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WorksheetsDifficulty Level 3
Total questions: 80
Worksheet time: 40mins
An executory contract met the four requirements of a valid contract, but the contract could not be legally enforced. The reason was
the statute of frauds.
the statute of limitations.
the parole evidence rule.
it was unilateral.
On a real estate closing statement, prepaid rent is always a
debit to the buyer.
debit to the seller.
credit to the seller.
balance factor.
Meridians are of concern to
an appraiser.
a mortgage broker.
a surveyor.
a property manager.
To be eligible for a homeowner's capital gains exclusion,
the home must be the principal or secondary residence.
the homeowner must not have previously taken the exclusion.
five-year ownership is required.
two-year ownership is required.
A grantor is a lessee in the case of a
sandwich lease.
sale-leaseback.
gross lease.
percentage lease.
Subleasing can be described as being
an assignment.
greater than an assignment.
a hypothecation.
less than an assignment.
Death of a party to an agreement voids the agreement when the agreement is
a purchase contract.
a land contract.
an option to purchase.
an exclusive-right-to-sell listing.
L took title to property under the name ML. When L sold the property, L signed the deed as KL, grantor. The buyer has
a cloud on the title.
color of title only.
an exception on the deed.
clean title.
An $1,800 loan is repaid with $600 payments every six months plus 9% annual interest. What is the total interest paid?
$81
$162
$216
$243
To what loan type would obligatory advances apply?
shared appreciation mortgage
construction loan
growing equity mortgage
participation mortgage
On October 1, a buyer mailed a purchase offer to a seller. On October 2, the man mailed a revocation of the offer to the seller. On October 3, the seller received the offer, and on October 4 mailed the acceptance to the buyer. On October 5, the seller received the buyer's revocation of the offer. What are the rights of the parties?
The seller's acceptance was not effective because it was mailed after the revocation, so the offer was revoked.
If the buyer received the seller's acceptance before the seller received the revocation, then a legal contract was formed.
The buyer is obligated because the buyer's offer must remain open for a reasonable period of time.
Because acceptance takes place upon mailing and revocation is not effective until received, a valid contract was formed.
A woman received a property by descent. Therefore, she received the property by
escheat.
dedication.
inheritance.
adverse use.
When parties own property as tenants in common, each owner
must be mentioned in the same instrument (deed or will).
owns an individual divided share of the property.
must have acquired rights simultaneously with the other owner(s).
has ownership of no specific part of the property.
What effect do rising interest rates have on the value of a commercial property that is on a long-term lease at a fixed rent?
They would result in the use of a lower capitalization rate.
They would increase the gross multiplier.
They would lower the property's value.
They would require that the property be appraised using the cost approach to value.
The Real Estate Settlement Procedures Act applies to
home equity loans.
purchase loans on one-to-four residential unit buildings.
loans for one-to-six residential unit buildings.
residential, commercial, and industrial financine.
A parcel of land sold for $328,000, which was 82% of its list price. What was it listed at?
$268,960
$387,040
$400,000
$437,000
A broker listed a property at $92,500 with $30,000 down and the balance at 7% interest. The broker brought in a full-price cash offer that the owner rejected. The broker is entitled to
the full commission.
half the commission.
the commission split agreed on.
nothing.
A residential lease provided that the landlord supply the water. The water to the building was cut off because the landlord had not paid the water bill. The tenant can leave the premises with no further lease obligations based on
condemnation.
surrender.
constructive eviction.
sufferance.
Under RESPA, a lender is required to provide the purchaser with a
good-faith estimate of closing costs.
home protection warranty.
mortgage insurance property.
certified appraisal.
A legal process used to clear a title is
a quitclaim deed.
an action to quiet title.
an action in personam.
a writ of mandamus.
A $7,000 investment in a straight mortgage earns $210 in three months. What is the annual percentage return on the investment?
9%
11%
12%
14%
The term menace is associated with
restrictive covenants.
contracts.
easements.
financing.
A contractor agreed to reduce the contract amount by $100 for every day completion of a home was delayed beyond a stated due date. This is an example of
liquidated damages.
compensatory damages.
punitive damages.
an illegal agreement.
Because a woman mistakenly measured from the wrong surveyor's stake, she built a fishing cabin on a neighbor's land. What are the rights of the parties?
The neighbor would take title to the cabin by accession.
The woman has the right to buy the land at its tax-appraised value.
The woman is allowed to remove the improvements, provided any damage to the property is repaired.
The neighbor retains title to the land, but the woman is allowed to use the cabin.
A one acre parcel sold for $58,900. The price per square foot was approximately
$0.73
$0.94
$1.22
$1.35
Which of the following does the CAN-SPAM Act of 2003 NOT require?
inclusion of an "opt-out" mechanism
a subject line indicating that the email is an advertisement
written permission to send the message
the sender's physical location
The broker's authority under a listing includes
everything necessary to conclude a sale.
an act performed in the owner's best interest.
the customary authority of a general agent.
only the authority granted or implied.
What law allows personal information about a neighbor to be available to a prospective purchaser?
