End of Pre-License Course Exam Questions

End of class exam questions WITH NO ANSWERS

(ANSWERS WILL BE REVEALED WITH PROPER SUBSCRIPTION)

1) A licensee is a broker for several real estate companies. In this situation , the licensee should request that the DBPR issue them

1. a) a group license
2. b) multiple licenses.
3. c) one broker and register the various companied as branch offices
4. d) one broker license and require him to appoint another licensee as the broker for the other companies.

2) A sales associate was issued his initial Florida sales associate’s license last year. The sale associate wants to become a licensed real estate broker. To be eligible for a broker’s license, he must

1. a) submit proof of completed real estate transaction during the previous five-year period.
2. b) complete 14 hours of continuing education for his sales associate’s license
3. c) wait at least 12 months before submitting his broker application.
4. d) show proof that he has held an active real estate license for at least 24 months

3) Which expenses may NOT be deducted when calculating taxable income for an investment property?

1. a) Property taxes
2. b) Hazard insurance
3. c) Depreciation
4. d) Reserve for replacements

4) A developer purchased two 115-front-foot lots for $23,500 net each and divided them into three lots of equal footage. The developer sold the lots for $225 per front foot. Calculate the developer’s percentage of profit.

10. a) 10.11%
11. b) 9.75%
12. c) 9.00%
13. d) 9.15%

5) Federal Housing Administration (FHA) and Department of Veterans Affairs (VA) loans differ in that the

1. a) VA changes a mortgage insurance premium; the FHA charges a funding fee.
2. b) VA requires the borrower to make a down payment on a single-family, fixed-rate loan; the FHA does not.
3. c) FHA guarantees the mortgage and requires a set minimum down payment; the VA does neither
4. d) FHA insures the mortgage and establishes a maximum mortgage amount; the VA guaranteed the mortgage and has no legislated down payment requirement.

6) The interest on an assumed mortgage is entered on the closing statement as a

1. a) debit to the seller and credit to the buyer
2. b) debit to the seller only
3. c) debit to the buyer only
4. d) credit to the seller and debit to the buyer

7) A license sales associate decides to have personalized key rings made. Which statement is TRUE regarding the key rings?

1. a) The name on the real estate brokerage firm for which the associate works must be printed on the key rings
2. b) As long as the sales associate is paying the entire cost of the rings, he can put any wording on them he chooses.
3. c) If the sales associate’s employment status is independent contractor, he need only print his name and phone number on the key rings.
4. d) The sales associate is required to have his license status printed on the key rings.

8) Which individual must hold a Florida license?

1. a) Person who works for an owner-developer and is paid a salary plus a bonus on each lot sold in the development
2. b) Attorneys-at-law acting within the scope of their professional duties
3. c) Person who rents lots in mobile parks
4. d) Person who sells cemetery lots

9) A broker is NOT required by law to notify the FREC of conflicting demands in which situation?

1. a) The day after signing the sale contract and receiving the condominium documents, the buyers notify the broker that they want cancel the contract
2. b) Buyer finds another property at a lower price and demands a refund of the earnest money deposit; seller refuses to sign the release of escrow funds
3. c) Buyer decide not to go through with a purchase one week after signing the contract; seller and buyer both claim earnest money deposit.
4. d) Sellers decide they do not want to sell the property and refuse to allow the broker to release buyer’s earnest money deposit.

10) Developers of 25 or more lots must provide buyers  with which document before signing the sale contracts?

1. a) Prospectus
2. b) Declaration
3. c) Survey
4. d) Property report

• You are appraising a four-year-old single family residence. The livable area is 52 feet by 45 feet. The garage is 25 feet by 19 feet. According to figures obtained from a cost-estimating service, the base construction cost per square foot of livable area is $102 and $88 per square foot for the garage.  Calculate the reproduction cost of new structure.

1. $295,800
2. $280,480
3. $287,130
4. $293,680

12) Which statement MOST accurately describes the first year of a 30 year level payment fixed rate mortgage?

1. a) Principal payments remain constant while interest payments increase
2. b) Principal comprises the majority of the payments
3. c) Monthly payments remain constant, and the interest portion comprises the majority of the payment amounts.
4. d) Interest payments remain constant while principal increase

13) A buyer and a seller are disputing a contract for sale and purchase. They agree to submit the matter  to a third party who will make a binding determination regarding the matter. This type of settlement is called

1. a) Mediation
2. b) Ligation
3. c) Arbitration
4. d) Counseling

14) If a tenant vacates a rental unit at the end of the lease period, how many days does the landlord have by the law of return the security deposit to the tenant if the landlord does NOT intend to claim part of the security deposit?

1. a) 30
2. b) 7
3. c) 3
4. d) 15

15) When real property is pledged as security for a debt, it is called

1. a) hypothecation
2. b) subordination
3. c) estoppel
4. d) novation

16) In Florida, which type of brokerage relationship is presumed?

1. a) general
2. b) no brokerage
3. c) transaction broker
4. d) single agent

17) the first step in protesting the assessed value of real property is to

1. a) contact the zoning department
2. b) file a suit against the county commission
3. c) contact the value Adjustment Board
4. d) contact the county property appraiser or a representative

18) On an adjustable-rate mortgage loan, the lender’s estimated overhead costs plus profit equals the lender’s

1. a) index
2. b) margin
3. c) calculated interest rate
4. d) points

19) Which law requires lenders to provide  borrows with an estimate of closing costs at the time of the loan application or within three business days?

1. a) Consumer Credit Protection Act
2. b) Real Estate Settlement Procedures Act
3. c) Truth in Lending Act
4. d) Equal Credit Opportunity Act

20) Which requirement must a deed contain in order to be valid?

1. a) the signatures of the grantor, grantee, and reorder
2. b) the notarized signature of the grantee
3. c) the seal of the clerk of the court
4. d) the property witnessed signature of the grantor

21) In order to enlarge your home by extending the side of your home beyond the setback boundary you must first obtain

1. a) a variance
2. b) a special exception
3. c) Nonconforming use
4. d) site plan approval

22) A parcel of real estate has been left through her husband’s will for the wife’s use and enjoyment during her lifetime, with the provision that the property go to wife’s stepson at her death. What interest does the stepson hold?

1. a) Life estate
2. b) Tenancy by the entireties
3. c) Tenant at will
4. d) Remainder estate

23) How is the documentary stamp tax on a promissory note entered on the closing statement?

1. a) Debit to the buyer only
2. b) credit the seller and debit the buyer
3. c) debit to seller only
4. d) debit the seller and credit the buyer

24) Which statement is FALSE regarding a temporary real estate license?

1. a) the active duty member must be assigned to duty in florida
2. b) A temporary license may be renewed only one time
3. c) a temporary license expires six months after date of issue
4. d) a temporary license may be issued to the spouse of an active duty member of the armed forces

25) A sales associate received a cash earnest deposit before noon on Friday. The associate is required to deliver the deposit to her broker before the end of business on

1. a) Monday of the next week.
2. b) Friday.
3. c) Tuesday of the next week.
4. d) Saturday.

26) The loan-to-value ratio for home purchased for $285,000 with a down payment of $ 42,750 is

1. a) 75%
2. b) 80%
3. c) 85%
4. d) 15%

27) A real estate broker has been hired to manage an apartment complex on behalf of the landlord. How must the broker as agent handle the receipt of security deposits and advance rent?

1. a) Post a surety bond for $50,000 and deposit the funds into the broker’s operating account.
2. b) Place the funds in an interest-bearing account in a Florida bank and pay the tenant 5%
3. c) Place the funds in the broker’s operating account.
4. d) Place the funds in the broker’s escrow account.

28) A resident zoning category requires at least 12,000 square feet per lot. The developer is reserving 25% of the land to the streets, sidewalks, and a community center. The tract of land for development consists of 150 acres. How many residential lots are available for development?

1. a) 545
2. b) 408
3. c) 272
4. d) 306

29) Which mortgage provision allows another mortgage created at a later date to take priority?

1. a) Partial release
2. b) Subordination
3. c) Acceleration
4. d) Exculpatory

30) Three brothers join together to purchase property. The brothers want their interest in the property to go to their spouses in the event of their deaths. What type of estate or tenancy have they created?

1. a) Estate for years
2. b) Tenancy in common
3. c) Tenancy by the entireties
4. d) Joint tenancy

31) Local government can recover the cost of widening a street in an existing neighborhood by changing the neighborhood property owns a

1. a) higher millage rate.
2. B) fee based in the assessed value of the property
3. c) special assessment
4. d) recapture tax when the property is sold

32) A buyer was defrauded by a real estate licensee. The buyer is awarded a judgment against the licensee in the amount of $60,000 damages plus $12,500 for attorney’s fees and court costs. The buyer has been unable to collect the judgment. It is determined that the buyer may seek restitution from the Real Estate Recovery Fund. How much can the buyer recover from the Fund?

1. a) $50,000
2. b) $60,000
3. c) $25,000
4. d) $72,500

33) A Baptist church owns a convalescent home for its members. The church only admits members of its church to the convalescent home. Which statement is TRUE regarding this practice?

1968. a) This is a violation of Title VII of the Civil Rights Act of 1968.
1969. b) This is permissible only if the church is registered as having exempt status with the DBPR.
1970. c) This is a violation of the Civil Rights Act of 1866
1971. d) This is permissible under the Fair Housing Act.

34) Which feature applies to the mortgagee title insurance policy?

1. a) Policy is transferable
2. b) Benefits the owner and the owner’s heirs
3. c) issued for the purchase price
4. d) Seller typically pay this expense

35) In the government survey system, the six mile vertical strip of land that extends from the north to the south of Florida, located immediately west of the of the Tallahassee Principal Meridian, is called

1. a) Township 1 Range 1.
2. b) Range 1 West.
3. c) Principal Range 1.
4. d) Range 1 North.

36) The direction opposite South 45 degrees West in a metes-and bounds description is

1. a) North 90 degrees West.
2. b) South 90 degrees West.
3. c) South 45 degrees East.
4. d) North 45 degrees East.

37) Which standard can be used for judging whether an item is a fixture?

1. a) Relationship or agreement of the parties.
2. b) Size of the item.
3. c) Date of purchase of the item.
4. d) Cost to install the item.

38) Right of survivorship is contained in which tenancy?

1. a) At sufferance
2. b) Leasehold
3. c) Joint
4. d) in common

39) A commercial tenant pays a fixed rent each month. The landlord pays the property taxes, hazard insurance, and maintenance expenses. The tenant has what type of lease?

1. a) Expense
2. b) Net
3. c) Gross
4. d) Percentage

40) Positive leverage is defined as

1. a) the increase in return on equity from using borrowed funds.
2. b) gaining a higher rate of return on real estate than on other types of investments.
3. c) selling a commercial property for more than its purchase price.
4. d) using the art of persuasion to sell real estate at the highest price.

41) A broker may reopen a branch office in the same location during the same license period

1. a) by informing the DBPR in writing the 10 business days.
2. b) by requesting a reissue of the branch office license.
3. c) by paying an additional fee.
4. d) without further action by operation of law.

42) Which is TRUE regarding the federal telemarketing law?

1. a) Real estate licensees may advertise their residential listings by faxing promotional flyers to a list of local businesses and hospitals that are on the National Do Not Registry.
2. b) Real estate licensees may contact their former customers for up to 18 months following the closing of a transaction, even if the customer’s name in on the National Do Not Call Registry.
3. c) Real Estate licensees may call all the for-sale-by-owner sellers in a community to solicit listings without regard to whether the homeowners are listed in the National Do Not Call Registry.
4. d) Real estate licensees are exempt from the telemarketing laws.

43) Which type of contract allows the legal title to remain with the seller while the buyer has an equitable interest in the property?

1. a) Contract for mortgage
2. b) Contract for deed
3. c) Contract for assignment
4. d) Deed-in-lieu of foreclosure

44) What is required to make a contract valid?

1. a) Signatures of two witnesses
2. b) Good-faith deposit
3. c) Offer and acceptance
4. d) Notarization

45)   Property values have increased in a residential neighborhood approximately 8% per year. An appraiser chooses a comparable sale that occurred six months ago in the same neighborhood, Which adjustment will be required?

1. a) Plus 6% for conditions of sale
2. b) Minus 4% for conditions of sale
3. c) Plus 4% for market conditions
4. d) Minus 6% for market conditions

46) Which type of listing allows the seller to list the property with multiple brokers?

1. a) Net
2. b) Agency
3. c) Right-of-sale
4. d) Open

47) The Federal Reserve’s Regulation Z does NOT require disclosure of which loan costs?

1. a) Title insurance fee
2. b) Amount financed
3. c) Finance charge
4. d) Total payments

48) Which is the section number immediately north of section 24?

1. a) 25
2. b) 13
3. c) 23
4. d) 19

49) The street in front of your house is to be paved at a cost of $35 per foot. The city has agreed to pay 30% of the paving cost and will assess abutting properties for the remainder. If your lot frontage on the street is 75 feet, what is your portion of the special assessment?

625. a) $2,625.00
626. b) $787.50
627. c) $918.75
628. d) $1,837.50

50) Which statement is TRUE regarding a title company holding the escrow funds?

1. a) The broker must be a signatory on the title company’s escrow account if the broker is using the title company’s escrow in lieu of his own escrow account.
2. b) The broker must provide the principal with the account number of the title company’s escrow.
3. c) Within 10 business days after the deposit is due under the sale contract, the broker must make a request in writing to the title company for a written verification of receipt of the deposit.
4. d) If the buyer and the seller both make demands for the escrowed funds, the broker can ask the FREC to issue an escrow disbursement order.

51) A rental property has an annual income of $200,000 and operating expenses of $211,000. Which statement is TRUE regarding this property?

1. a) The NOI of this property is $11,000.
2. b) The rental property is an appreciation of minus $11,000.
3. c) The rental property has a negative cash flow of $11,000.
4. d) This is an example of negative leverage.

52) A contract classification that a court of law will uphold refers to which type of contract?

1. a) Unenforceable
2. b) Void
3. c) Voidable
4. d) Enforceable

53) An administrative complaint is issued against a broker for a failure to properly maintain his escrow account. The attorneys for the DRE and the broker’s attorney reach an agreement as to the penalty for the license law violation. This agreement is called a

1. a) stipulation.
2. b) citation.
3. c) recommended order.
4. d) finding of fact.

54) The Federal Reserve votes to raise the discount rate, how will this likely affect interest rates on short-term credit?

1. a) There will likely be no effect on short-term rates because the discount rate is charged directly to borrowers.
2. b) They will likely increase.
3. c) They will likely decrease.
4. d) There will likely be no effect because the discount rate affects mortgage rates only.

55) Which board endorses uniform examinations for appraisal certification?

1. a) Appraiser Examination Board
2. b) Appraisal Foundation Board of Education
3. c) Appraiser Qualification Board
4. d) Appraisal Standards Board

56) Any person or group of persons occupying a separate housing space is defined by the U.S. Census Bureau as a

1. a) tenant.
2. b) household.
3. c) family.
4. d) housing space.

57) A sales associate received a citation and $500 fine for failure to notify the Division of Real Estate of a change of mailing address. The citation was issued in error. What should the sales associate do?

1. a) File a written objection within 30 days explaining that the citation was issued in error.
2. b) Disregard the citation because it was issued in error.
3. c) Pay the fine to avoid the filing of an administrative complaint against the sales- associate.
4. d) Call the Division of Real Estate and explain the situation.

58) A developer purchased three small lots along a street targeted for widening. The developer paid $30,000 per lot. The developer combines the three small lots into one larger lot valued at $145,000. What is the appraisal term for the added value resulting from combining the small lots into one large lot?

1. a) Progression
2. b) Assemblage
3. c) Plottage
4. c) Situs

59) How many years is the statute of limitation for a parol contract?

1. a) Five
2. b) Two
3. c) Three
4. d) Four

60) A seller places an ad in the local newspaper indicating that the seller will pay $10,000 to the first licensed real estate broker who finds a buyer for the seller’s condo that the results in a closed sale. Which type of contract is this?

1. a) Bilateral
2. b) Executed
3. c) Implied
4. d) Unilateral

61) Caveat emptor applies the MOST in which type or relationship?

1. a) Seller in a listing with a broker
2. b) Buyer who I independently looking at for-sale-by-owner property
3. c) Seller considering listing with a brokerage
4. d) Buyer in a buyer-broker agreement with a brokerage company

62) A residential real estate investment property is purchased for $300,000 with the land valued at $70,000. Based on the IRS straight-line method depreciation deduction, which calculation is correct?

1. a) Useful asset life of 39 years with depreciable basis of $230,000
2. b) Useful asset life 27.5 years with the depreciable basis of $230,000
3. c) Useful asset life of 27.5 years with depreciable basis of $300,000
4. d) Useful asset life of 39 years with the depreciable basis of $300,000

63) Unlicensed practice of real estate for compensation is which type of violation?

1. a) Third-degree misdemeanor
2. b) Third-degree felony
3. c) First-degree misdemeanor
4. d) Second-degree misdemeanor

64) Which contract is considered a residential transaction under Florida Statute 475?

1. a) Contract to auction a single-family dwelling
2. b) Sale and purchase contract of a residential duplex
3. c) Contract with a lending institution to appraise residential property
4. d) Lease agreement for a residential apartment

65) The right of the state to take property of a person who died intestate and without heirs is called

1. a) dower right.
2. b) eminent domain.
3. c) escheat.
4. d) police power.

66) Which statement is TRUE regarding a comparative market analysis (CMA)?

1. a) A CMA may be called an appraisal.
2. b) When preparing a CMA, the license takes into account the sale price of recent sales of similar properties and expired listings.
3. c) Real estate licensees must abide by the Uniform Standards of Professional Practice (USPAP) when preparing a CMA.
4. d) Real estate licensees are prohibited from charging a fee for a CMA.

67) How is a new purchase money mortgage (PMM) entered on a closing statement?

1. a) Debit seller only
2. b) Debit seller and credit buyer
3. c) Debit buyer only
4. d) Debit buyer and credit seller

68) A land developer has planned for 120 single-family homes and a higher-density area of 350 duplexes. The developer has a left a strip of undisturbed wooded land between the lower-density single-family homes and the duplexes. The wooded area called

1. a) a legally nonconforming use.
2. b) an easement.
3. c) an environmentally sensitive area.
4. d) a buffer zone.

69) A real estate sales associate searched a database of renters in the community where the associate works. The associate pulled from the database a group of renters based on certain socioeconomic characteristics and plans to focus his efforts on the group. This type of prospecting for potential customers is called

1. a) blind advertising.
2. b) a specialized database.
3. c) a focus group.
4. d) target marketing.

70) Who issues a recommended order at the conclusion of a formal hearing?

1. a) DBPR secretary
2. b) Administrative law judge
3. c) Florida Real Estate Commission
4. d) Probable cause panel

71) An appraiser has assigned the following weights to three adjusted sales prices:

Comparable 1: $330,500, 45%

Comparable 2: $322,900, 30%

Comparable 3: $314,500, 25%

What is the reconciled estimated market value of the subject property?

1. $330,500
2. $324,220

72) A broker’s original real estate license was issued on September 10, 2014. What is the expiration date on the broker’s license?

1. a) March 10, 2016
2. b) March 31, 2016
3. c) September 30, 2015
4. d) September 30, 2016

73) A licensed a sales associate from a property management company calls a client to inform that he has found a tenant for her residence. The client asks the sales associate,” Does the tenant have dark skin?” How should the sales associate reply?

1. a) Answer the question truthfully,
2. b) Inform the owner that the company is cancelling the property management agreement immediately and then forward the property owner’s name and address to HUD.
3. c) Respond that the tenant’s race is of no relevance, and furthermore, to base the decision of whether to rent to a prospective tenant on race is a violation of fair housing laws.
4. d) Answer the question truthfully but also explain that refusing to rent to the prospective tenant, if based on race, is a violation of the Fair Housing Act.

74) What is the size restriction for a homestead property located within the city limits?

1. a) 640 acres
2. b) 10 acres
3. c) .5 acres
4. d) 160 acres

75) The three real estate license categories do NOT include

1. a) sales associate
2. b) certified appraiser
3. c) broker
4. d) broker associate

76) An 88-year-old legally blind veteran is 20% disabled as a result of injuries suffered in combat. His homesteaded property is assessed at $249,500. What is the total tax exemption on his homesteaded property?

1. a) $55,000
2. b) $55,500
3. c) $30,500
4. d) $50,500

77) A business owner has a five-year variable lease. The first year of the lease calls for rent of $23.50 per square foot based on a beginning index of 189. The index increases to 194 at the beginning of the second year. What is the new rental rate per square foot?

24. a) $24.12
25. b) $24.67
26. c) $24.05
27. d) $24.50

78) Under the statue of frauds, which element is required for contracts pertaining to the purchase and sale of real property (except for certain specific exceptions)?

1. a) Acknowledged
2. b) Recorded
3. c) in writing
4. d) Signed by witnesses

79) Planning commissions commonly do NOT have the final authority to decide on

1. a) special exceptions
2. b) subdivision plat approvals
3. c) sign controls
4. d) site plan approvals

80) The brokers of three independent brokerage companies decide to lower their commission rates to 3% for four months in hopes of gaining market share from their competitors. This scheme is called

1. a) competitive advantage
2. b) market allocation
3. c) target marketing
4. d) price-fixing

81) What is the right of recession period after receipt of the condominium documents when a buyer is purchasing a new condominium from the developer?

1. a) 10 days
2. b) 3 days
3. c) 30 days
4. d) 15 days

82) Two parties with adverse interest who are negotiating a sale and have equal bargaining positions are

1. a) general agents
2. b) dealing at arm’s length with each other
3. c) in a fiduciary relationship with each other
4. d) dual agents

83) Which term is used for the receipt of property by will?

1. a) Bequest
2. b) Devisee
3. c) Testatrix
4. d) Beneficiary

84) Which legal instrument authorizes a person to act for and on behalf of another person?

1. a) Novation
2. b) Option
3. c) Acknowledgement
4. d) Power of attorney

85) Which item is classified as a fixed expense in the circulation of net operating income?

1. a) Mortgage payment
2. b) Water bill
3. c) Hazard insurance
4. d) Depreciation

86) A licensed Florida real estate broker resides in Panama City. The broker decides to keep open his real estate office in Panama City but reside in Mississippi. Which statement applies to this situation?

1. a) The broker must notify the Commission of his change in residency within 60 days of moving out of state.
2. b) The broker is not required to do anything because he plans to keep his office in Panama City.
3. c) The broker must notify the DBPR of his intent to keep the Panama City office open.
4. d) The broker must notify the DBPR of his change in mailing address within 15 days after the change.

87) While working for a broker, a sales associate acquired a listing for $298,900 at a 6% commission rate. A second sales associate, who works for another brokerage office, found the buyer for the property. The listing and selling brokers agree to a 50-50 split between the two offices. The property sold for $296,000. The selling broker kept 45% of the commission received by the selling office. How much did the selling office’s sales associate receive?

1. a) $4,400
2. b) $3,996
3. c) $4,884
4. d) $4,932

88) A homeowner is considering replacing his five-year old fiberglass shingle roof. The cost to replace the roof is $35,000, though an appraiser has advised the homeowner that he will only get about $15,000 in added value for the tile roof. The appraiser would classify this as

1. a) accrued depreciation
2. b) substitution
3. c) an improvement
4. d) cost-effective

89) After a legally sufficient complaint has been filed and the DBPR has investigated, the next step is

1. a) a formal hearing
2. b) probable cause determination
3. c) an informal proceeding
4. d) insurance of a final order

90) A township has 35 parcels called sections. Section 36 is located in which corner?

1. a) Northeast
2. b) Southeast
3. c) Northwest
4. d) Southwest

91) The closing date is Febraury 12. The buyer is assuming the seller’s mortgage loan, which has a principal balance of $212,500 at 3.5% interest. The day of closing charged to the buyer. What is the proration, and how is it entered on the settlement statement?

224. a) $224.14 debit seller, $224.14 credit buyer
225. b) $244.14 credit seller, $244.14 debit buyer
226. c) $244.52 credit seller, $244.52 debit buyer
227. d) $244.52 debit seller, $244.52 credit buyer

92) Which criterion is NOT required of sales associate applicants?

1. a) High school diploma or its equivalent
2. b) Be at least 18 years of age
3. c) Proof of U.S. Citizenship
4. d) Social Security number

93) Which action associated with water rights will cause the uncovering of additional land by the gradual receding of water?

1. a) Erosion
2. b) Accretion
3. c) Reliction
4. d) Alluvion

94) A homesteaded property is located in Sunrise, Florida, in Broward County. The city tax rate is 8.6 mills, the county tax rate is 9.2 mills, the school district rate is 6 mills. The homeowner is a blind widow and has qualified for homestead exemption, The home has been assessed at $178,000. What must the homeowner pay in property taxes?

184. a) $3,184.50
185. b) $4,088.00
186. c) $3,196.40
187. d) $3,172.60

95) In states that subscribe to the title theory, a mortgage

1. a) creates a tenancy in common between the mortgagor and the mortgagee
2. b) transfers the title to the mortgage or an agent until the loan is paid
3. c) transfer the right of possession to the mortgagee
4. d) creates a contract for deed between the mortgager and the vendor

96) Which remedy for breach of contract requests that the courts award damages for the extent of loss suffered?

1. a) Rescission on breach of contract
2. b) Liquidated damages
3. c) Compensatory damages
4. d) Specific performance

97) A lender quotes a mortgage loan of $275,000 at 5% interest. The monthly payment is $1,476.26. How much of the second monthly payment will apply to the principal reduction?

330. a) $330.26
331. b) $331.80
332. c) $330.43
333. d) $330.57

98) Which type of value takes into consideration and individual’s equity and income tax implications?

1. a) Market
2. b) Going concern
3. c) Investment
4. d) Unique

99) A Florida real estate associate has been licensed since 2010. The associate’s real estate license expired six months ago. Which education is required for the license renewal?

1. a) 14-contniung education course
2. b) Sales associate prelicense course
3. c) 28-hour reactivation course
4. d) Post-license course

100) Which lien is classified as a voluntary lien?

