Real Estate Exam One
Real Estate Exam One
Questions and Answers
- 1.
A title was recorded for a parcel of real property vested in the name of Johan Wilson, a single woman. After her marriage to William Roberts, she executed a deed to the property only in the name of Johan Roberts, a married woman. The discrepancy in the grantor's name is.
- A.
Valid if William Roberts agrees to it
- B.
A defect on title that may cause title to be vested as tenants in common
- C.
Immaterial if the propety is properly describe
- D.
A defect which may cause a cloud on the title
Correct Answer
D. A defect which may cause a cloud on the titleExplanation
The discrepancy in the grantor's name is a defect which may cause a cloud on the title. This means that the difference in the name on the deed compared to the name on the recorded title could create uncertainty or doubt about the ownership of the property. It could potentially lead to legal issues and disputes regarding the validity of the deed and the rightful owner of the property.Rate this question:
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- 2.
Which Contract would be the most difficult for a buyer to obtain financing?
- A.
Land Contract
- B.
FHA
- C.
VA
- D.
Conventional
Correct Answer
A. Land ContractExplanation
A land contract is the most difficult for a buyer to obtain financing because it involves the buyer making payments directly to the seller over a period of time, without involving a traditional lender. This means that the buyer may not have access to the same financing options and benefits that they would with other types of contracts, such as FHA, VA, or conventional loans. Additionally, lenders may be hesitant to provide financing for land contracts due to the potential risks and uncertainties involved in such arrangements.Rate this question:
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- 3.
When a broker runs an advertisement, the broker must disclose:
- A.
Last name of the broker
- B.
Name of the broker
- C.
Name of broker and salesperson
- D.
Name of the salesperson
Correct Answer
B. Name of the brokerExplanation
When a broker runs an advertisement, they are required to disclose their name. This is important for transparency and accountability in the real estate industry. By providing their name, the broker is ensuring that potential clients have access to the necessary information to make informed decisions. It also helps establish trust between the broker and the public.Rate this question:
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- 4.
Following in-house sales are true, except:
- A.
A listing agent can act as a dual agent
- B.
The listing broker can act as a buyer's agent only
- C.
The broker may purchase the property himself
- D.
The seller may represent the seller only
Correct Answer
B. The listing broker can act as a buyer's agent onlyExplanation
The given statement states that the listing broker can act as a buyer's agent only, which means that they cannot act as a dual agent. A dual agent represents both the buyer and the seller in a real estate transaction. Therefore, this statement contradicts the concept of a listing agent being able to act as a dual agent.Rate this question:
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- 5.
The Federal Housing Administration (FHA) was created primarily:
- A.
To provide insurance for home loanis in the secondary market
- B.
To insure the borrower
- C.
To provide insurance for home loans made by approved lender
- D.
To improve the economy for mortgage bankers
Correct Answer
C. To provide insurance for home loans made by approved lenderExplanation
The Federal Housing Administration (FHA) was created primarily to provide insurance for home loans made by approved lenders. This means that if a borrower defaults on their loan, the FHA will reimburse the lender for the loss. This insurance helps to mitigate the risk for lenders and encourages them to provide loans to borrowers who may not otherwise qualify for conventional financing. By providing this insurance, the FHA helps to promote homeownership and increase access to affordable housing options.Rate this question:
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- 6.
Which of the following loans on a home would probably be made without requiring a down payment from the borrower?
- A.
VA Loan
- B.
CAL-VET
- C.
FHA
- D.
Conventional
Correct Answer
A. VA LoanExplanation
A VA Loan is a type of loan that is guaranteed by the Department of Veterans Affairs and is available to eligible veterans, active duty service members, and surviving spouses. One of the benefits of a VA Loan is that it typically does not require a down payment from the borrower. This is because the loan is backed by the government, providing additional security to the lender. Therefore, a VA Loan would probably be made without requiring a down payment from the borrower.Rate this question:
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- 7.
A person who wishes to purchase a home using the Cal-Vet program would send his application to:
- A.
Department of Real Estate
- B.
Real Estate Commissioner
- C.
Department of Veterans Affairs
- D.
