Real Estate Agent Practice Exam: Quiz!
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How much do you know about being a real estate agent? Are you studying for an exam? This quiz can help. A real estate agent assists people with the buying or selling of property. They possess the skill and expertise necessary to either market the property or sell for the best possible outcome. If you want to put your knowledge to the test, look no further than this quiz.
- 1.
MORTGAGE YIELD IS BEST DESCRIBED AS:
- A.
What the lender receives when a loan secured by a mortgage is paid off
- B.
All of the money received by a lender after deducting closing costs and loan fees
- C.
The effective interest return obtained from a first trust deed by an investor
- D.
An increase in value of a property which has a mortgage
Correct Answer
C. The effective interest return obtained from a first trust deed by an investorExplanation
Mortgage yield refers to the effective interest return that an investor obtains from a first trust deed. It represents the amount of income generated from the mortgage investment, taking into account factors such as the interest rate, loan fees, and closing costs. This measure allows investors to assess the profitability of their mortgage investments and make informed decisions.Rate this question:
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- 2.
A VALID ESCROW REQUIRES W/C OF THE FFG:
- A.
Escrow instructions with no conditions
- B.
A binding contract between the buyer and seller and the condition delivery of transfer instruments to a third party
- C.
The services of a licensed real estate broker
- D.
None of the above
Correct Answer
B. A binding contract between the buyer and seller and the condition delivery of transfer instruments to a third partyExplanation
These are required for a valid escrowRate this question:
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- 3.
A REAL ESTATE BROKER IS USUALLY:
- A.
A fiduciary to a person interested in buying a property the broker has listed
- B.
An attorney-in-fact
- C.
An agent serving the principal under a duly executed power-of-attorney
- D.
None of the above
Correct Answer
D. None of the aboveExplanation
The broker is usually the agent (fiduciary) of the seller and usually does not have a power-of-attorneyRate this question:
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- 4.
THE BEST DEFINITION OF A STRAIGHT NOTE IS:
- A.
Sometimes secured by a trust deed
- B.
Sometimes used to finance real property
- C.
Principle is all due at one time
- D.
All of the above
Correct Answer
C. Principle is all due at one timeExplanation
A straight note has no principal payments and principal is due all at one time.Rate this question:
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- 5.
A LOAN FOR WHICH INTEREST-ONLY PAYMENT ARE MADE IS:
- A.
A straight note
- B.
Amortized
- C.
Partially amortized
- D.
A graduated payment note
Correct Answer
A. A straight noteExplanation
A straight note has no payment of principal on the installment basis and principal is due at maturity. When interest only is paid, the no principal is paid until maturity.Rate this question:
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- 6.
COMPARING AN INSTALLMENT NOTE TO A STRAIGHT NOTE, THE STRAIGHT NOTE WILL HAVE:
- A.
A total effective interest rate greater that if the loan were an installment loan
- B.
Equal annual principal reduction payments
- C.
No principal payments during the term of the loan except on the last payment
- D.
None of the above
Correct Answer
C. No principal payments during the term of the loan except on the last paymentExplanation
The straight note will have no principal payments during the term of the loan except on the last payment. This means that the borrower will only make interest payments throughout the loan term and will pay off the principal amount in full on the final payment. In contrast, an installment note would require the borrower to make regular principal reduction payments along with interest payments throughout the loan term. Therefore, the straight note does not involve any principal payments until the final payment, making it different from an installment note.Rate this question:
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- 7.
AN “ABLE BUYER” MEANS ONE:
- A.
Financially able
- B.
Having the ability to obtain the necessary funds to purchase real property
- C.
Having the ability to obtain necessary financing
- D.
Any of the above
Correct Answer
D. Any of the aboveExplanation
Any of these would indicate an “able” buyerRate this question:
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- 8.
OPTION TO RENEW A LEASE IS A:
- A.
Covenant
- B.
Restriction
- C.
Limitation
- D.
Condition
Correct Answer
A. CovenantExplanation
An option to renew a lease is a promise by the lessor to do so in the event the lessee desires it. A promise in a contract is a “covenant”Rate this question:
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- 9.
WHICH OF THE FOLLOWING IS A LEGAL TERM USED TO DESCRIBE THE ENTIRE PARCEL OF REAL PROPERTY AND ALL STRUCTURES ON SUCH PROPERTY?
- A.
Condominium
- B.
Condominium unit
- C.
Condominium Project
- D.
All of the above
Correct Answer
C. Condominium ProjectExplanation
When you consider the condominium units as well as the common areas, you have a condominium projectRate this question:
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- 10.
