If title to real property remains in the seller’s name after it is sold on an installment
payment plan, the buyer would have purchased it under
a. an FHA mortgage.
b. a conventional mortgage.
c. a contract for deed.
d. a VA loan.
Roberto has been depreciating a piece of residential income property for 17 years. He
then sells it to Pauline. How many more years can Pauline depreciate the property?
a. 10 1/2 years
b. 17 years
c. Up to 27 1/2 years
d. It depends on cash flow and Pauline’s tax rate
An easement appurtenant may be terminated
a. by merger of the dominant and servient estates.
b. by court action when the dominant tenement changes.
c. by continuous use.
d. unilaterally by the holder of the servient tenement.
According to regulation Z, which of the following would be allowed without further
disclosure in an advertisement to sell a residence?
a. Easy 11% mortgage assumption
b. Take over an 11% loan
c. Assume an 11% annual percentage rate mortgage
d. Assumable 11% loan
A real estate licensee may advise sellers or buyers regarding which of the following?
a. Which deed form to use
b. How to take title
c. Tax implications on the sale or purchase
d. Choices of financing for the transaction
Ownership of the common elements by an owners’ association is typical of which kind
of development?
a. Condominium
b. Planned unit development
c. Cooperatives
d. REIT’s
Lenders who could be described as investing a major portion of their assets in
long-term real estate loans, preferring not to service their own loans, and favoring large
commercial properties would be
a. commercial banks.
b. savings and loans.
c. mutual savings banks.
d. life insurance companies.
The authority of government to control land use is derived from the right of
a. escheat.
b. eminent domain.
c. property taxation.
d. police power.
A contract that results when a promise is exchanged for a promise is called
a. bilateral contract.
b. unilateral contract.
c. express contract.
d. implied contract.
The phrase “taking back paper” applies to
a. a cash sale.
b. conventional loans.
c. VA loans.
d. seller financing.
The tax rate on a property is $3.32 per $100 of assessed valuation. The assessed value is
$55,864. What is the annual tax payment? (round to the nearest dollar)
a. $185
b. $594
c. $592
d. $1,855
Title insurance premiums are paid
a. annually.
b. semi-annually.
c. upon assumption of the loan.
d. at the inception of the policy.
Barry purchased Bob’s home without accepting obligation for the existing loan. Barry is
said to be buying the house
a. subject to the loan.
b. with an assumption of the loan.
c. with an assumption by substitution of the loan.
d. by contract for equitable title.
Which of the following is responsible for processing license applications, issuing real
estate licenses, and collecting license fees?
a. State legislature
b. Federal Department of Real Estate Licenses
c. Attorney General
d. State Real Estate Commission or Department
How many covenants does a bargain and sale deed contain?
a. None
b. Two
c. Three
d. Five
A real estate purchase agreement contract used by a multiple listing member may be all
of the following EXCEPT
a. receipt for earnest money.
b. contract up to the date of closing.
c. commission agreement between the seller and broker.
d. statement of the buyer’s costs.
The broker/manager receives 45% of the commissions on all sales made through her
office. What would she receive on monthly sales totaling $252,000 at an average 3.7%
commission (rounded to the nearest dollar)?
a. $9,324
b. $4,196
c. $7,527
d. $3,765
The parties to a mortgage are called
a. mortgagor and grantor.
b. mortgagee and beneficiary.
c. beneficiary and trustee.
d. mortgagor and mortgagee.
A buyer’s walk-through is conducted for the purpose of
a. appraising the property in order to get a loan on it.
b. inspecting the property for major structural defects.
c. meeting the seller and obtaining the keys to the property.
d. making a final inspection just prior to closing.
Tests of a fixture include all of the following EXCEPT
a. agreement of the parties.
b. adaptability of the object.
c. value of the item.
d. manner of attachment.
When property is held by two or more owners as tenants in common, upon the death of
one owner, that person’s ownership interest would pass to
a. the surviving spouse only.
b. whoever is designated in the decedent’s will.
c. the surviving owner and/or his heirs.
d. the remaining owner or owners.
