The amount of earnest money necessary for a given transaction is NOT determined by
a. the buyer.
b. the seller.
c. the buyer and seller.
d. the broker.
Which of the following in an old commercial building would most likely be a cause of
incurable obsolescence?
a. Lack of computer wiring
b. Widely spaced support walls
c. Lack of intercom system
d. Unattractive dcor
Which of the following age groups should be the most cautious in terms of investment
risk taking?
a. 35-45 years
b. 45-55 years
c. 55-65 years
d. 65+ years
A licensed real estate salesperson can accept a commission from more than one broker
a. if both brokers are fully informed in writing.
b. when brokers are cooperating through the multiple listing service.
c. at no time.
d. if the salesperson was the procuring cause in each transaction.
A licensed real estate salesman may lawfully receive a commission from
a. the buyer.
b. the seller.
c. the title company.
d. his broker.
Which of the following is given consideration in evaluation of a loan application?
a. Race
b. Marital status
c. Sex
d. Income adequacy
A typical HO-A homeowner’s policy covers damage caused by
a. mudflow.
b. civil war.
c. freezing water pipes.
d. earthquakes.
When an appraiser has a property to evaluate, which of the following would he need to
know first?
a. Comparable properties
b. Amount of his fees
c. Assessed valuation
d. Highest and best use
A broker listed a property and in one week found a buyer for the property herself.
Under these circumstances, the broker
a. may only represent the seller.
b. may have a dual agency.
c. may not represent the buyer.
d. is not required to disclose a dual agency.
A home with a cost basis of $40,800 in 2005 is resold today for $90,000. Commissions
and closing expenses are $6,300. What is the gain on the sale?
a. $6,300
b. $42,900
c. $83,700
d. $82,600
When buying property under a land sales contract, which of the following does the
buyer receive immediately?
a. Possession
b. Title
c. Encumbrances
d. Estate in fee simple
A tenant seeking both flexibility for himself and commitment from the landlord would
request a
a. participation clause.
b. month-to-month lease.
c. long-term lease.
d. lease with options to renew.
A quasi-governmental agency, which was originally established to create a secondary
mortgage market for FHA loans, is
a. FNMA.
b. GNMA.
c. FHLMC.
d. HUD.
Which deed form gives the most guarantee and security to the grantee?
a. Special warranty deed
b. Grant deed
c. General warranty deed
d. Quitclaim deed
The Federal Equal Credit Opportunity Act protects borrowers from discrimination
based on
a. handicap status.
b. familial status.
c. sexual preference.
d. marital status.
If a contract is breached and the damaged party wants the contract carried out, he would
sue for
a. specific performance.
b. money damages.
c. novation.
d. unilateral rescission.
Who holds a less than freehold estate under a valid lease?
a. Lessor
b. Lessee
c. Landlord
d. Owner
The New York fire insurance form does not provide coverage for losses
a. by fire.
b. by lightning.
c. sustained while removing property from damaged premises.
d. by flood.
When a valid, enforceable lease is terminated before expiration by means of a mutual
agreement, but no penalties are required between the lessor and the lessee, the situation
would be referred to as
a. surrender.
b. rescission.
c. release.
d. satisfaction.
By what action does the government take property for public use?
a. Condemnation
b. Adverse possession
c. Zoning
d. Public vote
A real estate agent buys a house and lot for $49,900. He spends $1,200 to remodel it.
What price must he sell the property for to realize a 20% profit?
a. $61,320
b. $58,440
c. $59,880
d. $42,583
The financial responsibility which one has to others as a result of one’s actions or
negligence is known as
a. personal liability.
b. public liability.
c. both a and b.
d. neither a nor b.
Within any given township, section 18 can be found
a. east of section 13.
b. west of section 17.
c. north of section 3.
d. south of section 27.
All of the following are essential elements of a contract EXCEPT
a. competent parties.
b. lawful objective.
c. monetary consideration.
d. meeting of the minds.
The term “rescinded” in real estate means
a. rewritten.
b. rejected.
c. reworded.
d. canceled.
Deeds are recorded
a. to provide constructive notice of their existence.
b. because the law requires it.
c. to satisfy a lender.
d. to give actual notice.
When the supply and demand relationship in a market is unbalanced because of excess
supply, it is to the advantage of
a. buyers.
b. sellers.
c. sellers of services only.
d. buyers of services only.
After a trustee’s sale has been held and the property goes to the highest bidder, in most
states the original trustor has
a. 21 days to pay off the loan balance.
b. 90 days equity of redemption.
c. one year to redeem the property.
d. no recourse.
When default is declared on a loan secured by deed of trust, which of the following is
true?
a. The trustee must sell the property at a private sale.
b. The successful bidder at the trustee’s sale receives a trustee’s deed at the time of sale.
c. The defaulting borrower has a one year period of redemption after the trustee’s sale.
d. After a year, the successful bidder at the trustee’s sale receives a trustee’s deed.
If an owner of a single-family residence defaults on his mortgage, it can
a. not be foreclosed if an ALTA title insurance policy insured it.
b. be foreclosed on.
c. not be foreclosed on if the mortgage went into effect before 1978.
d. only be foreclosed on if an ALTA title insurance policy insured it.
Most subdivision plats make use of which type of land description?
a. U.S. government survey
b. Rectangular survey
c. Assessor’s parcel number
d. Lot and block
An investor can invest in mortgages by purchasing all EXCEPT
a. Ginnie Mae pass-through certificates.
b. Freddie Mac participation certificates.
c. junior mortgages.
d. municipal bonds.
Discount points are more likely to be used during periods of
a. tight money.
b. available money.
c. cash sales.
d. seller financed sales.
Under section 203(b), the FHA
a. insures lenders against loan default.
b. lends to the secondary market.
c. guarantees loans.
d. makes loans directly.
The assessed value of all lands and buildings are made available for public inspection in
what is known as the ____________________ rolls.
____________________ liability, also called public liability, is the financial
responsibility one has toward others as a result of one’s actions or failure to take action.
An endorsement that periodically increase insurance coverage is known as
____________________ guard.
An individual posing as a potential purchaser to determine whether discrimination
exists in a real estate transaction is known as a ____________________.
A recovery fund is a state-operated fund that can be tapped to pay real estate brokers
who have claims against other brokers.
Tax laws will not allow depreciation on a building to be started over each time the
property is sold.
Concerning the duration of deed restrictions, they ____________________ with the
land.
As well as a borrower’s assets, the lender will evaluate the borrower’s
____________________.
A transfer of land by a private party to a government entity is called a public grant.
The Federal Reserve Board, through the Federal Reserve Banks, has the ability, through
____________________ policy, to create and destroy money.
A(n) ____________________ foreclosure does not go to court and is not heard by a
judge.
For a corporation to be granted a license as a real estate broker, all officers must be
licensed as real estate brokers.
A formal declaration by a person signing a document that he or she, in fact, did sign the
document is called a(n) ____________________.
Any item of personal property to be sold with the real estate must be handled with a bill
of sale.
An agency relationship may be created by ratification or estoppel.
The title that the borrower grants to the trustee is referred to as “naked title”.
A ____________________ mortgage encompasses existing mortgages and is
subordinate to them.
Considering an apartment building, a retail business in a leased space, a housing
subdivision selling finished homes or an unimproved tract of land, the apartment
building is most likely to result in a negative cash flow.
A comprehensive guide for the physical growth of a community is known as a
____________________ plan.