Worksheets(Do Last) School Exam Study Guide 1
Total questions: 100
Worksheet time: 25hrs 0mins
An appropriation of land for some public use made by the owner and accepted for such use by or on behalf of the public, such as streets in platted subdivision, is called
an easement
dedication
a public grant
condemnation
The buyer should keep the original recorded deed because
it is only evidence of title
if lost, the buyer loses title
it is needed to transfer title
it is proof of title
Which is TRUE of first refusal given to a prospective buyer?
The seller must sell if the buyers decides to buy
The seller must accept the buyer's offer
The buyer must buy if the seller decides to sell
The seller must offer the property to the prospective buyer if the seller decides to sell
Compensation often follows a court action relating to a
trustee's sale
police power
condemnation
quiet title
The joint tenancy creation acronym PITI stands for
principal, interest, taxes, title, and time
principal, income, taxes, and title
possession, interest, time, and title
possession, income, time, and title
Replacement cost is BEST described as the
original cost adjusted for inflation
cost of building a property of equivalent utility with modern materials
cost of purchasing an equally desirable property
cost of building an exact replica of the subject
The taxes on a house for the fiscal year July 1 to June 30 are $900, to be paid in advance. If the house is sold February 15, what is the amount of the prepaid portion owed back to the seller?
$56.25
$100.00
$337.50
$562.50
Highest and best use is NOT concerned with
net yield to owner
utility of surrounding area
relationship to regional development
interest rate on investment loans
A real estate broker enters a neighborhood bordering a blighted area and, in good faith, offers owners a reduced commission rate if they list with the firm and the property is sold within 180 days. There is no mention of the blighted area. This practice is
blockbusting
steering
redlining
acceptable
A broker promises to give a $20,000 bonus to the first salesperson who sells 20 houses. What type of contract is this?
Unilateral
Executed
Bilateral
Nominal
When buying an investment piece of real estate, the buyer should obtain
flood insurance
estoppel letter from tenants
reduction certificate
tax withholding statement
Interest rates jumped to 7.5%, without lender approval, and an owner decided to sell a home and allow a buyer to assume the balance of a 5% conventional mortgage. If the lender had a "due-on-sale" clause, then the entire balance would become due on the sale to the new buyer. What is the name of the mortgage clause that describes this procedure?
Stepping up
Rushing
Alienation
Estrangement
A court-issued order to sell property to satisfy a judgment is called
an easement
an encumbrance
an attachment
a writ of execution
The main purpose of a metes-and-bounds description is to
allow a surveyor to walk the boundaries
assist the assessor in determining land value
help an owner determine a fence line
eliminate the rectangular survey system
A landlord owner cannot deduct against rental income
loan interest
accelerated depreciation
repairs
condominium maintenance fees
During the term of the lease, whose property is the security deposit?
Lessor
Mortgagee
Lessee
Property Manager
The Truth in Lending Act is designed to
limit the amount of interest charged the borrower
limit the amount of closing costs
disclose total closing costs
disclose loan finance costs
What percentage profit is made on a sale if the selling price is $90,000 and the purchase price is $75,000?
12%
15%
20%
120%
Which of these acts on the part of a real estate broker would NOT constitute steering and thus be prohibited under be prohibited under the Fair Housing Act?
Directing a prospective buyer of one minority group to work only with a salesperson of the same minority group and to look at areas dominated by that minority group
Directing a member of one minority group away from properties located in areas dominated by other races
Referring a member of one minority group to properties located only in areas dominated by members of the same group
Directing a minority buyer to an expensive subdivision
What factor might be classified as functional obsolescence?
The exterior needs painting
The property fronts on a busy expressway
The property has a single-car garage
The neighborhood is 50 years
Which of these types of property is NOT normally real property?
Water rights
Appurtenances
Air space rights
Furniture
A broker usually pays a salesperson a share of the commission received by the broker from a sale when
the salesperson submits a sufficient earnest money deposit to the broker
the sale is consummated and title is transferred to the purchaser
there is a valid and binding offer and acceptance
the contract and earnest money are placed in escrow
Which of the following is an essential element of any contract?
Written instrument
Words of conveyance
Consideration
Acknowledgment
A minority group is moving into an area immediately adjacent to an old subdivision. A brokerage offers in good faith to list homes in the subdivision at a lower-than-usual rate if the owners list within 45 days. There is no mention of race. Which statement is TRUE?
