
limits the amount the rate can adjust at subsequent adjustment dates. The lifetime cap is usually expressed as a percentage increase from an initial interest rate.
Foundation walls, which may be made of
poured concrete, blocks, and bricks
Shelves attached with brackets would be considered_______
real property
A periodic estate
renews automatically at the end of each period specified in the lease agreement.
Rental agents may...
represent the landlord, the tenant, or both (with full disclosure and permission from both parties), and may act as both the listing and leasing agent.
A subdivision plat is recorded in a plat book at...
the county clerk's office and is the legal description used on the deed.
A forced air system
uses ducts to transport heat to areas of the home.
What do you do to protect yourself from a contractor not paying their subcontractors?
you can require them to obtain a payment bond before beginning work.
