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?
Situs
How does a creditor who has obtained a judgment get satisfaction against a debtor who will not pay?
Writ of execution
What type of map is MOST useful for describing the terrain of a very hilly lot?
Contour map
A tenant rented an apartment, signing a 15-month lease. After the lease expired, the tenant paid 1 month's rent and got a receipt. What kind of leasehold does the tenant have?
Tenancy at will
A major difference between freehold and nonfreehold estates is that all freehold estates
are of indeterminable duration
Real property can be converted to personal property by
Severance
A lawsuit for inverse condemnation may be brought by
a homeowner
A deed restriction is applicable to the activities of
present and future owners.
If conditions for purchase are included in a deed and these conditions are violated, what is the penalty?
Return of the property to the original owner.
The terms "littoral," "riparian," and "appropriative" refer to
water rights.
Which of the following BEST illustrates the concept and intent of a buffer zone?
Garden apartments located between a single-family residential neighborhood and a shopping center.
A property owner died, having willed his real property to his two daughters. There is still a chance that they could lose the land for a variety of reasons, but it CANNOT be taken through
escheat
An environmental impact statement typically describes the effects of a proposed project on factors such as
public health and safety
All of the following are methods to calculate the reproduction or replacement cost of a building EXCEPT the
straight-line method
Which of the following approaches MOST reliably estimates the sales price of a single-family residence?
Market data
A formal appraisal will ALWAYS be REQUIRED when the
lender wants to sell the mortgage to the secondary market.
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
most homes are larger than the sale home.
An appraiser MUST be licensed or certified to handle Federally related work on residential property valued at more than
$250,000
A competitive market analysis is MOST often used for
setting a listing price
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?
GRM
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
mortgagor
When the sellers are lending part of the purchase price, they may secure the debt either with a deed of trust or a mortgage. For the seller, one benefit of the deed of trust is that
foreclosure is usually simpler and faster
Regulation Z requires that the borrower be fully informed of all of the following EXCEPT
the total interest
The FHA functions MOST like
an insurance company
The purpose of usury laws is to regulate
interest rates charged by lenders
Which of the following statements about discount points is FALSE?
They are computed as a percentage of the selling price
A borrower has defaulted on the mortgage. The mortgage contains an acceleration clause. This permits the lender to
demand immediate payment of the entire note
A loan which requires the borrower to pay interest only until the maturity date (or due date), and then to pay the entire principal on the maturity date, is called a
term loan
An example of a fiduciary relationship is one which exists between the listing broker and
her client
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 seller accepts the offer
One common method for controlling the problems created by conflict of interest in dual representation is
allowing a broker to designate separate salespeople within the company as legal representatives of each of the clients.
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
he is no longer the listing agent
When a principal authorizes an agent to perform a particular act or transaction, it is an example of a
special agency
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?
Agency coupled with an interest.
A broker, acting as agent for the seller, presents an offer to buy from the broker's former college roommate. The broker knows that the buyer will increase the amount of the offer if the seller turns down the offer. When presenting the offer, the broker s
tell the seller that the buyer will pay more
During the listing presentation, the seller questions the amount of commission to be paid and is told
the amount of commission is negotiable
Which of the following events would AUTOMATICALLY cancel a listing agreement?
Property owner's death
Under the terms of their listing contract, the owners may sell their house themselves and pay no commission. If their agent sells it, a commission will be due. What kind of listing contract do the owners have?
Exclusive agency listing
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.
Which of the following is the first action to take when mold problems are found?
Identify and remedy the cause of the problems
Without checking the facts, a broker who is the seller's agent tells a buyer that the property taxes in a particular neighborhood are among the lowest in the area. The buyer relies on the broker's statement and makes an offer on a house in the neighborhoo
misrepresentation
The real estate broker who is listing a house for sale should personally verify
the number of square feet in the building
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
tell potential buyers about the parties
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
require the buyer to acknowledge disclosure of the presence of any known lead paint
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 t
The buyer may sue the seller for specific performance
The document used in a real estate sale that establishes the legal rights of the buyer and seller is the
purchase contract
While an agent is showing a listed property, the seller and the buyer enter into an oral agreement for the purchase of the home. If a dispute over the terms arises later, the agreement may be unenforceable because
the agreement does not comply with the Statute of Frauds
A written agreement in which a purchaser agrees to buy and a seller agrees to sell is called
a contract
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
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 foun
Both contracts are valid
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
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
impossibility of performance.
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
an option contract
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.
For Federal income tax purposes, which of the following are costs of homeownership that may be deducted from gross income?