1. a) Judgment lien
2. b) Income tax lien
3. c) Estate tax lien
4. d) Vendor’s lien

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1)
2)
3) How many members make up the Real Estate Advisory Commission?
a. 10
b. 12
c. Four
d. Six
4)
5)
6)
7) What is the goal of real estate law?
a. Limit activities real estate professionals can perform
b. Limit the services consumers can obtain from real estate professions
c. Promote the interests of real estate professionals
d. Protect and promote public safety, health, order, and welfare
8)
9) How many members on the Real Estate Advisory Commission are unlicensed consumers?
a. Eight
b. Four
c. Six
d. Ten
10) How is an individual selected to act as Real Estate Commissioner?
a. A public vote
b. The individual is appointed by the governor
c. The individual is selected by the attorney general
d. The Real Estate Advisory Commission holds a vote
11) How are members selected to serve on the Real Estate Advisory Commission?
a. They are appointed by the governor
b. They are appointed by the Real Estate Commissioner
c. They are elected by former Real Estate Advisory Commission members
d. They are elected in a public election
12) Which of the following actions can an individual holding only a prepaid rental listing service (PRLS) license perform?
a. Listing properties for rent
b. Negotiating lease agreements on behalf of the landlord
c. Negotiating lease agreements on behalf of the tenant
d. Providing listings of residential properties available for rent to prospective tenants for a fee
13) Jim would like to sell his own home. What is the minimum real estate license he must possess?
a. Associate broker
b. Broker
c. None
d. Salesperson
14) Which of the following properties is considered a manufactured home?
a. A structure transported in three units and built in 1975 on a permanent foundation
b. A structure transported in two units and built in 1975 on a permanent chassis
c. A structure transported in two units and built in 2005 on a permanent chassis
d. A structure transported in two units and built in 2005 on a permanent foundation
15) What must be true for a corporation to conduct real estate activities?
a. All officers must hold a broker license
b. All officers must hold a salesperson license
c. At least one officer must hold a broker license
d. At least one officer must hold a salesperson license
16) Consuela is a real estate licensee, and she has three other licensees working under her supervision. What type of license does Consuela hold?
a. Associate broker
b. Broker
c. Office manager
d. Salesperson
17) Jimbo doesn’t yet have a real estate license. Which activity is he legally allowed to perform without one?
a. Give advice to a friend who is negotiating the purchase of a house.
b. List a friend or family member’s home for sale for a fee.
c. Negotiate the sale of a house for two friends and receive a tip as thanks.
d. Receive payment for managing real estate.
18)
19)
20) In which of these scenarios does the consumer need a real estate license?
a. Jessie is searching for a new home for a friend moving into town, who will compensate her 2% of the sale price for her time and effort.
b. Mickey is selling his own home and isn’t using the services of a listing agent.
c. Peter is helping his sister, Kristen, find a new apartment and will not be compensated in any way.
d. Ronald is acting as executor of his uncle’s estate, which includes selling the property his uncle owned.

21) Which real estate brokerage ownership types may do business under a fictitious name?
a. Partnerships only
b. Sole proprietorships and partnerships only
c. Sole proprietorships only
d. Sole proprietorships, partnerships, and corporations
22) When is a real estate license required?
a. When performing maintenance work for one property owner
b. When performing real estate activities for others, for compensation of any kind
c. When performing real estate activities for others, without compensation
d. When performing real estate activities for yourself
23)

29) Lynnette works for a regional bank. Her role is to gather information from buyers looking to obtain a home loan and make a recommendation as to whether the loan should be approved. Does she need a real estate license?
a. If her compensation is tied to the transaction being completed, she needs a real estate license.
b. No, bank employees are exempt from licensure.
c. Yes, any individual, including lenders, involved in the purchase of real property must have a license.
d. Yes, employees of banks, credit unions, and lending institutions must obtain a real estate license.
30)
31) Which of these parties must obtain a real estate license before performing real estate activities?
a. Apartment resident managers or their employees
b. Attorneys-at-law performing legal services for a client
c. Persons holding a duly executed power of attorney from the real property’s owner
d. Persons representing buyers or sellers who will receive compensation for their services
32) River is an unlicensed assistant at a brokerage. Which of the following tasks is she permitted to perform for her broker?
a. Assemble closing documents.
b. Host an open house.
c. Negotiate on a client’s behalf.
d. Suggest a sale price for a client’s listing.
33)
34) What must be true for a business to perform real estate activities?
a. All employees of the business must have a real estate license
b. At least one employee must have a broker license
c. At least one employee must have a salesperson license
d. At least one employee must have a salesperson license and another employee must have a broker license
35) Which real estate brokerage ownership types require a separate license?
a. Corporations only
b. Partnerships and corporations only
c. Partnerships only
d. Sole proprietorships only
36) Adam is an unlicensed assistant working with Sarah, a licensed salesperson. The following tasks are on their plates. Which of these actions can only Sarah performed?
a. Placing a for sale sign on a property
b. Preparing marketing materials for the property
c. Providing factual information about the property
d. Showing the property to prospective buyers
37) Amanda helps her neighbor sell his home by assisting with negotiations. She receives no compensation for her assistance. Based on this one transaction, Amanda ______.
a. Doesn’t need a real estate license
b. Must have a broker license
c. Must have at least an associate broker license
d. Must have at least a salesperson license
38)
39) Angela is an unlicensed assistant working with Sam, a licensed salesperson. The following tasks are on their plates. Which of these actions can only Sam perform?
a. Draft the buyer’s offer to the seller
b. Negotiate on the client’s behalf
c. Provide factual information about a property
d. Schedule showings for a buyer
40) Tom is an unlicensed individual helping his sister, Katie, find a new house, in return for a trip to Europe. Which of the following activities can Tom legally perform?
a. He can negotiate the sale of her old house.
b. He can purchase a new property for Katie at an auction.
c. He can receive compensation from Katie for assisting in the purchase of her new house.
d. He can search real estate sites and resources to find available homes in the area.
41) June has worked with buyers and sellers for years. When homeowners default on their mortgage, June acts as trustee for the deed of trust. Under the deed of trust, June has the authority to sell the property. Does June have a real estate license?
a. If she receives compensation for performing this activity, she must have a real estate license.
b. No, trustees selling properties under a deed of trust are exempt from licensure.
c. She only needs a real estate license if she is selling her own property.
d. Yes, she is selling property for others. She must have a real estate license.
42)
43)
44) Which of the following statements best describes a real estate partnership?
a. A brokerage owned by a single person
b. A brokerage owned by at least two people
c. An entity owned by one or more parties
d. A team of two individuals who each hold a real estate license.
45) Which of the following describes a prepaid rental listing service (PRLS)?
a. A PRLS is a group of real estate licensees who only deal with residential property rentals.
b. A PRLS is a type of real estate brokerage.
c. A PRLS provides listings of residential properties available for rent to prospective tenants for a fee.
d. A PRLS represents landlords by marketing their properties to prospective tenants for a commission.
46) Which of the following statements best describes a real estate corporation?
a. A brokerage owned by a single person
b. A brokerage owned by at least two people
c. A group of individuals who each hold a real estate license
d. An entity owned by one or more parties
47) What are common ownership structures for real estate brokerages?
a. Partnerships only
b. Sole proprietorships and partnerships only
c. Sole proprietorships only
d. Sole proprietorships, partnerships, and corporations
48)
49) Sally just obtained her salesperson license. How long is the license valid?
a. Four years
b. One year
c. Three years
d. Two years
50) Jackson holds a real estate broker license with an MLO endorsement. How many hours of continuing education must he complete each year to renew this endorsement?
a. 10 hours
b. 20 hours
c. 45 hours
d. Eight hours
51) To best prevent risk associated with licensee non-compliance with real estate-related federal regulations, brokerage firms should do which of the following?
a. Encourage licensees to obtain outside training on real estate-related federal regulations.
b. Include a review of related federal legislation in the policies and procedures manual and provide appropriate training.
c. Rely on licensees to make themselves aware of all federal regulations related to real estate.
d. Require licensees to keep a tracking journal of all activities as proof that they’ve not violated federal regulations.
52) What is the minimum amount of full-time real estate industry experience that an individual must have to qualify for a broker’s license?
a. Four years
b. One year
c. Three years
d. Two years
53)
54)
55) Which of these does a sponsoring broker owe their associate brokers and salespersons?
a. Free desk and office support
b. Passing along leads
c. Paying for marketing materials
d. Supervision of activities
56) What is vicarious liability as it applies to real estate?
a. A broker commits an illegal act.
b. A broker directs a licensee to commit an illegal act
c. A broker is held responsible for the actions or omissions of the broker’s licensees.
d. One licensee witnesses another licensee’s misconduct.
57)
58) Sally is a real estate salesperson. How many hours of continuing education must she complete before the license expiration date in order to renew it for another four years?
a. 25 hours
b. 30 hours
c. 45 hours
d. 8 hours
59) How long is an MLO endorsement valid?
a. Four years
b. One year
c. Three years
d. Two years
60) Maura is a real estate salesperson who does not have an MLO endorsement. Which of these actions can she perform for her client, who is financing the purchase of a single-family home?
a. Offer to negotiate the terms of the client’s loan application.
b. Offer to provide the client with a list of lenders they could consider working with to obtain the loan.
c. Service the client’s loan.
d. Take the client’s residential mortgage loan application.
61)
62) Jackson holds a real estate broker license with an MLO endorsement. How often must he renew his MLO endorsement?
a. Every four years
b. Every three years
c. Every two years
d. Every year
63) Bradley has a real estate salesperson’s license. He’s done some traveling recently and missed the deadline to renew his license. It’s now 30 days past the expiration date. What must he do to renew his license?
a. Complete the continuing education requirements and submit a renewal and late fee.
b. File an appeal with the Real estate Commissioner.
c. Re-qualify for a real estate license by completing pre-licensing courses and passing the state licensing exam.
d. Retake the state licensing exam.
64)
65) Al is 70 years old and has held his real estate broker license in good standing for 30 consecutive years. His license is up for renewal soon. How many continuing education hours must he complete?
a. 0 hours
b. 30 hours
c. 45 hours
d. 8 hours
66) Years ago, Rachel held a real estate license. She took some time off to travel and start a family. Now she’s ready to get back in the saddle. Her license expired three years ago. What must she do to renew her license and start practicing real estate again?
a. Complete the continuing education requirements and submit a renewal and late fee.
b. File an appeal with the Real Estate Commissioner.
c. Requalify for a real estate license by completing pre-licensing courses and passing the state licensing exam.
d. Retake the state licensing exam.
67) Which federal act requires states to pass laws relating to mortgage loan originator (MLO) endorsements?
a. Consumer Financial Responsibility Act
b. Regulation Z
c. SAFE Act
d. Senate Bill 36
68) How many hours of continuing education must real estate licensees complete each year to renew their MLO endorsement?
a. 10 hours
b. 20 hours
c. Eight hours
d. Four hours
69) What is the relationship between a policies and procedures manual and the broker’s obligation to supervise agents?
a. Brokers who can prove that all agents have access to the PPM won’t be cited for failure to adequately supervise agents.
b. Brokers who enforce policies and procedures outlined in an effective PPM have proof of efforts to properly train and supervise agents.
c. The PPM may be used in place of face-to-face orientation training for new licensees.
d. The PPM outlines the broker’s responsibility to supervise and provides detailed proof of scheduled one-on-one meetings and group training sessions.
70) Karla is a sponsoring broker who owns her own brokerage. She has two associate brokers and two salespersons, who all work as independent contractors. She also has an unlicensed assistant on payroll as an employee. Which of the following is true of Karla’s liability?
a. Karla is liable for the actions of all members of her firm, both the independent contractors and the employee.
b. Karla is only liable for the actions of her associate brokers.
c. Karla is only liable for the actions of her associate brokers and salespersons.
d. Karla is only liable for the actions of her salespersons.
71) As a managing broker, you’re responsible for your associate brokers’ actions. Which of the following risk management techniques helps prevent the risk associated with vicarious liability?
a. Equipping your office with fire alarms and sprinklers
b. Prohibiting licensees from recommending third party vendors to clients
c. Providing training and policies/procedures documentation to staff
d. Purchasing a general liability insurance policy

72) Which of these real estate licensees may be exempt from the continuing education requirements for license renewal?
a. Al is 70 years old and has been licensed in good standing for 30 consecutive years.
b. Candice is 55 years old and has been licensed in good standing for 30 consecutive years.
c. Savannah is the broker of record responsible for supervising five salespeople.
d. Willard is 70 years old and has been licensed in good standing for 20 consecutive years.
73) What must real estate licensees who obtain the MLO endorsement do?
a. They must complete 20 hours of education, pass an examination, submit fingerprints to NMLS&R, and authorize a credit report pull.
b. They only need to complete 20 hours of education.
c. They only need to complete 20 hours of education and pass an examination.
d. They only need to pass an MLO exam containing national and state-specific content.
74)
75)
76) Seamus sent a letter to the residents of Maywood Park, stating, “The Mormons are moving in! Sell your houses before property values plummet.” This is a fair housing violation, and also ______.
a. A license law violation
b. A strong business practice
c. Creative advertising
d. Morally ambiguous
77)
84) If a licensee commits a violation and it’s found the broker didn’t adequately supervise the licensee, whose license in jeopardy?
a. Both the broker’s and licensee’s
b. The broker’s
c. The licensee’s
d. The license of any future licensee of the firm
85) Rita missed an important deadline for her client. This is an example of a(n) ______.
a. Conversion
b. Negligence
c. Ordinary mistake
d. Personal dealing
86)
87) If Jan is using the designation GRI (Graduate of the Real Estate Institute), but she has not paid her annual membership dues, is this a violation?
a. No, because failure to pay dues does not constitute non-membership
b. No, because GRI is not covered in real estate law
c. Yes, because failure to pay dues is considered petty theft
d. Yes, because it is dishonest
88)
89) What is the maximum amount that will be paid out of the Recovery Account for a transaction?
a. $10,000
b. $100,000
c. $25,000
d. $50,000
90) The DRE investigated Sheila and has imposed a license suspension. What does this mean for Sheila?
a. Her license is void. She’s not allowed to practice real estate anymore, and can’t reactivate her license.
b. She may perform all her normal licensed activities, but she’s on probation so she better mind her Ps and Qs.
c. She must pay a fine to have the suspension removed, and may not perform real estate activities until she does so.
d. She’s not allowed to practice real estate during the term of the suspension, but after that time she can continue performing licensed activities.
91) What is the maximum amount that will be paid out of the Recovery Account per licensee?
a. $100,000
b. $250,000
c. $50,000
d. $500,000
92) Requiring a licensee to submit detailed reports related to trust fund accounting is an example of a condition that may be placed on a licensee with a ______ license.
a. Restricted
b. Retracted
c. Revoked
d. Suspended
93)
94) Gina received an earnest money check from her buyer on Friday, after the office had closed and her broker had gone home for the day. For safekeeping, Gina should ______.
a. Cash the check and write a new check Monday for the same amount
b. Deposit the money into her savings account so her client can earn interest over the weekend
c. Hold onto the check until Monday, and give it to her broker then
d. Return the check to her client
95) Tabor’s uncle hired him as a listing agent. Because of their relationship, what may Tabor do with regard to the termination date of the agreement?
a. Include an automatic renewal clause.
b. Include a reasonable termination date.
c. Leave it out.
d. Write “family member” in the termination date field.
96) A cabin has 120 feet of lake frontage. The cabin owner’s ability to access the lake is based on ______.
a. An aquifer
b. An easement
c. Littoral rights
d. Riparian rights
97) Which economic characteristic of land contains the concept that a land’s value can be affected by the changes made to it, such as construction of buildings or fences?
a. Improvements
b. Permanence of investment
c. Scarcity
d. Uniqueness
98) Property owners who live on or next to water have certain rights. An example of one of these rights includes ______.
a. Contamination
b. Hazardous waste
c. Littoral
d. Reversionary
99) A river runs adjacent to a rancher’s property. The rancher’s ability to use the water from the river is based on ______.
a. Aquifer rights
b. Encroachment rights
c. Littoral rights
d. Riparian rights
100) Which of these is the best definition of real estate?
a. Everything that’s not real property
b. Land, plus all things permanently attached to it naturally or artificially
c. Real property, plus all of the interests, benefits, and rights included in ownership
d. The earth’s surface extending downward to the center of the earth and upward to infinity, including permanently attached natural objects
101) Annette really wants to move to San Francisco, but she’s unsure whether she’ll be able to afford to live there. Housing is very expensive because there simply is no room to build any new housing units. Which economic characteristic does this reflect?
a. Area preference
b. Improvements
c. Permanence
d. Scarcity
102) The right to access non-navigable rivers, streams, and other flowing bodies of water adjacent to a property is called ______ rights.
a. Land
b. Littoral
c. Mineral
d. Riparian
103)
104) What’s the best definition of land?
a. Everything that’s not real property
b. Land, plus all things permanently attached to it, naturally or artificially
c. Real estate, plus all of the interests, benefits, and rights included in ownership
d. The earth’s surface, extending downward to the center of the earth and upward to infinity, including permanently attached natural objects
105) Littoral rights allow property owners to take which of these actions?
a. Construct a dock to moor their boat.
b. Irrigate from a stream running through the property.
c. Navigate the river running through the property.
d. Use the water from the lake bordering the property.
106) Over time, a river running through Farmer Jones’ ranch deposits sediment along the banks of the river and adds half an acre of land to the ranch. This is an example of what process?
a. Accretion
b. Avulsion
c. Erosion
d. Riparian buffering

107) Physical characteristics of land include its immobility, indestructibility, and ______.
a. Location
b. Permanence of investment
c. Scarcity
d. Uniqueness
108) In many areas of the country, Marcellus Shale has become a hot commodity. This type of rock produces gas, which can be mined, stored, and sold. Abe learned that his family farmstead sat over a rich deposit of Marcellus Shale. What type of rights does Abe have relative to this shale?
a. Air rights
b. Sub-surface rights
c. Surface rights
d. Water rights
109) Sarah owns her own home. As part of her basic property rights, she has the right to decide who may or may not access the property. Which right is this?
a. Disposition
b. Enjoyment
c. Exclusion
d. Possession
110) Hal and Sara own a 212-acre farm. Their property is landlocked, but they have permitted water rights to use the stream located six miles away for irrigation purposes. What kind of water rights do they hold?
a. Alluvial
b. Littoral
c. Prior appropriation
d. Riparian
111) The right to access ponds, lakes, and other stationary bodies of water is ______.
a. Littoral
b. Mineral
c. Riparian
d. Water
112) Jamie owns a lakeside home. Over a period of years, the water has receded quite a bit, doubling the size of the sand beach on his property. What’s the name of this process?
a. Accretion
b. Erosion
c. Exclusion
d. Reliction
113) Licensee Arlene is helping a client purchase a property that’s suitable for use as a private school, meaning it needs to have classrooms, assembly rooms, and sports fields. She locates two properties in the area that have the required attributes. What category of property is this considered?
a. Commercial
b. Industrial
c. Residential
d. Special purpose
114) Basic property rights include the rights of possession, control, exclusion, enjoyment, and ______.
a. Destruction
b. Disposition
c. Encroachment
d. Reliction
115) Doreen owns an office building and receives income from six stable tenants. What category of real estate does Doreen own?
a. Agricultural
b. Commercial
c. Industrial
d. Residential
116) Which physical characteristic of land addresses the concept that land isn’t interchangeable, and one piece of land isn’t exactly like another?
a. Immobility
b. Indestructibility
c. Permanence of investment
d. Uniqueness
117) Jordan bought 25 acres along a navigable river. Several years later, Jordan calculates that the river has slowly carried away almost two acres of land. What process caused this?
a. Accretion
b. Avulsion
c. Erosion
d. Riparian buffering
118) When Henry first began his real estate career, he focused on residential properties. As he gained more experience, he found that he really enjoyed helping business owners find warehouses for their products, or properties where they could conduct manufacturing activities. Of the primary categories of real estate, what types of properties does Henry handle?
a. Industrial
b. Leisure
c. Residential
d. Retail
119) Property ownership gives the title holder a bundle of rights. What’s significant about the concept of a bundle of rights?
a. It describes an infinite number of rights associated with property ownership.
b. It describes the ability to separate one right from the others while leaving the rest of the bundle intact.
c. It’s an ancient Latin term meaning the property owner’s rights can’t be taken away.
d. The property owner must identify each separate right that will be purchased; they’re not automatically included in a transfer.
120) Along with property ownership, rights are granted to use the land’s physical components. Which right allows a property owner to use or sell the underground resources, such as natural gas and minerals?
a. Air
b. Sub-surface
c. Surface
d. Water
121) Which term would you most likely see associated with a lake?
a. Fracking
b. Littoral
c. Percolating
d. Riparian
122) Which physical characteristic of land addresses the concept that the geographic location of a piece of land is fixed and can never be changed?
a. Immobility
b. Indestructibility
c. Scarcity
d. Uniqueness
123)
124) What’s the best definition of personal property?
a. Artificial attachments to land that include things such as fencing, buildings, and walkways
b. Everything that’s not real property
c. Land
d. Property that’s fenced
125) Allen and Lewis are friends who each recently purchased real estate. Allen purchased a patio home in a small town an hour from the city, while Lewis purchased a condo in a really hot area near the city center. Although they paid similar amounts for their properties, Lewis’ condo is worth much more two years later. Which economic characteristic does this demonstrate?
a. Area preference
b. Improvements
c. Permanence
d. Scarcity
126) Juan has decided to invest his small inheritance in real estate. He is drawn to the fact that he can add a building where there wasn’t one previously and immediately increase the value of his investment. Which economic characteristic of real property is this?
a. Area preference
b. Improvements
c. Permanence
d. Scarcity
127) The owners of Brick and Brack, a development company, have purchased several acres of vacant land for their latest development. They plan to build a community of affordable single-family homes. What category of real estate will these be in after construction?
a. Agricultural
b. Commercial
c. Industrial
d. Residential
128) Your neighbor bought rights that will prevent you from ever building above two stories. What type of rights are these?
a. Air
b. Littoral
c. Mineral
d. Riparian
129) Sally and Pete are city dwellers who have always dreamed of living in a rural setting. When Pete inherits a 600-acre cattle ranch from his uncle, they don’t waste a moment packing up and moving to the ranch. What category of real estate is their new home considered?
a. Agricultural
b. Commercial
c. Industrial
d. Residential
130) What do riparian rights give landowners the ability to do?
a. Drill an agricultural water well.
b. Prohibit others from using the water.
c. Use a pond adjacent to the property.
d. Use a river running through the property.
131) Jacob is a developer who purchased 78 acres and had it subdivided into half-acre lots. He decided to install sewer and underground electric for the entire subdivision, because he thinks that he will easily recoup his initial infrastructure investment. This is an example of which economic characteristic of real property?
a. Area preference
b. Immobility
c. Permanence of investment
d. Scarcity
132) What’s the best definition of real property?
a. Artificial attachments to land that include things such as fencing, buildings, and walkways
b. Earth, soil, and air
c. Land, plus all things permanently attached to it naturally or artificially
d. Real estate, plus all of the interests, benefits, and rights included in ownership
133) Alluvion describes new deposits of land that are the result of what natural process?
a. Accretion
b. Erosion
c. Exclusion
d. Reliction
134) John and Tara have lived in their home for 23 years and are excited to move to Florida for retirement. As homeowners, what right allows them to sell their home?
a. Disposition
b. Enjoyment
c. Exclusion
d. Possession
135) Which of the following is true about air rights?
a. They allow the owner to use the open space above buildings.
b. They allow the owner to use the space directly below buildings.
c. They cannot be bought or sold.
d. They include mineral rights.
136) What are improvements with regard to property?
a. Another name for a building permit
b. Artificial attachments to land that include items such as fencing, buildings, and walkways
c. Natural fixtures that are part of the land and that enhance its value
d. The right to increase the value of a property
137) Which physical characteristic of land addresses the concept that while improvements may deteriorate over time, the land itself cannot be destroyed?
a. Immobility
b. Indestructibility
c. Permanence of investment
d. Uniqueness
138) Which of the following is included with real property rights?
a. Enjoyment
b. Hazardous acts
c. Right to destroy
d. Right to encroach
139) Shannon’s rural property in San Diego County has a small stream that runs across one corner where her horses are pastured, and her horses use it as a water source. What’s true about this situation?
a. Shannon has a riparian right to use the water flowing across her property as a water source for her animals, though she may not divert the water.
b. Shannon is violating the state’s water laws, which prohibit any use of water that flows across a property.
c. She must have a permit from the state water board to use the water from the stream that runs across her property.
d. The doctrine of prior appropriation makes this use of the stream water illegal, since it originates on another person’s property.
140) The right to access rivers, streams, and other flowing bodies of water adjacent to a property is called ______.
a. Land
b. Littoral
c. Mineral
d. Riparian
141) Display shelves installed by a business owner in a rented building are a good example of ______.
a. Leased premises
b. Real estate
c. Real property
d. Trade fixtures
142)
143) What term explains the complexity of property ownership rights and how rights for a single property can be “owned” by multiple parties at the same time?
a. Littoral rights
b. Physical component rights
c. Riparian rights
d. The bundle of rights
144) Licensee Dionne pointed out to her buyer client the items that would be considered real property. What is one of the key characteristics of an item that is real property (also known as a fixture)?
a. Internal or external to the house
b. Made of the same material as an interior or exterior wall
c. Over or under a certain value
d. Permanently affixed to the property
145) Of the following, which is most likely to be considered a fixture?
a. a fence around a field
b. a pasture
c. a stream
d. a tractor
146) Mrs. Blanchard cut down a tree growing on her property. Which of the following has occurred?
a. A fixture has become real property.
b. Personal property has become real property.
c. Real property has become a trade fixture.
d. Real property has become personal property.
147) What are emblements in real estate?
a. Cultivated crops
b. Detached fixtures
c. Free-standing plants
d. Open spaces
148) Having _______ on file allows lenders to confiscate personal property pledged as collateral in the event of a borrower default.
a. A chain of title
b. A title insurance policy
c. A UCC security agreement and financing statement
d. Proof of ownership
149) What’s the Uniform Commercial Code?
a. A set of business laws created to regulate commercial transactions, including contracts dealing with personal property
b. A set of business laws created to regulate financial contracts dealing with real estate
c. A set of standards created to create a uniform way in which all commercial real estate transactions must be conducted
d. A set of standards for commercial business code of ethics
150) Which of the following is an example of a fixture that is real property?
a. Above-ground pool and pool accessories
b. Bathroom mirror hanging on a hook
c. Photos and wall hangings
d. Shelves attached to the wall with brackets
151) What’s contained in a UCC security agreement?
a. A complete description of the personal property used as collateral
b. A list of personal character references
c. A list of security services provided under the contract
d. A signature of an authorized representative of the lender
152) Bart just toured his fourth patio home of the day. To help him remember what he saw in each one, he’s making notes about décor, updates, and inclusions that will stay with the property. Which of the following items is NOT considered personal property and would therefore stay with a home?
a. The area rug in the dining room
b. The banker’s lamps in the den
c. The chandelier in the foyer
d. The patio heater on the back patio
153) Who is required to sign a security agreement for security arrangements under the Uniform Commercial Code?
a. The borrower
b. The lender
c. The seller
d. The testator
e. The UCC requires the borrower to sign a security agreement for any security arrangements. When used in the financing of real estate, the agreement must adequately identify personal property used as collateral.
154) Which of the following would be considered personal property?
a. Built-in microwave
b. Custom curtains
c. Free-standing TV
d. In-ground pool
155) Which of the following are included in the transfer of real property unless specifically excluded in writing?
a. Chattel
b. Fixtures
c. Personal possessions
d. Personal property
156) What is the best way for a seller and buyer to demonstrate their agreement that the home’s existing refrigerator and a dishwasher are included in the property sale?
a. By including a bill of sale or agreement in the purchase contract
b. By shaking hands on it on the day of the sale
c. By verbal agreement after the sale
d. By verbal agreement before the sale
157) Which of the following would be used to describe an item that is both a fixture and real property?
a. Above-ground
b. Free-standing
c. In-ground
d. Movable
158) An item that would most likely be considered a fixture because of agreement between buyer and seller is _____.
a. a garage door opener
b. a garbage disposal
c. draperies
d. kitchen cabinets
159) Ron’s company leased a building so that it could build an escape room experience. After operating for two years, attendance (and thus its profits) started to drop significantly, so it decided to close the location. When the workers started taking down the installation, they realized that some of the structures would damage the walls if they were to try to remove them. Which of these is true about these trade fixtures?
a. If Ron leaves them in place and the lease expires, he has three months to remove them.
b. Ron is required to leave the fixtures if they’re attached.
c. Ron is required to take the fixtures and return the premises to its original condition.
d. Ron may take the fixtures as long as he repairs any damage caused by removal.
160) If an item is permanently attached to a property, a court would most likely consider it a fixture if it passes which of the following tests?
a. Adaptability of the item to the land’s use
b. Agreement of the parties
c. Method of annexation
d. Relationship of the parties
161) When using the MARIA acronym to test whether an item is a fixture, what do the two As stand for?
a. Acceptability of the fixture and agreement of the parties
b. Adaptability of item and accessibility to the property
c. Adaptability of item to land’s use and agreement of the parties
d. Allowable use and acceptable use
162) Ted’s seller client is adamant that she’ll be uprooting and taking most of the fruit trees in the backyard when she sells her home. Ted makes a note to himself that he’ll need to include the ______ of the trees in the comments for his listing.
a. Abatement
b. Annexation
c. Defenestration
d. Severance
163) In the consideration of real property and personal property, severance is ______.
a. The process of cancelling the agreement or bill of sale for a real estate transaction.
b. The process of converting personal property to real estate.
c. The process of removing a fixture before agreement or after negotiation, to designate it as personal, rather than real, property.
d. The test of how an item is attached to the property and how permanent the attachment is.
164) If the sale of a property that includes soybean fields occurs before the crops are ready for harvest, which of the following is the best option for the parties to the transaction to take?
a. The buyer should assume the crop transfers with the property.
b. The contract between the parties should clarify the disposition of the crop.
c. The seller should assume the crop does not transfer with the property.
d. The seller should harvest the beans before the sale closes.
165) Tim and Tina Wells bought a home with absolutely beautiful perennial gardens in the back. The plantings were designed to bring birds, bees, and butterflies and to provide color for most of the year. When they did the final walkthrough, they were dismayed to see that many of the shrubs and flowering plants had been removed. They expected these plantings to be considered part of the real property because of the ______.
a. Adaptation to the land
b. Agreement of the parties
c. Intention in placing the item
d. Method of annexation
166) The MARIA acronym helps to identify the five tests of a fixture. Which of the following tests refers to how and whether the item is attached to the property?
a. Adaptability of the item to the land’s use
b. Agreement of the parties
c. Intention in placing item on land
d. Method of annexation
167) Which of the following is NOT one of the five basics tests that courts use to determine whether an item is a fixture or personal property?
a. Agreement of parties
b. Legally permissible use
c. Method of annexation
d. Relationship of the parties
168) In which form of co-ownership is a person’s ownership inheritable?
a. Joint tenancy
b. Tenancy by the entirety
c. Tenancy in common
d. Tenancy in severalty
169) Once Greg and Caitlin were married, they decided to purchase a home together. Since it was a shotgun wedding after a weekend in Vegas, they made sure that their ownership included the right of survivorship as well as protection from the other spouse attempting to sell the house from under them. Though not recognized in all states, the most likely form of co-ownership under which they would make this purchase is ______.
a. Estate in severalty
b. Joint tenancy
c. Tenancy by the entirety
d. Tenancy in common
170)
171)
172) Property with ownership by more than one person is known as ______.
a. Co-ownership
b. Dual ownership
c. Estate by severalty
d. Property partnership
173) Billie (Wilhelmina) Silva was just licensed as a broker, and she plans to hang out a shingle and go into business for herself. As a sole proprietor, which of the following business names can she NOT use?
a. Billie Silva
b. Billie Silva Realty
c. Happy Homes Realty
d. Wilhelmina Silva Realty
174) Sam and Bridget are cousins who jointly own property. They are both named on the deed, they received title at the same time, they have the right of survivorship, and they each have equal interest and undivided rights of possession. What type of ownership do they have?
a. Estate in severalty
b. Joint tenancy
c. Tenancy by the entirety
d. Tenancy in common
175) Ken, Barbie, and Skipper owned a property as a joint tenancy. When Skipper moved out of state, she sold her interest to Midge. Two years later, Ken died. How is the interest in the property divided?
a. Barbie and Midge each own 50%.
b. Barbie and Skipper each own 50%.
c. Barbie, Midge, and Ken’s heirs each own one-third.
d. Barbie owns two-thirds, and Midge owns one-third.

