Real Estate State Practice Exam

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merger of titles

An easement can be terminated by

Situs

Two lots of the same size are sold on a street. The lot on the corner sells for $20,000 more than the lot in the middle of the street. Which of the following characteristics MOST likely explains the price difference

the identity of the legal owner is kept confidential

A distinguishing characteristic of owning property by land trust is that

Writ of execution.

How does a creditor who has obtained a judgment get satisfaction against a debtor who will not pay

tenants at sufferance.

Tenants are still in their rental property even though their lease has expired. The landlord has given them written notice to quit and refused to accept rent. They are

Contour map

What type of map is MOST useful for describing the terrain of a very hilly lot

severance

Real property can be converted to personal property by

An Environmental Impact Statement (EIS)

projects the impact on the environment of a proposed project.

a special assessment

New sidewalks installed only on one particular street will probably be paid for by

a homeowner

A lawsuit for inverse condemnation may be brought by

prior appropriation

Although states make specific laws governing water rights and the rights in land that borders water, most states generally follow one of two basic doctrines regarding water rights. In many states, the common law doctrine of riparian and littoral rights dictates that water rights are automatically conveyed with property. In others, all water rights are controlled by the state under the doctrine of

all owners, present and future

A deed restriction is applicable to the activities of

is a legal implementation while planning is a process.

The principal difference between zoning and planning as they relate to land use control is that zoning

Return of the property to the original owner

If conditions for purchase are included in a deed and these conditions are violated, what is the penalty

a competitive market analysis to determine the property's value.

A prospective seller asks a salesperson to recommend a listing price for a property. The salesperson should suggest

Market data

Which of the following approaches MOST reliably estimates the sales price of a single-family residence

$250,000

An appraiser MUST be licensed or certified to handle Federally related work on residential property valued at more than

GRM

Which rule-of-thumb version is being offered to an investor who is told that a house renting for $900 a month should sell for about $90,000?

most homes are larger than the sale home

According to the principle of progression, a three-bedroom, one-story home is MOST likely to bring the highest sales price if located in a neighborhood in which

lender wants to sell the mortgage to the secondary market.

A formal appraisal will ALWAYS be REQUIRED when the

demand immediate payment of the entire note

A borrower has defaulted on the mortgage. The mortgage contains an acceleration clause. This permits the lender to

the total interest.

Regulation Z requires that the borrower be fully informed of all of the following EXCEPT

mortgagor

When a property owner uses his home as collateral for a loan and creates a lien in favor of the lender, title is held by the

The FHA functions MOST like

an insurance company

Which of the following statements about discount points is FALSE?

They are computed as a percentage of the selling price.

nterest rates charged by lenders

The purpose of usury laws is to regulate

Mortgage broker

What is the term used for the person or organization who acts as an intermediary for the purpose of obtaining financing?

negative amortization.

An adjustable rate loan should include all of the following elements EXCEPT

Agency coupled with an interest

A broker supplies the financing for a project to build condominiums with the stipulation that he has the exclusive right to sell the completed condos. Which of the following BEST describes this relationship?

special agency

When a principal authorizes an agent to perform a particular act or transaction, it is an example of a

One

In an exclusive right-to-sell listing, an owner lists the property for sale with how many brokers?

a subagent of the seller

A broker lists a property, with a listing contract allowing subagency and dual agency. One of the broker's salespersons shows the property. The salesperson would be classified as

he is no longer the listing agent

The day after a broker's listing on a house expired, it was listed with another broker and offered in the MLS. Several days later, a third licensee called the first broker and asked for the key to show the home. The broker should inform the caller that

the seller accepts the offer

A broker has brought a ready, willing, and able buyer to a seller. In MOST listing contracts, the broker has earned his commission when

The amount of commission to be paid is

agreed upon by the seller and agent on the contract.

fiduciary

The relationship in which the agent is placed in the position of trust and confidence to the principal is known by the term

Which of the following events would AUTOMATICALLY cancel a listing agreement?

Property owner's death.

A salesperson lists a property with a contract that allows for subagency and dual agency. The salesperson is

an agent to the broker and a subagent to the principal.

A seller tells the listing agent that her home was treated for termites 10 years ago, so there are no termites now. Before listing the property, the agent should

tell the seller to disclose the termite treatment on the property disclosure.

State laws differ on whether a buyer is entitled to know about

a suicide that occurred in the house last year

require the buyer to acknowledge disclosure of the presence of any known lead paint.

The Department of Housing and Urban Development estimates that most private homes built before 1978 contain potentially dangerous levels of lead. Because of this, some Federal agencies, such as FHA

the number of square feet in the building.

The real estate broker who is listing a house for sale should personally verify

Seller

A seller mentions to his agent that the previous owners of his property may have dumped hazardous waste on the site. Under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), who is liable for damages from the dumping prior to the sale of the property?

tell potential buyers about the parties

At the time of listing, the seller tells the listing agent they are moving because the neighbor has loud parties every weekend. The agent should

a contract

A written agreement in which a purchaser agrees to buy and a seller agrees to sell is called

impossibility of performance

The real estate contract for a specific property for use as an unlicensed whiskey sales operation was forced to terminate. The termination was the result of

The buyer may sue the seller for specific performance.