Mortgage loan interest, local property taxes, mortgage loan origination fees
A judgment has been properly recorded. Any subsequent purchasers, whether they have actually examined the record or not, have been given
constructive notice
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.
Under a land contract for deed, who retains fee ownership of the property?
Vendor
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
The escrow officer or closing agent MUST give information regarding the sales price and seller's social security number to
IRS
A managing broker can be held responsible for
all real estate activities of salespersons
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
prepayment penalties and rebates
The statement "this property has the most beautiful views in the neighborhood" is an example of
puffing
A charge of violation of Federal Fair Housing laws can be heard by an administrative law judge within the Department of Housing and Urban Development (HUD) or by a Federal district court judge in Federal court. The advantage of a Federal court hearing to
there is no dollar limit on damages paid
When is racial discrimination in the rental of rooms or apartments permitted?
Under no circumstances.
An equal housing opportunity notice MUST be
displayed in the brokerage office.
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
suggest the buyer ask a lawyer to furnish the wording
Antitrust laws prohibit competing brokers from all of the following EXCEPT
receiving compensation from both the buyer and the seller
An agent shows a home to a couple and mentions that it has a lovely fireplace in the living room. After buying the home, the buyers and agent discover that the brick fireplace is just a decorative fireplace and is not "wood burning." Which of the followin
E & O coverage.
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?
$110,753
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.)
$1,125
If a borrower can afford to make monthly principal and interest payments of $1,000 and the lender will make a 30-year loan at 8-1/2%, how large a loan (rounded to the nearest $100) can this buyer afford? (BE SURE TO USE THE AMORTIZATION TABLE.)
$130,000
On January 15, a seller paid $960 in annual property tax for the current calendar year. A buyer is purchasing the house with the closing set for March 1. What will be the seller's credit for the property taxes already paid if the buyer pays for the day of
$800
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
$810.60
Too much leverage may result in
negative cash flow
A major reason for buying and owning a condominium rather than a detached single-family home is that
a condominium tends to be more affordable
Ownership of common stock in a corporation gives
an interest that is classified as personal property
A homeowner is willing to let his neighbor park an RV in his backyard. He does NOT want to make the permission permanent in case he dislikes others who might move next door in the future. What should he give his neighbor?
A license
When someone has living heirs but dies without leaving a will, the estate is distributed according to the
statute of descent.
Earnest money should be deposited into a trust account
in a timely manner, according to state laws
A property is encumbered by a first mortgage of $60,000 and a second mortgage of $23,500. The property has just been sold at a foreclosure auction to a speculating investor for $88,000. Assume that all costs of the foreclosure sale are included in these b
The second mortgagee receives nothing unless he forced the foreclosure auction.
A homeowner has negotiated with a neighbor to obtain the permanent right to pass over the northern part of the neighbor's land to gain access to the river. He pays the neighbor $9,000 for the right of access and receives a deed. This is an easement
appurtenant
The main difference between tenancy in common and joint tenancy is that with tenancy in common, when a co-owner dies,
his undivided interest passes to his heirs.
Joint tenancy
right
An estate owned by two or more people whith equal and undivided possession. Both must purchase at same time, right of suvivorship possible.
Tenancy in common
Two or more owners with NO RIGHT of survivorship
Three people buy a house as tenants in common. Subsequently, two of the owners want to sell, but the third discourages each potential purchaser. The two owners who wish to sell the house can
file an action for partition against the third owner
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 di
prior appropriation
Legal descriptions using the government survey system are NOT generally used in
the original 13 states
A landowner wishes to build a neighborhood grocery store on a busy street in an area zoned for residential use. Which of the following would MOST likely be used to obtain permission for this store?
Conditional use permit or zoning variance.
Building codes are
ordinances that specify construction standards
A deed restriction is applicable to the activities of
all owners, present and future
An escheat occurs when
a property owner dies without heirs or a valid will
An Environmental Impact Statement (EIS)
projects the impact on the environment of a proposed project
A couple owns an older home in a neighborhood that is becoming a commercial area. Because of the change in the use of the land, the couple can expect the value of their parcel to increase at some future time. This is an example of the principle of
anticipation
A competitive market analysis takes into consideration
square footage of the subject property
If all other factors are equal, in which location is a parking lot likely to bring the highest sales price?
Business district zoned for a six-story office building
When preparing a market data estimate of value, which of the following categories of adjustment is NOT essential?
