The least appropriate person to choose which title and escrow company to use in
closing a real estate sale would be
a. the seller.
b. the listing agent.
c. the buyer.
d. the home builder.
The definition of fair market value requires, among other things, that the
a. property is exposed to the open market for a reasonable time.
b. seller can convey a fee simple title.
c. buyer is qualified for reasonable financing.
d. sale was free of high-pressure listing and sales agents.
The buyer agrees to pay $90,000 for a home, contingent upon obtaining an 80% loan.
The lender charges $3,600 for points. How many points were charged?
a. 2 points
b. 4 points
c. 5 points
d. 6 points
A lease which requires a fixed constant amount of rent for each payment period of the
term is called a
a. gross lease.
b. net lease.
c. percentage lease.
d. raw lease.
The covenant whereby the grantor guarantees that there are no tax liens, mortgages or
assessments, except as stated in the deed, is called the covenant
a. of seizen.
b. of quiet enjoyment.
c. against encumbrances.
d. of further assurance.
Through zoning, a community can protect existing land users from all of the following
EXCEPT
a. encroachment by undesirable uses.
b. uncontrolled development.
c. incompatible uses of land.
d. competitive business establishments.
The most commonly used methods of real estate appraisal are
a. market approach, income, and cost.
b. income, reproduction, and cost.
c. residual, cost, and market data.
d. comparison, income, and capitalization.
When real property loses value due to social or economic changes, this loss is called
a. obsolescence.
b. depreciation.
c. chattel loss.
d. recapture.
To be certain that the seller is actually the owner of the property, the buyer should order
a. an estoppel certificate.
b. a general warranty deed.
c. a survey.
d. a title search.
Broker Alice was to receive 6% on a property she had listed for $170,000. How much
commission would she receive if the owner accepted an offer which reduced the price
by 4%?
a. $8,976
b. $9,792
c. $10,200
d. $17,000
Which of the following most correctly describes “chain of title”?
a. Boundary descriptions of the property
b. Encumbrances which prevent use of the land
c. Succession of property owners
d. Recording laws
The power of governments to appropriate private property for the public welfare is
known as
a. zoning.
b. eminent domain.
c. appropriation.
d. police power.
The purchaser of a new home may protect himself against loss due to structural defects
by
a. having the home inspected before purchase.
b. purchasing insurance under the Home Owners Warranty Program.
c. both a and b.
d. neither a nor b.
A seller has agreed to pay 80% of the title insurance company’s fee on a sale. The
company charges $550 for the title policy, plus $95.50 for the title search and $50 for
processing the papers. What is the difference between what the seller has to pay and
what the buyer has to pay?
a. 20%
b. $139.10
c. $417.30
d. $556.40
An encumbrance which becomes a lien on real property could be created by
a. restrictive covenants.
b. granting a license.
c. an encroachment.
d. special assessments.
If a potential investment is referred to as an alligator or loss, the investor knows he can
expect
a. water problems.
b. a negative cash flow.
c. no profit.
d. a break even investment
Albert owns a certain parcel of land. You cold most easily find Albert’s name and this
parcel listed in the
a. grantee index.
b. grantor index.
c. trustor index.
d. lis pendens index.
A couple makes an appointment with a broker to look at homes. He has not met them
previously. They decide to make an offer on one of his listings and they all return to the
real estate office to write up the offer. The broker should
a. keep quiet and hope it is a good offer.
b. tell the buyer about the dual agency after writing the offer.
c. tell the buyer about the dual agency before writing the offer.
d. write the offer.
A residential real estatesalesperson can usually expect from his or her principal broker
all of the following EXCEPT
a. supervision, training and advice.
b. signs, advertising, office space and supplies.
c. payment of dues to the local REALTORS Association.
d. access to multiple listing services.
Money for tax and insurance payments that accompanies principal and interest could be
placed in any of the following accounts EXCEPT
a. a trust account.
b. an escrow account.
c. a remaining balance account.
d. a reserve account.
