Regulation Z requires a lender to disclose
a. interest charges expressed as dollars and percent.
b. dollar amount of any finance charge.
c. APR as a dollar amount.
d. all charges only as a percent.
In a condominium, which of the following would be limited common elements?
a. Assigned parking spaces
b. Landscaped areas
c. Unit of the caretaker
d. Airspace in each unit
If a lease on a commercial building contains an escalation clause, the
a. tenant must maintain the elevators.
b. rent could change.
c. rent must go up and down regularly.
d. rent stays the same but the term may change.
The National Association of REALTORS has sponsored many groups to further
enhance the industry; they include all of the following EXCEPT
a. Society of Industrial REALTORS.
b. Farm and Land Institute.
c. Society of Real Estate Appraisers.
d. Institute of Real Estate Management.
A woman owned a duplex and lived in half and rented out the other half. She put a “For
Rent” sign in the front yard. The first applicant was a black man whom she turned down
stating that she didn’t rent to men. Under the Fair Housing laws, she
a. is within her rights since she didn’t use any discriminatory advertising.
b. is in violation of the Fair Housing laws since she may not discriminate even if only
verbally.
c. is guilty of steering.
d. can expect a warning from HUD because she turned down a black.
Broker Billy secured a written listing from a large company which owned an unused
warehouse. Billy later entered into a verbal agreement to share his commission with
cooperating broker, Cynthia. The cooperating broker procured a buyer, but later Billy
refused to split the commission at closing. Cynthia could
a. sue to recover her share.
b. not sue because this was only a verbal agreement.
c. ask the real estate commission to arbitrate.
d. forbid her sales agents from ever working with Billy’s agents in the future.
A lessee is in possession of a valid lease when a buyer agrees to assume a veteran’s loan
and close a sale subject to the lease. The earnest money contract is signed before the
lease is due to expire. The lease can
a. be terminated immediately.
b. be changed by the new buyer.
c. not be terminated by the buyer.
d. be terminated at close of escrow.
The ECOA has contributed to greater numbers of homeowners among
a. single persons.
b. divorced persons.
c. employed women.
d. all of the above.
The number of feet of wire required to enclose 1/4 of 1/4 of a section of land with two
strands of wire is
a. 5,280 feet.
b. 10,560 feet.
c. 21,120 feet.
d. 34,848 feet.
Among the following, who does NOT hold an insurable interest?
a. A property owner.
b. The listing broker.
c. A mortgage lender.
d. The tenant.
A real estate broker’s or salesperson’s license would most likely be revoked for
a. failure to pay REALTORS dues.
b. misrepresentations.
c. failure to practice real estate.
d. failing to split a commission with an unlicensed individual.
Developers avoid land locked properties by creating an easement
a. by necessity.
b. by prescription.
c. in gross.
d. in common.
Under federal law, the owner of one single-family dwelling in which the owner has
resided for 10 years, who does not employ an agent and does not use discriminatory
advertising, may discriminate in the sale or rental of the property on any of the
following EXCEPT
a. religion.
b. race.
c. color.
d. national origin.
An earnest money agreement signed by all parties is
a. binding on the seller.
b. a binding contract on the seller only if it is full price and the terms of the listing
agreement are met.
c. revocable by the buyer for 72 hours.
d. only binding on the buyer.
When making a mortgage loan application, borrowers are protected from discrimination
based on marital status by the
a. Fair Credit Reporting Act.
b. Fair Housing laws.
c. Equal Credit Opportunity Act.
d. Real Estate Settlement Procedures Act.
Flood insurance can be purchased for
a. structures and contents.
b. public liability.
c. medical expenses.
d. damages and legal costs.
Mortgage balance reduction is
a. an out-of-pocket expense.
b. a deduction for tax purposes.
c. tax-exempted.
d. quite large at the beginning of the loan period.
A holdover tenancy is most likely created after the expiration of a
a. the tenancy in common.
b. joint tenancy.
c. tenancy by the entirety.
d. tenancy for years.
How many acres does a parcel of land 660″ by 660″ contain?
a. One-eighth acre
b. One acre
c. Ten acres
d. One hundred acres
All of the following may constitute a lien on real property EXCEPT
a. a mortgage.
b. unpaid real property taxes.
c. a restrictive covenant in a deed.
d. a judgment against the owner.