The original cost of the building
A prospective seller asks a salesperson to recommend a listing price for a property. The salesperson should suggest
a competitive market analysis to determine the property's value
Federal Truth-in-Lending laws are also known as
Regulation Z
In helping a buyer to select a lender, if the buyer believes he has good credit and his income is documentable as a salary and by tax returns, the licensee might recommend a mortgage banker, instead of a mortgage broker, for all of the following reasons E
more variety of loan programs available
Which of the following consumers would be able to derive the most benefit from a reverse mortgage?
A couple in their late 60?s who need to tap their home equity to help cover their expenses but do not want to sell their house
An agency relationship between a property owner and a property manager is usually created by
a management agreement
Even after an offer has been accepted and is binding, the buyer and seller may still choose to sign mutual release papers rather than proceed to closing. Which of the following circumstances would NOT give either party a justifiable reason to insist on a
The buyer finds a better property for better terms
Which of the following real estate contracts is a service contract?
a listing agreement
To what party or parties does the broker owe the fiduciary duty of care?
the party or parties employing the broker
Under the common law of agency, licensees owe the broker with whom they are associated all of the following duties EXCEPT
indemnification
A real estate salesperson is representing only the buyer in a transaction. Which of the following actions would be a violation of the salesperson's agency duties to the client?
disclosing the highest price the buyer is willing to pay
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 realty firm has just entered into an agreement to represent a home builder in the sale of a new subdivision. The firm has located several potential buyers and five homes have been sold to purchasers that the firm's agents have contacted. The realty firm
the builder
State laws differ on whether a buyer is entitled to know about
a suicide that occurred in the house last year
Unrepresented buyers ask the licensee who listed the home whether they should order a property inspection as a part of their due diligence for the purchase of the home. Which of the following would be the most appropriate way for the listing agent to resp
If you feel it is in your best interest, please do so.
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,
require the buyer to acknowledge disclosure of the presence of any known lead paint
A seller's statement in a property disclosure document means
the owner is disclosing known latent defects.
A licensee is listing a property in a known flood plain. The seller flatly denies that the structure and the property have ever been flooded. What is the licensee required to do in this situation?
Inform the seller of the legal obligation to disclose facts regarding flood plains
What is the duration of a home warranty's coverage?
as disclosed in the contract that offers the warranty
What critical aspect of the property inspection process MUST licensees convey to prospective buyers?
Need for inspections to be completed within the time stated in the 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
an option contract
When a listing broker is preparing an Offer to Purchase for a buyer customer, contingencies involving inspections or approval by a third party should
have short deadlines
In an exclusive right-to-sell listing, an owner lists the property for sale with how many brokers?
One
A licensee has an agency representation agreement with a buyer. When showing another company's listing, what obligation does the licensee have to the seller and the listing broker at the other company?
Disclose the agency relationship when arranging the showing and disclose material information about the buyer if presenting an offer
If leased premises become unusable for the purpose state in the lease, the tenant may have the right to abandon the premises. This action is called
constructive eviction
A company agrees to lease a property to be used as a gambling casino. State laws prohibit gambling. This particular contract would be legally defined as
void
A broker has signed a listing contract for the sale of a home. Which of the following could make this contract voidable?
The seller is heavily under the influence of alcohol at the time of signing
An example of a contract terminated due to inability to perform would be one in which the
seller had contracted for sale of the entire property without the knowledge or consent of the other joint tenant
A salesperson in a branch office is sued for damages by a buyer after the salesperson misrepresents a property. Who has the ultimate responsibility for the salesperson's actions?
the supervising broker
A minority couple come to a salesperson looking for a house. The salesperson has some properties for which the couple qualify but avoids showing or mentioning these listings. Instead, the salesperson shows only properties in low-priced and integrated neig
steering
Which of the following services can be provided by a real estate salesperson?
competitive market analyses
Salesperson Susan was at the local coffee shop with some agents from other offices. The subject of commissions came up, and agents began to compare their commission rates. Susan should
advise her friends this could constitute a violation of Sherman Antitrust Act.
Failure of a real estate agent to comply with Fair Housing practices is punishable by
license revocation and criminal prosecution.
Under the Federal Fair Housing Law, which of the following is considered discriminatory advertising?
Catholics preferred.
Which restrictive covenant would be considered illegal?
A covenant that restricts selected parcels within a defined subdivision.
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 ma
An individual entrepreneur who owns several apartment buildings.
MOST closed real estate transactions should be reported to the IRS. REQUIRED information includes seller name(s) and social security number(s) and
the sale price.
An exception to title insurance coverage is
defects that clearly appear in the title search.
To be valid, every deed must
be executed by the grantor.
In MOST states, foreclosed property is sold through
public auction.