A meeting of the minds creating enforceable rights is called
a. a contract.
b. an estoppel.
c. a lien.
d. a deed.
Records of the assessed valuations of all properties within a jurisdiction are known as
a. appraisal rolls.
b. allocation rolls.
c. appropriation rolls.
d. assessment rolls.
If an appraiser felt some comparable sales were better indicators of value than other
comparables, he would assign more weight to them in the
a. adjusted sales price.
b. correlation process.
c. 4-3-2-1- rule.
d. replacement cost approach.
The value of vacant land is commonly stated in any of the following terms EXCEPT
value per
a. square foot.
b. acre.
c. front foot.
d. square yard.
The operating expense ratio is
a. operating expenses divided by effective gross income.
b. operating expenses divided by scheduled gross income.
c. operating expenses plus scheduled gross income divided by effective gross income.
d. reserves plus collection loss divided by effective gross income.
Of the following described properties, which contains the smallest amount of land?
a. 1/2 of a section
b. One mile by one mile
c. 1/4 of 1/4 of a section
d. 320 acres
Construction loans are
a. long term, low risk.
b. long term, high risk.
c. short term, high risk.
d. short term, low risk.
Which of the following would be most important to a lender qualifying an individual
for a residential mortgage loan?
a. Borrower’s regular income
b. Overtime income
c. Spouse’s part-time income
d. Pest and dry rot report
A disinterested party representing both buyer and seller in a real estate sale is the
a. broker.
b. salesperson.
c. escrow agent.
d. attorney-in-fact.
The primary purpose of benchmarks is to indicate
a. points of beginning.
b. corners.
c. altitude and elevation.
d. end points.
Multiple listing organizations typically use
a. an open listing.
b. an non-exclusive listing.
c. a net listing.
d. an exclusive right to sell listing.
If a lease must be acknowledged for recording, whose signature should be
acknowledged?
a. Property manager
b. Lessor
c. Lessee
d. Notary public
The Americans with Disabilities Act (ADA) applies only to residential properties.
A primary mortgage lender is one who
a. lends to FNMA, FHLMC and GNMA.
b. pools, insures, guarantees and sells first mortgage loans.
c. lends to borrowers, services the loans and perhaps sells the instruments to another.
d. lends only for first mortgages and deeds of trust.
With an exclusive right to sell listing agreement, the owner may sell the property
through their personal efforts without liability for a commission.
____________________ notice is knowledge that one has actually gained based on
what one has seen, heard, read, or observed.
A special warranty deed places the least obligations on the grantor.
The GRI designation is offered by the state real estate commissions.
The bundle of rights includes the right of escheat.
The trustee in a deed of trust is a neutral ____________________ party.
A listing is automatically terminated upon the death of the seller.
Long-term capital gain is a preferential income tax treatment on the sale of an
appreciated asset.
The market value of each unit in a condominium reflects not only the value of the unit
itself, but also the value of the ____________________ ownership in the common
elements that accompany the unit.
Earnest money is required to make a sales contract enforceable.
A country club has several guest bedrooms which are made available to members for a
nominal charge but are not available to the general public. This is a violation of the
federal fair housing laws.
A disclosure statement given prospective investors in a limited partnership, outlining
the plan and prospects for the partnership as called a cash flow projection.
Under certain circumstances the ____________________ evidence rule permits oral
evidence to complete an otherwise incomplete or ambiguous written contract.
The owner of a beautiful old house was told that because of the location of the property,
bordered by two very busy streets, that it would have more value if the house was torn
down and the empty lot put on the market. This is an example of highest and best use.
Negative leverage occurs when an investment property depreciates in value.
If title to real property is said to be fee simple, it can NOT be alienated.
Comparing sections and townships, a township is 6 square miles.
A situation where one or more individuals under the age of 18 are domiciled with a
parent or other person having custody is described as ____________________ status.
The most popular index is the local bank prime rate.
According to regulation Z, easy 11% mortgage assumption would be allowed without
further disclosure in an advertisement to sell a residence.