Veterans Administration
Correct Answer
C. Department of Veterans AffairsExplanation
The Cal-Vet program is a home loan program specifically designed for veterans. Therefore, it makes sense that the person who wishes to purchase a home using this program would send their application to the Department of Veterans Affairs, as they are the government agency responsible for administering veterans' benefits and services. The other options listed, such as the Department of Real Estate and the Real Estate Commissioner, are not relevant to the Cal-Vet program.Rate this question:
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- 8.
The item that would appear on the debit side of a buyer's closing statement would be:
- A.
Purchase Price
- B.
Prepaid Rents
- C.
Mortgage Interest
- D.
Down Payment
Correct Answer
A. Purchase PriceExplanation
The purchase price would appear on the debit side of a buyer's closing statement because it represents the amount of money that the buyer is paying to purchase the property. This is a significant expense for the buyer and is therefore recorded as a debit, which represents an increase in expenses or a decrease in assets. The other options listed (prepaid rents, mortgage interest, and down payment) would not appear on the debit side of the closing statement as they do not represent the initial cost of purchasing the property.Rate this question:
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- 9.
When dealing with the public, a broker may not:
- A.
Disclose any of his duties to other agents
- B.
Remain silent concerning material facts about a property know only by himself
- C.
Reject a listing if it is discriminatory or overpriced for minorities
- D.
All of the above
Correct Answer
B. Remain silent concerning material facts about a property know only by himselfExplanation
A broker may not remain silent concerning material facts about a property known only by himself. This means that the broker is obligated to disclose any important information about the property that could affect a buyer's decision. This is important for ensuring transparency and fairness in real estate transactions.Rate this question:
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- 10.
Which of the following is the reason that a real estate agent must keep his principal informed of material facts concerning a pending real estate transaction?
- A.
When the agent is a fiduciary
- B.
When it's printed on the purchase agreement
- C.
When the agent concerned with the commission which seller is paying
- D.
When the broker works only for the seller
Correct Answer
A. When the agent is a fiduciaryExplanation
A fiduciary is a person who is entrusted with the responsibility to act in the best interest of another party. In the context of a real estate agent, being a fiduciary means that the agent has a legal and ethical obligation to prioritize the interests of their client, the principal. By keeping the principal informed of material facts concerning a pending real estate transaction, the agent ensures transparency and allows the principal to make informed decisions. This helps to maintain trust and fulfill the agent's fiduciary duty towards the principal.Rate this question:
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- 11.
A buyer relied upon the fraudulent statement of the seller's agent and was damaged. The seller was unaware of the agents's false statement, and he tried to enforce the agreement. The buyer:
- A.
Could sue the seller for fraud
- B.
Could sue the seller's agent for fraud
- C.
Has sufficient grounds for rescission
- D.
Could do any of the the above
Correct Answer
D. Could do any of the the aboveExplanation
The buyer could do any of the above because they relied on the fraudulent statement of the seller's agent and suffered damage as a result. They could sue the seller for fraud because the seller may be held responsible for the actions of their agent. They could also sue the seller's agent for fraud because the agent made the false statement. Additionally, the buyer has sufficient grounds for rescission, which means they can seek to cancel or void the agreement due to the fraudulent statement.Rate this question:
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- 12.
Lenders know that the lower the loan-to-value ratio, the higher the:
- A.
Interest Rate
- B.
Risk
- C.
Loan to Value Ratio
- D.
Equity
Correct Answer
D. EquityExplanation
Lenders know that the lower the loan-to-value ratio, the higher the equity. This means that borrowers have a larger stake in the property, which reduces the lender's risk. When borrowers have more equity, they are less likely to default on the loan, making it safer for the lender. As a result, lenders may offer more favorable terms, such as lower interest rates, to borrowers with higher equity.Rate this question:
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- 13.
An offer to purchase a real estate could be terminated in all of the following ways, except:
- A.
Acceptance with a counter offer to the offeror
- B.
Failure to communicate notice of revocation before the other party has communicated his acceptance
- C.
Death of offeree or offeror
- D.