A BUYER DEFAULTS IN MAKING PAYMENTS ON A LOAN, THEREFORE THE LENDER’S ACTION PROBABLY WOULD RESULT IN:
- A.
Subordination
- B.
Escalation
- C.
Acceleration
- D.
Alienation
Correct Answer
C. AccelerationExplanation
Acceleration indicates the right to declare the entire sum of a note to be due and payable immediately. Most trust deeds contains several acceleration clauses.Rate this question:
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- 11.
WHICH OF THE FOLLOWING IS THE CLASSIC DEFINITION OF THE BOUNDARIES OF REAL PROPERTY?
- A.
The surface area indicated on a map
- B.
A reasonable use of airspace and extended to the center or the earth
- C.
A reasonable distance down and unlimited airspace
- D.
A practical or reasonable use of the earth and unlimited airspace
Correct Answer
B. A reasonable use of airspace and extended to the center or the earthExplanation
The surface of the earth and the material beneath the surface to the center of the earth is part of the real property. Since airways are now public domain, the ownership of airspace is “use to an enjoyable and reasonable height”Rate this question:
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- 12.
AN OFFER BY ONE OF THE PARTIES TO A REAL ESTATE TRANSACTION TO CARRY OUT THAT PARTY’S PART OF THE CONTRACT IS CALLED A:
- A.
Gratuity
- B.
Satisfaction
- C.
Recourse
- D.
Tender
Correct Answer
D. TenderExplanation
Usually made at the conclusion of the transaction, the tender is the offer to perform on the terms agreed to. If the other party cannot perform, then the party that made the tender can rightfully claim the other party defaulted.Rate this question:
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- 13.
TO ALIENATE TITLE TO REAL PROPERTY, ONE WOULD:
- A.
Encumber it
- B.
Place a homestead on the property
- C.
Convey the title
- D.
Cloud the title
Correct Answer
C. Convey the titleExplanation
The term “alienate” means to transfer or convey. To alienate title means to convey it.Rate this question:
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- 14.
REAL PROPERTY WOULD INCLUDE:
- A.
Real property tax lien
- B.
Trust deed
- C.
Oil
- D.
None of the above
Correct Answer
D. None of the aboveExplanation
None of the possible answers to this question is real property. A tax lien and a trust deed, although having to do with real property, are not real property. Oil which has been “captured” is personal property.Rate this question:
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- 15.
IN AN ESCROW, PREPAID RENTS ARE NORMALLY:
- A.
Debited to the vendor
- B.
Credited to the vendor
- C.
Debited to the buyer
- D.
Credited to the buyer
Correct Answer
D. Credited to the buyerExplanation
The vendee is the buyer. The buyer normally receives the prepaid rents.Rate this question:
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- 16.
THE HIRING OF A SPECIALIST IN PROPERTY MANAGEMENT WOULD BE JUSTIFIED BY:
- A.
Absentee ownership
- B.
Technological advances in building concepts
- C.
Vacancy factor high than normal
- D.
Urbanization
Correct Answer
A. Absentee ownershipExplanation
In absentee ownership. The owner lives away from the property and is not able to adequately supervise it.Rate this question:
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- 17.
A CONTRACT TO KEEP AN OFFER OPEN FOR A SPECIFIC PERIOD OF TIME IS:
- A.
A periodic agreement
- B.
An open-ended agreement
- C.
A trust deed
- D.
An option
Correct Answer
D. An optionExplanation
An offer to purchase may be revoked or rejected at any time before communication of acceptance. In one wishes to keep an offer to sell open for a period of time, they must give consideration to the optionor (seller) thus creating a contract with consideration to the optionor and the promise of the optionor is to keep his offer open for a definite period of time.Rate this question:
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- 18.
WHICH OF THE FOLLOWING IS NOT ONE OF THE FOUR IMPORTANT ELEMENTS OF VALUE:
- A.
Scarcity
- B.
Appreciation
- C.
Utility
- D.
Transferability
Correct Answer
B. AppreciationExplanation
The four elements of value are Demand Utility, Scarcity, and Transferability (DUST)Rate this question:
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- 19.
PLACING TWO OR MORE CONTIGUOUS UNITS UNDER COMMON OWNERSHIP FOR THE PURPOSE OF INCREASING THE VALUE PER UNIT IS KNOWN AS:
- A.
Terminus ownership
- B.
Severalty ownership
- C.
Plottage
- D.
Disassemblage
Correct Answer
C. PlottageExplanation
Placing two or more contiguous units under common ownership in order to increase the units value is known as plottage.Rate this question:
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- 20.
WHICH OF THE FOLLOWING ITEMS WOULD MOSTLY LIKELY TO APPEAR AS A CREDIT ON THE SELLER’S CLOSING STATEMENT?
