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MIDTERM EXAM
Practice Exam
| Question | Answer |
|---|---|
| All of the following are requirements for obtaining a Georgia real estate salesperson’s; license, Except: | At least 21 years old |
| Instate succession of real property will occur if the property’s owner’s | Died without executing a valid will |
| The instrument used to transfer possession of personal property is a: | Bill of sale |
| A right or privilege associated with ownership of a piece of real property is: | Appurtenance |
| A contract with an unlawful purpose is | Void |
| Agents sometimes find potential buyers while on floor duty. Floor duty is the practice of: | assigning one agent to handle all the telephone calls and brokerage office visits for a period of time |
| Which of the following estates is a freehold estate? | Fee estate |
| The owner of a property with a condition subsequent: | has a qualified fee simple |
| A tenancy in common can terminate by: Th | mutual agreement or partition action |
| A buyer and seller enter into a purchase and sale agreement that specifies that specifies that the buyer has days to obtain financing. Through no fault of the buyer, it becomes impossible to obtain a loan commitment from a lender within the prescribed per | Amendment |
| P enters int a purchase and sales agreement with Seller H. Shorty thereafter, a title search reveals that H will not be able to deliver marketable title to P because there are some title defects that cannot be corrected. P demands that her earnest mone | Take no action until the buyer and seller have reached an agreement on the disposition of the earnest money |
| The Real estate Commissioner: | Is elected to a four – year term |
| The land description method that makes reference to sections, townships, andn ranges is the | Government survey method |
| A broker sells the house that he owns to another person. The broker represented himself in the sale and disclosed the fact that he is a broker to the buyer and put this in writing. Later that month, the broker represents a buyer and a seller in the sale | No, because there is no violation |
| Broker Williams has a listing o Falk’s house. After an offer has been presented and accepted and delivered back to the buyer ad buyer’s agent, a latter offer arrives with a better price than the first. What should Broker Williams do? Broker… | Should inform the second offer that his offer will be presented if and when the first offer falls through |
| An offer to purchase becomes a counter-offer when the seller, having received the offer, responds by changing: | Anything on the original offer |
| A broker receives more that bona fide offer on a property, at approximately the same time. The broker should present: | All offers |
| Two men are joint tenants. One of the men sells his interest to another person. What is the remaining man’s relationship in the new tenant regarding the property? | Tenants in common |
| A lien that arises as the result of a judgement, estate or inheritance taxes, a decedent’s debts, or federal taxes is what type of lien? | Specific |
| An item of functional obsolescence is considered incurable is the | value of the property decreases after the repair |
| Agents sometimes find potential buyers while on floor duty is the practice of: | Assigning one agent to handle all the telephone calls and brokerage office visits for a period of time |
| The owner of a property with a condition subsequent: | Does not own the land |
| A tenancy in common can terminate by: | Mutual agreement or partition action |
| Which is the following estates is a freehold estate? | Fee estate |
| An easement created by long, continuous, apparent, and non-permissive use would be as easement by: | prescription |
| The land description method that makes reference to sections, townships and ranges is the: | Government surety method |
| T owns an interest in a cooperative, T receives which of the following? | Stock in a corporation |
| An estate in real estate: | Must include title for the builder of the estate |
| An agency terminates because the Buyer’s agent helps the buyer to successfully purchase a home. The agency terminates because of : | Fulfillment of purpose |
| A federal law that pertains to loan transactions, including residential, real estate loans and prohibits discrimination based on race, color, religion, national origin, sex or material status, or because the applicant receiving public assistance, is the: | Equal Credit Opportunity Aid |
| P enters into a purchase and sale agreement with Seller H. Shortly thereafter, a title search reveals that H will not be able to deliver marketable title to P because there are some title defects that cannot be corrected. P demands that her earnest money | Take no action until the buyer and seller have reached an agreement on the disposition of the earnest money |
| A broker receives more than one bona fide offer on a property, at approximately the same time. The broker should present: | all offers |
| Jim gives a life estate to Sarah, in which she will keep her estate interest as long as Carl is alivce. When Carl dies, title wil pass to Mark, the reaminerman. Sarah's interest is best described as a / an: | Life estate autre vic |