176) Siblings Julia and Gene are co-owners of a small retail building in which a tanning salon is currently operating. Gene really wants to leave his ownership interest to his son when he dies, but the way in which they own the property doesn’t allow him to do so. What type of ownership do they have?
a. Joint tenancy
b. Tenancy by the entirety
c. Tenancy in common
d. Tenancy in
177)
178) Which ownership type is defined by four unities: time, title, interest, and possession?
a. Freehold estate
b. Joint tenancy
c. Tenancy by the entirety
d. Tenancy in common
179) Which type of ownership includes the unity of time, title, interest, possession, and marriage, and dissolves to a tenancy in common after a divorce?
a. Estate in severalty
b. Joint tenancy
c. Tenancy by the entirety
d. Tenants in common
180) Which one of the following statements about community property rights and property ownership is true?
a. All property purchased before and during the marriage or legal union automatically becomes community property.
b. All property purchased separately before the marriage or legal union must be sold and the profits divided equally between the partners.
c. Any property purchased before the marriage or legal union must have the spouse as the beneficiary.
d. Property owned separately before the marriage or legal union is separate from the community property, but property purchased during the marriage is owned equally.
181) Ryanne is a tenant in a single-family home owned by Dominick. What type of interest does Ryanne have in the property?
a. Freehold
b. Homestead
c. Leasehold
d. Lifelong
182) Which of the following describes an estate for an unknown period of time, with either party permitted to terminate the lease by giving notice to the other?
a. Estate at will
b. Estate for years
c. Leasehold estate
d. Life estate
183) Lucas, Ivan, Chad, and Trace own a property as joint tenants. After a few years, Ivan sells his interest to Tom (with permission from Lucas, Chad, and Trace). Chad dies intestate but is survived by a wife, Amy. Trace also then passes away but wills his property to Monique. Who owns the property after Trace’s death?
a. Lucas
b. Lucas and Tom
c. Lucas, Monique, and Amy
d. Lucas, Tom, Amy, and Monique
184) What form of ownership is inheritable and includes the entire bundle of rights, not subject to any conditions or qualifications?
a. Fee entire
b. Fee on condition
c. Fee simple absolute
d. Qualified fee
185)
186) Eva, Stella, and Lynn owned a vacation home two blocks from the beach. Sadly, Stella passed away over the winter, so when summer arrived, Eva and Lynn shared the home with Stella’s nephew Drew, to whom Stella willed her share of the property. What type of ownership is this?
a. Estate in severalty
b. Joint tenancy
c. Tenancy by the entirety
d. Tenancy in common
187) Which of the following is a life estate in property held by a widow?
a. Curtesy
b. Dower
c. Estate at will
d. Homestead
188) Lewis and Elliot started a real estate investment business together. After much discussion with their attorney, they decided to incorporate, but in such a way that they are treated like a partnership and don’t have to pay corporate taxes. What form of business do they have?
a. Double proprietorship
b. Limited liability partnership
c. Subchapter C corporation
d. Subchapter S corporation
189) Rhonda and Oliver bought an old schoolhouse with the hope of transforming it into a residence. They owned the property as joint tenants. After Oliver died, how did Rhonda own the building?
a. As a joint tenant with rights of survivorship
b. As a tenant in common with Oliver’s heirs
c. In severalty
d. In trust
190) Ken, Dale, and James were brothers who owned more than 100 acres as tenants in common. The relationship between Ken and James disintegrated, and so James initiated a lawsuit. The end result was that the court gave each brother a designated set of acres to own. What did the court grant?
a. Bifurcation
b. Parcel
c. Partition
d. Severalty
191) An inheritable freehold estate that’s a fee simple defeasible (where the grantor can reclaim ownership) is also known as ______.
a. Fee absolute
b. Fee simple
c. Qualified fee
d. Tenancy at will
192) What’s the difference between reversionary interest and remainder interest in a property?
a. Remainder interest applies only to heirs.
b. Reversionary interest only applies to spouses.
c. With remainder interest, the property remains with the owner, even when a life tenant possesses the property.
d. With reversionary interest, the property reverts to the owner after the death of the life tenant.
193) Sherman, who owns property in a life estate, neglects the property, significantly diminishing its value. This is called ______.
a. A lease option
b. An act of waste
c. An estate at sufferance
d. A possessional prerogative
194) Non-lawful possession after the expiration of a lease is called ______.
a. Estate at sufferance
b. Estate at will
c. Estate for years
d. Leasehold estate
195) A sole proprietor is a familiar business model. If you practice real estate as a sole proprietor, which of the following is a true statement?
a. You are on a salary.
b. You cannot be held liable for your actions.
c. You have a partner.
d. You’re an independent contractor.
196) Peter is a tenant in a single-family home owned by Cheyenne. What type of interest does Cheyenne have in the property?
a. Freehold
b. Homestead
c. Leasehold
d. Lifelong
197)
198) ______ is the form of ownership used by married couples in certain states. It includes automatic survivorship rights.
a. Tenancy by five unities
b. Tenancy by the entirety
c. Tenancy by union
d. Tenancy in common
199) To what type of estate does pur autre vie apply?
a. Fee simple
b. Freehold estate
c. Homestead
d. Leasehold
200) Which one of the following types of ownership termination allows each tenant to have a specific, divided portion (partition) of the property exclusively?
a. Termination by division
b. Termination of co-ownership by partition
c. Termination of estate in severalty
d. Termination of joint tenancies
201) Which form of real property ownership (for owners other than married couples) means there’s equal ownership shares with undivided possession rights?
a. Joint tenancy
b. Tenancy by the entirety
c. Tenancy in common
d. Tenancy in severalty
202) Jenner purchased his first home, to which he’ll have access forever, as far as he knows. Jenner owns ______.
a. A freehold estate
b. A leasehold estate
c. An estate for years
d. An ownership estate
203)
204) Widget Corporation just bought land on which it plans to build a new manufacturing facility. How is the land owned?
a. It’s a joint tenancy.
b. It’s held as a tenancy in common.
c. It’s owned as an estate in severalty.
d. There isn’t enough information to tell.
205) Which of the following is NOT a characteristic of a corporation?
a. Corporations are recognized legal entities.
b. Corporations are tangible and nontaxable.
c. Corporations are taxable.
d. Corporations have tax rates separate from individual tax rates.
206) Which of the following is a life estate in a property held by a widower?
a. Curtesy
b. Dower
c. Estate at will
d. Remainderman
207) Limited liability companies and limited liability partnerships are favorable forms of business because ______.
a. Owners of the LLC or LLP are personally liable for LLC/LLP obligations.
b. They aren’t taxed as partnerships.
c. They don’t require a general partner.
208) All trusts have three parties: the trustor, the beneficiary, and the ______.
a. Attorney in fact
b. Broker
c. Founder
d. Trustee
209) When Edmund died, he left several properties to his heirs. He owned a grocery store and a campground outright, and a strip mall that was held in a living trust. Which of the properties, if any, did NOT have to go through the probate process after his death?
a. The campground
b. The grocery store
c. The strip mall
d. They all had to go through probate.
210) Marcia Weinstein died, and her property wasn’t held in a trust. Thus, her estate will go through ______ to ensure her property is distributed to her beneficiaries in accordance with her will.
a. A moderator
b. An attorney
c. Estate planning
d. Probate
211) Under a land trust, the owner directs a ______ to hold title to the real estate.
a. Corporate fiduciary
b. Family member
c. Friend
d. Real estate broker
212) What primary benefit does a living trust have over a will?
a. It avoids probate.
b. It avoids taxes.
c. It’s easier to establish.
d. It’s less expensive.
213) Peter wants to set up a land trust so that his children can benefit from his real estate investments after he dies. He asked his financial advisor Tom to manage the trust, and Tom agreed. How is the trust created?
a. Peter conveys the real estate to Tom.
b. Peter dies.
c. Peter purchases the real estate.
d. Tom distributes income from the real estate investments.
214) Julian and Clara want to leave their real estate holdings to their children. If at all possible, they’d like those holdings to avoid the probate process after they’re deceased. Their attorney recommends a land trust. Is there a type of trust they could establish that would avoid probate?
a. No, all trusts go through probate.
b. Yes, a C trust would avoid probate.
c. Yes, a living trust would avoid probate.
d. Yes, a testamentary trust would avoid probate.
215) Which one of the following statements about testamentary trusts is true?
a. Like living trusts, testamentary trusts avoid probate.
b. Testamentary trusts do not avoid probate.
c. Testamentary trusts do not need to be reviewed by an attorney.
d. The costs of administering a testamentary trust is not borne by the beneficiaries.
216) Martin placed all of his real estate investments in a trust, and the proceeds are distributed through the trust to his son Nathan. Martin still manages the properties indirectly, and Nathan currently benefits, as he’s past the required beneficiary age of 18. What type of trust is this?
a. Indirect trust
b. Living trust
c. Probate trust
d. Testamentary trust
217) Martin placed all of his real estate investments in a trust, and the proceeds will be distributed through the trust to his son Nathan. In this situation, Nathan is the ______.
a. Beneficiary
b. Fiduciary
c. Trustee
d. Trustor
218) In a trust, the trustee is the person who ______.
a. Creates the trust
b. Is empowered to void the trust for any reason
c. Makes sure the terms of the trust are carried out
d. Receives the benefits of the trust
219) Which one of the following statements is true about land trusts?
a. A beneficiary’s interest in the land must be conveyed through a deed.
b. Land trusts generally continue for a specified term, such as 10, 20, or 30 years.
c. The identity of the trust owner is made public.
d. The person who establishes the trust (the trustor) is rarely the beneficiary.
220) Which of the following trusts is created according to the terms of the will of a deceased person?
a. Juvenile
b. Living
c. Tertiary
d. Testamentary
221) XYZ Trust would like to sell its property. Which of the following is the legal title holder?
a. The beneficiary
b. The personal representative of the estate
c. The trustee
d. The trustor
222) Which of the following statements is true regarding trusts?
a. Any asset may be held in a trust.
b. The beneficiary can’t be a minor.
c. The trustee conveys title to the trustor.
d. The trustor is the person who carries out the trustee’s wishes.
223) A living trust differs from a testamentary trust in that a living trust is established to convey property as well as to ______.
a. Dictate terms of care in the event the trust creator becomes incapacitated
b. Hasten the probate process
c. Shelter income from taxation
d. Transfer ownership before death and avoid probate
224) There are many advantages to holding property within a trust. One of the most important advantages is that some trusts ______.
a. Avoid probate
b. Need not be reviewed by an attorney
c. Require probate
d. Typically take years to sort out
225) Henry died, and his property wasn’t held in a trust. Thus, his estate will go through probate to ensure his property is distributed to his beneficiaries in accordance with his will. The probate process often takes ______ before the property is distributed.
a. 20 years or more
b. A few days
c. A few hours
d. A year or more
226) All sorts of trusts, including living trusts, have three parties: a trustee, a trustor, and a beneficiary. In the case of a living trust, the person who places property in trust while still alive for the benefit of another person is the ______.
a. Beneficiary
b. Optee
c. Trustee
d. Trustor
227) When a land trust expires, the trustee must either extend the trust term or sell the real estate and ______.
a. Give all of the proceeds to the attorneys involved
b. Give the proceeds to the beneficiary
c. Give the proceeds to the trustor
d. Retain the proceeds
228) Darren set up a land trust so that his children could benefit from his real estate investments after he dies. He asked his financial advisor Tom to manage the trust. Darren is the ______.
a. Beneficiary
b. Executor
c. Trustee
d. Trustor
229) What type of asset is held in a land trust?
a. Always tillable land
b. Cash
c. Real estate
d. Stocks and bonds
230) Beneficiary interest in land that’s part of a land trust is considered ______.
a. Personal property
b. Protected from creditors
c. Real property
d. Subject to partition
231) Anthony owns a new commercial strip mall with several units. He’s hired Jillian as his agent to find tenants to rent each unit. Is Jillian required to provide Anthony with an agency disclosure form?
a. It depends on how many units are for lease.
b. No, agency disclosure is only required for residential transactions.
c. No, agency disclosure is only required on sales of commercial properties.
d. Yes, Jillian is required to provide Anthony with an agency disclosure form.
232) Rob is searching for a new apartment that he can lease for the next two years while he’s working in the area. He has hired Danielle to represent him as his agent in this transaction. Is Danielle required to provide Rob with an agency disclosure form?
a. No, agency disclosure is only required on leases shorter than one year.
b. No, agency disclosure is only required on sales of residential properties with one to four units.
c. No, Danielle does not provide the agency disclosure to her client. He only provides it to the landlord involved in the transaction.
d. Yes, agency disclosure is required on leases exceeding one year.
233) Simon is a buyer represented by Peter. Peter shows Simon several homes currently on the market. What is Peter’s relationship to the sellers, if he doesn’t represent them?
a. Peter has no relationship with the sellers.
b. Peter is a fiduciary for the sellers.
c. The sellers are Peter’s customers.
d. The sellers are Peter’s principals.
234) Cam is a broker. His licensees, Jane and John, represent two sides in a single transaction. Jane represents the seller; John represents the buyer. What relationship does Cam have to the buyer and the seller?
a. Cam is a designated agent to both the buyer and seller.
b. Cam is a designated agent to the buyer and a dual agent to the seller.
c. Cam is a designated agent to the seller and a dual agent to the buyer.
d. Cam is a dual agent to both the buyer and seller.
235) Rhonda is an unrepresented buyer who’s purchasing Tony’s townhome. Gary represents Tony in the sale of his property. What’s Rhonda’s relationship to Gary?
a. A client and fiduciary
b. A customer
c. A customer and client
d. A fiduciary
236) As Tina’s agent, Marcus has broad responsibility to handle all the details of a specific transaction. What type of agent is Marcus?
a. Dual
b. General
c. Limited
d. Specific or special
237) Stacey, a buyer, is working with Rebecca, a licensee, in a state that doesn’t recognize or permit implied agency. Rebecca doesn’t represent Stacey, however, and is performing only ministerial tasks for her. Which of the following statements about this situation is correct?
a. Rebecca can’t work with Stacey without an agency agreement.
b. Rebecca is acting in an agency capacity for Stacey.
c. Stacey is Rebecca’s client.
d. Stacey is Rebecca’s customer
238) Which of the following lease agreements should be accompanied by an agency disclosure?
a. 15-month lease
b. Nine-month lease
c. Six-month lease
d. Three-month lease

239) Jill is selling her property and hired David as her agent. David brings another client, Kirk, to see the property, which Kirk is interested in purchasing. What kind of agent is David acting as in this scenario?Top of Form
a. A buyer’s agent
b. A dual agent
c. A seller’s agent
d. A sub-agent
240) An unrepresented ______ who’s a party to a transaction is known as a principal.
a. Agent
b. Broker
c. Client
d. CustomerBottom of Form
241) When a licensee has broad responsibility to handle all details of a specific transaction, what type of real estate agency relationship usually exists?
a. Designated
b. General
c. Special
d. Universal
242) You’re holding an open house for Brenda. Walt and Mary walk in and ask you for a flyer that gives details about the property. At this point, what’s your relationship with Walt and Mary?
a. Clients
b. Confidantes
c. Customers
d. Friends Top of Form
243) Which one of the following definitions best describes a consumer?
a. Someone who is hired to act on behalf of a client
b. Someone who is in a position of trust and loyalty
c. Someone who is involved in a transaction but represents neither party
d. Someone who uses or purchases a product or service
244) Which of the following best indicates that Harold is Kelsey’s seller client?
a. At an open house, Harold asked Kelsey about her commission rate and sales track record.
b. Harold and Kelsey talked at a local elementary school event about the real estate market and the possibility of Harold selling his house.
c. Kelsey and Harold have a signed agency agreement.
d. Kelsey cold-called Harold, and he mentioned that he had been thinking of selling his house.
245) Javier represents Marcus, who’s selling his rental property to Ben. Ben is represented by another real estate licensee, Francis. What is Ben’s relationship to Javier?
a. Client and fiduciary
b. Customer
c. Customer and client
d. Fiduciary
246)
247) What’s the term for someone who’s been given the authority to act on behalf of someone else?
a. Agent
b. Client
c. Mortgage lender
d. Trustor
248) Phil is a property manager, which means he serves as a _______ agent to his landlord/client.
a. Designated
b. General
c. Special
d. Universal
249) Jennifer is selling her property and hired Larry as her agent. Jane brings her prospective buyer client, Andrew, to see Jennifer’s property. What is Larry’s role in this scenario?
a. A buyer’s agent
b. A dual agent
c. A seller’s agent
d. A sub-agent
250) Which of the following statements regarding buyer and seller agency is true?
a. A seller’s agent represents the buyer, while the buyer’s agent represents the seller.
b. A seller’s agent represents the seller, while the buyer’s agent represents the buyer.
c. A sub-agent represents the buyer.
d. Seller agents are dual agents.
251) Terry represents seller Farrah, and Michael represents Troy, the buyer. Who is (or are) the principal(s) in this transaction?
a. Farrah
b. Farrah and Troy
c. Terry and Michael
d. Troy
252) Which of the following describes a universal agent?
a. Buyer’s agent
b. Conservator
c. Escrow officer
d. Listing agent
253) Paulo is a property manager for several large properties. Which type of agent is he in relation to the landlord/client?
a. Dual
b. General
c. Limited/special
d. Unlicensed
254) April and Wayne are the buyer and seller of a condo, respectively. April is represented by Steve. Wayne is represented by Wanda. Name the principal(s) in this transaction.
a. April and Wayne
b. Only Wanda
c. Only Wayne
d. Steve and Wanda
255)
256) You have a listing agreement with Sam. Because of this, what is Sam’s relationship to you?
a. Client
b. Confidante
c. Customer
d. Friend
257) Tamron owns a commercial strip mall with several units. She’d like to sell the property and move on to another project. She has hired Christopher as her agent. Is Christopher required to provide Tamron with an agency disclosure form?
a. No, agency disclosure is not required on commercial properties.
b. No, agency disclosure is only required on sales of residential properties with one to four units.
c. No, Christopher does not provide the agency disclosure to his client. He only provides it to prospective buyers.
d. Yes, agency disclosure is required on commercial properties
258) Which of the following is the most serious consequence of treating a customer as a client?
a. Breaching your duty to your actual client
b. Drumming up potential business
c. Wasting your time
d. Working for someone for free
259) In general, what is the term for a person who’s been placed in a position of loyalty and trust?
a. Attorney in fact
b. Client
c. Fiduciary
d. Mortgage lender
260) Which type of agent is an escrow officer?
a. General agent
b. Limited agent
c. Single agent
d. Universal agent
261) Taylor is the owner of a new apartment building. She has 15 units she needs to lease, so she has enlisted Pablo as her agent. Is Pablo required to give Taylor an agency disclosure form?
a. No, agency disclosure is not required for residential transactions involving five or more units.
b. No, agency disclosure is only required for commercial transactions.
c. No, agency disclosure is only required on sales of residential properties.
d. Yes, agency disclosure is required for lease transactions.
262) Gregory is looking for an apartment to rent for six months. He’s hired Franklin as his agent to help with this search. Is Franklin required to provide Gregory with an agency disclosure form?
a. No, agency disclosure is only required for commercial transactions.
b. No, agency disclosure is only required for lease agreements exceeding one year in length.
c. No, agency disclosure is only required on sales of residential properties.
d. Yes, agency disclosure is required for lease transactions.
263) What’s the term for someone who has agency representation with the licensee?
a. Client
b. Consumer
c. Customer
d. Fiduciary
264)
265) Melanie is selling her single-family home. She has hired Damian to represent her as her agent in this transaction. Is Damian required to provide Melanie with an agency disclosure form?
a. No, agency disclosure is not required on sales of residential properties with one to four units.
b. No, agency disclosure is only required on leases exceeding one year.
c. No, Damian does not provide the agency disclosure to his client. He only provides it to others involved in the transaction.
d. Yes, agency disclosure is required on sales of residential properties with one to four units.
266) When working with a client on a real estate sale, a real estate licensee is usually acting as which type of agent?
a. Designated
b. General
c. Special
d. Universal
267) In most cases, what type of agent is a real estate licensee when working with a client on a real estate sale?
a. Double
b. Dual
c. General
d. Limited or special
268) Your college friend Dave found out that you have a real estate license, and has asked you to help him put together an offer on his neighbor’s house. You agree. What is your relationship with Dave?
a. Dave is your client.
b. Dave is your customer.
c. Dave is your principal.
d. You are Dave’s customer.
269) After the closing, Donna ensures that her client has keys to the property and copies of all the transaction paperwork. Which fiduciary duty is Donna performing?
a. Accounting
b. Confidentiality
c. Disclosure
d. Loyalty
270) Micah’s client often tells him to do things that Micah doesn’t necessarily agree with and that create a lot more work for him. Micah has multiple clients and can’t spend all of his time doing the bidding of just one demanding client. Micah decides to pick and choose which of his client’s instructions he is going to follow. What might be the consequence if Micah doesn’t fulfill his duty of obedience to his client?
a. Micah may be forced to send the client a written apology.
b. Micah may lose the client’s business.
c. Micah may receive a slap on the wrist from his broker, and be told to shape up or ship out.
d. Micah’s commission may be at risk.
271) In which of these situations did the licensee breach the fiduciary duty of loyalty?
a. Margo tells her seller client Troy that his property is worth less than it really is so he will get a quick sale.
b. Michael submits all offers he receives on Jarrod’s property.
c. Steven postponed his vacation so he could attend his seller client’s closing.
d. Tanaka refuses to encourage his seller client to lower his asking price.
272) Informing parties of material facts related to a transaction describes the duty of ______.
a. Accounting
b. Disclosure
c. Loyalty
d. Reasonable skill and care

