At the time of harvest, crops that require annual planting are generally considered to be
personal property
An owner hired a construction company to build a swimming pool at a new home. The owner failed to pay the bill once the work was completed and the construction company filed a lien to obtain payment of the debt. The encumbrance created is called
A mechanic's lien
In every real estate transaction, a legal description of the real estate MUST appear in the transaction documents. What kind of legal description should be used in MOST transactions?
The same one used in prior transfers of the parcel, verified by a surveyor
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
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
Tenants at sufferance
Timeshare ownership programs MOST often use which of the following ownership forms?
Tenancy in common
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
A lawsuit for inverse condemnation may be brought by
a homeowner
The PRIMARY purpose of zoning ordinances is to
implement a local master plan
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
An environmental impact statement typically describes the effects of a proposed project on factors such as
Public health and safety
An escheat occurs when
a property owner dies without heirs or a valid will
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. Either riparian and littoral rights are automatically conveyed with proper
water is scarce
A deed restriction is applicable to the activities of
all owners, present and future
All of the following are methods to calculate the reproduction or replacement cost of a building EXCEPT the
straight-line method
A commercial property lost value because a recently constructed highway moved traffic away from the property. This is an example of
economic or external obsolescence
Which of the following approaches MOST reliably estimates the sales price of a single-family residence?
Market data
A competitive market analysis is MOST often used for
setting a listing price
Parcels A, B, and C are located side by side and owned by three different owners. A is worth $20,000, B is worth $27,000, and C is worth $16,000 for a total of $63,000. A developer believes that if all three can be purchased, the larger parcel would be wo
Plottage
An appraiser MUST be licensed or certified to handle Federally related work on residential property valued at more than
$250,000
Which of the following statements about discount points is FALSE?
They are computed as a percentage of the selling price
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
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
The FHA functions MOST like
an insurance company
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
Usury laws were enacted to protect the
borrower
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
Regulation Z addresses all of the following issues EXCEPT
usury
When a principal authorizes an agent to perform a particular act or transaction, it is an example of a
special agency
The real estate licensee who accepts an undisclosed fee for referring a buyer to a specific title company may be in violation of
RESPA
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
An example of a fiduciary relationship is one which exists between the listing broker and
her client
An agency relationship between a property owner and a property manager is usually created by
a management agreement
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 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
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
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
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
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
The real estate broker who is listing a house for sale should personally verify
the number of square feet in the building
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
Seller
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
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
An agreement to purchase that has NOT yet closed is
an executory 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
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 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
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
When one of the parties to an agreement fails to perform one of its conditions, that contract is deemed to be
breached
An example of a contract terminated due to inability to perform would be one in which the
seller had contracted the sale of the entire property without the knowledge or consent of the other joint tenant
A written agreement in which a purchaser agrees to buy and a seller agrees to sell is called
a contract
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
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
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
A judgment has been properly recorded. Any subsequent purchasers, whether they have actually examined the record or not, have been given
constructive notice
When someone has living heirs but dies without leaving a will, the estate is distributed according to the
statute of descent
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.
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
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
Antitrust laws prohibit competing brokers from all of the following EXCEPT
receiving compensation from both the buyer and the seller
Errors and Omissions insurance covers the broker for
unintentional misrepresentations
A landlord may legally refuse to rent to a prospective tenant if the tenant
has ever been convicted of selling illegal drugs
The practice of inducing panic selling in a neighborhood for financial gain is
blockbusting
A managing broker can be held responsible for
all real estate activities of salespersons
A broker says, while showing a rural property, "This property has the world's purest well water." This would be an example of
an expression of opinion, or puffing, which could lead to misrepresentation
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
Earnest money should be deposited into a trust account
in a timely manner, according to state laws
Why was the Jones vs. Mayer decision of 1968 important?
By upholding the Civil Rights Act of 1866, the Supreme Court removed all exceptions to racial discrimination in housing.
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
A buyer is getting a fully amortized loan for $220,000. The bank will give the buyer the loan for 15 years at 5 1/2% or for 30 years at 6 1/2%. To the nearest cent, what is the difference between the monthly payments for these two loans? (BE SURE TO USE T
$409.20
If you own a building free and clear that is worth $115,000 and want an annual return of 12%, what net income is needed each month?
$1,150
A lender will make an 80% loan-to-value loan on a property that is appraised for $72,250 and sells for $73,500. How much can the purchaser borrow?
$57,800
The sale of a home closed on October 16. Homeowners association fees of $500 for the current calendar year had already been paid. How much does the buyer owe the seller for these fees if the buyer pays for the day of closing? Use a 30-day month and a 360-
$104.17
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
Too much leverage may result in
negative cash flow
Ownership of common stock in a corporation gives
an interest that is classified as personal property