| How is real property most different from personal property? | Diffenent method of transfer of title. |
| Two friends entrant a six-months oral lease. If one friend defaults, the other may | bring a court action because six-month leases need not be in writing to be enforceable. A lease of less than a year is enforceable |
| Abstract of Title | a historical summary of the publicly recorded documents that affect a title |
| Deed | Usually title is conveyed from one person (the grantor) to another (the grantee) by means of a written instrument called a deed |
| Deed Restrictions | Limits the use of property by all owners of that property including future owners. |
| Easement | A nonpossessory interest in land. It is the right to use land that is owned or leased by someone else for some special purpose. It entails only a limited user privilege and not privileges associated w/ownership. |
| Estate | "All that a person owns" |
| Estate for years | The type of leasehold estate investors and lenders are most likely to encounter. Created by a lease that specifies an exact duration for the tenancy. |
| Estate from year to year | Tenancy continues for successive period until either party give proper notice of its intent to terminate at the end of one or more subsequent periods. |
| Fee simple estate | The freehold estate that represents the most complete form of ownership of real estate. A hold of this type of estate is free to divide up the fee into lesser estates & sell, lease, or borrow against it. |
| Freehold estate | Lasts for an indefinite period of time; there are no definitely ascertainable date on which the estate ends. |
| Future Estates | An estate not in possession, which does not convey the right to enjoy the property until some time in the future. |
| General Warranty Deed | Most commonly used and most desireable type from buyer's perspective. It offers the most comprehensive warranties about the quality of the title |
| Leasehold Estate | is different than a free hold estate because it expires on a definite date and implies only the right to possess and use the property owned by another for a period of time. |
| Lessee | A person who leases land |
| Lessor | A person who holds the title (so possession of the property is granted by the owner to the other person for a period of time. |
| Life Estate | It is possible to have a freehold estate that has fewer ownership rights than a fee simple estate. This is an example. It is a freehold estate that lasts only as long as the life of the owner of the estate or the life of some other person. |
| Mechanics' lien | Give unpaid contractors, workers, and material suppliers the right to attach a lien on the real estate to which they added their labor or materials. To obtain pmt owed them, they may foreclose such liens by forcing a judicial sale and pd from proceeds. |
| Nonpossessory Interest | The right to use land that is owned or leased by someone else for some special purpose (like an easement). |
| Ownership Rights | Many parties can have different ownership rights in a given parcel of real estate. These rights associate with the real estate are referred to as real property. |
| Personal Property | Or Personality are things like intangibles and all movable things (autos, stocks, patents, furniture) |
| Property Rights | The right of a person to the possession, use, enjoyment, and disposal f his or her property. |
| Quitclaim deed | Offers the grantee the least protection - it simply conveys to the grantee whatever rights, interests, and title that the grantor may have in the property. Is just says the grantor "quits" whatever "claim" he has in the property (which may be none). |
| Real Estate | Things that are not movable such as land and improvements permanently attached to the land. |
| Real Property | Ownership rights associated with the real estate. |
| Recording acts | Not uniform among states, these acts in general provide a publicly accessible system for assessing and establishing claims or interests in real estate as against all other parties. And provide a set of rules for resolving priority disputes. |
| Remainder | Exists when the grantor of a present estate with fewer ownership rights than the grantor's own estate conveys to a third person the reversionary interest the grantor or the grantor's heirs would have in the property upon termination of grantee's estate |
| Reversion | Exists when the holder of an estate in land (grantor) conveys to another person ( grantee) a present estate int he property that has fewer ownership rights than the grantor's own estate and retains for the grantor or the grantor's heirs right 2 take back |
| Secured Interest | Although a lender may not possess or use the real estate, the mortgage document provides the lender with evidence of a secured interest. This reduces the quantity of the rights possessed by the owner. |
| Specialty Warranty Deed | Makes same warranties as a general warranty deed except that it limits their application to defects and encumbrances that occurred only while the grantor held title to the property. But warranties don't apply to previous owners. |
| Title | An abstract term frequently used to link an individual or entity who owns property to the property itself. When a person has this, he is said to have all of the elements, including the documents, records, and acts, that prove ownership. |