273) What happens when two fiduciary duties conflict? For instance, your clients ask you not to show their property on evenings and weekends, when most showings occur. To obey (a fiduciary duty) means to fail in reasonable skill and care (another fiduciary duty). What should you do?
a. Discuss the issue with your clients and let them decide.
b. Obey. It always trumps reasonable skill and care.
c. Refuse to work with these unreasonable clients.
d. Wait until your clients are out of town, then show the property.
274) Which of these situations addresses the fiduciary duty of confidentiality?
a. Jeanette, a seller’s agent, tells the buyer’s agent that her client must sell his home because of an illness.
b. Mark discloses the commission split he receives from his broker to a colleague at another firm.
c. Regina tells her seller client that he’s required to disclose the roof damage.
d. Todd’s lender shares Todd’s financial information with the loan underwriter.
275) Monica meets a colleague from another firm, Kate, for lunch, and discovers that a former seller client, Reuben, is now Kate’s buyer customer. Monica tells Kate, “You know Reuben inherited a bunch of money right before he sold his house, right?” Which of these statements is true?
a. This is a breach of confidentiality because confidentiality survives forever.
b. This is a breach of confidentiality because the information impacts Reuben’s negotiating ability with the seller.
c. This isn’t a breach of confidentiality because Reuben is no longer Monica’s client.
d. This isn’t a breach of confidentiality because the information shared doesn’t negatively impact the client.
276) If an agent fails to perform the duty of obedience, what might the legal consequence be?
a. The agent may be charged with misrepresentation.
b. The agent may be given a verbal warning by his broker.
c. The agent may receive a nasty call from the client.
d. The agent may receive a reduced commission.
277) Norman, the seller’s agent, notices a significant crack in the foundation that the inspector failed to note in the inspection report. Norman decides to keep this information to himself. He really needs to close this deal. Which fiduciary duty has Norman breached?
a. The duty of accounting
b. The duty of disclosure
c. The duty of obedience
d. The duty of reasonable skill and care
278) Specifically, what does the fiduciary duty of disclosure relate to?
a. Adverse material facts and publicly recorded facts only
b. Conflicts of interest and confidential information only
c. Conflicts of interest, material facts, and adverse material facts
d. Material facts and adverse material facts only
279) The duty of confidentiality survives agency unless the information is known from other sources or ______.
a. it will help another client.
b. the former client has moved out-of-state.
c. the former client is found guilty of fraud.
d. the transaction has closed.
280) Carrying out a client’s instructions describes the duty of ______.
a. Accounting
b. Loyalty
c. Obedience
d. Reasonable skill and care
281) Alex’s client doesn’t want prospective buyers to track dirt and mud throughout her clean home. She asks Alex to place a box of booties by the front door with a sign asking visitors to wear the booties while viewing the home. Alex does as his client instructs—no questions asked. What fiduciary duty is this an example of?
a. The duty of accounting
b. The duty of loyalty
c. The duty of obedience
d. The duty of reasonable skill and care
282) When does an agent’s fiduciary duty of loyalty to the client begin?
a. Five days after both parties have signed the agency agreement
b. The moment both parties agree to an agency relationship
c. The moment the client enters into a sales transaction with another party
d. The moment the seller accepts the buyer’s purchase offer
283) Gary’s new seller client is concerned about privacy and doesn’t want her listing posted on the MLS. Gary explains to her the potential impact this will have on marketing her property, but the client remains adamant. Gary doesn’t list the property on the MLS. What fiduciary duty is at play?
a. The duty of confidentiality
b. The duty of disclosure
c. The duty of loyalty
d. The duty of obedience
284) If you fail to notify your client of a conflict of interest, in addition to the duty of loyalty, what other duty have you breached?
a. Confidentiality
b. Disclosure
c. Obedience
d. Reasonable skill and care

285)
286) Your clients closed on their property yesterday, but you still have some paperwork that you need to deliver to them as soon as possible. Under which fiduciary duty are you acting?
a. The duty of accounting
b. The duty of confidentiality
c. The duty of disclosure
d. The duty of obedience
287) What’s one of the most fundamental of all fiduciary duties, and is the one that underlies all other duties?
a. Accounting
b. Disclosure
c. Loyalty
d. Obedience
288) Your buyer client, Ben Dalton, tells you two weeks before closing that he’s lost his job. He doesn’t have any other income at the moment, and may not be able to follow through on his purchase of the house you’re helping him buy. However, he doesn’t want to miss out on his dream home and is optimistic that he’ll find something soon, so he asks you to keep it confidential. What should you do?
a. Disclose this fact to all parties to the transaction if Ben refuses to do so.
b. Keep it confidential, because you owe him that fiduciary duty.
c. Keep it confidential, but only on the condition that Ben promises not to tell anyone he told you, so you can play dumb.
d. Send an anonymous note to the seller’s agent telling him the truth.
289) Select the situation that correctly represents a true conflict of fiduciary duties.
a. Kai learns that her buyer clients’ inspector will be reporting a furnace issue to the buyers. She doesn’t want to break the news to them. Her duty of confidentiality to the seller and her duty of loyalty to her buyers are in conflict.
b. Nikki’s seller client has instructed her not to present offers that are less than the listing price. This is a conflict of Nikki’s duty of disclosure, which requires her to present all offers, and her duty of obedience.
c. Renee’s clients don’t want showings on weekends. Renee knows this may reduce market exposure and she feels it’s not in her client’s best interests. This is a conflict of her duty of loyalty and her duty of obedience.
d. Terrance’s buyer clients don’t want him to share with the seller that they’re having trouble coming up with the down payment. Terrance’s duty of loyalty to his clients is in conflict with his duty of disclosure.

290) Which of the following details may you share with the buyer if you’re the seller’s agent?
a. None of these facts may be shared with the buyer if you’re the seller’s agent.
b. The roof leaks when it rains.
c. The seller is in a hurry to move because his wife is seven months pregnant.
d. The seller is willing to take less than the asking price.
291) Simone can’t believe that her client won’t let her put a lockbox on the property. How does he expect other agents to be able to show the home? Oh well, it’s not as if he’s asking her to do something illegal. The client’s wish is her command. What fiduciary duty is this an example of?
a. The duty of accounting
b. The duty of loyalty
c. The duty of obedience
d. The duty of reasonable skill and care
292)
293) A seller tells his agent that he has to sell his house quickly because of a divorce proceeding, and that he’s willing to accept less than his list price. His agent tells a buyer that the seller will accept as much as $10,000 less than the list price. Which of these is true?
a. The agent has breached his duty of confidentiality to his client.
b. The agent hasn’t violated any fiduciary responsibilities to his client.
c. The buyer is prohibited from making an offer because of the agent’s breach of confidentiality.
d. Unless the agent has the seller’s permission to share this information, the agent should have disclosed only that the seller is willing to reduce his price, not the amount.
294) Henry is Monica’s listing agent. As Monica’s agent, Henry has a duty to account for and properly handle her funds and ______.
a. Financial investments
b. Paperwork
c. Personal savings
d. Property taxes

295) While hosting an open house, Liza speaks with prospective buyers. They’re interested in the house, but think the listing price is a little high. They ask her what other incentives they could include in their offer to get the seller to come down on their price. If Liza helps them, what duty may she be breaching?
a. Accounting
b. Loyalty
c. Obedience
d. Reasonable skill and care
296) You might tell a new client, “This means that I, as the agent, have to keep certain private information you tell me, or that I find out otherwise in our relationship, to myself,” when describing your duty of ______ to the client.
a. Confidentiality
b. Loyalty
c. Obedience
d. Reasonable skill and care.
297) What happens when your client asks you to do something that’s against the law?
a. According to the duty of obedience, you must obey, but document the request.
b. You must break your duty of obedience.
c. You must obey, but ask your client to sign a disclaimer for your actions.
d. You must report your client to the authorities.
298) Which of these would be a breach of Margo’s fiduciary duty of confidentiality?
a. Margo told a potential buyer that the city council was considering rezoning the area around the property to commercial/light industrial.
b. Margo told her seller client Troy the percentage commission split she gets from her broker.
c. Under court order, Margo revealed conversations about the financial status of her previous client.
d. When asked by the buyer’s agent if the seller was firm on his price, Margo said, “Everything’s negotiable,” and winked at the other agent.
299) Shari’s clients want her to post that there are “no showings on weekends” on the MLS. Shari knows that will significantly cut down on their market exposure. Her duty of reasonable skill and care is in conflict with her duty of ______.
a. Accounting
b. Disclosure
c. Loyalty
d. Obedience
300) What does the letter R in the acronym for fiduciary duties (OLD CAR) stand for?
a. Rationality
b. Reasonable skill and care
c. Respect
d. Responsibility
301) Which of these situations is addressed by the fiduciary duty of disclosure?
a. The buyer fails to disclose to the seller his need to close on the property quickly.
b. The buyer’s home inspector refuses to share the inspection report with the seller.
c. The seller refuses to complete a property disclosure form.
d. The seller’s agent fails to disclose a conflict of interest.
302) Which one of the following is an example of the duty of loyalty?
a. Carrying out a client’s instructions without question
b. Keeping a client’s confidential information confidential
c. Never questioning a client’s opinion
d. Putting the client’s interests first
303) Jim represents Joel in the sale of Joel’s country acreage and house. Jim’s business partner, Rolly, informed Jim that he wants to put an offer in to purchase the property, with the intention to subdivide it. Which statement best represents the disclosure requirements regarding this transaction?
a. Because Jim isn’t buying the property for himself, he has no disclosure requirements.
b. Jim may disclose that he’s partners with Rolly, only if Rolly agrees.
c. Jim must disclose that Rolly is his partner and that Rolly intends to subdivide the property.
d. Rolly must disclose that he and Jim are business partners.
304) A client has asked her agent for a 24-hour notice on showings. The agent knows this will have a negative impact on the number of showings. Which duty is in conflict with reasonable skill and care?
a. Accounting
b. Confidentiality
c. Disclosure
d. Obedience
305) Newt’s buyer client isn’t happy with him. The buyer has accused Newt of breaching his duty of ______ by mishandling the earnest money.
a. Accounting
b. Confidentiality
c. Disclosure
d. Obedience
306) Which of these is an example of an agent NOT executing the duty of reasonable skill and care?
a. Kevin, Corinne’s buyer agent, helped her write her offer and reviewed it to make sure it was what she wanted before presenting it to the seller’s agent.
b. Marta agreed to list a commercial property even though her expertise is in residential real estate.
c. Morgan is careful to protect and manage all his client’s earnest money deposits.
d. Rex promptly submits all offers to his seller client.
307) Which fiduciary duty requires agents to handle their clients’ funds and paperwork properly?
a. The duty of accounting
b. The duty of confidentiality
c. The duty of disclosure
d. The duty of obedience
308)
309) Which of these tasks that Jenna performs does NOT represent the fiduciary duty of accounting?
a. She avoids commingling trust funds with her firm’s operating funds.
b. She discloses the terms of the listing agent’s compensation to her client.
c. She meticulously manages all her clients’ transactional paperwork.
d. She properly records the earnest money her buyer client gave her.
310) Facts that negatively affect a property’s value are known as:
a. confidential.
b. Immaterial facts.
c. Material facts.
d. property fraud.
311) Which of these circumstances does NOT require agent disclosure?
a. As part of his corporation, Sean, a licensee, owns several investment properties. He’s selling one.
b. Gary represents the buyer. He’s a shareholder in the title insurance company the buyer has selected.
c. Marty is representing Dwayne in both the sale of his current home and the purchase of his new home.
d. Megan has listed her brother’s townhome for sale.
312) Which of the following statements about the fiduciary duty of confidentiality is true?
a. It doesn’t extend to material facts relating to the property.
b. It encompasses any and all information the client tells the agent, not just confidential information.
c. It ends with the termination of the agency agreement.
d. It never conflicts with the duty of disclosure.
313) Which of the following is an example of the duty of disclosure?
a. Carrying out a client’s instructions without question
b. Informing parties to the transaction of material facts related to the transaction
c. Keeping a client’s confidential information confidential
d. Keeping the client in the loop on all that is happening with the transaction
314) Jessie, the buyer’s agent, decides to informally inspect the property while she waits for the professional inspection. She notices a small puddle of water in the basement behind a stack of boxes. Later, Jessie calls the seller’s agent and tells him what she found. The agent tells her not to worry; the seller is aware of the leak and plans to have it fixed within the week. Which one of these statements about this situation is true?
a. Jessie can check the basement later to be sure the leak is fixed.
b. Jessie can rely on the inspector to discover and disclose the leak.
c. Jessie should disclose this to her buyer.
d. Since the seller intends to fix the leak, Jessie doesn’t need to disclose it to her buyer.
315) When agents put their clients’ interests ahead of their own, this describes the duty of ______.
a. Accounting
b. Loyalty
c. Obedience
d. Reasonable skill and care
316) Which of the following statements about the fiduciary duty of disclosure is true?
a. It only applies to the seller’s agent.
b. It requires licensees to disclose everything to all parties.
c. It’s owed to other parties, not just to the licensee’s clients.
d. It’s owed to the licensee’s clients only.
317) Which fiduciary duty may continue even after the transaction closes?
a. The duty of accounting
b. The duty of disclosure
c. The duty of obedience
d. The duty of reasonable skill and care
318) Layla, a licensee, has had a few casual meetings with a potential client, Marcus. Marcus has told Layla the type of home and locations he’s interested in. Layla has mentioned a few homes that she thinks Marcus might be interested in. Although Layla hasn’t said that she will continue to look for homes for Marcus, Marcus believes she’ll do just that. Which of these statements about this situation is correct?
a. Because Layla doesn’t know if Marcus is working with another agent, she’s just inadvertently created a dual agency situation.
b. Because Layla has performed some agency tasks for Marcus, she has an express agency agreement with him.
c. Layla and Marcus have no agency agreement, either express or implied, until Layla begins showing Marcus homes.
d. Layla’s actions may have created an implied agency agreement with Marcus.

319) Max has a written agency agreement with Rufus in which Max will receive all of the listings in the subdivision that Rufus purchased (with Max’s representation) and is developing. One day when Rufus is visiting the site of the subdivision, a work truck accidentally runs him over and he’s seriously injured. Rufus can no longer run the development of the subdivision. What happens to Max’s agency coupled with interest?
a. It’s still in place because it doesn’t terminate on the death or incompetence of the principal.
b. Max has no recourse; the agency relationship is terminated and he receives no compensation.
c. Max now owns the subdivision as a result of the principal’s death or incapacity.
d. Rufus must now pay Max the commission that he didn’t get from the original listing, and the agency relationship is terminated.
320) Leigh Ann is a licensee. Her cousin, Carly, is interested in buying a house. Leigh Ann shows Carly how to look for properties online and runs some CMAs for her. When Carly finds a property she likes and asks Leigh Ann to help her make the offer, Leigh Ann decides she should ratify the agreement with Carly. What are Leigh Ann’s options for accepting an agency relationship after the fact?
a. Continue to assist Carly and have her sign an estoppel certificate.
b. Leigh Ann’s only option is to get a signed listing agreement.
c. Prepare an agency agreement or continue to assist Carly with the purchase.
d. Prepare an estoppel certificate and a listing agreement.
321) Elisa agreed to list Simone’s house for sale. After the listing contract was signed, Simone lost her job, and her father, George, offered to help Simone by paying Elisa’s listing commission. The buyer’s agent, Carl, also reduced his commission. Who is Elisa’s client?
a. Carl
b. George
c. No one
d. Simone
322) When the listing agreement’s purpose has been fulfilled, what happens to the agency agreement?
a. Agency continues for future transactions.
b. Agency continues until the agreement’s expiration date.
c. The agency agreement terminates by completion.
d. The agent can renounce the listing agreement to terminate it.
323) Alice listed a three-bedroom home for her client, but before she finds a buyer, the home burns to the ground. What happens to the agency agreement that Alice has with her client?
a. The agency agreement continues as created unless Alice and her client can mutually agree to terminate it.
b. The agency agreement is terminated if the property is destroyed.
c. The agency agreement must be extended until the home is rebuilt, or for six months, whichever is longer.
d. The agreement must continue, but it can be modified due to the changed value of the property.
324) Jenson signed a seller agency agreement with Susan. Right before closing, a hurricane destroyed the property. What happened to Jenson and Susan’s agreement?
a. It’s terminated once the specified term in the agency agreement expires.
b. Jenson and Susan can mutually agree to terminate the agreement.
c. The agreement terminates by force of law.
d. The client can revoke the agreement but may be considered in breach of contract.

325) Which one of the following actions would result in the legal termination of an agency agreement?
a. The client wants the seller to make improvements to the property.
b. The client wants to attach an addendum to the sales contract.
c. There’s an unexpected death in the agent’s family.
d. The term specified in the agency agreement expired.
326) In which of the following listing agreement terminations is there LEAST likely to be a penalty for terminating the agreement?
a. The agent abandons the listing.
b. The client and agent mutually agree to terminate the listing.
c. The client revokes the listing agreement to sell the property to a family member.
d. The seller withdraws the listing, deciding instead to stay in the property.
327) Imagine that you’re an active real estate licensee as well as an architect, and you’d like to partner with a builder who’s just beginning a development. Which of these creates agency coupled with interest?
a. You agree to design the houses for this builder in return for getting the listings when the properties are finished.
b. You agree to list the properties for a reduced commission once they’re built.
c. You have the builder and developer sign listing agreements now that will be effective when the properties are complete.
d. You tell the builder that he has to hire you to design the houses if the builder wants you to list them when they’re finished.
328) In which of these situations would a listing be most likely to terminate due to listing agreement expiration?
a. A market with high inventory and low demand
b. A market with low inventory and high demand
c. A moderately-priced home in a neighborhood slated for renewal
d. A moderately priced home sold as-is in a market full of investors
329) Marcus listed his property with Home Sweet Home Realty and one of its listing agents, Ron Savage. About a month later, Ron filed for bankruptcy. Which of the following statements about this situation is true?
a. Bankruptcy has no impact on agency agreements.
b. Marcus can choose whether or not to continue the listing agreement with Ron.
c. The agency agreement is terminated because the agent filed for bankruptcy.
d. The agency agreement only terminates if the broker or the principal declares bankruptcy.

330) What happens if a real estate licensee acting as a finder performs duties beyond just introducing the buyer and seller?
a. An agency relationship is created. The licensee can face disciplinary action if an agency is formed without proper agency disclosures.
b. Nothing. The person has a real estate license and can perform other duties as needed.
c. The licensee can get in trouble for acting as a dual agent.
d. The licensee is guilty of misrepresentation.
331) You represent the buyer, and another licensee from your brokerage represents the seller in the same transaction. What type of agency relationship do you and the other licensee have with your clients?
a. Buyer agency
b. Dual-licensed dual agency
c. Seller agency
d. Single-licensed dual agency
332) Broker Adeline’s firm has a listing for a condo downtown. Maurice is a cooperating agent. What does this mean?
a. He doesn’t mind working with other brokers.
b. He’s from another brokerage and brings a potential buyer for the listing.
c. He’s the listing agent for the condo and also represents a buyer interested in the condo.
d. He works at Adeline’s firm and is helping to market the condo listing.
333) Which fiduciary duties does a finder owe?
a. A finder doesn’t owe any fiduciary duties.
b. A finder only owes the duties of confidentiality and loyalty.
c. A finder only owes the duty of confidentiality.
d. A finder owes the duties of obedience, loyalty, disclosure, confidentiality, accountability, and reasonable skill and care.
334) Hanna represents the buyer, and Hank, an agent from a different firm, represents the seller in the same transaction. What type of agency relationship does Hanna have with her client?
a. Buyer agency
b. Dual-license dual agency
c. Seller agency
d. Single-license dual agency
335) Estelle is representing seller Margaret. Which of the following tasks is one that Estelle is required to perform as Margaret’s agent?
a. Determine the property’s listing price based on comparables.
b. Give the buyer’s earnest money to Margaret to deposit into her personal checking account.
c. Hire someone to market the property.
d. Inform Margaret about required property condition disclosures.
336) Which of the following is an example of a sub-agency situation?
a. Kayla is a licensee with ABC Realty and lists a property for seller Devon. Maurice is a salesperson with XYZ Realty Group, and he has a buyer customer who wants to see the property.
b. Kermit is represented by Burt, an agent with Street Realty. Today they are seeing Oscar’s house, which has been listed by Oscar’s agent, Ernie, from Energy Realty.
c. Rita is a licensee with Hawthorne Realty. She has a client, Dinah, who is selling her condo. Rita thinks Dinah’s house will be perfect for Ruby, a customer.
d. Tim and Tom are both licensees with Acme Realty. Tim is the listing agent on a home where Tom represents the buyer.
337) Madeline works for a single-agency firm. If she wants to represent both the buyer and seller in a transaction, what must she do?
a. She can’t do this at her firm.
b. She may act as a designated agent for one client and a representative agent for the other.
c. She should get informed consent from both sides to represent them.
d. She should have her broker act as a dual agent, and she can be a single agent for each party.
338) Ned represents Sofia in the sale of her townhome. Luciana represents Sofia’s buyer, Arturo. What is Luciana’s responsibility to Sofia?
a. Assist Sofia in the performance of tasks that Sofia needs to accomplish in order to get to a successful closing.
b. Contact the tax assessor’s office for an estimate of the real property taxes.
c. Disclose that the buyer is a registered sex offender.
d. Disclose that the buyer will not have the funds for the down payment unless he sells his current home.
339) In a seller agency relationship, to which party does the licensee owe undivided loyalty?
a. Both the seller and the buyer
b. The broker
c. The buyer
d. The seller
340) As a licensee, you’ll have several tasks you must perform for your buyer client. One of these tasks is to ______.
a. Coach the buyer on how to negotiate the terms of the sales contract to be completely in the buyer’s favor
b. Explain to the buyer why it’s unnecessary to have a professional inspection done on a new home
c. Review transaction documents with the buyer, clarifying anything that could be confusing, without stepping outside the scope of your license
d. Show properties the buyer might qualify for if he would put down more earnest money

341) Bradley is acting as a finder for Emma. He’s introduced her to Rachel, the other party in the transaction. Whom does Bradley represent?
a. Both Emma and Rachel
b. Emma
c. Neither Emma nor Rachel
d. Rachel

342) If you represent the buyer and seller in the same transaction, what type of agency relationship do you have with your clients?
a. Buyer agency
b. Dual-licensed dual agency
c. Seller agency
d. Single-licensed dual agency