A buyer was negotiating the purchase of a house for himself. During a conversation with the seller, the seller agreed to include all kitchen appliances in the sale, and this fact was included in the sales contract. In this situation, if the seller takes the appliances with him, what recourse does the buyer have?

A mentally disabled person who has been declared incompetent by a judge wishes to enter into a contract. Under what conditions can such a person do so?

The person appointed by the court to act for the disabled person must contract on his or her behalf.

A prospective buyer made an offer to purchase a property. The owner responded with a counteroffer. While the buyer was reviewing the counteroffer, the owner received a better offer. The owner can accept the second offer if

the owner withdraws the counteroffer before it is accepted.

an option contract

A contract has been drawn which obliges the sellers to convey title to their land to the buyers if the buyers come up with $22,000 on or before December 31st. This is called

A couple signed a lease on an apartment for a period of 1 year. The lease does NOT contain an automatic renewal clause. The couple plans to move out at the end of the lease rather than renew it. How much notice MUST they give to comply with the lease term?

No notice is required

Prospective buyers made an offer on a property. The seller did NOT accept, but made a counteroffer. The prospective buyers signed the counteroffer and the real estate agent delivered their acceptance to the seller. In the interim, the same buyers had found another house that they liked better and made an offer on it, which was accepted. Which of the following is TRUE?

Both contracts are valid

The purpose of requiring an earnest money deposit in a real estate sales contract is to

provide evidence of the buyer's intention to carry out the contract.

an executory contract.

An agreement to purchase that has NOT yet closed is

constructive notice

A judgment has been properly recorded. Any subsequent purchasers, whether they have actually examined the record or not, have been given

statute of descent

When someone has living heirs but dies without leaving a will, the estate is distributed according to the

Which of the following is NOT usually prorated at closing?

Special tax assessments.

The buyer is assuming a mortgage presently on the property in the amount of $110,000. What is the adjustment made at closing?

Credit buyer $110,000; debit seller $110,000.

At the closing on June 15, the buyer is assuming a mortgage presently on the property, on which the monthly interest charge is currently $600. The seller has made the payment due on June 1. Assuming a VA mortgage, what is the adjustment made at closing?

Debit seller $300; credit buyer $300

IRS

The escrow officer or closing agent MUST give information regarding the sales price and seller's social security number to

Mortgage loan interest, local property taxes, mortgage loan origination fees.

For Federal income tax purposes, which of the following are costs of homeownership that may be deducted from gross income?

Antitrust laws prohibit competing brokers from all of the following EXCEPT

receiving compensation from both the buyer and the seller

A managing broker can be held responsible for

all real estate activities of salespersons.

Failure to display the equal housing opportunity poster at the broker's place of business.

Which of the following may be considered prima facie evidence of discrimination by a broker?

"Catholics preferred."

Under the Federal Fair Housing Law, which of the following is considered discriminatory advertising?

prepayment penalties and rebates

According to the Truth-in-Lending Act, if any "trigger terms" are used in an ad, all of the following disclosures MUST appear in the ad EXCEPT the

in a timely manner, according to state laws.

Earnest money should be deposited into a trust account

an expression of opinion, or puffing, which could lead to misrepresentation.

A broker says, while showing a rural property, "This property has the world's purest well water." This would be an example of

unintentional misrepresentations.

Errors and Omissions insurance covers the broker for

blockbusting

The practice of inducing panic selling in a neighborhood for financial gain is

suggest the buyer ask a lawyer to furnish the wording.

The buyer wants to make the purchase offer contingent on a complex mortgage arrangement. The buyer's agent who is drawing up the contract should

$810.60

The sellers have agreed to give the buyers an allowance to recarpet the living room. They will allow $22.95 per square yard for carpet plus $6.00 per square yard for pad and installation. If the living room is 21 feet x 12 feet, how much will it cost the sellers (to the nearest cent)?

10,020

A buyer wants to purchase a home for $60,000 with a 15% down payment. The lender charges 2 points. How much money does the buyer need up front to make the purchase?

None of the above

An owner lists her home at a 7% commission rate and wants to net $45,000 after paying the mortgage balance of $68,000 and the broker's commission. To the nearest dollar, what should the selling price be to net her $45,000?

$1,125

Two buyers bought a house with a $178,000 mortgage. The interest rate is 6 1/2% per annum payable for 30 years. To the nearest dollar, what is their monthly principal and interest payment? (BE SURE TO USE THE AMORTIZATION TABLE

$225.00

A couple bought a rental house for $195,000. Its assessed value was $180,000. If the tax rate is $1.50 per $100 of assessed value, what is the monthly contribution the lender will REQUIRE for taxes? Round to the nearest cent.

an interest that is classified as personal property

Ownership of common stock in a corporation gives

An individual entrepreneur who owns several apartment buildings.

A property management plan may serve different purposes for different owners, and generally has to strike a balance between preservation of the property's value and generation of income. Which of the following owners would MOST likely prefer a property manager who emphasizes cash flow or income over the maintenance of value?

a condominium tends to be more affordable

A major reason for buying and owning a condominium rather than a detached single-family home is that

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