An example of an encumbrance would be
a. a servient estate.
b. a dominant estate.
c. a life estate.
d. an easement in gross.
Which of the following would NOT involve the documented transfer of title?
a. Avulsion
b. Eminent Domain
c. Adverse possession
d. Foreclosure
A neutral third party would be found in
a. a regular mortgage.
b. an equitable mortgage.
c. a deed of trust.
d. a land sale contract.
All of the following may be considered in calculating the cost basis of a property in a
capital gain tax computation EXCEPT
a. purchase price.
b. repairs or maintenance.
c. landscaping.
d. improvements.
The method used to compute a gross rent multiplier is
a. averaging the net operating income of the subject property.
b. the sale price of the subject property divided by its original cost.
c. the sale price of similar properties divided by their rental income.
d. the maximum rent times twelve months.
The home was sold on July 18. The next payment date is August 1. The buyer agreed to
assume the seller’s 6% loan which has a balance of $36,800 as of July 1. Interest on this
loan would be prorated as
a. debit buyer $77.16 and credit seller $106.84.
b. debit seller $77.16 and credit buyer $106.84.
c. credit seller $106.84 and charge buyer $106.84.
d. credit buyer $106.84 and charge seller $106.84.
Comparing the 1968 Fair Housing Law and the Civil Rights Act of 1866, which is true?
a. The Act of 1968 prohibits discrimination based on sex, religion, national origin and
marital status.
b. The Act of 1866 has no exceptions but it covers only racial and religious
discrimination.
c. The Act of 1968, called the Fair Housing Law, exempts properties offered for
commercial use.
d. Both acts prohibit steering and block busting.
A real estate licensee draws $1,000 per month from her broker against future
commissions. Last year, she sold $2,000,000 worth of property. If she makes 3% gross
commissions on all sales, how much did she earn last year?
a. $48,000
b. $55,000
c. $60,000
d. $72,000
All of the following are acceptable means of describing real property EXCEPT
a. metes and bounds.
b. lot and block.
c. allodial method.
d. rectangular survey method.
Three people are going to purchase an investment property as co-owners, and will take
title as joint tenants. As joint tenants,
a. each will acquire their interests at the different moments in time.
b. each will receive a separate deed for his/her share.
c. all will have equal interests in the property.
d. all will enjoy unequal rights of possession.
One of the most outstanding characteristics of joint tenancy is that
a. death extinguishes the interest of the deceased.
b. tenants use separate deeds.
c. tenants hold unequal interests.
d. interests of the deceased tenant pass to his natural survivors.
The owner of a rented property may insure that property by obtaining
a. an endorsement to an existing homeowner policy.
b. a landlord package policy.
c. both a and b.
d. neither a nor b.
The phrase “as is” when used in real estate contracts means the buyer is accepting the
property without
a. a survey.
b. a title report.
c. new financing.
d. warranty as to physical condition.
With regard to renting one vacant apartment, advertising money is usually most
effectively spent on
a. radio ads.
b. television ads.
c. newspaper.
d. billboards.
If an owner’s semiannual property taxes on a $90,000 home are $840 and the house is
assessed at 80% of value, what is the tax rate per thousand dollars of evaluation?
a. $11.66
b. $18.66
c. $23.33
d. $720.00
A title insurance policy in favor of the mortgagee will insure the
a. owner.
b. buyer.
c. buyer and seller.
d. lender.
A deed given as security for the loan against real estate is known as
a. a trust deed.
b. illegal consideration.
c. usury.
d. hypothecated.
The basic intent for real estate license laws and regulations was to
a. help brokers settle their disputes.
b. protect the public.
c. protect the broker
d. control the real estate market.
The purchaser of a timeshare week who wants to receive a deed to that specific week
would buy a
a. leasehold timeshare.
b. right-to-use timeshare.
c. fee simple timeshare.
d. model timeshare.
Joint tenants must acquire their interests in jointly held property
a. at the same time.
b. from different sources.
c. in separate instruments.
d. from a partition action.
A local federal savings and loan makes a home loan. RESPA requires that
a. a good faith estimate of closing costs be given to the borrower.
b. an HEW closing statement be used for the closing.
c. a credit application be filed with escrow.
d. a credit statement be given the borrower.
