Real Estate 1

                                  REAL ESTATE 1
1.	Which of the following is NOT a category of the uses of real property?
a.	 Residential
b.	 Developmental
c.	 Agricultural 
d.	 Industrial

2.	Real property can become personal property by
a.    Severance
b.    Purchase
c.    Hypothecation
d.    Attachment 
      3.   A property sold and is closing on September 15th. The annual real estate taxes of 
      $3,348 have been paid for this calendar year. What is the settlement sheet entry?
                  Buyer                                                            Seller
              a.    $2,371.50 Debit                                         $2,371.50 Credit
              b.    $   976.50 Debit                                         $    976.50 Credit
              c.    $2,371.50 Credit                                         $2,371.50 Debit 
              d.    $   976.50 Credit                                         $    976.50 Debit

      4.    In some states, a broker is permitted to represent both the seller and the 
       Buyer in the same transaction when
               a.     The principles are not aware of such action
               b.     The broker is a subagent rather than the agent of the seller 
               c.     Commissions are collected from both parties
              d.    Both parties have been informed and agree to the dual representation
     5.    Which of the following best defines the “law of agency?”
               a.     The selling of another’s property by an authorized agency
               b.     The rules of law that apple to the responsibilities of a person who act for
               c.     The principles that govern one’s conduct in business
               d.     The rules and regulations of the state’s licensing agency

6.      Broker J was accused of violating laws. She was probably accused of 
           a.     Not having an equal housing opportunity sign in her office window
           b.     Undisclosed dual agencies
           c.     Allocation of customers or price fixing
           d.     Dealing in unlicensed exchange services

7.      Which of the following is NOT a reason a listing agreement may be terminated?
           a.    Sales of the property
           b.    Death of the salesperson
           c.    Agreement of the parties
           d.    Destruction of the premises

8.      Under which of the following listing agreements can the owner of listed property sell
the property on his or her own without having to pay the listing broker a commission?
      a.     Exclusive-right-to-sell listing
      b.     Exclusive-agency listing 
      c.     Open listing
      d.     Both b and c 

9.    Which of the following has an indefinite duration?
         a.    Freehold estate
         b.    Less-than-freehold estate
         c.    Estate for years
         d.    License

10.  V and N are co-owners of a fee simple interest in a small office building. N dies intestate
and leaves no estate to be distributed to his heirs. V is neither related to N or a creditor of N.
Which of the following would explain why V acquired the interest of N?
         a.     Taken by adverse possession
         b.     V had reversionary rights
         c.     Ownership held in joint tenancy
         d.      Property was in foreclosure

11.   The method of legal description that defines a parcel of land using township and 
Section is the 
        a.    Geodetic survey
        b.    Rectangular survey
        c.    Lot and block system 
        d.    Metes and bounds system

      12.   When a company furnishes materials for the construction of a house and is 
       subsequently not paid, it may file a(n)
              a.    Deficiency judgment
              b.    Mortgage lien
              c.    Estoppel Certificate
              d.    Mechanic’s lien
 13.   A void contract is
               a.     Not in writing 
               b.     Not legally enforceable 
               c.     Rescindable by agreement
               d.     Voidable by only one of the parties

 14.   Agent A, who represents the buyer and Agent X (seller’s agent) rewrote a contract
       because Agent Z needed to add another person. This is called a(n)
              a.     Assignment 
              b.     Novation
              c.     Operation of law
              d.     Mutual agreement
 15.   A gift of real estate from a person who died testate is referred to as a
               a. Legacy
               b. Bequest
               c. Devise
               d. Demise 
  16.  A deed that had no expressed warranties against encumbrances, but does imply
      the grantor holds titles to a property is a 
              a. Bargain & sale deed
              b. Reconveyance deed
              c. Special warranty deed
              d. Quitclaim deed