343) Assuming that dual agency is legal where these scenarios occur and that the licensees’ brokerages permit it, which of these situations demonstrates illegal dual agency?
a. Jarrod represents the seller, Juan. A buyer, Alaina, approaches Jarrod about representing her in the purchase of Juan’s house. Jarrod obtains Juan and Alaina’s consent to dual agency.
b. Kady’s firm uses representation agreements that, when signed, provide consent to dual licensee dual agency. Kady’s buyer makes an offer on one of Kady’s colleague’s listings.
c. Levi’s customer, Renee, wants to make an offer on Levi’s seller client’s home. Levi explains that he represents the seller but then presents Renee’s offer to his client.
d. Tom is holding an open house for his client. Ruby, a buyer, says she wants to make an offer. She details her situation; Tom waits until she finishes and then suggests that she offer a non-refundable earnest money deposit to strengthen her offer.
344) What happens if a person without a real estate license is acting as a finder and performs duties beyond just introducing the buyer and seller, such as negotiation or advising?
a. An agency relationship is created. The individual can face disciplinary action if an agency relationship is formed without proper agency disclosures.
b. Nothing. The person is not a licensee and doesn’t face any repercussions from the real estate commission.
c. The individual can get into trouble for acting as a dual agent.
d. The individual could face penalties for acting as a real estate licensee without having a real estate license.
345) Bradley is acting as a finder for Emma. He’s introducing her to Rachel, the other party in the transaction. Which fiduciary duties does Bradley owe Rachel?
a. A finder doesn’t owe any fiduciary duties.
b. He only owes the duties of confidentiality and loyalty.
c. He only owes the duty of confidentiality.
d. He owes the duties of obedience, loyalty, disclosure, confidentiality, accountability, and reasonable skill and care.
346) Licensee Randy has a written listing agreement with Brent, a seller. The buyer is Tim. Who is Randy’s client?
a. Both the seller (Brent) and the buyer (Tim)
b. Randy’s broker
c. The buyer (Tim)
d. The seller (Brent)
347) Natalie is selling her home and has hired Dylan as her agent. Natalie has given Dylan permission to enlist the services of another licensee, Al, to act as a sub-agent for the transaction. Who is liable for Al’s actions?
a. Dylan and Al only
b. Dylan, Natalie, and Al
c. Dylan only
d. Natalie only
348) Who does a finder represent?
a. Both the buyer and seller
b. Neither the buyer nor seller
c. The buyer
d. The seller
349) Orla represents the seller, and Pardeep, an agent from a different firm, represents the buyer in the same transaction. What type of agency relationship does Orla have with her client?
a. Buyer agency
b. Dual-licensee dual agency
c. Seller agency
d. Single-licensee dual agency
350) After a few meetings, the Stinsons sign a listing agreement with broker Vera so she can sell their house. The house has already generated interest from a potential buyer named Sergei, who has spoken with Vera about the house’s price and square footage. Which of the following is true about this situation?
a. Because Vera now has a sub-agency relationship with the Stinsons, she shouldn’t talk to Sergei until the house is officially on the market.
b. The Stinsons and Vera have brokerage relationship agreement.
c. Vera has an agency agreement with Sergei.
d. Vera should disclose the dual agency that has been created by her direct assistance to the buyer
351) Bradley is acting as a finder for Emma. Which action can he perform?
a. Introduce Emma to the seller (or buyer)
b. Negotiate an offer for Emma
c. None of these actions
d. Present the offer on Emma’s behalf
352) In a buyer agency relationship, what relationship does the seller have to the licensee?
a. The seller is the licensee’s client.
b. The seller is the licensee’s customer.
c. The seller is the licensee’s fiduciary.
d. The seller is the licensee’s nemesis.
353) Which of the following questions can an agent in a dual agency transaction answer without breaching her duties to either client?
a. Are you aware of any structural issues with the property?
b. How much should my counter-offer to the buyer be?
c. What repairs or concessions should I ask for from the home inspection?
d. What should I agree to fix from this list the buyer sent?
354) A middleman is another term for a _______.
a. Finder
b. Keeper
c. Universal agent
d. Wholesaler
355) Mavis is a buyer’s agent working with Blaine, an unrepresented seller. Mavis’s buyer, Cintra, makes an offer on Blaine’s property. Mavis assists Blaine with the paperwork. What’s Mavis’s relationship to the parties?
a. She’s a buyer’s agent to Cintra and an undisclosed dual agent with the seller.
b. She’s a dual agent to the buyer and seller.
c. She’s an agent to Cintra, and the seller is her customer.
d. The seller and buyer are her customers.
356) When a licensee represents a seller, which one of the following statements is true about the licensee’s ability to list other properties that are for sale?
a. The licensee isn’t permitted to list other properties for sale.
b. The licensee is permitted to list other properties for sale as long as they’re not competing properties.
c. The licensee is permitted to list other properties for sale, even if they’re competing properties.
d. The licensee must list the seller’s property only for the first 90 days, after which the licensee may list other properties.
357) A licensee has several tasks to perform for seller clients. What’s one of those tasks?
a. Advise sellers on the property conditions they shouldn’t disclose to the buyer.
b. Communicate all offers and counter-offers to the sellers.
c. Disclose to the sellers that if the property doesn’t sell within 60 days, the asking price must be lowered.
d. Ensure an implied agency agreement is in place.
358) Erik is acting in a single agency capacity in a transaction. What does this mean?
a. Erik isn’t part of a realty team within his brokerage firm.
b. He’s representing (and owes undivided loyalty to) either the buyer or the seller.
c. He’s working as a non-agent for either the buyer or seller.
d. His firm doesn’t allow dual agency.
359) Bradley is a real estate licensee acting as a finder for Emma. What happens if he performs duties beyond just introducing the buyer and seller, such as negotiating a deal?
a. An agency relationship is created. Bradley can face disciplinary action if an agency is formed without proper agency disclosures.
b. Bradley is guilty of misrepresentation.
c. He can get in trouble for acting as a dual agent.
d. Nothing. He has a real estate license so he can perform other duties as needed.
360) Which one of the following tasks must licensees perform for seller clients?
a. Dictate the listing price of the property.
b. Drive the sellers around to show them other properties that are for sale in their neighborhood.
c. Ensure that the buyer’s earnest money is deposited.
d. Show the sellers how they can market their property.
361) A licensee must perform which of the following tasks for a buyer client?
a. Ensure the buyer understands the importance of due diligence, including a professional inspection of the property.
b. Review the seller’s property disclosures and show the buyer the ones that you believe are important.
c. Show the buyer properties that you are listing for other sellers.
d. Tell the buyer how much earnest money she should put down to ensure the deal goes through.
362) What is a sub-agent?
a. An agent appointed by another agent to assist in serving a seller client
b. An agent who handles the listing for a seller
c. An inexperienced agent
d. Anyone who works for a broker
363) Buyer Kristin has a buyer agency agreement with Carlotta, a licensee. Kristin’s brother, Dalton, is going to showings with Kristin and helping her decide which house is the best fit. Who is/are Carlotta’s client(s)?
a. Kristin
b. Kristin and Dalton
c. Kristin and the seller
d. The seller
364) A finder is a _______.
a. General agent
b. Limited agent
c. Middleman
d. Universal agent
365) Melinda is selling her home and has hired Megan as her agent. Megan enlists the services of another licensee, Alison, to act as a sub-agent for the transaction without permission from Melinda. Who is liable for Alison’s actions?
a. Megan and Alison only
b. Megan, Melinda, and Alison
c. Megan only
d. Melinda only
366) Marge is a licensee in a dual agency transaction with seller Steven and buyer Alda. In which of the following situations can Marge share what she knows with all parties without compromising her duty of loyalty?
a. Alda tells Marge she wants to make an offer on Steven’s property and asks Marge what she should offer, since Marge knows Steven’s rock-bottom price.
b. Alda tells Marge that she’s hired an inspector to perform a property inspection.
c. During the home inspection, Marge hears the buyer tell the inspector several times, “That’s no big deal. I can fix that.” The buyer lists those as repairs she wants the seller to make.
d. Steven tells Marge he can reduce his price, and Alda tells Marge she can increase her offer.
367) In a buyer agency relationship, whom does the licensee represent?
a. Both the seller and the buyer
b. The buyer
c. The listing firm and the buyer
d. The seller
368) Bradley is acting as a finder for Emma. What’s Bradley’s role?
a. To help buyers and sellers locate agents
b. To introduce the buyer and seller, but not provide representation
c. To investigate title issues
d. To try to locate the prior owners of a specific property
369) A person who doesn’t owe either party any fiduciary duties and only introduces the buyer and seller is called a ____.
a. Finder
b. General agent
c. Limited agent
d. Special agent
370) Ryan is an unlicensed individual acting as a finder for Rachel. What happens if he performs duties beyond just introducing the buyer and seller, such as negotiating a deal?
a. An agency relationship is created. Ryan can face disciplinary action if an agency is formed without proper agency disclosures.
b. Nothing. Ryan is not a licensee, so he doesn’t face any repercussions from the real estate commission.
c. Ryan can get in trouble for acting as a dual agent.
d. Ryan could face penalties for acting as a real estate licensee without having a real estate license.
371) What responsibility does the seller’s agent have to the seller?
a. Advocate for and ensure the sale is profitable for the seller.
b. Advocate for the seller and help present the property in the best light, even if it means covering up material defects.
c. Ensure the sale is profitable for the seller.
d. Seek a sale at the best price at terms that are acceptable to the seller.
372) Which of the following is a buyer’s agent’s task or duty?
a. Advocating for the seller
b. Negotiating for the seller
c. Representing the buyer’s interests
d. Reviewing transactional documents with the seller
373) Which one of the following provides the best example of single agency?
a. A broker acts as a dual agent to one party only.
b. An agent from one firm acts as the agent for the buyer.
c. Two agents from different firms each act as a sub-agent for the other.
d. Two agents from one firm act, separately, as the agent for the buyer the agent for the seller.
374) Monica’s business is booming. She’s representing an owner who’s selling a $500,000 home on one side of town, and a buyer who’s purchasing a $300,000 property on the other side of town. As it happens, the seller and buyer both know each other from church and have been talking to others about Monica’s talents, which has brought in several new leads for her to pursue. What type of agency relationship does Monica have with the seller and buyer?
a. She is each party’s single agent.
b. She’s a dual agent, since the seller and buyer know each other.
c. She’s the buyer’s agent and the seller’s sub-agent.
d. She’s the seller’s agent and the buyer’s sub-agent.
375) Which of these situations is an example of designated (appointed) agency?
a. Jacob, a broker, acts as the dual agent and appoints Mark to represent the buyer and Todd to represent the seller in the same transaction.
b. Marvel’s broker at Homeworks Realty appoints her as the buyer’s agent in a transaction. Tim’s broker at Great Homes Real Estate appoints him as the seller’s broker in the same transaction.
c. Meredith’s broker appoints her to represent both the buyer and the seller in a single transaction.
d. Michele is the firm’s managing broker. She’s the designated dual agent in all dual agency transactions.
376) Which action can a finder perform?
a. Introduce the buyer and seller
b. Negotiate an offer for a client
c. None of these actions
d. Present the offer on a client’s behalf
377) Camille has a listing for a townhome, and appoints Ivy as her sub-agent. Ivy brings a buyer customer to the transaction, and the buyer purchases Camille’s listing. What’s true about the agency relationships in this situation?
a. Camille owes her loyalty to Ivy.
b. Ivy is Camille’s sub-agent and owes loyalty to the seller.
c. Ivy owes her loyalty to the buyer.
d. The buyer is the sub-agent to the seller.
378) Which of these tasks must a licensee perform for buyer clients?
a. Advise the buyer on how to get the seller to come down on the asking price.
b. Ensure that the buyer receives copies of all signed paperwork.
c. Explain to the buyer how to deposit the earnest money into the seller’s personal checking account.
d. Explain to the buyer that there’s really no need to review transaction documents because they’re all standard.
379) You’re representing Abe and Ben in a dual agency situation. Abe tells you something that would give Ben a distinct advantage if he knew. Do you tell Ben?
a. No, because agents can’t share information with their clients.
b. No, because it’s hearsay.
c. No, because you can’t share one client’s confidential information with another client.
d. Yes, because Ben is your client and has a right to know.
380) Which legal description method uses compass headings and directions?
a. Block and grid
b. Lot and block
c. Metes and bounds
d. Rectangular government survey
381) “Beginning at a stake and stones about 30 feet from the center of the brook that runs across the road Southwesterly from the dwelling house of the late Henry Nelson …” is an example of what type of legal description?
a. Benchmark
b. Lot and block
c. Metes and bounds
d. Rectangular
382) Which entity decides the matter when two different legal descriptions conflict?
a. Appraisers
b. Land surveyors
c. The courts
d. The property owners
383) Travis is a new real estate licensee and is writing up his first offer to purchase for his buyer clients. Which of these statements is true?
a. Real estate licensees don’t have access to legal descriptions.
b. Travis should include the legal description in the offer, because it provides a complete description of the property.
c. Travis should not include the legal description on the offer to purchase, but he should include the address.
d. Travis shouldn’t write up the offer to purchase; the client should.
384) Which of these may have been used as a point of beginning in the metes and bounds system?
a. A fence post
b. All of these
c. An iron stake
d. A pine tree
385) A registered land surveyor is preparing a plat map that will show elevations and boundaries for a multi-level condominium complex. What is used as a reference point for measuring elevation?
a. Datum
b. Monument
c. Point of beginning
d. Sea level
386) Morty, a land surveyor, was called out to survey a property. After doing some research, he located the legal description for the property in question. Now, if he could just find the point of beginning located at the iron pin on the southerly line of state route 117, 30 feet east of the oak tree next to Bear Creek. What type of legal description is Morty working with?
a. Benchmark
b. Datum
c. Metes and bounds
d. Rectangular government survey
387) What’s a datum?
a. An iron pin or other permanent marker used in metes and bounds descriptions
b. A point indicating a location is at sea level
c. A point, surface, or line used as a reference for measuring elevations
d. The center of a township
388) Sunshine Surveyors, Inc. created a lot and block survey for a new residential development, Happy Acres. The first thing the surveyor did when he surveyed the new neighborhood was to reference what type of description?
a. Map
b. Metes and bounds description
c. Monument
d. Plat book
389) Cheri wants to find the legal description for her property. Where could she look?
a. At a deed
b. In a history book
c. In a phone book
d. On a piece of mail
390) Which of the following is NOT one of the three most commonly used systems to describe land in the U.S.?
a. Lot and block
b. Metes and bounds
c. Monument system
d. Rectangular survey system
391) When looking at a rectangular survey system map, where would Section 36 be located?
a. The exact center of the township
b. The northeastern-most section of the township
c. The southeastern-most section of the township
d. The southwestern-most section of the township
392) What is a principal meridian?
a. An east-west line used as a reference point in the rectangular survey system
b. A north-south line used as a reference point in the rectangular survey system
c. The center-most section identified in the rectangular survey system
d. The center-most township identified in the rectangular survey system
393) Who can verify the boundaries of a legal description for a given property?
a. Anyone with a smart phone
b. Designated broker
c. Land surveyor
d. Title company
394) Pamela inherited a piece of property that has been in her family for generations. She wants to find the property’s exact boundaries. What should contain this information?
a. A fence company’s records
b. A legal description of the property
c. A satellite image of the property
d. Old family photos of the property
395) Buyers Tony and Sylvia know the postal address of the property they’re purchasing but are wondering about the legal description of the property. Where is the most likely place to find the legal description?
a. Deed
b. HOA covenant
c. Home warranty
d. Listing agreement
396) The Simpsons are buying a five-acre lot that was part of a much larger tract of acreage. When the owners of the large acreage decided to subdivide it, they needed to have a legal description created for the five-acre lot. What was used as the starting point for creating that legal description?
a. A benchmark
b. A plat map
c. A survey
d. Metes
397) What does the metes and bounds system use to develop a property’s legal description?
a. Compass headings and directions
b. Plat references
c. Principal meridians and base lines
d. Townships and sections
398) Related to the legal description of land, what is a monument?
a. 43,560 square feet
b. A permanent land marker sometimes used in legal descriptions
c. A point from which elevations are measured
d. The subdivision of air above the land
399) How is the grid that’s used in the rectangular survey system laid out?
a. The numbers are read left to right.
b. The numbers are read right to left.
c. The numbers start in the center and spiral out clockwise.
d. The numbers start in the northeastern corner and follow a zigzag pattern.
400) Absent a legal description, what are other ways to identify a property?
a. A legal description is the only way to identify a property
b. Family photos
c. Satellite imagery
d. Street addresses and tax map personal identification numbers
401) Which of the following is a key consideration and starting reference for a metes and bounds description?
a. Base line
b. Benchmark
c. Point of beginning
d. Principal meridian
402) Why is it important that the legal description appears in real estate documents?
a. It defines the duties an agent owes a client.
b. It details the terms for a lease.
c. It outlines all of the terms of a real estate purchase.
d. It precisely locates the property and its boundaries.
403) Which of the following is the least specific method for describing a property?
a. Lot and block description
b. Metes and bounds description
c. Rectangular survey system description
d. Street address
404) How large is a section used in the rectangular survey system?
a. 640 acres
b. 640 miles
c. 640 square feet
d. One acre
405) What does the lot and block system use to develop a property’s legal description?
a. Compass headings and directions
b. Plat references
c. Principal meridians and base lines
d. Townships and sections
406) Kellan and Stacy are in the midst of a property dispute. Each party has a legal description and survey that show conflicting boundaries between their properties. What may be the best way to resolve this dispute?
a. One property owner can sell their property to the other.
b. They must agree between themselves where the true boundary lies.
c. They must take the dispute to court.
d. They should each hire a land surveyor to determine the boundary.
407) Shannon is reading through paperwork related to her upcoming home purchase when she comes across the following: “Southwest quarter of Southwest quarter (SW ¼ of SW ¼) and West Half of Southeast quarter of Southwest quarter (W½ SE¼ SW¼) of Section Eleven (11), Township Four (4) North of Range Eight (8) West.” What did Shannon just find?
a. Legal description
b. Mortgage clause
c. Quitclaim deed
d. Tax description
408) If the land is described as “Lot 6 of Block 3 of the East Subdivision plat as recorded in Map Book 18, Page 11 at the Recorder of Deeds,” what type of legal description is being used?
a. Lot and block
b. Metes and bounds
c. Monument system
d. Rectangular government survey system
409) What is a bound?
a. A line that runs east to west
b. A line that runs north to south
c. A physical feature that defines the boundaries of the land
d. The direction and distance of a line forming the boundary of a property
410) What is a plat map?
a. A detailed depiction of air lots above the land
b. A detailed map of a subdivision that includes boundaries, measurements, and distances between points
c. A map showing all of the benchmarks located in the U.S.
d. A map tax assessors use when determining the value of a property
411) What is a section?
a. A 36-square-mile square formed in the use of the rectangular survey system
b. A one-square-mile square formed in the use of the rectangular survey system
c. A permanent reference point used in the measurement of elevations
d. The point of beginning used in a metes and bounds survey
412) Which of the following statements related to condominiums and surveys is true?
a. All states require that land used for condominiums be surveyed by a registered land surveyor and that a plat map be prepared to show the elevations of the floor and ceiling boundaries, as well as the vertical boundaries of each unit.
b. Condominiums are not required to be surveyed.
c. Multi-level condominium units cannot be surveyed.
d. Only the ground floor of a condominium unit is surveyed.
413) The process of determining the location, size, and boundaries of a parcel of property is called ______.
a. Platting
b. Subdividing
c. Surveying
d. Title searching
414) Jamie wants to find the legal description for a property. What’s her best bet?
a. County recorder’s office, registry of deeds, or a title company
b. Motor vehicle department
c. Neighborhood notice
d. Real estate flyer
415) Which type of legal description is this: “Plat of Block 28, Woodmen Heights Tract, recorded in Map Book 27, page 68, at the Eldor County Records Office”?
a. Benchmark
b. Lot and block
c. Metes and bounds
d. Rectangular government survey
416) Brandon is interested in purchasing a piece of property, but before doing so, he’d like to verify the accuracy of the legal description. Which of these options will accomplish this?
a. Having a home inspection performed
b. Having an appraisal performed
c. Having a survey conducted
d. Looking up the property on Google
417) What is the oldest type of legal description used in the U.S.?
a. Assessor’s parcel number
b. Lot, block, tract
c. Metes and bounds
d. Rectangular government survey
418) In the rectangular survey system, what is a base line?
a. An east-west line used as a reference point
b. A north-south line used as a reference point
c. The center-most section identified
d. The center-most township identified
419) How are sections and townships related to one another, relative to the rectangular government survey system?
a. Sections are divided into townships.
b. Townships and sections are opposites.
c. Townships and sections are synonyms.
d. Townships are divided into sections.
420) When Shauna looked at the legal description of the property she was interested in purchasing, she read the following: “Beginning at the corner of State Route 61 and Hallowell Road, north for 314 feet, then southwest for 193 feet.” In this description, what does “north for 314 feet” represent?
a. A benchmark
b. A bound
c. A mete
d. A monument
421) Which type of legal description do courts prefer?
a. Benchmark
b. Lot and block
c. Metes and bounds
d. Rectangular government survey
422) If the land is described as “Beginning at the great oak 60 yards from the center of the Rock River that runs north to south through the county,” what type of legal description is being used?
a. Lot and block
b. Metes and bounds
c. Monument system
d. Rectangular survey system
423) Benjamin is interested in a piece of property but is curious about its exact legal description. What’s one of the best ways to find this information?
a. Ask neighbors where the property boundaries are.
b. Look for the point of beginning.
c. Look up the latitude and longitude coordinates of the property on Google Maps.
d. Reference a previous property deed.
424) Harmony is looking at the legal description on her purchase contract. It mentions that the plat of her property is recorded in Map Book 12, page 14, at the county courthouse. What type of legal description is this?
a. Lot and block
b. Metes and bounds
c. Monument and benchmark
d. Rectangular government survey
425) Which legal description method is regulated by the U.S. Department of the Interior’s Bureau of Land Management?
a. Governmental
b. Lot and block
c. Metes and bounds
d. Rectangular government survey
426) Stan and Emile are arguing over their shared lot line, since Stan thinks that Emile planted a privet hedge on Stan’s property. Stan filed a civil legal action against Emile. Which of these would the court use to determine the actual lot line?
a. Aerial photographs
b. An affidavit from a surveyor
c. Legal descriptions of both properties
d. Testimony from long-time neighbors
427) Which type of survey system is also known as the public land survey system (PLSS)?
a. Address and zip code
b. Lot and block
c. Metes and bounds
d. Rectangular survey
428) When measuring elevations, what is used instead of a point of beginning?
a. Datum
b. Equator
c. Monument
d. Sea level
429) A drawing prepared by a surveyor showing the layout and location of a tract of land, including boundaries, designations of lots and blocks, and names of streets, is called a ______.
a. Metes and bounds description
b. Plat
c. Rectangular survey
d. Topographical map
430) A professional, on-site measurement of the lot lines and dimensions of a property is known as ______.
a. An abstract
b. An appraisal
c. An inspection
d. A survey
431) Which of the following is the best definition of a township?
a. A 36-square-mile square formed when using the rectangular survey system
b. A one-square-mile square formed when using the rectangular survey system
c. A permanent reference point used in the measurement of elevations
d. The point of beginning used in a metes and bounds survey
432) A surveyor created a lot and block survey for a new residential development. The first thing she did when she surveyed the new neighborhood was to reference a metes and bounds land description. From there, she divided the land into numbered lots and blocks. This output is known as a ______.
a. Benchmark
b. Monument
c. Plat map
d. Rectangular survey
433) Datums and benchmarks are used for ______.
a. Calculating area
b. Determining land acquisition costs
c. Measuring distance
d. Measuring elevations
434) What is a sketch that shows the location, size, and shape of any improvements on a property being surveyed?
a. Building plan
b. Legal description
c. Plat reference map
d. Spot survey
435) What is the starting point for any land surveyor who has been asked to perform a survey?
a. A review of existing historical records
b. Satellite photos
c. The point of beginning
d. Visiting the site
436) What does a land surveyor produce?
a. A determination of value of a property
b. A report detailing defects of a property
c. A survey that includes a legal description and a survey sketch
d. Property boundaries
437) Which of these is usually a brass marker that is used to mark a datum?
a. Base line
b. Benchmark
c. Monument
d. Principal meridian
438) Jenna’s closing agent has asked her to get a spot survey of the property she’s purchasing. What will this accomplish for Jenna and the closing agent?
a. It decides the location of the point of beginning.
b. It notes the location of major appliances and features inside a home.
c. It notes the location, size, and shape of any improvements on a property.
d. It’s provides a sketch based upon driving by the property.
439) Which of the following are possible effects of an incorrect legal description?
a. Clearer title for the property owners
b. Fewer legal issues for real estate licensees
c. No effect
d. Unintentional encroachment, title and legal issues
440) A ______ is a point, surface, or line used as a reference for measuring elevation.
a. Base line
b. Datum
c. Monument
d. Principal meridian
441) For what are datums and benchmarks used?
a. Calculating area
b. Determining land acquisition costs
c. Measuring distance
d. Measuring elevations
442) What’s the permanent marker used primarily for marking datums when measuring elevation?
a. Benchmark
b. Monument
c. Point of beginning
d. Sea level
443) What describes the different symbols that are used in a survey sketch?
a. Legal description
b. Spot survey
c. Survey legend
d. Surveyor’s stamp
444) What’s the point from which elevation is measured?
a. Base line
b. Datum
c. Monument
d. Principal meridian
445) What signifies that a survey is certified and represents a guarantee of accuracy?
a. Spot survey
b. Survey legend
c. Surveyor’s stamp
d. Title insurance policy
446) A lot measuring 108,900 square feet is for sale. How many acres is this?
a. Five
b. One
c. Three
d. Two-and-a-half
447) If a farm that’s for sale measures one and three-quarter square miles, how many acres is it?
a. 1,050
b. 1,120
c. 1,280
d. 875
448) A parcel of land measures one half mile by 3,000 feet. If price per acre is $4,200, what’s the list price for this parcel? Round to 10ths of an acre for your calculation.
a. $1,527,273
b. $752,066
c. $756,000
d. $763,560
449) The cost of a parcel of land is 50 cents per square foot. Candace wants to purchase one acre. How much will this cost?
a. $21,780
b. $43,560
c. $500
d. $5,000
450) How many acres are in a square mile?
a. 1,760
b. 43,560
c. 5,280
d. 640
451) James purchased five acres of land for $75,000. What was the cost per acre?
a. $15,000
b. $25,000
c. $375,000
d. $5,000
452) How do you determine the cost of purchasing land?
a. Divide the cost per unit by the land area
b. Divide the land area by the cost per unit
c. Multiply the land area by $100 per acre
d. Multiply the land area by the cost per unit
453) How many square feet are in an acre?
a. 10,000 square feet
b. 43,560 square feet
c. 53,640 square feet
d. 640 square feet
454) How long is a mile?
a. 1,000 feet
b. 1,000 yards
c. 43,560 feet
d. 5,280 feet
455) Gabi owns one parcel measuring one square mile and another parcel measuring one mile by a half mile. She combined the parcels and sold them for $2.5 million. What price per acre did she receive for the land?
a. $1,953.13
b. $2,604.17
c. $3,125.00
d. $3,906.25
456) How many feet are in a mile?
a. 2,400
b. 320
c. 5,280
d. 6,044
457) How many acres are in a quarter section in a rectangular survey?
a. 160
b. 450
c. 640
d. One
458) A property is 330 feet long by 100 feet wide. How many square feet is the property?
a. 10,300
b. 30,000
c. 3,300
d. 33,000
459) An 800-square-foot rectangular building sells for $75,000. What’s the cost per square foot?
a. $187.50
b. $46.88
c. $60.50
d. $93.75
460) A seller received $800,000 for a 5.5 acre rectangular parcel alongside a road frontage. The property is 400 feet deep. What was the price per front foot of the property?
a. $1,335.67
b. $2,000
c. $363.64
d. $598.95
461) Margie needs to know the square footage for the first floor of the condo her client is interested in buying. The kitchen is 10 feet by 15 feet, the living/dining combo is 20 feet by 25 feet, and the office and bedroom are each 10 feet by 10 feet. What’s the total square footage?
a. 2,200 square feet
b. 3,000 square feet
c. 750 square feet
d. 850 square feet
462) Your client Frank is interested in selling a 54,450-square-foot lot. A comparable property in the vicinity sold for $3,500 per acre. What would be reasonable list price for Frank’s property?
a. $3,500
b. $4,375
c. $4,955
d. $5,250
463) Alana and Michael want to build a 5,000-square-foot ranch home on two acres of land they just bought. Once the house is built, how many acres of land will remain unbuilt?
a. 0.88 acres
b. 0.89 acres
c. 1.86 acres
d. 1.89 acres
464) Your client, a builder, is considering buying three adjacent lots. They each have the same depth: 275 feet. Lot A is 35,750 s.f., Lot B 53,900 s.f., and Lot C is 33,000 s.f. If your client buys all three lots, what total street frontage will he have?
a. 446 feet
b. 462 feet
c. 464 feet
d. 466 feet
465) How much would a lot that is 400 feet wide by 500 feet long cost at $900 per acre?
a. $2,200
b. $3,060
c. $4,132
d. $4,500
466) A four-bedroom, four-bath, 4,875-square-foot house was listed at $445,000. Andreas, the seller, accepted an offer that was 95% of the listing price. What price per square foot did he get for the house?
a. $45.64
b. $82.15
c. $86.72
d. $93.00
467) A lot measuring three-fourths of an acre is for sale. How many square feet is this?
a. 10,890
b. 14,520
c. 32,670
d. 43,560
468) Clint is interested in making an offer on a house with hardwood floors that will need to be replaced. The hallway is 18 feet by 6 feet. The kitchen is 20 feet by 30 feet. The living room is 25 feet by 45 feet. There are two bedrooms, which measure 12 feet by 16 feet each, plus a master bedroom that is 14 feet by 20 feet. If the cost of the flooring is $5.48 per square foot, and the cost of installation is $1.49 per square foot, how much can Clint plan to spend to replace the floors?
a. $13,683.56
b. $16,065.85
c. $16,309.80
d. $17,404.09
469) An area of 640 acres is equal to ______.
a. One hectare
b. One kilometer
c. One square mile
d. One township
470) When a city is determining zones, what should be followed?
a. Construction standards
b. Federal zoning codes
c. State zoning codes
d. The comprehensive plan
471)
472) When the planning board gets together, Carl focuses on commercial aspects, Renee focuses on residential areas, and Arthur focuses on agricultural spaces—all without any insight from one another. What type of planning is this?
a. Form-based planning
b. Integrated planning
c. Pocket planning
d. Traditional planning
473) Spark City has built a new city courthouse. The construction caused a landslide, which buried most of Joe’s farmland; now it can no longer be used for farmland. Joe is bringing an action against the city for his property loss. What is this an example of?
a. Condemnation
b. Eminent domain
c. Foreclosure
d. Inverse condemnation
474) The Johnsons have owned a small restaurant for more than 20 years. It’s open for lunch and dinner six days a week, and 80% of its weekday revenue comes from the happy hour drink and appetizer specials. The town in which their restaurant is located recently constructed a new middle school and stripped the liquor license from the Johnsons’ restaurant, because it no longer complies with the ordinance to be 500 feet from a school property. The Johnsons have accused the town of _____.
a. Condemnation
b. Eminent domain
c. Escheat
d. Inverse condemnation
475) Police power is the government’s authority at what level(s)?
a. At any level
b. Federal only
c. Local only
d. State only
476) Which statement best describes traditional planning?
a. Developers identify how land will be used.
b. Residents determine how land will be used.
c. Specialists with different areas of expertise work separately and focus on designing “their” areas.
d. Specialists with different areas of expertise work together, focusing on overall use.
477) _________ is the power of the government to take private land for public use.
a. Eminent domain
b. Encumbrance
c. Escheat
d. Foreclosure
478) At what level of government are budgeting, site plan review, and building codes controlled?
a. Federal
b. Federal and state
c. Local
d. State
479) The Kelo vs. City of New London U.S. Supreme Court ruling was controversial because the U.S. Constitution prohibits the government from taking private property except for “public use”. What governmental power was central to this case?
a. Eminent domain
b. Escheat
c. Police power
d. Taxation