| Title Assurance | Refers to the means by which buyers of real estate 1) learn in advance whether sellers have and can convey the quality of title they claim to possess and 2) receive compensation if the title is not as represented. Also affects collateral value. |
| P=%xT | Part equals percent times total- a basic formula for real estate math |
| Loan Factor | Monthly payment amount of principal and interest required to amortize a loan of $1000 based on the interest rate and term of the loan-loan amount divided by 1000 times the factor equals payment |
| Debit | A debt at closing as shown on the closing statement |
| Credit | Cash due at closing as shown on the statement |
| LTV | Loan to value ratio-the percent of the price that the buyer is borrowing-high LTV means low down payment |
| How many square feet in an acre | 43, 560 |
| To determine a rectangles square footage | Multiply the length of one side by the length of the other side |
| To convert square footage to acreage | Divide the number of square feet by 43, 560 |
| To convert acreage to square feet | Multiply the number of acres by 43, 560 |
| If you are given the dimension only (300x200) the first number is considered to be | Front footage |
| To calculate a commission split between broker and sales associate: | multiply the total sales commission by the appropriate percentage that either the broker or sales associate is entitled to receive. |
| To calculate the appropriate selling price so that the seller will receive a certain amount to money after paying closing costs and the sales commission | Selling price= Sellers net + Closing cost divided by / 100% - Commission rate |
| Cost Depreciation Approach | Step one: Reproduction Cost / Economic Life X Effective Age = Total Depreciation / (means divided by) Step two: Reproduction cost - Total Depreciation (and step 1) + Land value = Depreciated Value of the Property |
| Income Capitalization Approach | I / R x V |
| Gross Rent Multiplier Approach | V / R x M |
| Discount points | One point is calculated as 1% of the loan |
| Amortization | I / P x R x T I= Amount of Interest paid in dollars P=Principal balance of a loan R=Rate of Interest T= Time length of the loan in terms of years |
| Amortization steps | 1. Loan amount x Annual interest rate = Annual interest / by 12= monthly interest amount 2.Deduct Monthly interest from total monthly payment amount 3. Principal balance of loan - principal portion of payment = New loan balance |
| Transfer tax | $1.00 per thousand (seller) |
| GA Residential Mortgage tax | $10.00 Any loan subject to GA Residential Mortgage Act (buyer) |
| Intangible tax | $3.00 per thousand Due 90 days from the date of the instrument (buyer) |
| Acceptance | The time at which an offer to purchase is accepted. The fact that it was accepted must be relayed to the person that made an offer in order for all parties to be bound to the contract. |
| Ad Valorem Tax | Charged by local government, this tax is based on the value of the property, as determined by the local government authorities. |
| Adjustable Rate Mortgage (ARM) | A mortgage whose interest rate over the life of the loan is not necessarily the same as the original interest rate at the loan inception. |
| Agent | A person authorized to act on another’s behalf. In real estate, this agent may be a listing agent representing the seller, a selling agent representing the buyer, |
| What is an agency? | Every relationship in which a real estate broker acts for or represents another as a client by the latter's written authority in a real property transaction. |
| What is an associate broker? | A person who acts on behalf of a real estate broker in performing any act authorized to be performed by the broker. |
| What is a broker? | Any person who, for another, and who, for a fee or commission, |
| What is the commission? | The Georgia Real Estate Commission |
| What is the commissioner? | The real estate commissioner, not the same as the "commission member" |
| What is a Community Association? | An owner organization of a residential or mixed use common such as condominiums, cooperatives, homeowner associations, timeshares, lot division |
| What is a firm? | Any business entity, including, but not limited to, a corporation, partnership, limited liability company, or sole proprietorship. |
| What is a licensee? | Any person who is licensed as a community association manager, salesperson, associate broker, or broker. |
| What are ministerial acts? | Those acts related to real estate brokerage activities, which a licensee or a licensee's employee performs and which do not require discretion or the exercise of the licensee's own judgement. |
| What is the authority of the Georgia Real Estate Commission based upon? | statutory law |
| What four categories does the Georgia Real Estate Commission authority involve? | 1) issuing licenses 2) disciplinary actions 3) passing rules and regulations 4) establishing fees |
| Real Estate Investment Trust (REIT) | A real estate investment business with at least 100 investors organized as a trust . |
| Regulation Z | Federal guidelines under the Truth-in-Lending Act that require full disclosure of all credit terms for consumer loans. |
| Remainderman | The person who has an estate in remainder. |