Americans with Disabilities Act
Megan's Law
1988 Fair Housing Amendments Act
Civil Rights Act of 1968
When using the income approach, an appraise would consider
accrued depreciation.
original cost to build.
market changes since comparable sales.
capitalization rate.
An example of functional obsolescence is
a building that, because of wear and tear, is no longer suitable for its intended purpose.
a large commercial structure with inadequate onsite parking.
an encroaching use.
a political change that has reduced value.
The requirement that buyers be made aware of the importance of a home inspection applies to
all loans by federally insured lenders.
transactions subject to PMI.
transactions involving FHA financing.
all loans subject to RESPA.
The maximum civil penalty for the first discriminatory act in violation of the Americans with Disabilities Act is
$5,000
$25,000
$45,000
$55,000
All of the rights of ownership, including the rights of ownership including the rights to use, encumber, transfer, and exclude, are called
emblements of title.
the bundle of rights.
chattels real.
fructus naturales.
Because a property manager expects residential rental demand to exceed the rental supply within a short period of time, the manager wants new leases to
reflect the CPI.
be based on percentage of the gross.
be for relatively short terms.
obligate the tenant to a long-term commitment.
By calling in a loan, the lender
gives a new loan.
accelerates loan payments.
shortens the loan term.
changes the interest rate.
A right of first refusal differs from an option in that the
holder of the option right must exercise it.
right of first refusal sets the exact price and terms.
right of first refusal can be exercised only if the owner decides to sell or lease.
right of first refusal is for leasing only, while the option is for purchase.
A woman agreed in writing to make a gift of her home to her friend. The agreement could be described as what type of contract?
valid
void
voidable
implied
As part of a purchase agreement, the seller agreed to complete a roof repair before closing. The seller now refuses to complete the repair. what rights does the buyer have?
reformation
accord and satisfaction
rescission
novation
In the acceptance of an offer, the offeree stated, "I accept the $1,950,000 purchase price, except I decline to remove the wallpaper in the entry as required in the offer. You are likely unaware that the paper is a one-of-a-kind design by Andy Warhol, so I am certain you won't want it removed." As to this acceptance
it is valid as it is substantially in accordance with the offer.
the acceptance was really a counteroffer.
if the owner sent a withdrawal of the exception, there is a binding contract.
the acceptance was actually a novation.
A listing stated "14 acres MOL." What does MOL stand for?
measurement of land
measurement owner's liability
more or less
measured on legal
A man owes $14,000 on a credit card bearing interest at 18%. The man is called to active duty in the U.S. Army Reserve. He has the right to
disregard credit payments until active service ends.
have the interest rate reduced to 6%.
have the loan expunged.
receive credit on principal for all interest paid.
An option does NOT become a binding contract on both parties until the
consideration is paid.
option is signed by both parties.
option period expires.
option is exercised.
The Uniform Residential Landlord and Tenant Act requires that the landlord inform the tenant about
the basis of any rent increase.
any encumbrances against the property.
the name and addresses where notices should be sent.
any pending sale of the premises.
Which of the following acts of a listing agent is proper conduct?
Remaining silent about the plumbing problem when directed by the seller to not disclose the information to the buyer.
Telling a prospective buyer about a recent violent death on the premises.
Informing a prospective buyer to lower an offer because the seller would accept less.
Volunteering information to prospective buyers about the racial composition of the area.
The activities of Fannie Mae in the secondary mortgage market serve to
create a market for existing home loans.
encourage lenders to make commercial loans.
insure or guarantee home loans.
make construction standards uniform.
A salesperson, working for a broker, was able to complete a complex transaction that benefited bot the buyer and the seller. The parties wanted to show their appreciation compensation. The salesperson can receive this compensation from the
seller.
buyer.
buyer and seller equally.
broker.
What type of mortgage has compound interest?
straight
bimonthly
reverse annuity
amortized
A prospective office manager is offered a salary of $2,000 per month plus 5% of gross commissions paid to the firm. If the manager wants a minimum of $60,000 per year, average monthly gross office commissions must be
$60,000
$64,000
$100,000
$120,000
When title is conveyed to two persons not married to each other and no mention is made of how they are to take title, ownership is presumed to be as
community property
tenants in common
joint tenants
tenants in the entirety
One month after receiving a three-month option to purchase, the optionee notified the optionor that the option was being revoked. Which of the following is TRUE?
The option is revoked, and the optionee is not entitled to any refund or consideration.
The optionee is entitled to full refund of consideration paid.
The optionee is entitled to two-thirds of the consideration paid.
The option remains in effect.
An offer is terminated by
rejection by the offeror.
rejection by the offeree.
revocation by the offeree.
request for an extension by the offeree.
A woman is in the National Guard and is on duty overseas. She receives notice that her home mortgage will be foreclosed. The woman's rights include
the right to appeal any foreclosure.
staying the foreclosure until 90 days after the end of active service.
the right to have interest forgiven.
a one-year period of redemption after foreclosure.