   17.  Emily and Jack brought a house. At settlement they paid a one-time fee for title
       insurance. Six months later Mr. & Mrs. Ted Jones, who owned a construction company
       and had done work for a previous owner, announced that they had a lien on the 
       home. When the title insurance company wants to make a settlement on the claim,
       they have the right to any remedy or damages available to the insured. This right is 
               a. Caveat emptor
               b. Surety bonding
               c. Subordination
               d. Subrogation
   18.    If the amount realized at a foreclosure sale is more than the amount of the 
       indebtedness and foreclosure expenses, the excess belongs to the 
               a.   Mortgagor
               b.   Mortgagee
               c.   Sheriff’s office
               d.   County

    19. One purpose of the Real Estate Settlement Procedures Act (RESPA) is to 
              a. See the buyers do not borrow more money than they can repay
              b. Make real estate brokers more responsible to the needs of buyer
              c.  Help sellers know how much money is required to purchase the property
              d.  Give buyers information about the costs of their closing  
20.  If the quarterly interest at 10 1/2 percent is $3,150, the principle amount of the loan
        a.      $  30,000
        b.      $  60,000
        c.      $  90,000
        d.      $120, 000

21. An office rents for $450 per month and measures 12 feet by 20 feet. The advertised 
annual rent per square foot would be
      a.     $   1.875
      b.     $   4.50
      c.     $  18.75
      d.     $ 22.50

22.  In most states, for a written lease to be valid, it must contain
       a.  The signature of both the lessor and the lessee
       b.  A statement of the specific length of time
       c.  A statement of the retention of the reversionary interest by the lessor
       d.  A complete legal description of the premises

23. A lessee who pays some or all of the lessor’s property expenses has an 
      a.    Gross lease 
      b.    Net lease
      c.    Percentage lease
      d.    Sublease

24. The cost to modify housing for a tenant with disabilities will be
       a.    Tax-exempt
       b.    Tenant’s cost
       c.    Owner’s cost
       d.    Shared by tenant and owner

25.  When appraising real estate, the priemer consideration of the appraiser should be
        a.     Asking price of the property 
        b.     Highest and best use of the property
        c.      Original cost of the property
        d.      Percentage of families with children in the neighborhood

26.  A building is valued at $215,000 and contains 4 apartments that rent for $470 each
per month. The owner estimates that the net operating income is 65 percent of the 
gross rental receipts. What is the capitalization rate?     
        a.    3.7 percent
        b.    6.8 percent
        c.  10.5 percent
        d.  14.2 percent
27. In the income approach, the appraiser makes use of
      a.   Reproduction cost
      b.   Capitalization cost
      c.   Depreciation schedules
      d.   Replacement cost 

28. The steps in the appraisal process do NOT include
       a.     Gathering specific data on the subject property
       b.     Gathering general data for the area of the subject property
       c.      Considering the seller’s estimate of the property’s value 
       d.      Applying the three approaches to value to the collected data

29.  A restriction on use of land that is not government-based is called a 
       a.      Restrictive covenant     
       b.      Recording restriction 
       c.       Deed restriction
       d.       Both a & c

30. The purchaser of property in a planned unit development will usually not receive
       a.    An interest in the unit owners’ association
       b.    A proprietary lease for the unit to be occupied
       c.    The title to the land on which the unit is built
       d.    A share in the control of the commonly-owned elements

31.  In order to file a complaint of discrimination, the complainant need only 
       a.      Provide that discrimination occurred 
       b.      Suspect that discrimination occurred
 c.       Be able to prove that the discrimination was intentional
 d.       Be able to produce witnesses to the discrimination

32.  Title VII of the Civil Rights Act of 1968 is called the
        a.     Federal Fail Housing Act 
  b.     Real Estate Settlement Procedures Act
  c.     Equal Credit Opportunity Act
  d.     Americans with Disabilities Act