- A.
Prepaid taxes
- B.
An assumed loan
- C.
Title insurance premium
- D.
Delinquent assessment lien
Correct Answer
A. Prepaid taxesExplanation
If the seller has prepaid the taxes, they would expect to get the unused portion back which will be a credit. The seller usually pays for the title insurance and delinquent assessment liens. The assured loan is a debit to the seller.Rate this question:
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- 21.
WHEN A STREAM SUDDENLY TEARS LAND AWAY FROM ITS BANK, IT IS CALLED:
- A.
Absorption
- B.
Accretion
- C.
Allusion
- D.
Avulsion
Correct Answer
D. AvulsionExplanation
Avulsion is distinguished from erosion (the gradual removal of the soil by air or water)Rate this question:
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- 22.
WHICH OF THE FOLLOWING IS USED TO DETERMINING THE NET INCOME OF A PROPERTY USING THE CAPITALIZATION APPROACH OF APPRAISAL?
- A.
Reserves for depreciation
- B.
Income tax paid
- C.
Vacancy allowance
- D.
Payments on a mortgage loan
Correct Answer
C. Vacancy allowanceExplanation
The only choice used to calculate net income is vacancy allowanceRate this question:
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- 23.
PRESCRIPTION IS:
- A.
Equitable title
- B.
Legal title
- C.
A grant
- D.
The right of use on the land
Correct Answer
D. The right of use on the landExplanation
Prescription relates to an easement, which is a real property right acquired through court action providing for the right to use the land of anotherRate this question:
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- 24.
IN YOUR OPINION, THE RELATIONSHIP BETWEEN THE THING DESIRED AND THE POTENTIAL PURCHASER IS BEST DEFINED AS:
- A.
The relationship between utility and value
- B.
The relationship between demand and value
- C.
Value
- D.
The present worth as opposed to future income
Correct Answer
C. ValueExplanation
This is a definition of the word “Value”Rate this question:
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- 25.
Novation is most closely related to:
- A.
Realization of an unexpected profit
- B.
Creation of an existing agreement
- C.
Substitution of a new contract for an old one
- D.
Modification of a contract
Correct Answer
C. Substitution of a new contract for an old oneExplanation
Novation is a legal term to describe replacing an old contract with a new contract.Rate this question:
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- 26.
ANOTHER NAME FOR AN ESTATE OF INHERITANCE IS:
- A.
Probate Estate
- B.
Fee simple defeasible
- C.
Estate is fee
- D.
Estate in Sufferance
Correct Answer
C. Estate is feeExplanation
Fee estates are of indefinite duration, can be willed, the greatest interest a person can own in land, freehold estate and not necessarily free of encumbrances.Rate this question:
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- 27.
WHEN RENT IS COMPUTED ON THE GROSS SALES OF A BUSINESS OCCUPYING REAL PROPERTY, THE LEASE IS CORRECTLY TERMED:
- A.
A net lease
- B.
A gross lease
- C.
A voidable lease
- D.
A percentage lease
Correct Answer
D. A percentage leaseExplanation
In a percentage lease, the rent is tied to a percentage of the gross receipts of a businessRate this question:
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- 28.
FEE SIMPLE ESTATE REFERS TO:
- A.
The greatest interest a person can own in land
- B.
An easy way to transfer title
- C.
A common way to hold title
- D.
An expensive way to transfer title
Correct Answer
A. The greatest interest a person can own in landExplanation
Fee simple estates: often defined as the greatest interest a person can own in land. The next estate would be a life-estate. Thirdly, one could own a lease hold estate which involves possession solely.Rate this question:
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- 29.
A DISTINGUISHING FEATURE OF A FEE SIMPLE ESTATE IS THAT IT IS:
- A.
Free of encumbrances
- B.
Freely transferable
- C.
Of definite duration
- D.
None of the above
Correct Answer
B. Freely transferableExplanation
Freely transferableRate this question:
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- 30.
A LEASE IS TO A LESSEE AS:
- A.
An assumption agreement is to an affiant
- B.
A trust deed is to a trustee
- C.
An agreement of sale is to an equitable owner
- D.
A fee simple estate is to an executor
Correct Answer
C. An agreement of sale is to an equitable ownerExplanation
An agreement of sale (land contract) gives the equitable owner the use of the property, as a lease gives the use of the premises to the lessee. An affiant is one who makes an affirmation. Know each of the terms in this question.Rate this question:
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- 31.
WHICH OF THE FOLLOWING IS CONSIDERED PERSONAL PROPERTY?
- A.
An easement
- B.
Mineral rights
- C.