| Riparian Rights | The water rights of a landowner whose property is adjacent to or crossed by a river (or any body of water). Compare: Appropriative Rights; Littoral Rights. |
| Appropriative Rights | Water rights allocated by government permit according to an appropriation system. It is not necessary to own property beside the body of water in order to apply for an appropriation permit. |
| Littoral Rights | Water rights of a landowner whose property is adjacent to a lake or contains a lake. Compare: Appropriative Rights; Riparian Rights. |
| Ratification | Confirmation or approval of an act not authorized when it was performed. |
| Reference to a Plat | A description on a deed that includes the property’s location on a plat map. |
| or gas is not owned until pumped to the surface and reduced to possession, According to the | Deposits of oil and gas are transitory and ever-changing (fugacious). Because of this, California follows the rule of capture, which states that oil and gas are not considered to be owned until pumped to the surface and reduced to possession. |
| Intestate succession of real property will occur if the property's owner: | sence of a valid will, the decedent's property will pass to his or her heirs through the process of intestate succession. |
| The instrument used to transfer possession of personal property is a: | A bill of sale transfers ownership and possession of personal property. A security agreement collateralizes personal property to secure a loan, but does not involve transfer of possession. |
| A right or privilege associated with ownership of a piece of real property is: | Appurtenance: A right or privilege associated with ownership of a piece of real property is an appurtenance. |
| How is real property most different from personal property? | Real property is considered immovable by law: Although the documents used to transfer title to or finance real and personal property have different names (deed vs. bill of sale, deed of trust vs. financing agreement), the general principle behind them i |
| Jim gives a life estate to Sarah, in which she will keep her estate interest as long as Carl is alive. When Carl dies, title will pass to Mark, the remainderman. Sarah's interest is best described as: | A life estate can designate anybody's life as the measuring life. When the measuring life is that of someone other than one of the parties, a life estate pur autre vie (based on the life of a third party) is created. As with any other life estate, upon th |
| A contract with an unlawful purpose is: | Void: Explanation: A contract that lacks one of the essential elements, such as a lawful objective, is considered void. |
| The land description method that makes reference to sections, townships, and ranges is the: | A. government survey method: The government survey method of land description identifies property through its location in a particular section, township, and range. |
| A federal law that pertains to loan transactions, including residential real estate loans, and prohibits discrimination based on race, color, religion, national origin, sex, or marital status, or because the applicant receives public assistance, is the: | Equal Credit Opportunity Act: promotes fair lending practices for all types of loans, including real estate loans. The Federal Fair Housing Act is limited to the sale, leasing, or financing of residential real estate. |
| T owns an interest in a cooperative. T receives which of the following? | Stock in a corporation: A cooperative tenant holds stock in the corporation that owns the cooperative. |
| An agency terminates because the buyer's agent helps the buyer to successfully purchase a home. The agency terminates because of: | Fulfillment of purpose |
| A tenancy in common can terminate by: | Mutual agreement or partition action |
| Which of the following persons would be | responsible to her employer for results only? Employee |
| A person who is authorized, in writing, to act legally for another person is: | Power of attorney |
| An easement is considered to be: | A. general lien on real property B. specific lien on real property C. encumbrance on real property D. encroachment on real property |
| In Georgia, a net listing is: | Always prohibited: Although they are legal in some states, net listings are always illegal under Georgia law. |
| A listing agreement provides for the payment of a commission to the broker even if the owner sells the property without the broker's help. This type of listing agreement is called: | Exclusive right to sell listing |
| Which of the following are NOT appurtenances that pass with the transfer of real property? | A. Easements in gross B. Fixtures C. Property improvements D. Water rights |
| A residential subdivision of single homes would MOST LIKELY be separated from an industrial park by which of the following: | A buffer zone |
| Agents sometimes find potential buyers while on floor duty. Floor duty is the practice of: | A. having an open house B. visiting local neighborhoods to ask homeowners if they know of anyone looking to buy C. assigning one agent to handle all the telephone calls and brokerage office visits for a period of time D. calling homeowners to see if they |
| Which of the following estates is a freehold estate? | A. Fee estate B. Estate for years C. Estate at will D. Estate at sufferance |