Expiration of time to accept an offer
Correct Answer
B. Failure to communicate notice of revocation before the other party has communicated his acceptanceExplanation
This answer is correct because failure to communicate notice of revocation before the other party has communicated their acceptance does not terminate an offer to purchase real estate. In this scenario, the offeror has the right to revoke the offer at any time before the offeree communicates their acceptance. Therefore, failure to communicate notice of revocation does not affect the termination of the offer.Rate this question:
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- 14.
In which of the following contract will apply if one of the parties agrees not to revoke an offer for a certain period of time:
- A.
Exclusive right to sell listing
- B.
Exclusive agency listing
- C.
Net Listing
- D.
An option
Correct Answer
D. An optionExplanation
If one of the parties agrees not to revoke an offer for a certain period of time, an option contract will apply. In an option contract, the party granting the option agrees to keep the offer open for a specified period, giving the other party the right to accept the offer within that timeframe. This means that the party granting the option cannot revoke the offer during the agreed-upon period, providing the other party with a certain level of security and time to make a decision.Rate this question:
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- 15.
For Federal Income Tax purpose, the capital expenditures for improvements are:
- A.
A percentage depreciated
- B.
Subtracted from the cost basis of the property
- C.
Added to the cost basis of the property and depreciated
- D.
Cannot be depreciated
Correct Answer
C. Added to the cost basis of the property and depreciatedExplanation
Capital expenditures for improvements are added to the cost basis of the property and depreciated for Federal Income Tax purposes. This means that the cost of the improvements is added to the original cost of the property, increasing the overall cost basis. The total cost basis is then depreciated over a certain period of time, allowing the taxpayer to deduct a portion of the cost each year as a depreciation expense.Rate this question:
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- 16.
A property sold for $150,000 in a county which had established a documentary transfer tax rate of $.55 for each $500. Of the purchase price of $150,000, only $125,000 was subjected to tax. Which of the following is nearest to the tax amount that would have to be paid?
- A.
$165
- B.
$138
- C.
$27
- D.
$139
Correct Answer
B. $138Explanation
$125,000 / 500 = 250
$.55 x 250 = $137.5Rate this question:
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- 17.
Leland uses an 8% capitalization rate for a 40-unit apartment building that generates $174,000 net income. Which of the following is the most appropriate value of this property?
- A.
$1,400,000
- B.
$1,566,000
- C.
$2,175,000
- D.
$2,170,000
Correct Answer
C. $2,175,000Explanation
$174,000 / .08 = $2,175,000Rate this question:
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- 18.
A broker is negotiating a 25-year commercial lease at a straight annual rental of $30,000. The broker is to recieve a compensation for negotiating this lease as follows: 7% of the annual rental for the first year, 5% of the annual rental for the next four years, 3% of the annual rental for each of the next fifteen years; and 1% of the annual renatl for every year thereafter during the term of the lease. By the end of the 19th year, the broker will have recieved a total commission of most nearly:
- A.
$25,000
- B.
$20,800
- C.
$20,500
- D.
$20,700
Correct Answer
D. $20,700Explanation
$30,000 x 7% = $2,100 x 1 = $ 2,100
$30,000 x 5% = $1,500 x 4 = $ 6,000
$30,000 x 3% = $ 900 x 14 = $12,600
TOTAL $20,700Rate this question:
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- 19.
A salesman was to receive a 45% share of a 6% gross commission. He received $8,100. The property was sold for:
- A.
$300,000
- B.
$200,000
- C.
$280,000
- D.
$400,000
Correct Answer
A. $300,000Explanation
$8,100 / 45% = $ 18,000
$18,00 0/ 6% = $300,000Rate this question:
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- 20.
Two brokers agreed to split a 4 1/2 % commission on a 50-50 basis on the sale of a property for $162,500. The listing salesperson agreed to a 50-50 split with his employing broker. What would be the commission amount for the listing salesperson?
- A.
$3,626.20
- B.
$1,828.13
- C.
$5,400.00
- D.
$4,860.00
Correct Answer
B. $1,828.13Explanation
$162,500 x 4.5% = $7,312.50
$7,312.50 x 50% = $3,656.25
$3,656.25 x 50% = $1,828.13Rate this question:
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- 21.