33.  A prospective homebuyer who is African American inquires about the availability of 
 a home in a predominately white residential neighborhood. What should the broker 
 say to this prospect?
 a.   “You wouldn’t want to live here because the neighbors are trying to protect the 
         integrity of the area.” 
 b.   “I’d be happy to show you homes in other areas where African-Americans are       
 c.   “ The residents here have expressed a desire to keep the area homogeneous
          with no minorities.”
   d.   “ I’ll be pleased to show you any houses that you’re interested in.”
34.   Actions that are made illegal by federal and state fair housing laws do NOT include 
        a.      Offering advantageous loan terms to encourage the re-segregation of a 
                   residential area.
        b.      Refusing to show certain residential property to non-English-speaking
        c.      Channeling members of a certain minority group into an area already
                predominately occupied by members of that minority
              d.      Refusing to show certain residential property to people who are not financially 
                       qualified to purchase it
35.     Protection from threats or acts of violence against those who assist and encourage
open housing rights is found in the 
         a.   Civil Rights Act of 1866
         b.   Civil Right s Act of 1964
         c.   Fair Housing Act & Amendments
         d.   None of the above
36. Discrimination on the basis of any of the following could be constructed as violation of
Fair housing laws EXCEPT for discrimination based on 
         a.       Ethnic considerations
         b.       Sex
         c.        Economic consideration
         d.        Religious persuasion
37.  A method of sealing off disintegrating asbestos is called 
        a. Capping 
        b. Encapsulation
        c. Containment 
        d. Contamination closure

38.   The Federal Lead-Based Paint laws apply to 
        a.    Houses with asbestos
        b.    Houses with a basement
        c.    Houses containing appliances 
        d.    Houses constructed before 1978

39.   At the closing, Bob’s attorney informed him that he would be debiting Bob and
giving credit to the buyer for certain accrued items. These items represent 
         a.     Bills related to the real estate that have already been paid by the seller
         b.       Bills related to the real estate that were not paid before closing 
         c.      All of the seller’s outstanding bills
         d.      All of the buyer’s outstanding bills 

40.   The Real Estate Settlement Procedures Act (RESPA) 
assumption if the
      a.      Lender modifies terms of the assumed loan 
      b.      Lender charges less than $50 for the assumption 
      c.      Buyer must be qualified by the lender for the assumption to occur
      d.      Seller does NOT want to be liable for the loan in the future
41.  Someone looking for a tax-advantaged investment similar to a mutual fund 
should probably invest in a 
         a.  Real estate investment trust
         b.   General partnership 
         c.    Limited partnership 
         d.    Corporation 

42.  A small office building sold for $949,000 and the broker received a commission of
 $54,990. What was the broker’s commission rate? 
         a.     5.8 percent 
         b.     6.2 percent 
         c.     7.0 percent
         d.   11.3 percent   
43.  A home valued at $168,500 has just had a 70 percent mortgage loan placed on it. 
The interest rate is 11.25 percent. The monthly payment is $1,292.22 including
principle and interest. What will the principle balance of the mortgage loan be after the 
First monthly payment has been made? 
        a.       $117,560.28
        b.         $117,763.56
        c.         $177,913.56
        d.         $177,950.00

44. A house was listed for sale at $84,900. The seller received $71,424 after paying the 
broker a 7 percent commission. What was the selling price of the property?
      a.     $76,423.68
      b.      $76,800.00
      c.       $78,957.00
      d.      $79,345.00

45. The seller-landlord has collected the September rent from all five tenants: two 
paying $345 per month each and three paying $425 per month each. Determine the 
prorated amount to be allowed the buyer when the sale closes on September 19th. 
       a.      $   720.50
       b.     $   786.00
       c.     $1,244.50
       d.     $1,965.00

46.  Which of the following would NOT affect supply?
       a.    Population
       b.    Construction costs 
       c.    Government controls
       d.   The labor force

47.  A physical characteristic of land is 
       a.     Indestructibility
       b.     A wasting asset
       c.     Immune to the forces of supply and demand 
       d.     Subordinate to real property rights 

48.  One factor that would NOT affect the desirability of the location of a residence
would be 
         a.    Square footage
         b.    Employment opportunities 
         c.    Social services
         d.   Cultural advantages 