| Agent Bob receives a deposit with a written offer that includes a five-day acceptance clause. n the second day, Buyer Martha notifies Agent Bob that she is withdrawing her offer and wants her deposit returned. Seller Lou hasn't accepted the offer yet. | Martha has the right to withdraw offer |
| Which of the following persons would be responsible to her employer for results only? | Employee |
| Under the 1988 amendments to the Federal Fair Housing Act, which of the following individuals qualifies on the basis of his or her age to live in housing that is exempt from the prohibition against excluding children? | A 56-year-old executive with nine years remaining until retirement |
| A seller who was recently divorced received ownership of the property through the divorce proceeding. She wants to sell the property but her ex-husband's name is on the original deed and she is unable to locate him,. Her BEST action would be to: | A. File a quiet title action |
| J is the listing agent for Seller Q. J shows Q's property to Buyer T. Which of the following is true? | J represents Q only: J is seller Q's agent, which she must disclose to T from the outset. J's conduct should in no way insinuate that she's acting in T's interest; otherwise an inadvertent dual agency might result |
| Property that is abandoned and remains unclaimed will ultimately: | Escheat to the state: Property escheats to the state after a person dies intestate and no heirs can be located, or when it is abandoned. |
| The state takes property under the power of eminent domain. Which of the following must apply? | The taking must be for a public purpose: Under the power of eminent domain, government agencies can take private property for a public use, upon payment of just compensation to the owner. |
| What is the difference between a latent defect and a patent defect? | A latent defect is hidden, while a patent defect is found through ordinary inspection: are those that would not be discovered through ordinary inspection. Both latent and patent defects should be disclosed on the property disclosure statement form. |
| A contract that obligates one party only if the other party elects to perform is: | Unilateral: A unilateral contract is one in which only one of the parties is obligated to perform. |
| Which of the following statements about the federal law on lead-based paint is false? | C. Tenants must be given ten days in which to conduct an inspection, although they may waive this right: Buyers, but not tenants, have a ten-day window in which to request an inspection for lead-based paint. |
| When must a selling agent give a copy of the agency disclosure form to the buyer? | Before the buyer signs the offer to purchase: on: The buyer must receive a copy of the agency disclosure form before signing the offer to purchase. |
| Zelinski, a real estate agent, entered into an exclusive right to sell listing with Green. A few weeks later, Zelinski found a ready, willing, and able buyer who made a full price offer. Green refused to accept the offer. Green: | can refuse the offer, but will owe Zelinski a commission: Once Zelinski finds a ready, willing, and able buyer under the terms of the listing agreement, he has technically earned his commission, regardless of whether Green accepts the buyer's offer. |
| An easement is considered to be: | Encumbrance on real property: Easements are a type of encumbrance. They're nonfinancial encumbrances that affect the use of a property, not liens (financial encumbrances). |
| A voidable contract is one that: | May be enforced or rescinded by one of the parties: A contract is voidable if one party's consent was obtained through fraud, duress, or undue influence, a minor and the contract does not involve real property. |
| A desk fee is: | All the above: A brokerage that does not collect part of the salesperson's commission may instead charge a monthly desk fee to cover office operating costs. |
| Bo gives a life estate to Joe, who then sells his interest in the property to Moe. Joe shortly thereafter dies unexpectedly. Who receives possession of the property? | Bo: Since there is no mention of a remainder interest (or a measuring life other than Joe), the property will revert to Bo. A life tenant may only sell his life estate, so when the life tenant is ended, it will revert to the grantor. |
| A federal law that pertains to loan transactions, including residential real estate loans, and prohibits discrimination based on race, color, religion, national origin, sex, or marital status, or because the applicant receives public assistance. | Federal Fair Housing Act (as amended in 1988) |
| Agents sometimes find potential buyers while on floor duty. Floor duty is the practice of: | Assigning one agent to handle all the telephone calls and brokerage office visits for a period of time |
| Which of the following estates is a freehold estate? | Fee estate |
| A tenancy in common can terminate by: | Mutual agreement or partition action |
| An estate in real estate: | Includes the absolute and exclusive right to possession |
| The owner of a property with a condition subsequent: | has a qualified fee simple A fee simple qualified estate (a.k.a. fee simple defeasible or fee simple conditional) can be either a fee simple determinable or a fee simple subject to a condition subsequent. |