The rboker's license can be revoked
This is blockbusting
Such practice is not illegal
Brokers cannot lower their standard rate of commission
A residence located in an area where there are factories and plants, and where there is much smoke and dust, is suffering from
physical depreciation
external obsolescence
residential regression
accrued depreciation
A condominium project restricts the type of window air-conditioning units that can be installed. In what document would this restriction MOST likely be found?
Bylaws
Master deed
Apartment deed
Articles on incoporation
The phrase "time is of the essence" is MOST likely to be stated or implied in which contract?
Exclusive authorization and right to sell
Real estate receipt for deposit
Grant deed
Option
A real estate salesperson might lawfully accept an extra commission in a difficult sale from
an appreciative seller
a thankful buyer
a broker-employer
a mortgage lender
A listing broker inspects the property and discovers a shared driveway. The listing broker should reveal this fact on which of these contracts?
The listing
The offer to purchase
The broker's agreement to split commission
All of these contracts
A salesperson receives 50% of all commissions. The salesperson sells 160 acres for $750 per acre. The commission rates are 10% on the first $50,000, 8% on the next $25,000, and 6% thereafter. What is the salesperson's commission?
$752
$4,850
$7,700
$9,700
A broker helped buyers prepare an offer to purchase a three-bedroom home. The buyers asked the broker whether that should hold title as join tenants. The broker should advise them to
take title as tenants by the entirety
consult a title company
take title as tenants in common
consult an attorney
In distinguishing between an attachment lien and a judgment lien,
an attachment is made after judgment
an attachment lien applies to all property of the debtor
a judgment lien is a general lien
a judgment lien can be obtained prior to a court decision
In 1989, what legislation required the use of either licensed or certified appraisers for federally related financed loans?
HUD
FIRREA
ECOA
FNMA
In preparing the mortgage document, one should note that the
mortgagor is not named in the mortgage
mortgagee is not named in the mortgage
mortgage does not sign the mortgage
mortgagee does not sign the mortgage
Where two cousins hold title to property, one having a one-third interest and the other having two-thirds interest, title is held in
joint tenancy
tenancy by the entirety
tenancy in common
tenancy in severalty
A $120,000 home carries fire insurance on 80% of it's value. If the rate is $3.50 per $1,000 of insured value for three-year policy what is the annual premium?
$112
$168
$224
$336
For which of the following is the escrow agent responsible?
To make certain that all encumbrances on the tile are removed prior to closing
To make certain that the buyer is in possession of the property prior to closing
To conduct a search of public records
To disburse all funds according to the agreement of the parties
tenancy in common is a form of
survivorship
ownership
probate
partition
As agent of the seller, a real estate broker is usually NOT authorized to
bind the principal under a sales contract
advertise the listed property
place a For Sale sign on the listed property
cooperate with other brokers to effect a sale
A property was purchased for $87,000. The buyers got an 80% loan-to-value first mortgage. They gave the sellers a 10% second mortgage at 11.5% interest only for five years. What was the balloon payment?
$5,003
$8,617
$8,700
$8,783
Under the Truth in Lending Act, disclosures of which of the following will trigger disclosure of other credit terms?
10% down payment
10% annual percentage rate
No down payment
Reasonable financing available
Which of the following is a triggering term?
The amount or percentage of any down payment: For example, “20% down” or “70% financing.”
The number of payments: For example, “monthly payments of less than $100,” “pay just 15% each month,” or “$12 per month.”
The period of repayment: For example, “10 years to pay off,” “24 months to pay down,” or “5-year loans available.”
The amount of any payment: For example, “you’ll make just 24 small payments” or “36 monthly payments and you’re all paid up.”
The amount of any finance charge: For example, “financing costs less than $500,” “less than $200 interest,” or “$250 financing.”
Real property taxes are determined
on an ad valorem basis
according to the # of occutpants
by the LTV ratio
by the duration on ownership
A landlord who wants to regain possession of the leased premise gives notice to
enjoin
attach
quit
relinquish
A clause in a sales contract or a mortgage that requires punctual performance is described as
specific performance
time is of the essence
escalation
subrogation
A veteran of the Vietnam War applies for a VA loan. Which of the following statements about VA financing is true?
The veteran is prohibited from using a second mortgage
The veteran can use the loan to purchase an investment summer vacation rental property
The VA will guarantee the lender against loss up to certain amounts
The VA will loan the money directly to the veteran
A buyer will buy a particular property only if the zoning can be changed. The buyer could put in an offer with a $5,000 earnest money deposit contingent on obtaining the zoning or she could negotiate a $3,000 option. Which is true if the zoning cannot be changed?
Under an option, the buyer is entitled to all the option money.
under a contingency and a sales contract, the buyer forfeits all the earnest money deposit
the money will be returned no matter which method is chosen by the buyer.
if the contingency and the offer is not met, the buyer will obtain a refund.