What is the annual interest on $50,000 calculated at a rate of 8.125% per annum?
a. $331.00
b. $406.25
c. $3,310.00
d. $4,062.50
The word variance in land use applies to
a. an open-ended use permit.
b. loan rates which raise and lower during the term of the loan.
c. property taxes.
d. zoning.
When considering loan applications, lenders like to see
a. very little use of credit cards.
b. good repayment records.
c. derogatory information.
d. information at least seven years old.
In an area where the multiple listing commission split is 50/50, a broker sells another
broker’s 6% listing for $105,000. How much commission will the selling broker
receive?
a. $1,896
b. $2,790
c. $3,150
d. $6,300
If a condominium unit owner defaults on his mortgage, what effect will this default
have on the other unit owners in the same condominium project?
a. It will create a lien on the other units as well.
b. They must make his payments to protect themselves.
c. It will create a lien on his condominium unit.
d. They will be foreclosed.
A salesperson received an earnest money check from a buyer on the listing of a co-op
broker. What should the salesperson do with the check?
a. Deposit it into his client trust account
b. Sign it and pass it on to the seller
c. Get it signed by the buyer and the seller and turn it over to his broker
d. Hold the check until the contract has been signed by all parties
If a home sold for $124,000 and was assessed at 80% of its value, how much would the
property taxes be at a rate of $18.20 per thousand dollars of assessed value?
a. $992.00
b. $1,444.35
c. $1,805.44
d. $2,256.80
The tenant has signed a percentage lease. The terms of the lease are $500 per month
plus an annual payment equal to 9% of gross sales over $250,000. If, at the end of the
year, the tenant is celebrating a million dollars in gross sales, how much additional rent
does he still owe?
a. $6,000
b. $61,500
c. $67,500
d. $73,500
Medical payments provided under a homeowner policy can be paid to
a. the named insured and family members.
b. guests of the insured on the premises.
c. claims arising from business pursuits.
d. none of the above.
A couple buys a house complete with furnishings. They assume and agree to pay the
existing mortgage. All of the following documents should be used in closing EXCEPT
a. note and mortgage.
b. assumption papers.
c. bill of sale.
d. closing instructions.
The printed portions of a standard residential sales contract refer to all the following
EXCEPT
a. title insurance.
b. liens.
c. discount rates.
d. closing date.
Assuming that no fraud is intended, what is the status of a contract signed by an
illiterate person?
a. Valid
b. Void
c. Voidable
d. Unenforceable
A lender who continues to collect mortgage payments even after selling the loan is said
to be
a. originating loans.
b. laundering money.
c. servicing the loan.
d. discounting the loan.
A lease takes on value when
a. economic rent exceeds contract rent.
b. contract rent exceeds economic rent.
c. contract rent equals economic rent.
d. contract rent is less than economic rent.
In order to ensure that the mortgagor has enough money to pay yearly property taxes
and hazard insurance, the lender may insist on a budget mortgage.
Standard owner’s title insurance premiums are paid only once, when the policy is
issued.
Title insurance has made titles to land much more ____________________.
The borrower’s income, the appraisal, and the needs of the borrower are important to a
mortgage lender when determining whether or not to make a real estate loan.
A(n) ____________________ of ____________________ is a complete historical
summary of all recorded documents affecting the title of a property.
When a property is held by one person, it is called an estate in
____________________.
A(n) ____________________ loan is any loan that has a final payment that is larger
than any of the previous payments on the loan.
A ____________________ will is a will that is entirely handwritten, with no typed or
preprinted words.
It is possible for individuals to buy second lien notes.
_________________________ results when depositors take money out of their savings
accounts and invest directly in government securities, corporate bonds, and money
market funds.
When a property owner offers a premium to entice a prospective tenant to move in, this
is known as a rent ____________________.
The covenant which promises that the grantor will execute any instruments necessary to
protect the grantee’s title is the covenant against encumbrances.
Job stability, income adequacy and credit rating of the borrower are the most important
factors that a lender considers in analyzing a loan application.
The placing of funds belonging to others in a broker’s personal bank account constitutes
____________________.
If a listing agreement mentions a refrigerator as part of real estate offering it should still
be mentioned in the ____________________.
The Asset Integrated Mortgage is designed to create a savings from the down payment
and is applicable to borrowers who wish to make minimal down payments.
Interpretations of various articles of the REALTORS Code of Ethics is known as the
____________________ of Practice.
A deed of trust can never be foreclosed judicially.