| Bob receives a deposit with a written offer that includes a five-day acceptance clause. n the second day, Martha notifies Bob that she is withdrawing her offer and wants her deposit returned. Seller Lou hasn't accepted the offer yet. In this situation: | Martha has the right to revoke her offer and get her money back at any time before Lou accepts the offer |
| Under the 1988 amendments to the Federal Fair Housing Act, which of the following individuals qualifies on the basis of his or her age to live in housing that is exempt from the prohibition against excluding children? | A 56-year-old executive with nine years remaining until retiremen |
| Earl and Merle own a property together with undivided interests, without the right of survivorship. This would be considered: | tenancy in common: Unity of possession is a key characteristic of tenancy in common. Each tenant's interest in undivided, so each co-tenant may occupy the entire property. |
| A prospective tenant who uses a wheelchair is shown a unit in a small apartment building. She likes the unit, but wants to lower the door handles and install grab bars in the bathroom. Under these circumstances, the property owner: | can require the tenant to pay for the modifications plus restore the property at the end of the lease (although the owner must allow the tenant to make the modifications) |
| Agency law is concerned with the duties and rights among: | A. agent and principal B. agent and third party C. principal and third party D. All of the above |
| If an improvement illegally extends onto a neighboring property, it is considered: | Encroachment |
| When a counteroffer is made: | the offeree becomes the offero: When a counteroffer is made, the original offer is terminated. The counteroffer is a new offer, and the offeree of the original offer is now the offeror of the counteroffer. |
| Which of the following deeds contains warranties that cover only defects that may have arisen during the grantor's period of ownership? | General warranty deed: A general warranty deed essentially warrants that the grantor has good title and will defend it against all adverse claims. |
| Private restrictions on land may be created by: | -Deeds -Written agreement -General restrictions -restrictions that are placed on a property by the owner |
| Mutual assent to a real estate contract is indicated by: | Offer and acceptance : Offer and acceptance, mutual assent, and mutual consent all mean the same thing. |
| A person has been in possession of a property for a long time without the owner's consent. That person's rights have been determined too supercede those of the fee simple owner. This method of acquiring the title to real property is an example of: | Adverse possession |
| The Statue of Fraud intent is to | Require real estate contracts to be in writing in order to be legally enforceable. |
| Which of the following relationships BEST describes a general agency? | A broker working for an owner as a property manager. |
| Which of the following is a physical characteristic of land? | Scarcity |
| The developer of a property is planning to install an underground septic tank and needs information to determine the soil absorption and drainage capacity. This information would be obtained from: | percolation test |
| Which of the following practices would NOT be considered a violation of antitrust laws? | A broker who requires that the independent contractors within his company follow a set rate of commission without deviation |
| Which of the following are NOT appurtenances that pass with the transfer of real property? | Water rights |
| Real property can become personal property by the process known as | If Severance. part of the real estate is severed from the structure or the land, it becomes personal property. The process is known as severance |
| A developer built a structure that has six stories. Several years later, an ordinance was passed in that area banning any building six stories or higher. This building is a | Conditional use |
| A man's neighbors use his driveway to reach their garage, which is on their property. The man's attorney explains that the neighbors have the right to use the driveway. The man's property is the | servient tenement. Because the man's property serves the neighbor, it is the servient tenement (parcel). |
| A buyer purchased a home under a land contract. Until the contract is paid in full, the buyer | B) has equitable title in the property. The purchaser under a land (installment) contract holds equitable title during life of the contract, usually until all payments have been paid. |
| If a borrower computed the interest charged for the previous month on a $260,000 loan balance as $1,300, what is the borrower's interest rate? | 6 percent |
| A Licensee does not show non-Asian clients any properties in several Asian neighborhoods. The licensee bases this practice on the need to preserve the cultural integrity of Asian communities. Which statement is TRUE regarding the licensee's policy? | C) The licensee's policy is steering and violates the fair housing laws regardless of motivation. It is steering, regardless of the licensee's motivation. |
