State Exam Questions 50 questions

Which of the following describes leverage?

• Leverage is the same as cash flow.

• Leverage is the use of borrowed funds to purchase assets or to finance an investment.

• Leverage can only be positive.

• Leverage is when an investor uses his equity to finance an investment.

How is the binder deposit shown on the Closing Disclosure Form?

• Credit to the buyer, debit to the seller

• Credit to the seller only

• Credit to the buyer only

• Debit to the buyer, credit to the seller

What is the status of a sales associates’ license if he/she does not complete the required post licensing education prior to his/her first renewal cycle?

• Involuntary inactive

• Inactive

• Suspended

• Null and void

How many sections are in a township?

• 640

• 36

• 43,560

• 30

Which mortgage clause allows the mortgagee the right to demand the outstanding loan balance plus accrued interest in the event that the borrower sells or transfers any interest in the property without the lenders prior written consent?

• Due-on-sale Clause

• Escape clause

• Acceleration clause

• Estoppel clause

What requirement does not apply regarding dwellings built prior to 1978?

• Sellers and lessors must disclose the presence of known lead-based paint in residential dwellings.

• Sale contracts and leases must include specific lead-based paint warning and disclosure language.

• Buyers and tenants must acknowledge that they have received the warning and disclosure.

• Buyers must have the property inspected for lead-based paint.

Two close friends own a daycare center as joint tenants with right of survivorship. One owner passed away. Who owns the daycare center?

• The owner of the daycare center will be decided by the court.

• The surviving owner will have to wait until the deceased owner’s estate is probated before taking sole ownership of the property.

• If the deceased owner has minor children, the children will receive a remainder estate for the deceased owner’s interest in the daycare center, and the surviving owner will take a life estate.

• The surviving owner becomes sole owner of the daycare center by operation of law.

The subject property is a three-bedroom, two-bath home. A comparable property is a three-bedroom, two and one-half-bath home. An appraiser has determined that the extra half bath is worth about $2,200. What adjustment should the appraiser make?

• Subtract $2,200 from the estimated value of the subject property.

• Subtract $2,200 from the comparable’s transaction price.

• Add $2,200 to the comparable’s transaction price.

• Add $2,200 to the estimated value of the subject property.

Which of the following is incorrect concerning FHA and VA mortgages?

• FHA and VA mortgages are government insured and guaranteed loans and therefore assumable.

• FHA is a government-insured loan.

• VA is a government guaranteed loan and could be accompanied by a funding fee.

• VA is a government insured loan and could be accompanied by an origination fee.

Which of the following liens would take priority?

• A vendor’s lien filed on December 12th 2017

• A mechanic’s lien filed on January 1st 2018

• Property tax lien filed on January 14th 2018

• A special assessment tax filed on January 13th 2018