Which of the following forms of co-ownership, historically used for apartment
buildings, is not considered a form of true direct co-ownership, but rather qualifies as a
proprietary corporation?
A.Cooperative
B.Tenancy by the entirety
C.Condominium
D.Partnership
A fishing company was formed in Juneau, Alaska. Over the next decade, a canning
plant, a processing plant, and a boat repair facility also opened in Juneau. This is an
example of
A.industry economies of scale
B.agglomeration economies
C.location quotient
D.linkages
In 1989, Congress took major steps to establish depository institution accountability by
requiring these institutions to hold more capital as they take on riskier assets. Which of
the following Congressional acts imposed these capital standards on depository
institutions?
A.Depository Institutions Deregulation and Monetary Control Act
B.Financial Institutions Reform, Recovery, and Enforcement Act
C.Secure and Fair Enforcement for Mortgage Licensing Act
D.Riegle Community Development and Regulatory Improvement Act
The majority of financing for the acquisition of land for development is most likely to
come from which of the following parties?
A.Developer
B.Banks
C.Pooled equity of a limited liability corporation (LLC)
D.Insurance companies
In each stage of the development process, the developer faces risks that can have a
profound impact on the success of the particular project. Which of the following risks is
of primary concern after the construction phase has been completed?
A.Environmental risk
B.Title risk
C.Market risk
D.Permitting risk
A developer’s selection of an architect is a vital step in the development process as the
architect fulfills a number of important roles throughout the life of the project. As
compensation for contributions in the design phase, the architect is often given a
percentage of the construction cost. For moderately complex designs, the average
compensation will be:
A.1 to 2%
B.3 to 7%
C.7 to 10%
D.greater than 10%
Large commercial properties valued well over $10 million are often referred to as:
A.segmented property
B.investment-grade property
C.speculative-grade property
D.immobile property
In 2007, the housing market was widely viewed as:
A.a resilient asset class that significantly softened the severity of the recession
B.a surging market pushing prices and new construction to unprecedented levels
C.the primary cause of a major economic downturn
D.unrelated to the condition of the U.S. economy
When a buyer signs an offer to purchase a property, the broker receives a monetary
amount from the purchaser of 5 or 10 percent of the purchase price. This deposit is
commonly referred to as the:
A.commission
B.earnest money
C.closing cost
D.title insurance premium
Significant tax benefits can be gained by using an alternative financing arrangement for
commercial property transactions. When the seller allows the buyer to pay the purchase
price over a number of years, recognition of the taxable gain can be spread over several
years, thereby reducing the present value of the tax payments. This type of financing
arrangement is commonly referred to as a(n):
A.installment sale
B.joint venture
C.land sale-leaseback
D.complete sale-leaseback
Competition in the _________, where households and firms compete for the currently
available supply of locations and space, determines the level of rental income for each
submarket and property.
A.user market
B.capital market
C.government
D.local market
Federal and state laws prohibit discrimination in housing. However, exemptions do
exist depending on the particular type of property that is being considered. All of the
following activities could be considered exempt in specific scenarios EXCEPT:
A.Refusing to sell or rent to a person because of race.
B.Refusing to sell or rent based on familial status (i.e. having children).
C.Refusing to sell or rent to persons based on age.
D.Refusing to sell or rent a single-family home based on religion.
Total mortgage debt outstanding at the end of 2008 approached $14.6 trillion. Which of
the following types of mortgage loans accounts for the greatest percentage of mortgage
debt outstanding?
A.Residential (1-4 family)
B.Apartment (multifamily)
C.Commercial
D.Farm
The presence of real estate cycles presents a major challenge when forecasting real
estate market parameters. If the market value of a residential developer’s project
exceeds its construction costs, an increase in the supply of units will occur, which will
most likely be followed by:
A.an increase in occupancy levels
B.an increase in market values
C.a decrease in real rental rates
D.a decrease in construction costs
An interest-only balloon mortgage loan is commonly referred to as a(n):
A.Mini-perm loan
B.Mezzanine loan
C.Land acquisition loan
D.Bullet loan
In general, most contracts – including real estate contract – can be assigned. All of the
following statements regarding assignment are true EXCEPT:
A.Any type of personal performance contracted by one party cannot be assigned
without that party’s permission.