Buyer Parker paid $4.40 per square foot to purchase a 20,000 square foot lot. If the parcel is in rectangular shape and 200 feet deep, the approximate cost per front foot would be:
- A.
$200
- B.
$440
- C.
$880
- D.
$960
Correct Answer
C. $880Explanation
20,000 / 200 = 100 front ft.
20,000 x $4.40 = $88,000 purchase price
$88,000 / 100 = $880Rate this question:
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- 22.
A deed:
- A.
Does not have to be recorded to transfer title
- B.
Has to be recorded to be valid
- C.
Has to be acknowledged
- D.
Can only be recorded by the lender
Correct Answer
A. Does not have to be recorded to transfer titleExplanation
A deed does not have to be recorded to transfer title because the act of transferring title is accomplished by the execution and delivery of the deed from the grantor to the grantee. Recording the deed is not a requirement for the transfer of ownership, but it is often done to provide notice to the public and protect the interests of the grantee. However, even if a deed is not recorded, the transfer of title is still legally valid.Rate this question:
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- 23.
Of the following types of deeds, which one would contain no warranties and expressed or implied:
- A.
A will deed
- B.
Grant deed
- C.
Warranty deed
- D.
Quitclaim deed
Correct Answer
D. Quitclaim deedExplanation
A quitclaim deed would contain no warranties, whether expressed or implied. This type of deed is used to transfer any interest or claim that the grantor may have in the property, without making any guarantees about the title or condition of the property. Unlike other types of deeds, a quitclaim deed does not provide any protections or assurances to the grantee regarding the ownership or quality of the property. Therefore, it is the correct answer as it does not include any warranties.Rate this question:
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- 24.
An easement could be created for what length of time:
- A.
Perpetual
- B.
For years
- C.
Lifetime
- D.
Any of the above
Correct Answer
D. Any of the aboveExplanation
An easement could be created for any length of time, including perpetually, for a specific number of years, or for the duration of a person's lifetime. The creation of an easement is not limited to a specific time period and can be tailored to the needs and agreements of the parties involved.Rate this question:
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- 25.
Land that is subject to an easement is said to be:
- A.
Prescriptive easement
- B.
Appurtenant to the land
- C.
Encumbered
- D.
An encroachment
Correct Answer
C. EncumberedExplanation
When land is subject to an easement, it means that there is a legal right for someone else to use that land for a specific purpose. This restricts the owner's full use and enjoyment of the property, as they must allow others to access or use it. Therefore, the land is considered "encumbered" because it has a burden or limitation on its use due to the existence of the easement.Rate this question:
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- 26.
The provision of the Subdivision Map Act is enforced by the:
- A.
Real Estate Commissioner
- B.
Subdivision Land Act
- C.
Planning Commission
- D.
Contractor License Board
Correct Answer
C. Planning CommissionExplanation
The provision of the Subdivision Map Act is enforced by the Planning Commission. The Planning Commission is responsible for reviewing and approving subdivision maps, which outline the division of land into smaller lots or parcels. They ensure that the subdivision complies with zoning regulations, environmental laws, and other relevant requirements. The Real Estate Commissioner oversees real estate licensing and enforcement, the Subdivision Land Act is not a governing body, and the Contractor License Board is responsible for licensing and regulating contractors.Rate this question:
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- 27.
Walker hired a construction company to install a swimming pool on their residential premises. In the event of the construction company was unpaid and it was necessary for them to file a lien for the payment of construction, the encumbrance created would be:
- A.
A specific lien
- B.
A general lien
- C.
Attachment lien
- D.
Contractors lien
Correct Answer
A. A specific lienExplanation
In this scenario, the encumbrance created would be a specific lien. A specific lien is a legal claim on a property that is directly related to a specific debt or obligation. In this case, the construction company would file a lien specifically for the unpaid payment of the construction work done on Walker's residential premises. This specific lien would give the construction company the right to seek payment from the proceeds of the sale of the property, should it come to that.Rate this question:
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- 28.
If no notice of non completion is recorded on an improvement project, anyone can record a mechanics lien within:
- A.
10 days
- B.
30 days
- C.
60 days
- D.