480) The power of ______ was commonly used by community redevelopment agencies (CRAs) to acquire blighted properties.
a. Condemnation
b. Eminent domain
c. Escheat
d. Inverse condemnation
481) What’s inverse condemnation?
a. It occurs when a property owner dies without a will, heirs, or creditors.
b. It occurs when government actions deprive a property owner of the value of the property without offering just compensation.
c. It occurs when municipalities pass enabling acts.
d. It occurs when the government places a lien on a property due to failure to pay taxes.
482) When government regulation causes a land owner’s property to decrease in value, it’s called ______.
a. Condemnation
b. Eminent domain
c. Escheat
d. Inverse condemnation
483) Under what type of police power is a property owner compensated for the loss of property?
a. Eminent domain
b. Escheat
c. Riparian
d. Taxation
484) Which agency administers the Interstate Land Sales Full Disclosure Act?
a. Consumer Financial Protection Bureau
b. Department of Energy Conservation
c. Developers Land Sales Act
d. Housing and Urban Development
485) A ______ is created after a jurisdiction’s general plan is adopted. It provides more detailed information and aids in the implementation of the general plan.
a. Development plan
b. General plan
c. Specific plan
d. Zoning map
486) Adams County implemented a 10 p.m. curfew for youths under age 18 because of the high number of fights that have been occurring late at night in public places. Which of the following gives Adams County the right to restrict the movements of its minor citizens?
a. Doctrine of laches
b. Municipal master plan
c. Police power
d. Power of escheat
487) What type of police power allows cities to identify specific uses for an area?
a. Condemnation
b. Eminent domain
c. Escheat
d. Zoning
488) In the movies, a shady salesperson might say “I have some great farmland to sell you in the Midwest; just take a look at this brochure and let me know if you’d like to buy!” The federal government passed a law to prevent such fraudulent sales of property sight unseen. What is that law?
a. Interstate Citizens Protection Act
b. Interstate Land Sales Full Disclosure Act
c. Police Power Act
d. Subdivision Act of 1997
489) The government’s authority at all levels to ensure the health, safety, and welfare of its citizens, which includes the control of public land use, is the definition of ______.
a. Condemnation
b. Eminent domain
c. Police power
d. Sovereignty
490) Which of the following is a true statement about police power and public land use controls?
a. Government agencies may exercise police power only when it does not restrict the freedom of its citizens.
b. Local governments and their planning boards control budgeting, site-plan review, and building codes.
c. Planning, zoning, and subdivision development are primarily controlled at the state level.
d. Police power is citizens’ rights to police themselves.
491) When it came time to plan the city, Arlene (the agriculture specialist), Robert (the residential guru), and Carmen (the commercial genius) all locked themselves in a room and planned the area together. What type of planning is this?
a. Form-based planning
b. Integrated planning
c. Pocket planning
d. Traditional planning
492) Local authorities lack police power over which of the following?
a. Budgeting
b. Federal government construction projects
c. Subdivision development
d. Zoning
493) What police power did community redevelopment agencies (CRAs) use?
a. Condemnation
b. Eminent domain
c. Escheat
d. Inverse condemnation
494) After a general plan is developed, what is the next step in the adoption process?
a. Developers bid on areas they would like to develop.
b. Residents vote on the plan.
c. The plan is reviewed at a public hearing by the local legislative body.
d. The plan is reviewed at a public hearing by the planning commission.
495) The Kelo vs. City of New London U.S. Supreme Court ruling was controversial because the U.S. Constitution prohibits the government from taking private property except for “public use”. What governmental power was central to this case?
a. Eminent domain
b. Escheat
c. Police power
d. Taxation
496) Can police power ever be used in a way that restricts citizens’ freedom?
a. No, that’s beyond the scope of police power.
b. Yes, but only when the citizen has committed a crime.
c. Yes, if it’s for the public good.
d. Yes, that’s the purpose of police power.
497) The process in which the government actually takes someone’s property through the power of eminent domain is called __________.
a. Condemnation
b. Encroachment
c. Encumbrance
d. Escheat
498) A ______ is created after a jurisdiction’s general plan is adopted. It provides more detailed information and aids in the implementation of the general plan.
a. Development plan
b. General plan
c. Specific plan
d. Zoning map
499) Jeffersontown has a zoning ordinance that requires all properties in a designated historic district to have brick or wood plank facades. No aluminum, cement board, or vinyl siding is allowed. What type of zoning is this?
a. Aesthetic zoning
b. Downzoning
c. Incentive zoning
d. Spot zoning
500) What’s one of the ways that bulk zoning achieves its objectives?
a. Through architectural style requirements
b. Through minimum height requirements
c. Through minimum parking space requirements
d. Through setbacks
501) What purpose does bulk zoning serve?
a. It homogenizes the look of the area.
b. It keeps similar races together.
c. It provides increased density.
d. It restricts building density.
502) Which of the following situations may result in inverse condemnation?
a. Property taxes rise because of an increase in property value.
b. Property values decrease because adjacent property was rezoned.
c. Property values decrease because the property was rezoned.
d. The government takes private property for public use and compensates the owner.
503) Residents of Tinytown have been complaining to town officials that the village-like character of their town is being affected by the medium-rise condos that developers are building on the edge of town. In response, local government officials rezoned the areas on the edges of town as parklands. What type of zoning is this?
a. Aesthetic zoning
b. Downzoning
c. Incentive zoning
d. Spot zoning
504) The Druid Hills neighborhood sits firmly within a single-family residential zoning area. Most of the lots are one-third of an acre or larger. A 20-acre parcel on the edge of the neighborhood sold recently. The buyer wants to build condominium flats since multi-family housing is in short supply in the area. The town is considering rezoning that parcel to allow this development because the developer plans to also include a public park and a walking trail. What kind of zoning is this?
a. Aesthetic zoning
b. Downzoning
c. Incentive zoning
d. Spot zoning
505) Your clients, the Harpers, live in Area B that’s adjacent to Area C; Area C was recently downzoned. If the Harpers believe the rezoning has harmed their property values, what can they do?
a. File a claim of inverse condemnation.
b. Move to Area C and file a claim.
c. Nothing, because they don’t live in the rezoned area.
d. They must sell to prove a loss of value.
506) Zoning that preserves the architectural style and cohesive appearance of an area is termed ______.
a. Aesthetic zoning
b. Architectural zoning
c. Bulk zoning
d. Density zoning
507) The Town of Petersville has just decided to restrict density in one area of town that previously allowed a higher density. This is known as ______.
a. Aesthetic zoning
b. Density zoning
c. Downzoning
d. Reduction zoning
508) FAR, or floor-to-area ratio, includes ______.
a. All of the habitable structures on a lot
b. All structures, including habitable structures and parking structures, but not parking lots
c. None of the habitable structures on a lot
d. The area within parking lots or parking structures
509) Which of the following statements is true about zoning classifications?
a. A property that’s zoned residential may be either single-family or multi-family.
b. A residential property may only have one use.
c. Condos are always commercial property.
d. Multi-family housing is zoned commercial.
510) What is a buffer zone?
a. A reduction in density
b. Rezoning of various spots in a city, town, or village that have similar architectural styles
c. Strips of land that are used to separate property dedicated to one use from property of another use
d. Zoning targeted to a specific demographic make-up
511) What’s the definition of a group home?
a. A facility where unrelated adults live
b. A home that’s grouped closely to other dwellings for increased density
c. An institution, such as a prison or mental health facility
d. Any multi-family dwelling
512) One area of town has maximum building height requirements and setbacks for the front, side, and rear yards. These requirements are all indicative of ______.
a. Bulk zoning
b. Commercial zoning
c. Density zoning
d. Residential zoning
513) You’re on a planning board that’s discussing how to keep the city more livable by reducing building density. The subject of bulk zoning comes up. What is your response?
a. “That applies to commercial areas only.”
b. “That’s a great way to meet our objectives.”
c. “That’s crazy. We’re trying to reduce density, not increase it.”
d. “That will work for residential areas, but what about commercial?”
514) If downzoning occurs in one area, reducing property values in adjacent areas, what can the homeowners in those adjacent areas do?
a. File a claim for inverse condemnation.
b. Require a zoning change to their own property.
c. Sell at a loss and file a claim.
d. Sue their neighbors.
515) A town has just assigned a lower-density use zone to an area that previously allowed higher density. What’s one reason the town may have done this?
a. To improve property values
b. To increase density in surrounding areas
c. To increase taxes
d. To limit overgrowth
516) The Arbor Heights community passed a zoning ordinance that requires group homes designated for disabled citizens to be situated outside of city limits. This is a violation of the ______.
a. City Charter Act
b. Fair Housing Act
c. Municipality Zoning Act
d. Zoning Disability Act

517) Which zoning classification would be used solely for the development of a home?
a. Industrial
b. Mixed use
c. Planned use
d. Residential
518) A town passes a zoning ordinance preserving the architectural style of an area and requiring plantings in the parking strips. This is an example of ______.
a. Aesthetic zoning
b. Architectural zoning
c. Bulk zoning
d. Variance zoning
519) Which type of zoning classification is used for areas that are undeveloped or are used to raise animals or plants?
a. Agricultural
b. Commercial
c. Industrial
d. Residential
520) Cluster zoning would include single-family homes, townhomes, apartments, and condominiums on a single parcel, provided that the developer leaves a portion ________.
a. Of each building for a community room
b. Of the parcel for parking
c. Of the parking lot for RV parking
d. Open for a playground, a park, and a walking path
521) Tres owns a warehouse in an area that is zoned light industrial. With an increased demand for housing in the area, Tres wants to create loft-style condos and have his property designated as residential, even though the surrounding buildings will remain light industrial. What type of zoning is this?
a. Aesthetic zoning
b. Downzoning
c. Incentive zoning
d. Spot zoning
522) A new development is going up just outside city limits where the population is expected to grow significantly in the next decade. The development will consist of commercial properties in one quadrant near a main road. The other areas are designated residential and will include single-family residences and multi-family townhomes. A small number of the single-family homes will border a golf course that is at the center of the development. What type of zoning is this an example of?
a. Conforming
b. Exclusive-use
c. Non-conforming
d. Planned unit development
523) Which of the following is a type of zoning action?
a. Aesthetic
b. Bulk
c. Moratorium
d. Rural
524) Which of the following actions likely requires a variance?
a. A change in architectural style
b. A garage repair
c. An addition which alters the setback
d. A remodel involving a different internal layout
525) Which of the following must occur before zoning changes are made?
a. Local development experts must be consulted.
b. Public hearings must be held.
c. The real estate commission must approve the changes.
d. Voters in that jurisdiction must vote to approve the change.
526) Which of the following is true about zoning?
a. Proposed zoning ordinances are examined for fairness before being enacted.
b. While zoning may impact a community, it does not impact individual property owners.
c. Zoning changes are enacted by local governments without public input.
d. Zoning does not impact property value.
527) Which of the following is a common action of historic preservation commissions?
a. Adopting ordinances to protect the historical character of the area
b. Buying any properties that are listed for sale in the area
c. Demolishing properties in the area
d. Prohibit construction or renovations of any kind
528) Which of the following statements about zoning ordinances is true?
a. Before zoning ordinances are changed, they must be examined for fairness and reasonableness.
b. Zoning ordinance changes apply to specific properties in different ways.
c. Zoning ordinance changes impact communities, but not individual property owners.
d. Zoning ordinance changes impact individual property owners, but not communities.
529) April was able to establish a day care in a residential neighborhood, where the zoning wouldn’t normally be permitted. This required permission from the planning commission and ______.
a. A special use permit
b. A tax referendum
c. A variance
d. A zoning ordinance
530) Back in the 1930s, the house at 102 Barbour Street was the only one in sight. Since then, however, the town has grown considerably and the once-residential Barbour Street is an industrial zone, with the residence at 102 Barbour Street in the middle of it all. What type of zoning does the residence demonstrate?
a. Conforming zoning
b. Non-conforming zoning
c. Planned unit development
d. Spot zoning
531) Your client, William, wants to run a tax office out of his home. He lives in an area that is not zoned for that purpose. What must William obtain to operate his tax office legally?
a. A home business waiver
b. A petition from his neighbors
c. A special use permit
d. A variance
532) The purpose of ______ commissions is to preserve buildings, landmarks, and the character of certain areas.
a. Historic preservation
b. Human rights
c. State real estate
d. Wetlands
533) What’s the difference between a special use permit and a variance?
a. A special use permit allows a deviation from the requirements of the zoning ordinance; a special use permit is the temporary use of another’s property.
b. A variance allows a deviation from the requirements of the zoning ordinance; a special use permit allows a use not ordinarily allowed in the zone.
c. A variance is temporary; a special use permit is permanent.
d. A variance relates to building height only; a special use permit can relate to building height, use, or setback.
534) The developer of a new subdivision is placing residential properties closer together, allowing him to include large open spaces throughout the development to build bike and walking trails, as well as a community pool and recreation center. What type of zoning is this?
a. Cluster
b. Conforming
c. Non-conforming
d. Spot
535) Which of the following is true about a variance?
a. It involves eminent domain.
b. It’s a use that was in place when the zoning ordinance was enacted.
c. It’s temporary.
d. To obtain it, the owner must show hardship.
536) What describes both the type of the development and the regulatory process that allows the developer to meet the community’s goals for land use and density without being restricted by existing zoning requirements?
a. Cumulative zoning
b. Planned unit development
c. Spot zoning
d. Subdivision
537) Which of the following is the sunshine law based on?
a. The First Amendment
b. The Freedom of Information Act
c. The Sarbanes-Oxley Act
d. The SPEECH Act
538) Builders weren’t allowed to develop new properties in Cityville for six months. This is likely because the city had enacted a ______.
a. Condemnation
b. Moratorium
c. New tax base
d. Zoning ordinance
539) When would a sheriff’s deed be used?
a. Property owned free and clear by the owner(s)
b. Property that is being passed down in probate
c. The court-ordered sale of a property
d. To clear interest in property from the title
540) Which term describes an oath by a subscribing witness, such as a notary public, that the grantor’s signing of the deed is a voluntary act and enables a deed to be recorded?
a. Acknowledgment
b. Grantee
c. Granting clause
d. Habendum clause
541) Siblings Shasta and Ruby inherited their mother’s home when she died. Ruby had been taking care of their mom, so she was already living in the home and continued to do so. Shasta lived in another state and remained there. After some years, Ruby decided to sell the house. Shasta agreed to the sale, and even offered to give up any of his ownership so Ruby could enjoy all the profits of the sale. What’s the best deed to use in this situation?
a. Executor’s deed
b. Quitclaim deed
c. Trustee’s deed
d. Warranty deed
542) Which of the following is an instrument of conveyance?
a. Deed
b. Mortgage
c. Promissory note
d. Title insurance policy
543) Joe Bob is the grantor of a deed, and is in the final stages of transferring a deed to the new owner, Frank. What must Joe Bob do in order to satisfy delivery and acceptance of the deed to Frank?
a. Deliver the deed to Frank, his agent or attorney, or the title company issuing the title
b. Get Frank’s signature on the official acceptance letter notarized and recorded at the county clerk’s office.
c. Send the deed via certified mail so that the shipment is officially tracked
d. Submit delivery and acceptance paperwork to the Board of Submission and Acceptance
544) Select the statement that accurately reflects the type of deed used for the transfer.
a. A bargain and sale deed conveys property in a foreclosure proceeding.
b. A deed of trust conveys real estate to a trustee for the beneficiary named in the deed.
c. A referee’s deed conveys property from one spouse to another in a divorce proceeding.
d. A warranty deed conveys REO property from the lender.
545) Which kind of deed releases any rights of the grantor to the property to the grantee and clears any clouds on a title, but does not offer any warranties to the grantee?
a. Executor’s deed
b. Grant deed
c. Quitclaim deed
d. Sheriff’s deed
546)
547) Which one of the following covenant terms promises that the grantor will provide any additional assurances that the grantee reasonably requires and perform any acts necessary to correct any defect in the title being conveyed?
a. Against encumbrance
b. Further assurances
c. Quiet enjoyment
d. Warranty
548) Select the statement that correctly exemplifies the covenant term.
a. The covenant against encumbrances is the grantor’s guarantee that he or she owns the property being conveyed.
b. The covenant for further assurances assures the grantee that there are no undisclosed encumbrances on the property.
c. The covenant of quiet enjoyment promises that the grantee won’t be disturbed by a title defect the grantor passes on.
d. The covenant of warranty promises that the grantor has the capacity to convey title.
549) A ______ is a method of conveying real property from one party to another.
a. Deed
b. Power of attorney
c. Promissory note
d. Recordation
550) Jerry’s client Carla has successfully closed on the purchase of a home. The deed shows she’s taken sole ownership of the property. Which of these actions is necessary before the escrow agent can have the deed recorded?
a. Carla must name a beneficiary.
b. Carla must state her acceptance of the deed.
c. The grantor’s signature must be acknowledged.
d. The title company must issue a standard policy that validates the deed.
551) Which type of deed comes with two covenants of warranty implied in its use?
a. Grant deed
b. Quitclaim deed
c. Sheriff’s deed
d. Warranty deed
552) Which covenant term means that the grantor both has legal capacity to convey the title and also has the title to convey?
a. Further assurances
b. Quiet enjoyment
c. Right to convey
d. Warranty forever
553) Which type of deed conveys real property from a decedent’s estate to a buyer?
a. Deed in trust
b. Executor’s deed
c. Quitclaim deed
d. Referee’s deed
554) John and Michelle received a general warranty deed when they purchased their house from Ted. A couple of months after they moved in, their neighbor, Bryant, drove his four-wheeler across their property to access the lake front. John discovered that Ted and Bryant agreed to an easement over Ted’s property several years earlier. Which general warranty deed covenant does this represent?
a. The covenant against encumbrances
b. The covenant of further assurances
c. The covenant of quiet enjoyment
d. The covenant of seisin
555) Kevin and Regina sold their property to Vickey using a general warranty deed. Which one of these statements is true?
a. Either Regina or Kevin can convey the property.
b. Kevin and Regina are the grantees.
c. Vickey is the grantee.
d. Vickey is the grantor.
556) A property owner who wishes to convey property to a new owner will generally use a ______.
a. Deed
b. Lease
c. Mortgage
d. Title abstract
557) Ari owned acreage in a rural area. He sold a small portion of it to a neighbor in an informal transaction but made no record of the sale or change of ownership. A developer offered Ari several million dollars for the entire acreage, and Ari eagerly accepted the offer. What covenant is Ari in danger of violating?
a. Against encumbrances
b. Quiet enjoyment
c. Seisin
d. Warranty
558) Meg is considering a move to a foreign country and wants to deed her property to her son, Christian, who’s 16. Which of these must occur to make this transfer legal?
a. Christian must agree to the transfer and sign the deed.
b. Christian must provide monetary compensation to Meg.
c. Meg must sign the deed and have her signature acknowledged.
d. Meg must wait until Christian has reached the age of majority.
559) Which term refers to the person conveying title, often called the “party of the first part,” in a deed?
a. Grantee
b. Grantor
c. Notary public
d. Witness
560) Todd conveyed title to his out-of-state property to Brad using a general warranty deed. A few months later, Brad discovered that the legal description of the property on the deed was incorrect, and his property was only half the size he thought he’d purchased. He sued Todd based on Todd’s promises of ______ in the deed.
a. Consideration and compensation
b. Habendum and fair dealing
c. Quiet enjoyment and further assurances
d. Seisin and right to convey
561) What phrase is or words are required on a deed and are considered an “act of conveyance?”
a. “Between ____ and ____.”
b. “Forever and always”
c. “Grant and convey”
d. “Witnesseth and acknowledged”
562) Colleen and Judy purchased a dilapidated townhome in an estate sale. Due to their fix-up work and the current economy, the property value has skyrocketed. They decide to sell it to get their equity out of it. After they list it, a woman comes forward, saying she is an heir to the previous owner and lays claim to the property. Which general warranty deed covenant protects Colleen and Judy?
a. The covenant against encumbrances
b. The covenant of seisin
c. The covenant of the right to convey
d. The covenant of warranty
563) Which of the following terms describes the actions required to transfer a title by deed?
a. Acknowledgment
b. Delivery and acceptance
c. Granting clause
d. Habendum
564) In order to convey real property, which one of the following documents would you use?
a. Deed
b. Mortgage
c. Promissory note
d. Title insurance
565) Which term refers to the person receiving title, often called the “party of the second part,” in a deed?
a. Grantee
b. Grantor
c. Notary public
d. Witness
566) Cheng is selling his property to Jericho. What’s the best method Jericho can use to ensure his interest in the property?
a. Ensure that Cheng signs the deed.
b. Ensure that he signs the deed.
c. Purchase title insurance.
d. Record the deed in his name.
567) Which type of deed is sometimes called a general warranty deed and contains all six covenants?
a. Bargain and sale deed
b. Quitclaim deed
c. Referee’s deed
d. Warranty deed
568) Which of the following could be a valid deed?
a. A napkin with both parties’ signatures and an oral agreement to sell the land
b. An oral agreement between two trusted individuals
c. An oral agreement between two trusted individuals and witnesses
d. A written document containing all of the required elements and adhering to all document formatting requirements
569) Which address(es) must be included on the deed?
a. The grantee’s
b. The grantor’s and the county clerk’s
c. The notary public’s and the county clerk’s
d. The notary public’s and the grantee’s
570)
571) Which option must be included on a deed for it to be valid?
a. County judge’s and sheriff’s signatures and approval
b. List of all living neighboring property owners
c. Name of next of kin for inheritance purposes
d. Names of grantor/grantee
572) Kandy was so excited to be buying her first home, a condo in a San Diego beach neighborhood. Thanks to an inheritance, she was able to pay for the property in cash! She gazed adoringly at her deed, admiring each of its elements that proclaimed her the sole owner of 1256 Voltaire Street, Unit 15. Which of these is NOT on Kandy’s deed?
a. A granting clause
b. Kandy’s signature
c. Names of the grantor and the grantee
d. The property description
573) What term is defined as the addition of value to property through labor or the addition of new materials?
a. Accession
b. Accretion
c. Alluvion
d. Avulsion
574) Jerome has four grown children. When he dies, he leaves his home to all four children, making them tenants in common with equal shares. One child wants to live in the house, another wants to use it as investment property, and two others want to sell it and take the cash. When they can’t agree on a solution, they end up in court and the property is ______.
a. Deeded by appointment
b. Foreclosed
c. Partitioned
d. Transferred via intestate succession
575) Which term is defined as someone claiming property of another simply by using it for an extended period of time?
a. Accession
b. Adverse possession
c. Dedication by deed
d. Public grant
576) What takes precedence over a deceased person’s wishes to grant his property at death, even if those wishes are specified in the decedent’s will?
a. Intestate succession
b. Location, location, location
c. Operation of law
d. Public interest
577) When co-owners of a property decide to partition the property, what does it mean?
a. One co-owner is foreclosing on another.
b. They’re dividing the property into parcels and maintaining co-ownership of each parcel proportionally.
c. They’re dividing the property proportionally so that each co-owner becomes sole owner of a portion.
d. They’re selling additional interests in the property, in essence adding co-owners.
578) Trinity has been named executor of her uncle’s will. What does this mean?
a. She receives all her uncle’s possessions and property.
b. She’s responsible for carrying out the will’s provisions.
c. She’s responsible for taking care of her uncle until his death.
d. She’s responsible for the probate of her uncle’s will.
579) Which term is defined as land that washes away and decreases the property size?
a. Accession
b. Accretion
c. Alluvion
d. Avulsion
580) Who would inherit the property in a family with legally adopted children if both parents died without a will?
a. The illegitimate children
b. The IRS
c. The legally adopted children
d. The state
581) Which term is used to describe when an owner gives or donates land or an easement for public use?
a. Accession
b. Adverse possession
c. Dedication by deed
d. Public grant
582) Which term is defined as an increase in land by the permanent and gradual withdrawal of water?
a. Alluvion
b. Avulsion
c. Dedication
d. Reliction
583) Frank had been talking about getting a will for a while now, but he never got around to it before he passed away unexpectedly. His wife and two kids were very distraught and the family got together with his only living relative, a cousin, and friends at the funeral for the first time in years. Frank’s wife is now concerned about who will get the farm where she and her children live. According to the laws of intestacy, can you figure out who will get the land?
a. The children
b. The closest living relative, Frank’s cousin.
c. The state
d. The wife
584) Susan Duffield died testate at age 49. What can be said about Susan’s estate?
a. Because of Susan’s age, any will is invalid.
b. Because of the will, it will avoid probate.
c. Because she died without a will, the estate becomes property of the state.
d. It will be put through probate.
585) Marsten is the personal representative for his grandmother’s estate. After her death, he learns that he can’t distribute the estate’s property until after the will goes through probate. What does this mean?
a. Marsten must apply through the courts to manage his grandmother’s estate.
b. The court must determine the will’s validity and supervise distribution of the estate.
c. The courts must contact all potential heirs to learn of their wishes regarding distribution of the estate.
d. The courts must review Marsten’s ability and knowledge related to distribution of the estate.
586) Which term is defined as the act of transferring away ownership of a property?
a. Alienation
b. Avulsion
c. Real transference
d. Reliction
587) Which term describes the newly formed land mass built up by the deposits of sediments on a property that belongs to the owner?
a. Alluvion
b. Avulsion
c. Erosion
d. Reliction
588) What might Trina’s mother have bequeathed to Trina?
a. Her interest in an oil drilling operation
b. Her jewelry and fine china
c. Her primary residence
d. Her vacation property
589) According to the laws of descent, who will inherit the property when there are no surviving heirs?
a. Friends of the family
b. Private auction
c. The neighboring property owner
d. The state
590) Which term is defined as the build-up of land near water from the accumulation of sand, silt, or gravel deposits?
a. Accession
b. Accretion
c. Accumulon
d. Avulsion
591) What is it called when property is taken by the state after the owner dies without heirs?
a. Accession
b. Escheat
c. Estoppel
d. Forfeiture
592) If a property owner dies intestate and no heirs or creditors can be found, what becomes of the property?
a. A lottery is held for ownership.
b. The property is combined with an adjoining property.
c. The property reverts to a former owner as recorded on the deed.
d. The state claims the property through escheat.
593) June specified in her will how title to her home would transfer. At her death, alternate conveyance occurred. What likely happened?
a. Fraud
b. Intestate hereditary
c. Operation of law
d. Testate succession
594) What do you have to prove in order to claim a piece of property through adverse possession?
a. Have a public grant land patent document
b. Must be dedicated to you by the true owner
c. Possession must be open, notorious, continuous, and uninterrupted without permission of the true owner
d. Prove the land was acquired through the accumulation of sediments
595) Which term is defined as the state government granting power, license, or real property to a private individual or individuals using a land patent?
a. Accession
b. Adverse possession
c. Dedication by deed
d. Public grant
596) Roberta worked with an attorney to prepare her will. What kind of will is this?
a. Descent
b. Functional
c. Holographic
d. Statutory
597) The terms of a person’s will are subject to ______.
a. Intestate succession
b. Legal duress
c. Nothing
d. Operation of law
598) Jardin passed away suddenly, and when his family started looking through his documents, they found a handwritten will. Which of these statements about the will is true?
a. A handwritten will, also called a holographic will, may be valid if it meets other terms for validity.
b. A handwritten will, also called a statutory will, is valid if it’s been witnessed.
c. A handwritten will is called a simple will.
d. A handwritten will is not valid.
599) What is it called when a property owner acquires additional land through manmade or natural causes?
a. Accession
b. Alienation
c. Dedication
d. Reliction
600) Your aunt bequeathed you her property in her will, but you never received it. Instead, the property went to pay her tax bill. Is this legal?
a. No, never
b. Not if there were other heirs
c. Yes, due to operation of law
d. Yes, if the will wasn’t witnessed
601) Shana received a devise from her mother. What might this be?
a. A written message
b. Her mother’s car
c. Her mother’s farm
d. Her mother’s jewelry
602) Elmer died and left a will. Before his estate can be distributed according to his wishes, it must go through ______.
a. A lawyer
b. Devise
c. Escheat
d. Probate
603) Meredith died, leaving behind a will. Although her instructions to devise her property to her daughter were explicit, her husband inherited. Why might this be?
a. Escheat
b. Intestate
c. Testate
d. The operation of law
604) Wilma died without a will. How will her heirs be determined?
a. A committee appointed by the court
b. Intestate bequest
c. Intestate succession
d. The process of escheat