B.Land contracts are not assignable without the owner’s permission.
C.If buyer’s of real estate assign the contract, the new buyers may pay the agreed upon
price and obtain title to the property.
D.When buyers assign their rights to someone else, they escape liability under the
original contract.
A city’s economic base can be viewed in terms of a multiplier process, in which the
money that is brought in through export activities is then respent within the city. Which
of the following economic activities is the least likely to be considered a high-impact or
high-multiplier economic base activity?
A.Tourism
B.Retirement
C.Computer assembly
D.Specialized medical services
Suppose that a mortgage bank “locked in” an interest rate for a prospective borrower at
8.5%. However, prior to the loan closing, the market mortgage rate falls to 7.5 %. In
this scenario, the mortgage banker would be most concerned with which of the
following risks?
A.Interest rate risk.
B.Pipeline fallout risk.
C.Default risk.
D.Liquidity risk.
The choice of which method to use in constructing the contracted rental rate can be
impacted by the term of the lease. With a shorter lease term, which of the following
methods is most likely to be observed?
A.Flat rent
B.Graduated rent
C.Indexed rent
D.Percentage rent
Computer software systems that enable one to manipulate and “map” information with
great flexibility and speed are referred to as:
A.geographical information systems (GIS)
B.psychographics
C.survey research
D.census mapping
The size of a single family residential lot is typically:
A.less than one acre
B.between one and two acres
C.between two and three acres
D.greater than three acres
There are a number of different types of listing contracts that can be used when
marketing a property. Which of the following types of listings requires the broker to be
paid a commission if any other broker, or even the owner, sells the property during the
contract period?
A.Open listing
B.Multiple listing
C.Exclusive agency listing
D.Exclusive right of sale listing
A law requiring any contract conveying a real property interest to be in writing in order
to be enforceable is a modern application of the:
A.Statute of Frauds
B.doctrine of constructive notice
C.habendum clause
D.actual notice
State and federal control of land uses has increased greatly over the past 40 years due in
part to an increased awareness of environmental hazards. Which of the following
federal environmental control laws was responsible for establishing the “Superfund” to
finance emergency responses and cleanups of abandoned and unregulated waste
dumps?
A.Clean Water Act
B.Resource Conservation and Recovery Act
C.Toxic Substances Control Act
D.Comprehensive Environmental Response Compensation and Liability Act
The emergence of mortgage securities propelled the development of mortgage
companies, an entity significantly different from the thrifts and banks that previously
dominated the mortgage landscape. Which of the following parties is responsible for
providing mortgage origination services and initial funding within this new framework?
A.Mortgage banker
B.Mortgage broker
C.Portfolio lender
D.Security analyst
Suppose that a development group would like to determine if the local zoning and
land-use ordinances will permit the type of development they desire. However, they do
not want to be obligated to purchase the property if they find that their proposed
development will not be permitted. To gain control of the site without being obligated
to perform, the development group should purchase which of the following?
A.Ground lease
B.Option
C.Fast-track
D.Floor loan
Considered a “questionable conveyance of title” by most courts, which of the following
types of deeds is worded to imply no claim of title, but rather only convey what interest
the grantor actually has? (Hint: This type of deed may be used by a developer to convey
certain lands of a subdivision to the local government through dedication.)
A.General warranty deed
B.Special warranty deed
C.Deed of bargain and sale
D.Quitclaim deed
Commercial real estate loan application packages typically contain cash flow estimates
that look at the expected cash flow from rental operations for the subject property.
Specifically, lenders provide the borrower with a discounted cash flow analysis
commonly referred to as a(n):
A.appraisal report
B.pro forma
C.loan commitment
D.rate lock agreement
The large and generally well-known retailers who draw the majority of customers to a
shopping center are more commonly referred to as:
A.Outlets
B.Anchors
C.Strips
D.Chains
As part of the data analysis step in the appraisal process, it is necessary to consider the
highest and best use of the property in question. In regards to determining highest and
best use, all of the following statements are true EXCEPT:
A.The proposed property use must be legally permissible.
B.It must be physically possible for the property to be used in the manner specified.
C.No financially limits are considered when determining the property’s best use.
D.The property use must provide the greatest benefit to the owner.