The Civil Rights Act of 1866 prohibits
a. racial discrimination.
b. steering.
c. block busting.
d. discrimination for any reason.
In a closing statement, the amount of interest on an assumed loan is a
a. charge to the seller only.
b. charge to the buyer only.
c. charge to the seller and credit to the buyer.
d. charge to the buyer and credit to the seller.
Which of the following is necessary in order to calculate cash flow?
a. Monthly appreciation
b. Mortgage balance
c. Monthly rents
d. Economic rents
Regarding real property,
a. mineral rights must run with the land.
b. air rights can be granted by deed.
c. annual crops are considered real property because they are attached to the land.
d. man made buildings are not part of the real property.
All of the following items are usually paid by the seller at the close of a residential sale
escrow EXCEPT
a. title search.
b. appraisal fee.
c. commission.
d. title insurance.
Generally, a person’s peak earning years occur at ages
a. 25-35 years.
b. 35-45 years.
c. 45-55 years.
d. 60 years.
Individual units in a condominium development are classed as
a. real property.
b. common elements.
c. cooperative elements.
d. personal property.
A rental contract gives the tenant
a. the right of possession.
b. temporary ownership.
c. a freehold estate.
d. the right to encumber.
Which of the following involves the greatest risk to a lender?
a. First mortgage
b. FHA loan
c. Construction loan
d. VA loan
When a broker joins a franchise organization, the financial arrangements usually
include
a. a salary paid to the broker.
b. a percentage of income paid to the franchiser.
c. free jackets to the sales associates.
d. salary to the agents.
All of the following are true of the ADA, enacted on July 26, 1992, EXCEPT
a. it provides access requirements and prohibits discrimination against disabled people.
b. it affects the real estate brokerage industry in that the licensees need to determine
compliance.
c. it requires modifications to procedures so that disabled individuals are not excluded
from regular programs.
d. it requires alterations to the property, no matter what that cost will be.
Standard owner’s title insurance coverage insures against all of the following EXCEPT
a. unrecorded encroachments.
b. recorded easements.
c. recorded liens.
d. forgery of documents.
For a veteran to obtain a VA loan, it is necessary to have a
a. certificate of optimal value.
b. certificate of eligibility.
c. history of property ownership.
d. certificate of deferment.
The type of depreciation in which a fixed yearly sum is subtracted from the depreciable
value of the property is called
a. sum of the years digits.
b. straight-line.
c. double declining balance.
d. accelerated.
As payments are made, the amount of interest taken from a mortgage loan payment
decreases and the amount applied to the principal increases. This is because of
a. appreciation.
b. variable interest rate.
c. amortization.
d. depreciation.
The greatest advantage of sole ownership is flexibility.
When there are higher prices due to greater effort needed to produce the same product
today it is called ____________________ inflation.
The extent to which regions and cities are vulnerable to changes in the economic base
depends on the number and kinds of base industries that are present.
A popular market comparison method that is used when a property produces income is
the gross rent ____________________, or GRM.
An encumbrance affects the loan to value ratio.
A minority is always described as a member of the smallest group of people.
An estate, which is indefinite in duration, inheritable and transferable, is called a
_________________________ estate.
To insure that information on the soundness of an investment is passed on the
prospective investors, several states have enacted ____________________ laws.
An individual investor who is seeking the advantages of a partnership, but who wishes
to avoid unlimited financial liability would join a limited partnership.
Under the right-to-use plan of timesharing, the purchaser holds title to real property.
The broker writes an offer on one of his own listings. He should inform the buyer that
he is an agent of the seller as well as the buyer prior to closing.
The division of ongoing expenses and income items between the buyer and seller is
called prorating.
Owner’s title insurance covers the mortgagee.
Life insurance companies do no get involved in real estate loans.
Freddie Mac buys loans only from savings and loan institutions.
The buyer normally pays the discount points when a conventional loan is taken out to
purchase a residence.
If a chain of title is broken, one must search outside the recorder’s office by searching
probate court records and civil court actions to regain the title sequence.
A Phase III assessment is always required to maintain a innocent landowner defense.