605) ______ determines who the heir or heirs will be if a person dies without a will.
a. Court appointment
b. Escheat
c. Intestate bequest
d. Intestate succession
606) When tenants in common can’t agree on how to manage the property and want to terminate their co-ownership without selling the property, how can this be accomplished?
a. Foreclosure
b. Law of succession
c. Partition
d. Process of escheat
607) In a contract, consideration is the giving of ______.
a. Notice to attorneys that they may review the terms of the agreement
b. Something of value in exchange for something of value
c. Something of value in exchange for something without value
d. Thoughtfulness and courtesy to all parties
608) Which of the following best explains how the statute of frauds protects consumers?
a. It doesn’t allow people to own land unless they can afford it.
b. It provides requirements that certain contracts have to meet to be legally enforceable.
c. It puts a limit on how much interest financial institutions can charge.
d. It states that all real property sales must involve lawyers.
609) Ken signed a contract to purchase Debra’s condo. Ken signed the contract two weeks prior to turning 18, which is the age of majority in his state. Debra found out about his age prior to the closing but honored the contract, and they closed on the condo a month after Ken’s birthday. What was the status of the contract when Ken and Debra entered into it?
a. Executed
b. Illegal
c. Void
d. Voidable
610) A legally competent party means that an individual has the capacity, legally and ______, to enter into a contract.
a. Financially
b. Mentally
c. Morally
d. Purposefully
611) Louellen is about to take out a mortgage loan from her credit union. The contract includes the following information: Louellen is offering her house as consideration, and the credit union is offering $350,000; and Louellen will pay the loan back over a certain number of months at a certain rate. Both Louellen’s signature and the credit union representative signed it. What, if anything, is this contract missing in order for it to be legally binding, according to the statute of frauds?
a. Louellen’s credit history needs to be included.
b. Nothing is missing.
c. The condition and size of the house needs to be included.
d. The credit union’s physical address needs to be included.
612) In contract law, a “legally competent” party has the ______ to enter into a contract.
a. Financial resources
b. Legal and mental capacity
c. Legal background
d. Motivation and means
613) Bill and Mindy, who are neighbors, get into a disagreement about late-night noise. The two come to an agreement: Bill promises to stop having loud parties and Mindy promises to keep her dogs inside after 10 p.m. Their promises represent the ______ in their agreement.
a. Consideration
b. Flaw
c. Legal competency
d. Undue influence
614) A real estate contract written for an illegal purpose is ______.
a. Permissible and valid
b. Void
c. Voidable only by the buyer
d. Voidable only by the seller
615) Which of the following elements is always required for a real estate contract to be valid?
a. Attorney review
b. Consideration
c. Earnest money
d. Profit
616) Which of the following is true about the statute of frauds?
a. All types of written contracts, with the exception of email or other online communication, may be considered “in writing” and binding.
b. Any form of written contract, including email communication, may be considered “in writing” and binding.
c. Only contracts that are handwritten are considered to be “in writing” and binding.
d. Only pre-printed contracts, the blanks of which have been filled in in ink, are considered to be “in writing” and binding.

617) What’s the best definition of legal purpose?
a. Attorney consideration
b. Mentally capable of entering into a contract
c. Written for a lawful objective
d. Written for an illegal purpose
618) Robert and Sarah enter into a contract for Sarah to purchase Robert’s home. Robert decides he doesn’t want to sell, and is elated when he finds out that Sarah’s only 17 years old. Can Sarah force Robert to sell?
a. No, because Sarah can’t legally enter into a contract.
b. No, she can purchase the house if Robert doesn’t object, but can’t do so if he objects.
c. Yes, as long as she gets a legally competent party to co-sign the contract with her.
d. Yes, Sarah can require that Robert fulfill the contract terms.
619) The statute of frauds states that if a contract transferring ownership of real property is not in writing, it’s ______.
a. Enforceable
b. Executory
c. Unenforceable
d. Voidable
620) What does the parol evidence rule say about contracts?
a. All contracts, commitments, and agreements for the sale of real property must be in writing.
b. A sales contract must contain the essential elements of a contract for it to be enforceable.
c. In order for a real estate agreement to be enforceable, it must be in writing and signed by both parties.
d. The terms agreed to in a written contract are the only terms relating to that contract.

621) According to the statute of frauds, which of the following agreements needs to be in writing to be legally enforceable?
a. Condo owner Freya agreed to let her friend’s daughter stay in her spare room for four months.
b. Geoffrey agreed to work on his uncle’s farm for a few days to pay off the $300 he owes him.
c. Lara sold her book collection to her friend for $450.
d. Pam agreed to rent her house to Miguel for three years.
622) Per the statute of frauds, which of the following agreements does NOT have to be written down in order to be legally binding?
a. Sierra sells her car to her cousin for $2,500.
b. Sloane agrees to pay the $400 in credit card debt that her sister owes.
c. The Lees rent out their basement to some college students for three months.
d. Tyrone and Alaya are getting married.
623)
624) Tom and Jim are neighbors. Jim wants to buy Tom’s rental property. In the contract they sign, Jim is identified only as “the neighbor.” Which statute or contract element does this violate?
a. Fair housing
b. Legal purpose
c. Offer and acceptance
d. The statute of frauds
625) Drew and Hank were camping at Hank’s riverfront cabin. Hank told Drew that he rarely used the cabin and was thinking of selling it. Drew said that he’d buy it from Hank for $80,000, which Hank agreed was a fair price. It’s two months later, and Hank is upset that Drew now says he won’t buy it. Why isn’t this contract enforceable?
a. Drew didn’t have the financial resources to make the offer.
b. Real estate contracts must be in writing.
c. There was no offer and acceptance.
d. This wasn’t a legal purpose.
626) Jolene signs a contract to buy Harvey’s home. Before closing, it’s discovered that Jolene is only 16 years old. Because she’s a minor, she’s not considered legally competent to enter into a contract. Which of the parties can void the contract?
a. Harvey
b. Jolene
c. Nobody
d. Only a judge
627)
628) The residents of Blair Avenue are a close-knit bunch. They’re all young couples with small children, and they don’t want this dynamic to change when two of the couples have to move. Those couples sign an agreement promising not to sell to anyone without kids or to anyone over the age of 50. The contract can’t be enforced because it’s missing ______.
a. Consideration
b. Legally competent parties
c. Legal purpose
d. Offer and acceptance
629) A valid contract must include which of the following elements?
a. Counter-offer
b. Electronic signature
c. Fairness clause
d. Legally competent parties
630) If a party to a contract lacks legal capacity but enters into a contract anyway, which party may void the contract?
a. Both parties
b. The broker
c. The party lacking legal capacity
d. The party possessing legal capacity
631) In a real estate transaction, which of the following is established when the parties enter into an agreement voluntarily with a full understanding of the contract terms?
a. Consent
b. Consideration
c. Legal competency
d. Legal purpose
632) Both the buyer and the seller have to sign the purchase and sale agreement in order to demonstrate that ______.
a. An attorney has reviewed the contract
b. Their agents have agreed to the terms and conditions
c. The very first offer was accepted
d. They understand the terms
633) An ______ minor is considered to be a legally competent party who is able to enter a contract.
a. Alien
b. Emaciated
c. Emancipated
d. Incompetent
634) When offer and acceptance has occurred, both parties enter into ______.
a. A contingency
b. A mutual agreement
c. Consideration
d. Understanding
635) A contract for an illegal purpose is ______.
a. Fraud
b. Valid
c. Void
d. Voidable
636) To meet the requirements of the statute of frauds, an agreement must clearly identify the contract’s subject matter, present the contract’s essential terms and conditions, and ______ to be enforceable.
a. Achieve a result that’s fair to all parties
b. Be agreed to verbally
c. Be reviewed by an attorney
d. Identify the contracting parties
637) Bobby has just found out that he was named as the executor of his grandfather’s will. In accordance with the terms of the contract, he may sell his grandfather’s property while serving as a ______.
a. Lawyer
b. Partner
c. Personal representative
d. Seller representative
638) Claudia and Yves enter into contract for her to buy his condo. The written contract must _____, identify the subject matter of the contract, and present the essential terms and conditions of the contract.
a. Achieve a result that is fair to all parties
b. Be handwritten
c. Be signed by two or more attorneys
d. Name the contracting parties
639) Carl and Sadie, who are neighbors, got into a disagreement about early-morning noise on the weekends. The two came to an agreement: Carl promised to not mow the lawn before 10 a.m., and Sadie promised to put bark collars on her dogs in the early morning hours. Their promises represent the ______ in their agreement.
a. Consideration
b. Flaw
c. Legal competency
d. Undue influence
640) In the eyes of the law, why do people under age 18 lack contractual ability?
a. They have insufficient resources.
b. They lack intelligence.
c. They’re immature.
d. They’re minors.
641) Another term used to describe an executor or executrix who was named to carry out the provisions of a will is a personal ______.
a. Assistant
b. Executor
c. Lawyer
d. Representative
642) What does the parol evidence rule state?
a. All contracts, commitments, and agreements for the sale of real property must be in writing.
b. An Agreement of Sale must contain the essential elements of a contract for it to be enforceable.
c. For a real estate agreement to be enforceable, it must be in writing and signed by both parties.
d. In most cases, a written agreement is the final and comprehensive expression of the parties’ agreement. It generally prohibits introducing oral or written evidence that contradicts that agreement.
643) Sylvia, who’s 15 years old, and her neighbor Marge, who’s 24, sign an agreement that Sylvia will babysit Marge’s toddler for the summer for $10 an hour. What type of contract is this?
a. Enforceable
b. Unilateral
c. Valid
d. Voidable
644) Jessica enters into a contract to acquire real property in return for some form of consideration. On the contract, Jessica is regarded as the ______.
a. Agent
b. Broker
c. Buyer
d. Seller
645) Doris and Kathleen, who are neighbors, enter into an agreement to not permit their real estate agents to sell their homes to families with children. This agreement lacks ______, so it’s void.
a. A lawful objective
b. A mutual agreement
c. A purpose
d. Two parties
646) Which of these is an example of good consideration?
a. A payment of less than $10,000
b. A payment of more than $10,000
c. Earnest money paid with a cashier’s check or wire transfer
d. Gifting a house to a family member
647) Which of the following states that, in certain cases, oral evidence can be used to support or complete an otherwise incomplete or ambiguous contract?
a. The parol evidence rule
b. The statute of frauds
c. The statute of limitations
d. The statute of oral evidence
648) Alex, a high school freshman, started a neighborhood lawn care business. Simone decides to hire Alex to mow her lawn every two weeks. Alex presents Simone with a written contract outlining the services to be provided and the fee Simone will pay. Which of the following is true in this situation?
a. Because minors can’t enter into a contract, this contract is void.
b. Because this contract binds Alex and Simone to an obligation that’s legal for a minor to perform (mowing lawns), the contract is valid and enforceable for both parties.
c. If both parties are content to uphold their agreement, the fact that it’s not legally binding doesn’t matter.
d. Minors can’t enter into contracts, so Alex’s parents are legally obligated to uphold the contractual obligations if Alex fails to fulfill them.
649)
650) An ______ minor is considered to be a legally competent party who is able to enter a contract.
a. Alien
b. Emaciated
c. Emancipated
d. Incompetent
651)
652) Jessica enters into a contract to acquire real property in return for some form of consideration. On the contract, Jessica is regarded as the ______.
a. Agent
b. Broker
c. Buyer
d. Seller
653) All of the following are true regarding implied agreements EXCEPT which one?
a. An implied agreement is based on actions or behaviors.
b. An implied agreement is based on a formal agreement.
c. With an implied agreement, it’s possible that the other party didn’t intend to be bound.
d. With an implied agreement, there’s an increased chance of confusion.

654) Real estate sales contracts must be valid, express, bilateral, ______, and executed or executory.
a. Enforceable
b. Oral
c. Unenforceable
d. Voidable
655) You sign a contract to purchase a machine that will allow you to travel back in time and meet Abraham Lincoln. Assuming that time machines don’t actually exist (for now), what type of contract is this?
a. Enforceable
b. Unilateral
c. Void
d. Voidable
656) Your automatic check writer wrote a check for $51.50, but your printer ran out of toner, so you had to fill in the handwritten line. In a hurry, you accidentally wrote, “Fifty-one dollars and no/100 cents.” Which amount takes priority?
a. Neither; the check is void
b. The handwritten number
c. The numerals
d. The recipient must split the difference between the two amounts
657) Which of the following is a contract that exists based on an understanding or assumption, rather than on specifically defined terms?
a. Express contract
b. Implied contract
c. Invalid contract
d. Unilateral contract
658) Which of these sentences accurately lists rules for interpreting a contract?
a. Pre-printed text takes precedence over typed and handwritten text.
b. Typed text takes precedence over handwritten text.
c. Typed text takes precedence over pre-printed text, and numbers (e.g. 2) take precedence over spelled-out numbers (e.g. three).
d. Typed text takes precedence over pre-printed text, and spelled-out numbers (e.g. four) take precedence over numerals (e.g. 5).

659) Which of the following is a primary focus of the statute of frauds as it relates to real estate transactions?
a. Anyone caught committing real estate fraud will be prosecuted.
b. Fraudulent behavior won’t be tolerated in the real estate profession.
c. Real estate purchase and sale contracts must be in writing to be enforceable.
d. There’s a limitation on how long someone can sue for fraud.
660) You receive an offer in the mail that says you’re eligible to win a cash prize if you place some stickers on a form and return it to the sender. What type of contract is this?
a. Implied contract
b. Invalid contract
c. Unenforceable contract
d. Unilateral contract
661) Which of the following is true regarding express agreements?
a. Express agreements are implied.
b. Express agreements are invalid.
c. Express agreements may be written or verbal.
d. Express agreements must be lengthy.
662) Alex and Michael Helbig signed a contract to purchase their first home from sellers Joe and Bonnie Watson. Once closing occurred and all closing requirements wrapped up, the Helbigs were given the keys to their house. What type of contract do they have at this point ?
a. Executed
b. Executory
c. Implied
d. Voidable
663) You’re talking to a co-worker at lunch, and she mentions she has a box of baby clothes her kids have outgrown that she needs to get rid of. You have a baby on the way, so you offer to pay her $25, and she agrees to bring the box to work the next day and give it to you. Which of the following is true in this situation?
a. This is an express contract because you defined in words the specific terms of the agreement and consideration to be exchanged.
b. This is an implied contract because it is not written down and nobody signed anything.
c. This is an invalid contract because it is not written down and nobody signed anything.
d. This is a unilateral contract because only one party is providing anything of value.
664) Why do you think that handwritten changes take priority over typed changes?
a. All typewriters are different.
b. It’s less likely to be done inadvertently.
c. They are made last.
d. Typed changes are the same as pre-printed changes.
665) In which of the following types of contracts does one or more of the contract’s terms still need to be completed?
a. Bilateral contract
b. Executed contract
c. Executory contract
d. Unilateral contract
666) Three of these statements about interpreting contracts are true, and one is not. Which statement is FALSE?
a. A handwritten insertion can be canceled out by typing over it.
b. Handwritten insertions take precedence over typed and pre-printed insertions.
c. If a contract shows a fee as $250 in one location and “three hundred fifty” in another, the amount of 350 will be assumed to be correct.
d. If typed text is crossed out and replaced with a handwritten note, the handwritten note is what should be executed.
667) What is wrong with this statement: “Handwritten information on a contract is not legally binding. All insertions must be typed.”?
a. Contracts are not legally binding.
b. Insertions are not allowed on contracts. They must be pre-printed.
c. Insertions do not have to be typed to be legally binding.
d. There is no reason to write by hand on a contract.
668) Rex needs to handle some money he acquired during an “unsavory” business deal. He agrees to sign his boat over to his colleague, Ben, if Ben can launder the money and return it to Rex as part of a legal business deal. What kind of contract do Rex and Ben have?
a. Executed
b. Executory
c. Void
d. Voidable
669) Which type of contract is the opposite of an express contract?
a. Bilateral
b. Executory
c. Implied
d. Voidable
670) In a purchase offer, is earnest money required in order to have a binding contract?
a. No, because earnest money isn’t part of a sales contract.
b. No, because the buyer’s consideration is the promise to buy.
c. Yes, because it opens escrow.
d. Yes, because it’s the buyer’s consideration.
671) Which of these situations represents a unilateral contract?
a. Cain sells Trenton his bike.
b. Maurice promises Shelton $100 if Shelton will sell his painting. Shelton agrees, but Maurice doesn’t pay Shelton.
c. Nathan and Sue exchange vows at their wedding.
d. Sherry promises to give Brent a ride home from work, and then doesn’t show up.
672) Which of the following best describes a bilateral contract?
a. A contract for which one or more terms has yet to be completed
b. A contract in which only one of the parties offers consideration
c. A contract that involves an exchange of consideration between two parties
d. A contract that is enforceable by law
673) Which of the following describes a contract that exists based not on words, but on the parties’ actions or behaviors?
a. Executed
b. Executory
c. Express
d. Implied
674) In an addendum to the purchase and sale contract, the seller agrees to paint the house before conveying the house to the buyer. The weather changes, and the seller is unable to finish painting the house before closing. Of what is this an example?
a. A void contract
b. Contract execution
c. Legal purpose
d. Partial performance
675) Kyle promised his grandmother he’d pay her $200 a month to live in the room above her garage. He lived there a few months without paying a dime and then disappeared one night after trashing the place. How long does Grandma have to decide if she can really bring herself to sue Kyle?
a. Six months
b. Two decades
c. Two months
d. Two years
676) Kenneth entered into a contract to sell his home to Valerie, who put down a $5,000 earnest money deposit. At the last minute, Valerie backed out of the deal, and Kenneth kept the earnest deposit. This is an example of ______.
a. Accepting liquidated damages
b. Accepting partial performance
c. Suing for damages
d. Suing for specific performance
677) When a contract has been breached, the wronged party may attempt to sue for punitive damages, which are ______.
a. An agreed-upon amount that the buyer will pay the seller if the buyer breaches the contract
b. Compensation for actual loss based on the contract’s value
c. Non-monetary damages
d. Payments in excess of any compensatory damages
678) Which of the following scenarios is an example of novation?
a. Cynthia has a contract with Jack to buy his house. She terminates the contract after the inspection and writes a similar contract on a new property with Jeff.
b. Doug is buying Norm’s farm, but has a serious accident and no longer wants to own a farm, so his daughter Linda decides to buy the property. Norm agrees to the substitution of Linda for Doug in the purchase contract, effectively creating a new contract.
c. Marcie contracts to buy Suzanna’s beauty salon. Marcie gets cold feet, though, and terminates the contract.
d. Using a clause in the original purchase contract, Roxanne assigns her contractual right to purchase a property to her friend, Caroline.
679) Which of these sentences accurately describes the phrase “statute of limitations”?
a. There are deadlines for certain types of legal action.
b. There are limits to how many times someone may sue another person.
c. There are limits to the monetary damages that may be awarded in a civil suit.
d. There’s a limit to the number of statutes that may be enacted each year.
680) Which one of the following statements is true regarding a partially performed sales contract that otherwise contains all of the essential elements?
a. The contract can’t close.
b. The contract is unenforceable in court.
c. The contract is void.
d. The contract is voidable.
681) Anna and Cindy entered a contract to buy Jake’s home. However, at the last minute, Cindy had a change of heart and wanted out of the deal. Anna asked another friend, Sally, if she wanted to take Cindy’s place as a co-buyer of Jake’s home. Everyone agreed to the substitution of Sally for Cindy on the contract. Of what is this an example?
a. Assignment
b. Fraud
c. Mutual mistake
d. Novation
682) DeeAnna thought she purchased an investment property, but the seller refused to deliver the title to her. DeeAnna met all of her obligations per the written contract she and the seller signed. She decided to take the seller to court in an effort to force him to hand over the title. This is an example of ______.
a. Accepting partial performance
b. Rescinding the contract unilaterally
c. Suing for damages
d. Suing for specific performance
683) Which of these situations could be most appropriately addressed through reformation of the contract?
a. Bobby the Buyer got a promotion with the same company, and a 10% raise in salary.
b. Bobby the Buyer wasn’t approved for a mortgage loan and asks Sally if he can have his earnest money back.
c. Sally the Seller and Bobby the Buyer request a new contract after Sally notices the property address is mistyped.
d. Sally the Seller decides she cannot part with her house after all. Fortunately for her, but not so fortunately for him, Bobby
684) What phrase do many real estate contracts contain that reminds the parties to avoid unnecessary delays to the transaction, and to adhere to all contract dates?
a. Haste makes waste
b. Patience is a virtue
c. Seek the advice of an attorney
d. Time is of the essence
685) Sue Ellen has a contract to buy Roger’s house, which she has always admired, when Roger decides he’s ready to move to a senior living community. After Roger finds a suitable senior apartment and moves, Sue Ellen writes a check for the agreed-upon amount, and Roger transfers the deed to her. What is happening in this scenario?
a. Assignment
b. Breach
c. Novation
d. Performance
686) Which of these phrases is used to describe the act of correcting a contract that contains a mistake?
a. Disclosing of a contract error
b. Reformation of a contract
c. Release of a contract
d. Renewal of a contract
687) Mary agreed to buy her mother’s house when her mother planned to move to a senior living community. They signed a purchase agreement, but when Mary had to move because of work, she signed her rights in the contract over to her sister, Tina. Mary may still owe money if Tina can’t come up with the agreed-upon funds. What’s happening in this scenario?
a. Assignment
b. Breach
c. Novation
d. Performance
688) What is it called when one party to a contract transfers the contractual rights and obligations to another but remains liable for the contract terms?
a. Assignment
b. Execution
c. Novation
d. Termination
689) Eileen entered into a contract to buy Peter’s home. The contract specified that Peter must leave the refrigerator with the home, and he must replace the roof before closing. During the pre-closing walk-through, Eileen confirmed the house had a nice new roof, but also found that Peter took the refrigerator with him. Eileen decided she didn’t want the refrigerator that much anyway so she didn’t make a fuss. This is an example of ______ of the contract.
a. Partial performance
b. Performance
c. Reinforcement
d. Voiding
690) Sam entered into a contract to sell his home to Gina. After the inspection, Gina insisted that Sam replace the damaged roof. Sam refused, and the parties agreed to cancel the deal. This is an example of ______.
a. Accepting liquidated damages
b. Accepting partial performance
c. Mutually rescinding the contract
d. Unilaterally rescinding the contract
691) Jayne was tired of waiting for her subcontractor to get his part of the deal done. The agreed-upon deadlines came and went, and Jayne lost money waiting for the subcontractor to come through. She decided that if the subcontractor weren’t going to honor his commitments, neither was she, so Jayne consulted with her attorney and then terminated the contract. This is an example of ______.
a. Accepting partial performance
b. Mutually rescinding the contract
c. Rescinding the contract unilaterally
d. Suing for damages
692) Grace found herself in a breach of contract situation where the other party met some of the terms but not others. Grace thought it would cost a lot of time and money to sue, so she decided to accept the work that had been done and call it good. This is an example of ______.
a. Accepting partial performance
b. Mutually rescinding the contract
c. Rescinding the contract unilaterally
d. Suing for damages
693) Which of the following scenarios describes an example of unilateral rescission?
a. A sales transaction falls through when Nora, the buyer, doesn’t qualify for financing.
b. Bobby, the buyer, makes an offer on a house that doesn’t meet the appraisal contingency. He cancels the sale.
c. Buyer Alice decides to join the Peace Corps. She and the seller mutually agree to cancel the sale, and the seller keeps Alice’s earnest money.
d. Sally, the seller, sells her property to two different buyers. Both buyers sue Sally for specific performance.
694) Shannon and Rene are sisters who entered into a contract to buy an income property. The sisters got into a dispute, and Shannon wants out of the deal. However, their uncle Jerry wants to replace Shannon on the contract. Shannon agrees to the substitution so they go ahead and do it. If Jerry fails to live up to his obligations under the contract though, Shannon will be held responsible. Of what is this an example?
a. Assignment
b. Fraud
c. Mutual mistake
d. Novation
695) What language may be included in a contract after the assignor’s name to make it clear that the contract is assignable?
a. “And/or assigns”
b. “Buyer beware”
c. “Spouse or partner”
d. “Time is of the essence”
696) Seller Gina feels awful that Martha, who was going to buy her property, lost her job. Gina decides to ______ Martha from the purchase contract.
a. Assign
b. Reform
c. Release
d. Rescind
697) Zack enters into a contract to buy Olivia’s home. Per the terms of the contract, Zack must put down a $10,000 earnest money deposit and have the property inspected within five days. In reality, he puts down a $12,000 deposit and has the property inspected within two days. Of what is this an example?
a. Buyer misrepresentation
b. Partial performance of the contract
c. Performance of the contract
d. Voiding of the contract
698) What’s the key difference between assignment and novation of a contract?
a. Assignment releases the original party from all obligations, while novation does not.
b. Individual contracts must specifically allow novation, but not assignment.
c. Novation is disallowed in many states, while assignment is not.
d. Novation releases the original party from all obligations, while assignment does not.
699) When a buyer breaches the real estate sale contract, the seller may file a lawsuit for compensatory damages. Which of the following best describes compensatory damages?
a. A specified monetary amount agreed upon by the buyer to pay the seller, if the buyer breaches the contract.
b. A specified monetary amount the seller agrees to pay the buyer, if the seller breaches the contract.
c. Compensation for actual loss based on the contract’s value.
d. Payment in excess of the contract’s value.
700) Mary contracted to buy her mother’s house when her mother moves to a senior living community, but now Mary has to move because of work and no longer wants to buy the house. With their mother’s agreement, Mary’s sister, Tina, steps in, releasing Mary from her obligation. They write up a new contract, with the only change being that Tina is now the party to the contract rather than Mary. What’s happened here?
a. Assignment
b. Breach of contract
c. Novation
d. Performance
701) Betty hired a contractor to replace her gutters. Within days, the gutters leaked and flooded her basement. She complained to the contractor, who replaced the gutters again. The next time it rained, the gutters leaked and flooded Betty’s basement a second time. Frustrated, Betty decided to file a lawsuit against the contractor in an attempt to recover the money she lost. This is an example of ______.
a. Accepting partial performance
b. Rescinding the contract unilaterally
c. Suing for damages and breach of contract
d. Suing for specific performance