90 days
Correct Answer
D. 90 daysExplanation
If no notice of non-completion is recorded on an improvement project, anyone can record a mechanics lien within 90 days. This means that if there is no official notification indicating that the project has been completed or abandoned, any party involved in the project can file a mechanics lien within 90 days to protect their right to payment. This allows them to claim a legal interest in the property until they are paid for their work or materials provided.Rate this question:
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- 29.
When comparing condominiums and rented apartments, which of the following is true?
- A.
Each will receive a separate tax bill
- B.
The occupier has a fee estate
- C.
The person who occupies each unit would have an estate in real property
- D.
None of the above
Correct Answer
C. The person who occupies each unit would have an estate in real propertyExplanation
When comparing condominiums and rented apartments, the person who occupies each unit would have an estate in real property. This means that they have a legal interest and ownership in the physical property itself, rather than just a temporary right to use it. This distinguishes condominiums and rented apartments from other forms of housing where the occupier does not have ownership rights.Rate this question:
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- 30.
In order to operate a competitve, yet profitable business, a real estate broker needs to be concerned with "desk cost." Which of the following most nearly represents the correct way to calculate the desk cost?
- A.
Divide the total operating expenses of the firm, plus commission
- B.
Divide the total operating expenses of the firm, including salaries, rent, insurance, etc., by the number of salesperson
- C.
Calculate the total monthly gross income and divide by the number of salesperson
- D.
Calculate the total monthly gross income and subtract any losses
Correct Answer
B. Divide the total operating expenses of the firm, including salaries, rent, insurance, etc., by the number of salespersonExplanation
The correct way to calculate the desk cost is by dividing the total operating expenses of the firm, including salaries, rent, insurance, etc., by the number of salespersons. This calculation takes into account all the expenses incurred by the firm and divides it by the number of salespersons, giving an average cost per desk. This helps the real estate broker analyze and manage the cost of each desk in order to operate a competitive and profitable business.Rate this question:
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- 31.
Local government laws for the regulation and control of land-use include which of the following?
- A.
Building codes
- B.
Zoning ordinances
- C.
Subdivision ordinances
- D.
All of the above
Correct Answer
D. All of the aboveExplanation
Local government laws for the regulation and control of land-use include building codes, zoning ordinances, and subdivision ordinances. Building codes set standards for the construction and maintenance of buildings to ensure safety and compliance with regulations. Zoning ordinances determine how land can be used in different areas, such as residential, commercial, or industrial. Subdivision ordinances regulate the division of land into smaller lots for development. Therefore, all of the options listed - building codes, zoning ordinances, and subdivision ordinances - are correct answers.Rate this question:
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- 32.
Broker Hudson had a house listed for sale for nine months without selling it. He knows that the building needs major structural repairs, and he has listed at 10% above its fair value. He runs an advertisment in a newspaper that says, "Three bedrooms and Victorian Style. You won't believe the price! Move right in. Hudson - XXX - XXXX." This advertisment is bad because:
- A.
It's deceptive and misleading since Hudson knows that the property needs major repair
- B.
It is illegal to advertise a property that is over priced
- C.
An overpriced property is a misleading price
- D.
The advertising is misleading and the broker will be liable
Correct Answer
A. It's deceptive and misleading since Hudson knows that the property needs major repairExplanation
The given answer is correct because the advertisement is deceptive and misleading. Hudson knows that the property needs major repairs but fails to mention this in the advertisement. By stating "Move right in" and emphasizing the Victorian style, he creates a false impression that the house is in good condition. This is deceptive to potential buyers who may be interested in the property based on the advertisement.Rate this question:
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- 33.
A high price, high quality home surrounded by lower price, lower quality properties will suffer loss in value due to:
- A.
Stability
- B.
Conformity
- C.
Progression
- D.
Regression
Correct Answer
D. RegressionExplanation
Regression refers to the tendency for the value of a higher-priced, higher-quality property to be pulled down by the lower-priced, lower-quality properties in its surroundings. This can occur because potential buyers or investors may compare the property to its neighboring properties and deem it overpriced or less desirable in comparison. As a result, the higher-priced property may experience a decrease in value or demand, leading to a loss in value.Rate this question:
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- 34.
Which of the following is acceptable response for the agent to seller who has indicated their home is not to be shown to sales of prospects who are memebers of the ethnic minority group?