A property manager asks a real estate broker to find partners for a venture that he will manage. The broker should
contact the Attorney General
check out the application of state and federal Securities laws
refuse to help
charge a flat fee
Which of the following is a source of primary mortgage funds?
Federal Deposit Insurance Corporation
Fannie Mae
Federal Home Loan Bank
Federal Savings and Loan Association
A farm was listed by seller. An interested buyer paid $5,000 for a 60-day option to purchase the farm for $85,000. after 45 days, the buyer submitted and offered to purchase the farm for $75,000. Which is true?
the option is terminated
the seller must accept the subsequent offer
a commission became payable when the seller gave a written option to the buyer
only if the seller accepts the offer will he owe a commission
A range is numbered to the
east or west of a principal meridian
north or south of a base line
north or south of a principal meridian
east or north of a base line
An apartment rents only the singles. refusal to rent to which of the following would result in a violation of the federal fair housing act?
families
lawyers
Military Officers
married couples
A property was sold on April 15th, and the 3-year insurance premium of $426 was paid on January 1st of the preceding year. How much does the buyer owe the seller?
$11.83
$24.26
$118.30
$242.52
Caitlin deeds a property to Julio, who failed to record. Caitlin subsequently deeds the same property to Augusto. Which one of these statements is true?
Julio owns the property based on his having the first deed
Augusto is the owner if he first records without notice of Julio's rights
Augusta and Julie or now tenants in common
Caitlin Remains the owner because both deeds are void
Which of the following is used as a basis for real property tax assessment?
land only
building only
both land and building
neither land nor building
Traditionally, one of the principal advantages of a condominium over Cooperative has been
lower maintenance
greater security
better location
easier financing
Carl and Samuel on a farm as joint tenants. Which statement is true?
Samuel's wife has a dower interest and the property
Carl can transfer his interest in the property by will
upon Samuel's death his interest will pass to his widow
Carl can sell his half interest in the farm without Samuel's consent
A vendee is best described as one who
sells or offers to sell
buys or offers to buy
loans money
borrows money
Clarence delivers a valid deed to Benjamin, who fails to record the deed. Benjamin then loses the deed and dies with Clarence and an accident before it is found. Who owns the property?
Clarence
Benjamin's heirs
the government
Clarence’s heirs
A person to whom real estate is conveyed, the buyer, also is called the
assignee
offeror
grantee
optionee
Title to property may be transferred without the owner's consent by
involuntary alienation
voluntary alienation
quitclaim deed
none of these
Who are subject to withholding tax on the sale of real property they own?
Students
Military Enlisted Persons
Foreign Investors
U.S. Homeowners
All of the above
A broker gets 6% of the first $100,000 and 3% of any amount over $100,000. What would be the loss to the broker if a house listed $180,000 has to be reduced by 20%?
$1,080
$7,320
$8,400
$15,720
Which of the following illustrates a voluntary transfer of legal title?
Eminent domain
Adverse possession
Deed of trust
Foreclosure
Physical deterioration MOST closely means
Obsolescence
Wear and tear
Reversion
Recapture
To be admissible to record in the appropriate public record office, a deed must be
signed by grantor and grantee
a printed form
signed by the grantee
signed by the grantor
Which method of ownership could result in double income taxation?
Joint tenancy
S Corporation
Corporation
Partnership
The law that bars legal claims after certain periods of time is called the
statute of frauds
statute of limitations
Administrative Procedures Act
real estate law
Which statement is TRUE concerning condominium conversion?
An owner might favorably consider converting an apartment building to a condo in an area with strict rent controls
Condo conversions receive universal support from city managers and governments
Condo conversions are illegal and fraudulent
Tenants have no right to buy their converted units
When a landlord makes improvements to property, the investment should be recovered over a set period of time. The landlord should use
An amortization rate
A discount rate
A recapture rate
A reformation rate
Which statement is FALSE about a party wall built on the property line between two lots?
Each owner is responsible for one-half of the maintenance fees
Each owner owns the half of the wall on their side and has an easement on the other half
Only one owner is responsible for the maintenance on the wall
Neither owner may destroy the wall without the other's permission
A written instrument of value is deposited with a disinterested third party who will deliver it on the fulfillment of some condition. This BEST describes
a bill of sale
a promissory note
an escrow
a hypothecation
Which of these professionals may NOT file a mechanic's lien after completing work and not being paid?