The process of warehousing refers to
the loans being used as collateral for other loans.
servicing mortgages for other owners.
the process of assemblage.
nonconforming loans.
On a closing statement, seller financing is shown
as a prorated factor.
as a credit to the buyer and a debit to the seller.
as a debit to the buyer and a credit to the seller.
not at all.
Which of the following statements regarding agency is TRUE?
Death of the agent terminates the agency.
Any agency can be terminated by repudiation by principal of agent.
Termination of an agency relieves the agent of confidentiality duties.
An agent can assign all interest in the agency to another agent.
A permanent loan that replaces a construction loan is a
takeout loan.
purchase money loan.
packaged loan.
participation loan.
A property owner paid $112,000 for a lot and spent $720,000 building an apartment building. He has since fully depreciated the improvements. The property owner has an adjusted cost basis of
$112,000.
$318,000.
$430,500.
$1,050,500.
Instruments that could contain subordination clauses are
deeds.
mortgages.
leases.
options.
Property of an owner was seized before a judgment was rendered. The seizure is
an execution of the judgment.
a sheriff's sale.
an attachment.
a lis pendens.
A, B, C, and D receive a farm from their parents in joint tenancy. D deeds her share to E, and B dies. How is the title held?
A and C as joint tenants, and B's heirs and E as tenants in common
A, C, and E as tenants in common
A and C as joint tenants, with E as tenant in common
A, C, B's heirs, and E as tenants in common
Lowering interest rates is expected to result in
lower sale prices.
more buyers entering the market.
a reduction in sales activity.
higher capitalization rates.
A monthly amortized loan payment differs from the prior month's payment in that the prior month's payment
was a greater amount.
was a lesser amount.
applied more money to principal.
applied more money to interest.
A new runway at an airport put a subdivision under the aircraft-landing pattern, which resulted in a lowering of values. This is considered
functional obsolescence.
external obsolescence.
physical deterioration.
inverse condemnation.
A property manager leased a store for three years. The first year's rent was $1,000 per month and was to increase 10% each year thereafter. The broker received 7% commission for the first year, 5% for the second year, and 3% for the balance of the lease. The total commission earned was
$840.00
$1,613.00
$1,936.00
$2,784.00
A loan that provides for future advances is
an open-end loan.
a shared appreciation loan.
a growing equity mortgage.
a blanket mortgage.
A broker made one of the salespeople the sole agent for an owner. That salesperson is considered
a facilitator.
a dual agent.
the designated agent.
a cooperating agent.
Disclosure must be made to a purchaser of
the true reason the property is being sold.
any serious health problem of prior occupants.
any known neighborhood nuisance problem.
actual annual utility costs.
A conveyance from J to K for life and then to L if L is still alive gives L a
reversionary interest.
fee simple.
contingent remainder interest.
vested remainder interest.
Which of the following hazardous substances is associated with electrical equipment?
asbestos
radon
PCBs
lead
What is a characteristic of both FHA and VA loans?
absence of prepayment penalties
absence of loan points
requirement of mortgage insurance
requirement of a certificate of reasonable value
Which of the following statements regarding the CAN-SPAM Act of 2003 is TRUE?
I. Solicitation emails must contain an opt-out mechanism.
II. Solicitation emails must include a functioning return email address.
III. Written permission is required to send a solicitation email.
IV. Solicitation emails may only be sent within three months of an inquiry
I only
I and II only
I, II, and III only
I, II, III, and IV
An owner may be required to make readily achievable modifications to premises because of
RESPA.
the Americans with Disabilities Act.
the 1988 Fair Housing Amendments Act.
the Civil Rights Act of 1968,
An income property is valued at 800,000 by an appraiser who used a capitalization rate of 8%. If the appraiser had used a capitalization rate of 6.5%, what is the appraiser's estimate of property value?
$443,000
$470,000
$650,000
$984,615
An example of a stigmatized property is a house
condemned by the city as unfit for habitation.
in an undesirable neighborhood.
with numerous physical defects.
regarded by the community as being unlucky.
The terms good, valuable, and legal refer to
income.
consideration.
commission.
capacity.
A 6-foot fence is to be build around all four sides of an 80-by-120-foot rectangular lot. The cost for the fence will be $2.50 per linear foot for labor plus $.042 per square foot for material. What is the total cost of the fence?
$1,008
$1,168
$2,008
$2,168
A buyer paid one discount point to obtain a home loan. The point paid by the buyer
is tax deductible by the buyer as interest.
is added to the buyer's cost basis.
is taxable as income to the buyer.
may be depreciated by the buyer.
At closing, which of the following is customarily a debit to the seller?
loan points
listing broker commission
lender's extended coverage policy of title insurance
prepaid property taxes
Before the expiration of an exclusive listing, the owner terminated the listing without cause. Based on the owner's action, the broker
is entitled to specific performance.
is entitled to damages.
can still earn a commission if a buyer can be located before the expiration date on the listing.
has no recourse against the owner because listings can be terminated at will.
The American Taxpayer Relief Act increased the capital gains tax for high-income taxpayers to
15%.
20%.
25%.
28%.