- A.
I can show it to anyone I want
- B.
With this condition, we will get a better price and value won't drop
- C.
I cannot accept the listing for your property because of prohibited discrimination
- D.
With unacceptable terms, they won't be interested
Correct Answer
C. I cannot accept the listing for your property because of prohibited discriminationExplanation
The correct answer is "I cannot accept the listing for your property because of prohibited discrimination." This response acknowledges that the seller's condition of not showing the home to prospects who are members of an ethnic minority group is discriminatory and goes against regulations. By refusing to accept the listing, the agent upholds their ethical responsibility to promote fair and equal treatment for all individuals.Rate this question:
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- 35.
Which of the following staements is most nearly true concerning the activities of mortgage companies?
- A.
They prefer to negotiate commercial loans
- B.
They are not regulated by the State
- C.
They prefer negotiating loans which are salable in the secondary market
- D.
They do not insure government loans
Correct Answer
C. They prefer negotiating loans which are salable in the secondary marketExplanation
Mortgage companies prefer negotiating loans that are salable in the secondary market because it allows them to sell the loans to investors, which helps them generate more funds for lending. This also reduces their risk as they can offload the loans to other parties. Additionally, loans that are salable in the secondary market often have more favorable terms and conditions, making them more attractive to mortgage companies.Rate this question:
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- 36.
The mortgage insurance on a FHA loan:
- A.
Protects the lender in the event of the trustor's death
- B.
Protects the borrower from a fire loss
- C.
Is paid by the lender
- D.
Protects the lender in the event of default
Correct Answer
D. Protects the lender in the event of defaultExplanation
The mortgage insurance on a FHA loan protects the lender in the event of default. This means that if the borrower fails to make their mortgage payments and defaults on the loan, the lender will be protected and reimbursed for any losses incurred. Mortgage insurance helps mitigate the risk for lenders and allows them to provide loans to borrowers with lower down payments or less-than-perfect credit.Rate this question:
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- 37.
A real estate salesman went into a neighborhood to obtain listings of residential property. He made a presentation that the property value would be reduced by a decline int he quality of schools, and an increase in the crime rate because of the entry of minority groups into the neighborhood. His action was:
- A.
Permissible as long as values do not decrease
- B.
No illegal as long as the statement is true
- C.
A disciplinary action
- D.
Unlawful only when the Real Estate commissioner finds out about the representation
Correct Answer
C. A disciplinary actionExplanation
The correct answer suggests that the real estate salesman's action is considered a disciplinary action. This implies that the salesman's behavior is not permissible and goes against professional ethical standards. Making statements that associate a decline in property value with the entry of minority groups is discriminatory and promotes prejudice. Such actions can lead to legal consequences and disciplinary measures taken by the relevant authorities.Rate this question:
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- 38.
The purpose of the Truth-in-Lending Act is to:
- A.
Regulate charges for credit
- B.
Assure a meaningful disclosure of credit terms
- C.
Establish the maximum monthly payments on a trust deed
- D.
Establish the maximum annual percentage rate
Correct Answer
B. Assure a meaningful disclosure of credit termsExplanation
The purpose of the Truth-in-Lending Act is to ensure that consumers are provided with clear and accurate information about the terms and costs of credit. This includes disclosing the annual percentage rate (APR), finance charges, and other important details that allow consumers to make informed decisions about borrowing money. By assuring meaningful disclosure of credit terms, the Act aims to protect consumers from deceptive practices and promote transparency in the lending industry.Rate this question:
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- 39.
Half a mile by half a mile represents how many acres?
- A.
80 acres
- B.
120 acres
- C.
140 acres
- D.
160 acres
Correct Answer
D. 160 acresExplanation
To find the number of acres represented by half a mile by half a mile, we need to convert the given measurements into the same unit. Since there are 640 acres in a square mile, we can calculate the area of half a mile by half a mile by multiplying 0.5 miles by 0.5 miles and then converting the result into acres. So, 0.5 miles by 0.5 miles is equal to 0.25 square miles. Multiplying this by 640 acres, we get 160 acres. Therefore, half a mile by half a mile represents 160 acres.Rate this question:
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- 40.