49. Upon discovering a material fact of the property, the licensee should discuss
the problem with the seller and then
      a.      Notify the seller that the defect must be repaired 
      b.      Arrange the repairs himself or herself
      c.      Inform any prospective buyers of the defect 
      d.      Contact the city building inspector about the defect

50.  Unless some other written agreement has been made, the broker will usually 
receive the sales commission when 
      a.     The purchaser takes possession of the property 
      b.     The seller lists the property with the broker
      c.     The transaction is closed
      d      An offer is procured from a ready, willing and able buyer

51. Which of the following is NOT prohibited under the antitrust laws? 
      a.    Two or more property management companies standardized management 
      b.    Two or more brokers allocating markets based on the values of homes
      c.    Real estate brokers agreeing NOT to cooperate with another broker because 
             of the fees that broker charges
      d.    A broker deciding whether to join a MLS

52. R owned the fee simple title to a vacant lot adjacent to a hospital and was
persuaded to make a gift of the lot. She had her attorney prepared a deed that
conveyed the ownership of the lot to the hospital “ So long as it is used for medical
purposes.” After the completion of the gift, the hospital will own a  
        a.       Life estate
         b.        Tenancy for years
         c.         Fee simple determinable 
         d.        Periodic tenancy 

53. An estate that is not created voluntarily by the owner is a 
      a.    Conventional life estate 
      b.    Legal life estate
      c.    Life estate
      d.    Fee simple estate

54. A lot with a depth of 80 feet and an area of 4,800 square feet was sold for
$350 per front foot. What was the total selling price? 
       a.      $21,000
       b.      $28,000
       c.      $31,800
       d.      $35,000  

55.  G has defaulted in the payment of several of his debts, and the court has ordered 
his property sold to satisfy them. A title search revealed several outstanding liens
against the property. Which of the following liens has first priority?
      a.    The outstanding first mortgage lien dated and recorded one year ago
       b.    The current year’s real estate tax lien 
       c.    The judgment lien rendered and recorded last month
       d.    The mechanic’s lien for work started two months before the mortgage was
56. A bilateral contract is one in which 
       a.  Only one of the parties is obligated to act
       b.  The promise of one party to act is given in exchange for the promise of the 
            other party to act
       c.  Something  is to be done by one party only 
       d.  A restriction is placed in the contracted by one party to 
            the other. 

57. E brought acreage in a distant county, never went to see it, and did not use it,
although he regularly paid the real estate taxes on it. L moved his mobile home onto F’s
property, drilled a well for water, and lived there for many years. L may have become
the owner of the acreage if he has complied with the state laws regarding 
        a.      Interstate succession 
        b.      Adverse possession 
        c.      The statue of frauds
        d.      The statue of limitations

58. The record of property ownership that starts with the earliest owner is called the
       a.    Chain of title 
       b.    Certificate of title 
       c.    Title insurance policy
       d.    Abstract of title

59.   A building was sold for $115,000. Earnest money in the amount of $15,000 was 
deposited in escrow, and the buyer obtained a new loan for the balance of the purchase
price. The lender charged two discount points on the loan. What was the total amount
cash used by the buyer for this purchase? 
      a.     $2,300
      b.    $15,000
      c.    $17,000
      d.    $17,300

60. Private Mortgage Insurance (PMI) is often charged to borrowers whose loan to 
value (LTV) ratio is greater than 80%. PMI is automatically terminated when
      a.     Borrower has 22% equity in the property 
      b.     LTV reaches 80%
      c.     Can’t be automatically terminated
      d.     None of the above
61. The authority to carry out the eviction of a delinquent from rented property, in 
most areas, is held by the 
       a.     Court
       b.     Landlord
       c.     Sheriff
       d.     Property owner
62. A property manager’s fiduciary obligation is to the
       a.     Tenants occupying the property
       b.     Owner of the property
       c.     Banker (holding the loan on the property)
       d.     Government authorities 