An existing mortgage
- D.
Tree growing in a forest
Correct Answer
C. An existing mortgageExplanation
An existing mortgage is a piece of paper, and therefore, is considered personal property. An easement and mineral rights are appurtenances, and therefore, real property. Growing trees are real property.Rate this question:
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- 32.
THE FOLLOWING IS LESS-THEN-FREEHOLD ESTATE
- A.
Fee simple defeasible estate
- B.
Leasehold estate
- C.
Life estate
- D.
Fee simple absolute estate
Correct Answer
B. Leasehold estateExplanation
A less than freehold estate is a leasehold. Leases are “lesses”Rate this question:
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- 33.
THE FOLLOWING IS NOT CLASSIFIED AS REAL PROPERTY
- A.
Unextracted oil
- B.
Unharvested crops
- C.
Easement
- D.
Leasehold estate in residential property
Correct Answer
D. Leasehold estate in residential propertyExplanation
A leasehold estate is NOT real property, it is personal property often called a chattel real. It is a personal property chattel interest in real property. The other choices are all classified as real property.Rate this question:
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- 34.
ALL OF THE FOLLOWING ARE FACTORS GENERALLY CONSIDERED WHEN DETERMINING WHETHER AN ITEM OF PERSONAL PROPERTY HAS BECOME REAL PROPERTY, EXCEPT:
- A.
Agreement between the parties
- B.
Permanence of the installation
- C.
Cost of the article
- D.
Relationship of the parties
Correct Answer
C. Cost of the articleExplanation
The five tests of a fixture are: Intention of person attaching it, method of attachment. Adaptability of the item, agreement of the parties, and relationship of the parties.Rate this question:
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- 35.
A PROPERTY IS DEEDED TO JOJO LEGASPI, ET UX. THE LATIN PHRASE “ET UX” AS SO USED, MEANS
- A.
An others
- B.
Amount over and above
- C.
And wife
- D.
Without recourse
Correct Answer
C. And wifeExplanation
This is a definition of “ET UX”Rate this question:
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- 36.
THE RECORDING OF A DEED:
- A.
Passes title
- B.
Guarantees ownership
- C.
Raises a presumption of delivery
- D.
Insures possession
Correct Answer
C. Raises a presumption of deliveryExplanation
When a deed is recorded, it creates a presumption that the deed has been delivered. It does not pass title, nor guarantee ownership, nor insure the new owner that he has possession of the propertyRate this question:
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- 37.
AN INSTRUMENT THAT TRANSFERS POSSESSION OF A REAL PROPERTY, BUT NOT TITLE, IS KNOWN AS:
- A.
A mortgage
- B.
A lease
- C.
A trust deed
- D.
An assignment
Correct Answer
B. A leaseExplanation
A lease transfers the possession right of real property. The remainder of the rights stays vested in the lessor.Rate this question:
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- 38.
AN OWNER WHO CONVEYS A PORTION OF HIS FEE ESTATE, FOR A TERM THAT IS LESS THAN HIS OWN, CREATES FOR THE RECIPIENT:
- A.
An estate in remainder
- B.
An estate at sufferance
- C.
An estate in reversion
- D.
A leasehold estate
Correct Answer
D. A leasehold estateExplanation
The party has not received full title to the property but mere a leasehold. The party making the conveyance holds an estate in reversion.Rate this question:
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- 39.
THE COVENANT OF QUIET ENJOYMENT MOST DIRECTLY RELATES TO:
- A.
Nuisances maintained on adjoining property
- B.
Title to real property
- C.
Possession of real property
- D.
All of the above
Correct Answer
C. Possession of real propertyExplanation
The right to “quiet enjoyment” is the tenants legal rights in rentals and leases during the occupancy (possession) of the property.Rate this question:
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- 40.
LEGALLY AND TECHNICALLY PROPERTY IS DEFINED AS:
- A.
The rights and interests which a person has in the thing owned
- B.
Freehold estate
- C.
Only personal property
- D.
Things that buyers and sellers own
Correct Answer
A. The rights and interests which a person has in the thing ownedExplanation
Ownership of real property is legally and technically defined as their right and interests of the thing ownedRate this question:
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- 41.
THE FOLLOWING IS REAL PROPERTY, A:
- A.
Harvested crop of wheat
- B.
Bearing wall in a single family dwelling
- C.
Built-in refrigerator in a mobile home which is not attached to a foundation
- D.