| A seller signed an exclusive-right-to-sell agreement with a licensee. If the seller finds a suitable buyer with no assistance, the licensee is entitled to | full compensation from the seller. If a seller signs an exclusive-right-to-sell listing with a broker, the seller owes the broker a commission, regardless of who sell the property. |
| A borrower applies for a mortgage, and the loan officer suggests that the borrower consider a term mortgage loan. Which statement BEST explains what the loan officer means? | C) the entire principal amount is due at the end of the term. In a term (straight) loan, the periodic payments are made on interest only. The entire original principal will come due at the end of the terms of the loan. |
| Which of the following BEST describes a capitalization rate? | B) Rate of return an income property will produce. |
| A broker receives a check for earnest money from a buyer and deposits the money in the broker's personal interest-bearing checking account over the weekend. This action exposes the broker to a charge of | B) commingling. The broker has commingled the deposit with the broker's personal funds. |
| Local zoning ordinances may regulate all of e following EXCEPT the | B) market value of a property. Zoning may have some impact on market value, but it does not regulate it. |
| If the mortgage loan is 80 percent of the appraised value of a house and the interest rate of 6 percent amounts to $460 for the first month, what is the appraised value of the house? | C) $115,00 |
| seller signs a listing agreement with licensee. a 2nd licensee finds a buyer, and the 1st licensee does not receive a commission. The 1st licensee does not sue the seller. the seller compensated the 2nd licensee. What was the type of listing agreement? | Open listing |
| A woman grants a life estate to her son-in-law and stipulates that upon his death, the title to the property will pass to her grandson. This second estate is known as a | C) remainder. The grandson has received a remainder interest. |
| On the closing statement of a typical real estate transaction, prepaid insurance and tax reserves, where the buyer assumes the mortgage, is a | debit to the buyer, credit to the seller. Prepaids are items that a seller has paid in advance, and the prorated amount not used should be credited back to the seller and debited to the buyer. |
| a house was for $247,900 A member of a minority group was interested. When the buyer asked for the price of the house, the licensee said $253,000 and that the seller was very firm. Under the federal Fair Housing Act of 1968, such a statement is | C) illegal. terms of the potential sale were changed for the prospective buyer. Quoting different prices or terms based on the prospect's membership in a protected group is a blatant violation of the federal Fair Housing Act. |
| Which activity is forbidden by the federal Fair Housing Act of 1968? | B) Limitation by religion and nationality in the sale of a single-family home where the property is not advertised by the listing broker. |
| A parcel of vacant land has an assessed valuation of $274,550. If the assessment is 85 percent of market value, what is the market value? | C) $323,000,00. If the assessment, $274,550, is 85 percent of the market value, find the market value by dividing the assessment by 85 percent ($274,550÷85%=$323,000). |
| A condominium community has a swimming pool, tennis courts, and a biking trail. These facilities are MOST likely owned by the | unity owners in the form of percentage undivided interests. Common areas, including amenities such as swimming, biking, and tennis areas, are owned by the unit owners in undivided percentage interests as tenants in common. |
| A man and a woman are next-door neighbors. The man gives the woman permission to park a camper in his yard for a few weeks. He does not charge her rent for the use of the yard. The man has given the woman a | C) license. Personal, revocable, and unassignable permission to use another's land is a license. |
| Two men are joint tenants. One of the men sells his interest to another person. What is the remaining man's relationship to the new tenant regarding the property? | B) Tenants in common. When the man sold his share, that action destroyed the joint tenancy (because there were only two joint tenants to start with). The remaining tenants now each own 50 percent of the property but as tenants in common. |
| A suburban home that lacks sufficient indoor plumbing suffers from which condition? | Functional obsolescence. Because suburban homes today are expected to have ample indoor plumbing, a home that does not suffers from functional obsolescence; it is lacking in the usual amenities of properties in its class. |
| Under the terms of a net lease, a commercial tenant would usually be directly responsible for paying all the following property expense EXCEPT | mortgage debt service. The tenant under a net lease pays all property expenses, including taxes and insurance, utilities, maintenance, and so on, but not debt service (the landlord's mortgage payment). |
| Whose signature is necessary for a signed offer to purchase real estate to become a contract? | C) Buyer's and seller's. A signed offer already has the buyer's signature, but to be a ratified contract, both buyer's and seller's signatures are necessary. |