63. Using which of the following would require the value of the land to be calculated
separately from the value of the improvements?
      a.     The income approach
      b.     The cost approach 
      c.     The sales comparison approach
      d.     The gross rent multiplier

64. Q is in the business of buying tracts of land, constructing building making  
other improvements on them, and then selling them to the general public. She is in the 
business as a 
      a.    Developer
      b.    Real estate broker
      c.    Engineer
      d.    Subdivider 

65. In effort to get homeowners to sell their properties, a salesperson represents w
that an ethnic minority is moving into an area. This is called
       a.    Blockbusting
       b.    Steering
       c.    Discriminatory advertising
       d.    Legal as long as it is true
 66. The refusal of a lending institution to make a residential real estate loan strictly 
because of the racial or ethnic composition of a neighborhood is called
       a.    Blockbusting
       b.    Redlining 
       c.    Steering
       d.   Panic peddling

67. Carbon monoxide is not 
       a.   Visible
       b.   A result of incomplete combustion
       c.   Quickly absorbed in the body
       d.   A natural result of combustion
68. The details of a sales transaction are always governed by the
      a.    Wishes of the seller as expressed orally
      b.    Wishes of the buyer as expressed orally
      c.     Escrow instructions that both seller and the buyer sign
      d.     Terms of the property executed purchase contract

69. Purchasing a property using leverage, refinancing it after it has appreciated, and
using the cash from the refinancing to purchase additional property is known as
      a.     Plottage
      b.     Pyramiding
      c.     Consolidation
      d.     Contribution
 70. An appraiser estimated the replacement cost new of a building at $560,000. The 
building has an estimated economic life of 40 years and an estimated remaining life of
30 years. What is the current value of the building?
     a.       $140,000
     b.        $392,000
     c.        $420,000
     d.        $560,000 	

71. A landowner subdivides his acreage and offers the lots for sale. Broker E verbally
tells the landowner that she can sell the lots. After Broker E sells some of the lots, the
landowner refuses to pay her a commission. In most states, Broker E can 
      a.       Report the landowner to the real estate licensing authorities
      b.       File a lien against the landowner’s remaining lots
      c.       Sue the landowner for breach of contract
      d.       Do nothing 

72. A licensed salesperson may receive compensation or commission only from
      a.    Their broker
      b.    The principle
      c.     Any broker
      d.     A landlord

74. In some states, the statutory right that a family has in its residence is
      a.     Entirety
      b.     Survivorship
      c.     Curtesy
      d.     Homestead	

75. To create a joint tenancy relationship in the ownership of real estate, there must 
unities of 
      a.      Grantees, ownership, claim of right , and possession 
      b.      Title, interest, encumbrance, and survivorship
      c.       Possession, time, interest, and title
      d.      Ownership, possession, heirs, and title

76. Under which of the following types of liens can both the real property and the 
personal property of the debtor be sold to pay the debt?
      a.     Real estate tax lien
      b.     Mechanic’s lien 
      c.     Judgment lien
      d.     Assessment lien

 77. Which of the following would NOT be considered fraudulent practice? 
       a.   Deceitful or dishonest practices 
       b.   Exaggerated statements about the property (puffing)
       c.   Omitted statements of material fact
       d.   False statements about the property 

78.  An option 
       a.    Requires the optionee to complete the purchase
       b.   Gives the optionee an easement on the property
       c.    Is enforceable by optionee only 
       d.   Makes the seller liable for a commission 

79.  P owns a one-quarter undivided interest in a parcel of land, and he wants his
interest transferred to his sister. As a general rule, which of the following  
actions will transfer P’s undivided interest out of his name?
        a.    The redemption from a foreclosure safe
        b.    The making and signing of a will
        c.    P’s delivery of the deed and acceptance by his sister
        d.    The acceptance by signature of an offer to purchase

80. The Fair Housing Amendments Act of 1988 added the following protected
       a.        Disability
       b.        Familial status
       c.        None of the above 
       d.        Both a & b