Trade fixture attached in such a way that can be remove without damage
Correct Answer
B. Bearing wall in a single family dwellingExplanation
A bearing wall is a wall that is fixed and bears the weight of the structure. It is classified as real property. Choice “C” refers to a built-in refrigerator in a mobile home. The mobile home is personal property and the refrigerator attached to it is personal property. Choice “D” states a trade fixture can be removed, such as a meat case in a meat market. Trade fixtures are classified as personal property. Choice “A” refers to a harvested crop in the soil.Rate this question:
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- 42.
A VALID DEED MUST CONTAIN:
- A.
An acknowledgement
- B.
A recital of consideration
- C.
The grantee’s signature
- D.
A granting clause
Correct Answer
D. A granting clauseExplanation
The granting clause is referred to as the action clause and is considered one of the essential elements to a valid deed. Although the deed may contain the choices “A”. “B” and “C”, they are not needed to make the deed valid.Rate this question:
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- 43.
THE PRINCIPAL DIFFERENCE BETWEEN REAL PROPERTY AND PERSONAL PROPERTY IS:
- A.
Mobility
- B.
Value
- C.
Permanence
- D.
Length of life
Correct Answer
A. MobilityExplanation
The principal difference between real property and personal property is mobility. Real property refers to land and any structures permanently attached to it, such as buildings, while personal property refers to movable items that can be easily transported, such as furniture or vehicles. The key distinction is that real property is immovable, while personal property can be moved from one location to another.Rate this question:
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- 44.
WHICH OF THE FOLLOWING DEEDS WOULD LEAST LIKELY CONTAIN IMPLIED COVENANTS BY THE GRANTOR:
- A.
Grant deed
- B.
Warranty deed
- C.
Quitclaim deed
- D.
Gift Deed
Correct Answer
C. Quitclaim deedExplanation
A quitclaim deed contains no warranties, guarantees, or covenants of any type.Rate this question:
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- 45.
THE FOLLOWING IS REAL PROPERTY:
- A.
Planted trees
- B.
Leasehold
- C.
Chattel real
- D.
Debts
Correct Answer
A. Planted treesExplanation
The chattel real is another name for a leasehold indicating it is personal property interest in the real property. Debts such as those evidenced by a note and deed of trust are personal property. Planted tress indicate the tree has been affixed to the land, therefore, it is real property.Rate this question:
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- 46.
WHICH OF THE FOLLOWING IS PERSONAL PROPERTY?
- A.
A sub-lease
- B.
Mineral rights
- C.
Trees in nature
- D.
A fixture
Correct Answer
A. A sub-leaseExplanation
A sublease is personal property (personal property interest)Rate this question:
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- 47.
PERSONAL PROPERTY PROVIDES DIFFICULTIES FOR REAL ESTATE BROKERS BECAUSE IS:
- A.
Could become real property
- B.
Can be hypothecated
- C.
Can be alienated
- D.
All of the above
Correct Answer
D. All of the aboveExplanation
This re-emphasizes a former question that personal property can be hypothecated, alienated and can become real property. It can be placed as security, sold and it can become a fixture when affixed to real propertyRate this question:
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- 48.
A JUDGEMENT THAT HAS BEEN RECORDED WOULD BE:
- A.
An involuntary lien
- B.
A superior lien
- C.
An equitable lien
- D.
An interior lien
Correct Answer
A. An involuntary lienExplanation
A judgment lien is an involuntary lien. If you placed a judgment lien on a person’s property, he certainly did not agree to that lien.Rate this question:
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- 49.
THE BENEFICIARY OF A SECOND TRUST DEED SOLD HIS INTEREST IN THE PROPERTY FOR LESS THAN THE UNPAID BALANCE OF THE NOTE. THIS IS MOST COMMONLY DESCRIBED AS:
- A.
Leveraging
- B.
Liquidating
- C.
Discounting
- D.
Subrogating
Correct Answer
C. DiscountingExplanation
This is a definition of discountingRate this question:
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- 50.
THE INSTRUMENT TO SECURE A LOAN ON PERSONAL PROPERTY IS CALLED A:
- A.
Security agreement
- B.
Bill of sale
- C.
Trust deed
- D.
Bill of exchange
Correct Answer
A. Security agreementExplanation
A security agreement is essentially a time payment contract on e\personal property such as: equipment, appliances, store inventory, etc. The terms of repayment differ among lenders. Like when retailers or distributors borrow large amounts from lenders or when retailers or distributors borrow amounts from lenders to buy merchandise, or stock, or inventory for “flooring” displays (i.e., cars, TV sets, appliances) the lender, for public notice, generally files a copy of the loan contract ( the security agreement) with the county recorder in the country where the personal property is located.Rate this question:
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Current Version
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Mar 22, 2023Quiz Edited by
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Feb 15, 2013Quiz Created by
Zaldyt
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