A carpenter
A real estate broker
An electrician
An engineer
An appraisal of real estate
determines value
estimates value
guarantees value
ensures value
A person would consider a purchase-money mortgage when
the buyer has only a small amount of cash for the purchase
the owner wants to obtain a second mortgage to pay for home improvements
an owner needs extra cash to add a new bedroom wing
the buyer will not take title until after paying all that is owed
Which of the following is MOST likely treated as an independent contractor?
Principal broker
salesperson
broker in charge
secretary
An exclusive listing is terminated with no further liability by
mutual agreement
the principal's default
election of the seller
election of the broker
Which coverage does title insurance extend?
Named defects described in the policy
The various liens listed in the policy
Defects known by the buyer
Defects not found in the public record
Which coverage does title insurance extend?
Named defects described in the policy
The various liens listed in the policy
Defects known by the buyer
Defects not found in the public record
An agency agreement to sell a specific piece of real property will NOT be terminated by
the death of the broker
bankruptcy of the seller
revocation of the listing salesperson's license
insanity of the broker
A contract of sale cannot exist without an offer and
an assignment
a mortgage
an assessment
an acceptance
A partial release clause is used commonly in
a lease
a blanket mortgage
an attachment
a judgment lien
Which of the following BEST applies to landlord-tenant relationship?
Tenancy in common
Tenancy at sufferance
Joint Tenancy
Tenancy by the entirety
A person rents each of her five apartments for $600/month and has a total amount of expenses of $1,000/month. She has an investment of $50,000 at 8% a year in the bank. She decides to use the bank interest to pay better and more frequent property maintenance. What percentage increase in rent per apartment must she obtain to offset this additional expense?
11.11%
10.12%
33.33%
12.11%
13.13%
In negotiating a property management agreement with the owner of an apartment building, the property manager would MOST likely base the fee on
the % of gross collectible income
the % of net income
a flat rate
cost and expenses
Which term BEST describes a modern form of real property ownership that involves the guaranteed right of occupancy and use of specific property for a specific portion of each year for either a fixed number of years or forever?
time-sharing
recreation lease
periodic tenancy
life estate
A life estate may be granted
only when it is for the duration of the grantee's life
for the duration of the life of someone other than the grantee
for a definite term
only to a grantee over the age of majority
A property manager of a commercial condo project normally does NOT
maintain the common elements
make repairs inside units
maintain books and records
market space
Which function does an abstract of title perform?
Guarantees a clear title
Insures the title
Gives the abstracter's opinion of the title
Offers a condensed history of all recorded documents
A seller sold her home on August 20th. She prepaid the taxes of $3,060 on January 1st of this calendar year. What was the prorated tax owed to the seller?
$849
$1,105
$1,955
$2,210
The normal shopping center lease is a
ground lease
percentage lease
gross lease
sublease
Which of the following is typically personal property?
Gas and mineral rights
Water rights
A beneficiary's rights under a real property trust
Trees on a farm
A floodplain control regulation is an example of which type of governmental power?
Eminent domain
Police power
Subdivision
Attachment
The commission on a house that sells for $96,000 is $4,800. What was the rate of commission?
2%
5%
20%
50%
In which one of the following ways do mortgage brokers differ from mortgage bankers?
Brokers service the loans they arrange
Brokers arrange junior financing
Brokers do not provide their own funds to originate loans
Brokers operate in the primary mortgage market
A bona fide purchaser for value who records their deed will take precedence over a grantee with a prior unrecorded deed
if the purchaser for value has actual knowledge of the prior unrecorded deed
if the prior unrecorded deed's grantee has taken possession of the property and is living in a house on the property
because the prior deed comes first in time
because the purchaser for value has a right to rely on what is found in the records
Which statement regarding title insurance is TRUE?
When a lender requires an American Land Title Association (ATLA) extended policy of the title insurance to cover its interest, the policy is not assignable
When a buyer acquires title insurance to protect their quity, the policy may be passed on to the next buyer when the property is later sold
It protects the seller from negligence by the title or abstract company doing the search
It protects against losses suffered owing to defects in the title
A fiduciary relationship usually exists between a principal and all of the following EXCEPT
a trustee
an administrator
an appraiser
a receiver
If a buyer of real property agrees in the contract of purchase to assume an existing loan, the
seller is entirely relieved of all responsibility to pay the note in full
seller remains solely responsible for repayment of the note
buyer can lose the property only through foreclosure but cannot be used for a deficiency judgment
buyer can be held liable is loan payments are not made
A contract that provides for the payment of a commission to the listing broker, no matter who sells the property, is called
a net listing
an open listing
an exclusive-agency listing
an exclusive-right-to-sell listing