| Three women owned a house as joint tenants. In the year 2009, one died. Last month, another died. Based on these facts, which of the following correctly describes the remaining woman's ownership interest in the house? | B) Severalty. When two of three original joint tenants have died the surviving party owns the entire property in severalty. |
| In an option to purchase real estate, which statement is TRUE of the optionee? | The optionee has no obligation to purchase the property during the option period. The optionee, in an option to purchase, is the party with the right to buy during the option period. But buying is optional; the optionee is not required to buy. |
| A grantor conveys property by delivering a deed. The deed contains five covenants. This is MOST likely a | B) general warranty deed. A (general) warranty deed contains covenants of seisin, further assurance, quiet enjoyment, freedom from encumbrances, and warranty forever. |
| All of the following will terminate an offer to purchase real estate EXCEPT | revocation by the offeror communicated to the offeree after acceptance. When an offer has already been accepted and the party making the offer has been told of the acceptance, it is too late to revoke the offer without incurring possible penalties. |
| A licensee present an offer to a seller who is ill. the seller's son and his wife are present. They urge the seller to accept the offer, though it is less than the asking price. If the seller accepts the offer, she may not be bound by it because the | seller was under undue influence from the son, so the contract is voidable. Valid contracts are voluntary agreements. Undue influence is a solid basis for rescinding a contract |
| A deed conveys ownership to the grantee "as long as the existing building is not torn down." What type of estate does this deed create? | Fee simple determinable estate. The grantee's ownership can be terminated by tearing down the building. It can be reverted because of the words as long as. If the building were torn down, the property would revert to the ownership of the grantor. |
| The form of tenancy that will expire on a specific date is a | C) tenancy for years. A rental tenancy that will expire on a fixed date is an tenancy for years. |
| Which of the following is a lien on real estate? | Recorded mortgage. A recorded mortgage constitutes a lien on a property. |
| On the closing statement of a typical real estate transaction, the buyer's earnest money deposit is a | C) credit to the buyer only. Earnest money is a credit to the buyer (borrower). No notation is made for the seller. |
| A property is sold. The deed of conveyance contained only the following guarantee: "This property was not encumbered during the time the seller owned it except as noted in this deed. "What type of deed makes such a covenant? | B) Special warranty. This is a special warranty deed because the grantor accepts responsibility only for encumbrances that arose during the grantor's ownership. |
| A broker took a listing and later discovered that the client had been declared incompetent by a court. What is the current status of the listing? A known defect or a cloud on title to property may be cured by | C) The listing is now of value to the Broker because the contract is void. |
| Under a cooperative form of ownership, an owner | C) is a shareholder in the corporation. Cooperative owners hold shares in the cooperative corporation. |
| A broker enters into a listing agreement with a seller in which the seller will receive $120,000 from the sale of a vacant lot and the broker will receive any sale proceeds exceeding that amount. This is what type of listing? | Net. This is a net listing, which is illegal in most states |
| The Civil Rights Act of 1866 prohibits discrimination based on | C) race. The Civil Rights Act of 1866 protects the property right of all citizens regardless of race. |
| A lien that arises as a result of a judgment, estate or inheritance taxes, a decedent's debts, or federal taxes is what type of lien? | B) General. Each creates a general lien-a claim against all the personal and real property of the debtor. |
| Police powers include all of the following EXCEPT | C) deed restrictions. Deed restrictions are an example of private land-use control. Zoning, building codes, and subdivision regulations are examples of the exercise of police power. |
| Two friends enter into a six month oral lease. If one friend defaults, the other may | B) bring a court action because six-month leases need not be in writing to be enforceable. A lease of less than a year is enforceable |
| A buyer is purchasing a condominium unit in a subdivision and obtains financing from a local savings and loan association. In this situation, which term BEST describes this buyer? | A) Mortgagor. What is implied here is a mortgage loan. A lender (mortgagee) always receives a mortgage (document), the borrower (mortgagor) always gives one in order to get the loan. |
| Using the services of a mortgage broker, a buyer borrowed $25,000 from a private lender. After the loan costs were deducted, the buyer received $24,255. What is the face amount of the note? | C) $25,000. If the buyer borrowed $25,000, he signed a note for $25,000, the face amount of the note. |
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