George Carson is selling time- shares in his Wildacre subdivision. He mailed advertisements to 10,000 people offering them the chance to win a prize, but did not reveal that the person must visit Wildacre and listen to a sales presntation in order to be eligible. All of the prize winners became the owners of Wildacre. Is there anything wrong with this situation:
- A.
No; prizes may be offered at any presentations related to real estate
- B.
Yes; property owners are excluded
- C.
Yes; anyone offering prizes or gifts must reveal any requirements such as an attendance of a sales presentation
- D.
No; if winners become property owners at Wildacre
Correct Answer
C. Yes; anyone offering prizes or gifts must reveal any requirements such as an attendance of a sales presentationExplanation
The answer is "Yes; anyone offering prizes or gifts must reveal any requirements such as an attendance of a sales presentation." This is because it is considered deceptive and unethical to withhold important information, such as the requirement to attend a sales presentation, when offering prizes or gifts. It is important for individuals to have all the necessary information before making a decision, and not revealing such requirements can be seen as misleading.Rate this question:
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- 41.
The appraisal of an income-producing property is made with an as of "given date" to indicate:
- A.
The Market conditions influencing the value of the property at the point in time
- B.
The effective age of the property
- C.
The date of inspection
- D.
The assessed value
Correct Answer
A. The Market conditions influencing the value of the property at the point in timeExplanation
The appraisal of an income-producing property is made with an as of "given date" to indicate the market conditions influencing the value of the property at that specific point in time. This means that the appraiser takes into account the economic factors, supply and demand, interest rates, and other market conditions that may affect the property's value on the given date. This helps provide an accurate and up-to-date assessment of the property's worth based on the current market conditions.Rate this question:
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- 42.
Morrison recieves a net income of $675 per month at an annual return rate of 7 1/2%. Morrison's Investment amounted to:
- A.
$8,100
- B.
$108,000
- C.
$10,000
- D.
$110,000
Correct Answer
B. $108,000Explanation
$675 X 12 = $8,100
$8,100 / 7 ½% = $108,000Rate this question:
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- 43.
Which of the following is least correct about in-house sales?
- A.
Brokers cannot sell their own in-house listings
- B.
The broker always works for the seller
- C.
May sell it only to a buyer
- D.
May be sold only from broker to broker
Correct Answer
A. Brokers cannot sell their own in-house listingsExplanation
The statement "Brokers cannot sell their own in-house listings" is least correct about in-house sales. In reality, brokers have the ability to sell their own in-house listings. This means that they can represent both the seller and the buyer in the transaction, allowing them to earn both the listing and selling commission. This practice is known as dual agency, where the broker acts as a neutral intermediary between the two parties involved in the sale.Rate this question:
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- 44.
The hardest and yet the most important part in the market data method of appraising is:
- A.
Establishing the value multiplier
- B.
Adjusting for the differences between the comparable properties and the subject property
- C.
Collecting neighbor data
- D.
Finding the unit of comparison
Correct Answer
B. Adjusting for the differences between the comparable properties and the subject propertyExplanation
The hardest and yet the most important part in the market data method of appraising is adjusting for the differences between the comparable properties and the subject property. This step is challenging because it requires a thorough analysis of various factors such as location, size, condition, amenities, and other relevant features that may affect the value of the properties. It is crucial to accurately account for these differences to ensure a fair and accurate appraisal.Rate this question:
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- 45.
Harrison and David, single people owned a parcel of real property as joint tenants. Harrison encumbered his interest for $10,000 and borrowing the amount to pay medical bills without the acknowledgement or consent from David. Shortly thereafter, Harrison died with the debt still unpaid. Which of the following would be true?
- A.
David becomes the owner but subject to pay the $10,000
- B.
Beneficiary and David become joint tenants each paying $5,000
- C.
Beneficiary and David as tenants in common each paying $5,000
- D.