An unwitnessed handwritten will is called a
a. poor man’s will.
b. codicil.
c. personal will.
d. holographic will.
A loan progress chart is used in connection with
a. partially amortized loans.
b. term loans.
c. index loans.
d. straight loans.
Which of the following real property investments is most likely to produce the largest
annual depreciation allowance expressed as a percentage of owner’s equity? Assume
each is newly purchased for 100% cash.
a. Large tract of land
b. Old apartment building
c. Retail business in rented space
d. New business
The first state to legislate licensing requirements for real estate agents was
a. Texas.
b. Rhode Island.
c. California.
d. New York.
A borrower who wanted to make a monthly payment larger than that called for by the
note, could do so if the note contains a
a. prepayment privilege.
b. grace period.
c. prepayment penalty.
d. subordination clause.
Howard signed an option with Paula giving Paula the “right to purchase” in 90 days.
Paula decided she did not want the property and did not exercise her option. Howard
can
a. sue for specific performance.
b. sue for damages.
c. sue for specific performance and damages.
d. do nothing.
The phrase “jointly and severally liable” in a note or bond applies when there are two or
more
a. makers.
b. obligees.
c. trustees.
d. holders.
Each of the following statements about open-end mortgage clauses is true EXCEPT
a. using an open-end clause, the new amount borrowed is added to the mortgage
balance.
b. they are used in government loans like DVA and FHA.
c. they are used in conventional mortgages.
d. funds borrowed using an open-end clause are reamortized over the remaining like of
the mortgage.
All of the following may be used for setting ARM interest rates EXCEPT
a. one-year U.S. Treasury securities.
b. six-month Treasury bills.
c. cost of funds to thrift institutions.
d. Gross National Product is not used to set ARM interest rates.
A listing agreement authorizes the broker to
a. find a buyer.
b. sell the property.
c. convey the property.
d. hypothecate the property.
A couple’s one year lease has expired, but they continued living on the premises. If they
now pay rent on a monthly basis, this type of tenancy is
a. by the entireties.
b. at will.
c. periodic.
d. at sufferance.
An option is given wherein consideration is stated as $10.00. The option is
a. valid.
b. invalid for lack of sufficient consideration.
c. void.
d. unenforceable.
Permission to use a building for a nonconforming use may be accomplished by
amendment of the zoning ordinance.
Since the VA is guaranteeing the loan, a VA loan typically requires a large down
payment.
Mineral rights can be conveyed separately but riparian rights cannot be conveyed
____________________.
The federal Fair Housing Law is officially known a Title VIII of the Civil Rights Act of
1968, as amended.
The term handicapped refers to having a physical or mental impairment that
substantially limits one or more life activities, or having a record of such impairments.
Upon default by the borrower under a deed of trust, the trustor issues a notice of
default.
If the buyer is unable to obtain financing on the terms outlined in the sales agreement,
the seller will have to return the buyer’s deposit.
A broker who intentionally misleads a prospect by making an incorrect statement
known to be not true is subject to license ____________________.
After the expenses of the sale are paid in a foreclosure sale, the
____________________ is paid.
Air rights are defined as rights of the property owner extending form the center of the
earth to a reasonable height above the land.
Mineral rights are considered personal property.
Real property taxes are levied by the government and become a lien monthly.
With an exclusive right to sell listing agreement, the broker will receive a commission
regardless of whether the property is sold.
In a residential neighborhood, the assessment for installation of storm sewers, curbs,
and gutters is made on a _________________________ basis.
A certificate of reasonable value is issued by a VA staff appraiser.
A victim of discrimination in housing may seek enforcement of the Fair Housing Law
by filing a complaint with the state real estate department.
By far the most common adjustment period in an ARM is six months.
A buyer and a seller are likely to shake hands upon completion of a real estate
transaction involving an escrow closing.
Most brokers are reluctant to accept net listings even when they are permitted to do so.
Executors of estates are specifically exempt from holding a real estate license.