David would own all the property free and clear of the encumbrance
Correct Answer
D. David would own all the property free and clear of the encumbranceExplanation
Harrison and David owned the property as joint tenants, which means they both had an equal interest in the property. However, when Harrison encumbered his interest for $10,000 without David's consent, it created a debt on his share of the property. When Harrison died, his debt did not transfer to David because joint tenancy includes the right of survivorship. This means that upon Harrison's death, his share automatically passed to David, free and clear of any encumbrance. Therefore, David would own all the property without having to pay the $10,000 debt.Rate this question:
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- 46.
When the governmenatal body takes a private real property necessary for public use, the certain legal processes must be followed. Takin a real property such as above is exercising the right of:
- A.
Eminent domain
- B.
Police Power
- C.
Escheat
- D.
Zoning Laws
Correct Answer
A. Eminent domainExplanation
Eminent domain is the correct answer because it refers to the government's power to take private property for public use, as stated in the question. This power is typically exercised after following certain legal processes, as mentioned in the question. Police power refers to the government's authority to regulate and control the use of property for public health, safety, and welfare. Escheat refers to the transfer of property to the state when the owner dies without a will or legal heirs. Zoning laws refer to regulations that dictate how land can be used in specific areas.Rate this question:
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- 47.
A title company could make a title search by searching the records of the:
- A.
County Clerk's Office
- B.
County Recorder's Office
- C.
Federal Land Office
- D.
All of the Above
Correct Answer
D. All of the AboveExplanation
A title company could make a title search by searching the records of the County Clerk's Office, County Recorder's Office, and Federal Land Office. These offices maintain different types of records related to property ownership and transactions. The County Clerk's Office keeps records of deeds, mortgages, and liens, while the County Recorder's Office maintains records of property ownership and transfers. The Federal Land Office maintains records of federal land grants and patents. By searching all of these offices, a title company can gather comprehensive information about a property's ownership history and any encumbrances or claims on the title.Rate this question:
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- 48.
When making a loan, amortization tables are used in order to determine the:
- A.
Monthly payment
- B.
Annual percentage rate
- C.
Interest rate
- D.
Beneficiary's right
Correct Answer
A. Monthly paymentExplanation
Amortization tables are used to determine the monthly payment for a loan. These tables provide a breakdown of the principal and interest portions of each payment over the life of the loan. By using these tables, borrowers can understand how much they need to pay each month to fully repay the loan by the end of the term. The tables take into account the loan amount, interest rate, and the length of the loan to calculate the monthly payment amount. Therefore, the correct answer is the monthly payment.Rate this question:
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- 49.
Broker Smith took a listing on commercial acreage and also received the right to purchase the property within 30 days. On the 28th day of the listing, the broker decided to buy the property. Before buying the property, he must:
- A.
Disclose any outstanding offers
- B.
Give the owner any material information
- C.
Obtain written consent from the owner which acknowledges any profit or anticipated profit
- D.
All of the above
Correct Answer
D. All of the aboveExplanation
The broker must disclose any outstanding offers because it is important for the owner to be aware of any potential competing offers before making a decision. The broker must also give the owner any material information about the property that may affect their decision to sell. Lastly, the broker must obtain written consent from the owner, acknowledging any profit or anticipated profit that they may make from purchasing the property. These steps ensure transparency and protect the owner's interests.Rate this question:
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- 50.
A real estate broker presented an offer to seller which met the terms of the listing. The offer was from a financially qualified black person. Later, his salesperson presented the seller an offer that was at a lower price from white prospect. The seller did not accept either offer, but instead, sold the property to a neighbor through the same salesperson. The neighbor wanted to buy the property to prevent minority person moving into the neighborhood. Which of the following parties has not violated the Civil Rights Act of 1968?
- A.
White prospect
- B.
Seller
- C.
Salesperson
- D.
Both salesperson and seller
Correct Answer
A. White prospectExplanation
The white prospect has not violated the Civil Rights Act of 1968. The act prohibits discrimination based on race in the sale of housing. In this scenario, the white prospect simply made a lower offer, which is not a violation of the act. The seller, salesperson, and the neighbor who bought the property to prevent a minority person from moving in could potentially be in violation of the act, as their actions may be seen as discriminatory.Rate this question:
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Quiz Review Timeline +
Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.
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Current Version
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Mar 20, 2023Quiz Edited by
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Dec 06, 2011Quiz Created by
Slynch1783
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