702) In contract law, when does partial performance occur?
a. When a party acknowledges receipt of the contract
b. When a party does some, but not all, of what the party has agreed to do
c. When a party meets all terms of the contract
d. When a party rejects all terms of the contract

703) Parker entered into a contract with seller Derrick to buy Derrick’s home. Before finalizing the sale, Parker had a change of heart and decided to renounce all worldly possessions. He no longer wanted to buy Derrick’s home. With Derrick’s approval, Parker is released and Parker’s brother, Tom, takes Parker’s place as the buyer in the purchase contract. Of what is this an example?
a. Assignment
b. Fraud
c. Misrepresentation
d. Novation

704) Martha made an offer to buy Drake’s home, and he accepted it. Under the terms of the agreement, Martha was supposed to make an earnest money deposit of $10,000, but she only put down $5,000. Drake accepted the lesser deposit, and the sale was ultimately finalized. This is an example of ______.
a. Accepting partial performance
b. Rescinding the contract unilaterally
c. Suing for damages
d. Suing for specific performance

705) Rescission can be ______ agreement to cancel a contract.
a. A mutual
b. An ill-advised
c. An unlawful
d. A tenuous

706) The owner of ABC Construction entered into a contract to build two homes for brothers Jack and John. The contract specified that the homes must be completed by April 1. ABC finished the homes on March 30. Of what is this an example?
a. Non-performance
b. Partial performance
c. Performance
d. Voiding
707)
708) What’s the key difference between assignment and novation of a contract?
a. Assignment releases the original party from all obligations, while novation does not.
b. Individual contracts must specifically allow novation, but not assignment.
c. Novation is disallowed in many states, while assignment is not.
d. Novation releases the original party from all obligations, while assignment does not.

709) In an addendum to the purchase and sale contract, the seller agrees to paint the house before conveying the house to the buyer. The weather changes, and the seller is unable to finish painting the house before closing. Of what is this an example?
a. A void contract
b. Contract execution
c. Legal purpose
d. Partial performance

710) What is the name of the process of substituting one party to an existing contract with a new party, releasing the original party from all contractual obligations and rights?
a. Assignment
b. Execution
c. Novation
d. Re-contracting

711) Select the correct definition for “reformation of a contract.”
a. Redrafting a contract
b. Releasing one party from a contract
c. Renewing a contract
d. Suing another party to a contract

712) Bob signed a contract to purchase Ingrid’s apartment building. Bob decided he didn’t want to be a landlord, and Ingrid decided she didn’t want to sell and move to Maui. They mutually agreed to cancel the contract, and Ingrid returned Bob’s earnest money. This is referred to as ______.
a. Assignment
b. Breach of contract
c. Novation
d. Rescission

713) This is a loss of money or anything of value, due to failure to perform.
a. Covenant
b. Forfeiture
c. Listing agreement
d. Options

714) This acts as the receipt for earnest money given by the buyer to secure an offer.
a. Covenant
b. Deposit receipt
c. Listing agreement
d. Options

715) This is a legal written agreement between a buyer and seller that states the purchase price and other terms of understanding by which real property will be transferred.
a. Contract for sale
b. Covenant
c. Listing agreement
d. Options

716) Which of these is a contract between a client and agent to sell real property?
a. Contract for sale
b. Covenant
c. Deposit receipt
d. Listing agreement

717) Which of the following means a legal section in a contract or law?
a. Listing agreement
b. Option
c. Provision
d. Tender

718) What is the deciding factor when determining whether the buyer or the seller takes the loss on a property that is taken by eminent domain?
a. The amount of the earnest deposit
b. The value of the property
c. Whether or not title and possession have transferred
d. Who has eminence

719) Which of these means, “A privilege sold by one party to another that offers the buyer the right, but not the obligation, to buy at an agreed-upon price during a certain period of time or on a specific date”?
a. Commission
b. Listing agreement
c. Option
d. Tender

720) Which of these means, “An agent’s compensation for performing the duties of agency; usually a percentage of a property’s selling price”?
a. Commission
b. Listing agreement
c. Options
d. Tender

721) This is the legal agreement between a buyer and a broker hired to represent the buyer’s interest.
a. Buyer representation agreement
b. Covenant
c. Listing agreement
d. Options
722)
723) Sally the Seller and Bobby the Buyer are about to sign the closing documents when a fire truck rushes by. The house is burning down! The documents are not signed. Which of these outcomes adheres to the rights provided by the Uniform Vendor and Purchaser Risk Act?
a. Bobby does not have to pay the closing costs and will get his earnest money back.
b. Bobby does not have to pay the closing costs, but Sally gets to keep the earnest money.
c. Bobby must go through with the purchase and will seek reimbursement through insurance.
d. Sally and Bobby must split the loss 50/50.

724) Which of these means “to formally offer”?
a. Commission
b. Conveyance
c. Listing agreement
d. Tender

725) Which of these scenarios describes a voluntary lien?
a. Ruby hasn’t paid her property tax, so the state put a tax lien on her home.
b. Sam hasn’t paid the general contractor for the new deck he built on Sam’s house, so the contractor put a mechanic’s lien on Sam’s property.
c. Sharon purchased a condo and now the lender has a mortgage lien on the property.
d. The court ordered Bob to pay his debt to Leo and placed a judgment lien on Bob’s property when he couldn’t pay.

726) What type of lien is defined as an involuntary lien placed on all of the property received by a deceased person’s heirs?
a. Estate/inheritance lien
b. Income tax lien
c. Judgment lien
d. Mortgage lien
727)
728) Which of the following defines the term ‘lis pendens’?
a. A legal notice that a lawsuit is pending that affects the title of a property
b. A legal term that means “it depends” and requires a certain minimum sales price of the property.
c. A notice that notifies potential buyers of a pending lease
d. A public listing and notice of foreclosure of a property.

729) April owes money to quite a few people after a round of court-ordered judgment liens were placed on her property. Can you determine who would get paid first?
a. Alycea filed at the end of June and was awarded $50,000.
b. Bob filed in May and was awarded $85,000.
c. Frank filed in February and was awarded $10,000.
d. Sarah filed in March and was awarded $15,000.

730) Why is it important to publicly record a deed?
a. The title insurance policy schedule of exceptions will include anything that’s publicly recorded.
b. Title insurance policies don’t cover publicly recorded events.
c. Title insurance policies must be publicly recorded to be legal.
d. Title representatives and attorneys who perform title searches look for documents that are publicly recorded.

731) Which of these statements is NOT true about a specific lien?
a. It may allow the creditor to sell the property through a court sale (foreclosure) and be repaid from the proceeds of the sale.
b. It prevents the debtor from transferring the property until the debt has been repaid.
c. It’s a lien against a single property rather than a person.
d. It’s always involuntary.

732) How is priority determined in cases where more than one judgment lien is filed against a property?
a. The government has priority, followed by whoever is owed the most next.
b. Whoever filed their claim first receives priority.
c. Whoever is owed the most money has priority.
d. Whoever paid to receive priority service at the county clerk’s office.

733) Conrad just closed on the house he’s buying to fix up. Why should he follow up to be sure the deed has been recorded?
a. He can’t legally make any improvements to the property until the deed is recorded.
b. He doesn’t legally own the house until that occurs.
c. Recording provides actual notice that he owns the property.
d. Recording provides constructive notice that he owns the property.

734) What makes an income tax lien different from a property tax lien?
a. An income tax lien has priority over a property tax lien and will be paid first upon foreclosure.
b. An income tax lien is a general lien and a property tax lien is a specific lien.
c. An income tax lien is placed by the federal government and a property tax lien is placed by the state.
d. An income tax lien is voluntary and a property tax lien is involuntary.

735) What type of notice results from publicly recording a title transfer?
a. Actual notice
b. Attorney notice
c. Constructive notice
d. Proper notice

736) Which of the following defines an income tax lien?
a. Involuntary lien placed against a property owner’s property due to a court decree resulting from a lawsuit.
b. Involuntary lien placed against a property owner’s property for due and unpaid taxes
c. Involuntary lien placed on all property inherited by a deceased person’s heirs.
d. Voluntary lien against a single property that uses the property as collateral for repayment of a loan.
737)
738) Joshua won his lawsuit against Savannah. The judge awarded him $30,000. Savannah was unable to pay, so the court placed a ______ on her home.
a. Foreclosure action
b. Judgment lien
c. Lis pendens
d. Mortgage lien

739) Which option is true if a deed is not recorded after closing?
a. The buyer must pay a fine to the seller.
b. The entire closing is void.
c. The property’s legal ownership can be challenged.
d. The title never changes hands from the seller to the buyer.

740) Which of these scenarios describes a voluntary specific lien?
a. The court placed a lien on the property Marge inherited upon Homer’s death.
b. The IRS placed a lien on Lisa’s property when she failed to pay her income taxes.
c. When Jack and Jill refused to pay the roofing contractor, he placed a lien on their property.
d. When Rob and Sue bought their house using a mortgage, the lender put a lien on the property.

741) Under which of the following circumstances would a mechanic’s lien be attached to a property?
a. The court has determined that the owner must pay for damages from a civil court case.
b. The owner fails to pay his homeowners association dues.
c. The owner fails to pay his property taxes.
d. The owner fails to pay the builder who added an extra bedroom to the house.

742) Which option describes a real property tax lien?
a. General and involuntary
b. General and voluntary
c. Specific and involuntary
d. Specific and voluntary

743) Daisy and her kids loved their new pool, but Daisy wasn’t so happy when she received notice that the general contractor who poured the concrete had placed a lien on her home. Daisy went through her records and discovered that she had never paid the general contractor. What’s true about this situation?
a. Daisy can now place a lien on the general contractor’s property.
b. The lien is illegal.
c. This is a legal judgment lien.
d. This is a legal mechanic’s lien.

744) What type of involuntary lien is placed on a person’s estate after their death if there are unpaid debts to creditors?
a. Deceased person’s debt lien
b. Estate/ inheritance tax lien
c. Mechanic’s lien
d. Real property tax lien

745) What type of individual’s property is affected by a general lien?
a. All real property and personal property
b. One specific property
c. Only personal property, not real property
d. Only real property and not personal property

746) Dorcas and Ralph were married for 15 years. Ralph, an accountant, always took care of the bills and other financial matters for the couple. Then Dorcas discovered that Ralph had failed to pay the property tax on their property for the last three years. Which of these is likely to happen?
a. Dorcas and Ralph will be required to sell their home to the state for the amount of property tax owed.
b. The state will place a condemnation order on their property so they can’t transfer their property until the debt is satisfied.
c. The state will place a mortgage lien on their home for the amount of property tax owed.
d. The state will place a tax lien on their property so it can’t be transferred without satisfying the debt.

747) What’s the definition of a judgment lien?
a. An involuntary lien due to a court decree resulting from a lawsuit
b. An involuntary lien placed on all of the property received by a deceased person’s heirs
c. An involuntary lien placed on a person’s estate after his or her death if there are unpaid debts to creditors
d. A voluntary lien against a single property that uses the property as collateral for repayment of a loan

748) When property changes hands, the deed is recorded and a fee is charged. What is the benefit to the grantee of having the deed recorded?
a. It impacts who owns the property.
b. It protects against foreclosure.
c. It puts the public on notice regarding ownership.
d. It’s required by law.

749) What’s the term for a notice given directly to and received by a person?
a. Actual notice
b. Constructive notice
c. Proper notice
d. UPS notice

750) Which one of the following is true about ownership or title to a property?
a. Constructive notice to the public of real property ownership occurs when the deed is recorded.
b. The last party to record has priority.
c. The seller is responsible for paying for owner’s and lender’s title insurance.
d. Title isn’t finalized until the deed has been recorded.

751) Christina purchased a house from Thomas. When did she officially gain ownership of the property?
a. After the appraisal was completed
b. Prior to closing after approving the Loan Estimate
c. When actual notice of the deed was given to the mortgage company
d. With the transfer of deed from the seller to the buyer

752) What’s the definition of a judgment lien?
a. An involuntary lien due to a court decree resulting from a lawsuit
b. An involuntary lien placed on all of the property received by a deceased person’s heirs
c. An involuntary lien placed on a person’s estate after his or her death if there are unpaid debts to creditors
d. A voluntary lien against a single property that uses the property as collateral for repayment of a loan

753) April owes money to quite a few people after a round of court-ordered judgment liens were placed on her property. Can you determine who would get paid first?
a. Alycea filed at the end of June and was awarded $50,000.
b. Bob filed in May and was awarded $85,000.
c. Frank filed in February and was awarded $10,000.
d. Sarah filed in March and was awarded $15,000.

754) Joshua won his lawsuit against Savannah. The judge awarded him $30,000. Savannah was unable to pay, so the court placed a ______ on her home.
a. Foreclosure action
b. Judgment lien
c. Lis pendens
d. Mortgage lien

755) How is priority determined in cases where more than one judgment lien is filed against a property?
a. The government has priority, followed by whoever is owed the most next.
b. Whoever filed their claim first receives priority.
c. Whoever is owed the most money has priority.
d. Whoever paid to receive priority service at the county clerk’s office.

756) How long after a notice of cessation or completion is filed can a contractor file a mechanics lien?
a. Within 60 days
b. Within 90 days
c. Within six months
d. Within two years
757)
758)
759) Which of the following options describes a subordination agreement?
a. An agreement between a contractor and any subcontractors
b. An agreement between a landowner and a contractor
c. An agreement between the court and landowner to decrease property taxes
d. An agreement between two lien holders to modify the order of lien priority

760) Frank has waited 30 days after notifying a client that the project he finished remains unpaid. The client has not filed a notice of completion or cessation with the county clerk. How long does Frank have left to file a mechanic’s lien?
a. 10 days
b. 30 days
c. 60 days
d. 90 days

761) How long does a homeowner have to pay off outstanding liens against his property?
a. 30 days
b. One week before the foreclosure sale is held
c. Until the foreclosure sale is held
d. Up to 10 years

762) Karen’s house was recently foreclosed on to pay off a lien on her home. What happens to any extra money after the lien and expenses of the sale are paid?
a. It goes to Karen.
b. It’s given to a local government-approved charity.
c. The bank receives the rest as compensation.
d. The state government receives the extra funds.

763) Which action can be taken if you don’t pay a lien against your property?
a. Accretion
b. Condemnation
c. Eminent domain
d. Foreclosure

764) What does the right of redemption allow?
a. It allows a property owner to freely give away her property to another and release it of any and all liens against it.
b. It allows a property owner to pay back any debts or liens against their property until a foreclosure sale is held.
c. It allows a property owner to sue a neighboring property owner over boundary disputes.
d. It allows the government to satisfy liens against a property through a foreclosure sale.

765) What can a property owner do to stop contractors performing unauthorized work from filing mechanic’s liens later?
a. File a lien release
b. File a notice of completion
c. Post and file a notice of nonresponsibility
d. Require the contractor obtain a payment bond

766) Which option best defines an equitable lien?
a. An income tax lien
b. A real property tax lien
c. Created by a court of common law; doesn’t give the right to possession of the property
d. Created by law and gives right of possession

767) One of Jackie’s creditors sued her in civil court. As a result of the judgment against her, her house, car, and art collection were all subject to sale in order to pay the creditor. What type of lien is this?
a. General
b. Special assessment
c. Vendor’s
d. Voluntary

768) What’s it called when lien holders allow another lien holder’s claim to have priority over their own?
a. Equitable lien
b. Lis pendens
c. Subordination agreement
d. Voluntary lien

769) What would happen if you bought a house and later found out that there were unpaid liens against the property?
a. Nothing. The former owner owes the money on the liens.
b. The lien claimants would lose their liens against your property.
c. The unpaid liens could trigger a foreclosure on your property.
d. You would have to assume a loan to pay off the liens.

770) Homeowners Daryl and Stella, who are both in their 70s, paid off their mortgage during good times, but recent medical bills have overcome them and their creditors have a judgment lien against their property. They decide to sell their home and downsize to pay off their bills. Which of these is NOT true about the homestead exemption for Daryl and Stella?
a. It protects $175,000 of their equity.
b. The holder of the judgment lien will be paid before they receive their exemption.
c. They’ll need to purchase another home within six months of the sale.
d. They must first file a declaration of homestead.

771) How can a foreclosure be stopped or prevented?
a. Auction
b. Fleeing the state
c. Paying all outstanding liens against the property
d. Refinancing

772) In a foreclosure situation, which lien has highest priority of the options listed below?
a. A judgment lien
b. A mechanic’s lien
c. An income tax lien
d. A real property tax lien

773) Which process temporarily stalls foreclosure?
a. Filing for Chapter 7 bankruptcy
b. Fleeing the state
c. Making a request for a break
d. Paying off all debts

774) How are creditors or lien holders paid during a foreclosure process?
a. Lien holders are given a referee’s deed to the property.
b. Tax refunds are disbursed after supplying a foreclosure affidavit to the court.
c. The property is portioned among the lien holders to have or to sell.
d. The property is sold at auction and lien holders are paid from the proceeds of the sale.

775) You have just started a construction project on your property and have hired a contractor to do some of the work. The contractor then brings on several subcontractors to do some of the tasks. What can you do to protect yourself from subcontractor liens should the contractor not pay them?
a. File a lien release.
b. File a notice of completion.
c. Nothing. There is no defense against unpaid subcontractors.
d. Require the contractor obtain a payment bond.

776) Which term means property that is used as the owner’s primary residence?
a. Estoppel
b. Homestead
c. Lis pendens
d. Reliction

777)
778) What happens after a foreclosure if there isn’t enough money from the sale to pay off all of the lien holders against a property?
a. All claims are void if there isn’t enough money after the foreclosure sale of the property.
b. The former owner may owe a debt to lien holders who aren’t fully paid.
c. The former owner’s wages will be garnished for the remainder of what’s owed.
d. The lien holders must refile on the former owner’s next property.

779)
780) What is the six-month rule for homestead exemptions?
a. No liens may be filed against homesteads unless at least six months’ notice has been given to the homeowner.
b. The property owner has six months to sell the property after a lien is filed.
c. The property owner must live in the home for at least six months before they may qualify for a homestead exemption.
d. The property owner must reinvest the homestead exemption amount within six months in another homestead to protect it from creditors.

781) Which option best defines a statutory lien?
a. A judgment lien
b. A mortgage
c. Created by a court of common law; doesn’t give the right to possession of the property
d. Created by law and gives right of possession
782)
783) How can a foreclosure process be temporarily stalled?
a. By filing for Chapter 7 bankruptcy
b. By fleeing the state
c. By paying off all debts
d. By request
784)
785) Which document is used to establish proof of ownership?
a. Abstract of title
b. Chain of title
c. Deed
d. Title insurance

786) Jeff has filed a quiet title suit against Roger. What’s the purpose of this suit?
a. To clear up a cloud on title
b. To clear up a property line dispute
c. To exercise his right to quiet enjoyment of the property
d. To prohibit the seller from releasing the buyer’s name

787) What is the purpose of the title search?
a. To collect evidence that the title is a marketable title, meaning it’s clear and free of encumbrances
b. To ensure the current owner has the title to give to the buyer
c. To ensure the title is on the record at the local clerk recorder’s office
d. To insure the owner against any financial loss due to a defect in the title

788) Anita is a new buyer. Luckily, ______ will help her before the sale and can reimburse her after the sale if a title issue arises.
a. Her buyer’s agent
b. Her title insurance
c. Seller credits
d. Seller disclosures

789) Which of these statements is NOT true about an extended title insurance policy?
a. It covers some items that aren’t part of the public record, such as unrecorded liens.
b. It’s typically purchased for the lender.
c. It’s typically used when the property is paid for in cash.
d. The buyer will most likely pay for this policy.
790)
791) What’s a quiet title action?
a. A lien placed against a potential land owner for property purchased by another
b. An action to locate and notify all who may have some claim on the title, and determine the validity of all claims
c. A type of title insurance that reimburses the policyholder if the neighborhood is noisier than normal
d. A way to anonymously purchase property without filing the title or transfer on record

792) What type of title insurance covers defects of an incorrect survey and boundary encroachments?
a. Extended title insurance
b. Homeowners insurance
c. Standard title insurance
d. Title survey and boundary insurance

793) In a typical transaction, which of these title defects is unlikely to cause a problem for the buyer?
a. A faulty survey
b. An unrecorded lien
c. A past error in recording title transfer
d. The seller’s existing mortgage

794) Which document is used to give a buyer an overview of the title history and information about what is or isn’t covered in an insurance policy?
a. Abstract of title
b. Guarantee of title
c. Preliminary report
d. Title insurance

795)
796) Which document establishes path and proof of ownership?
a. Abstract of title
b. Chain of title
c. Deed
d. Title insurance

797) Lisa purchased an older home with a large backyard that’s perfect for her pack of collies to romp in. Six months after she bought the property, a total stranger knocked on her door and told her he’s the true property owner. After investigating, it turns out the person who sold Lisa the property had forged the deed without the true owner’s knowledge. What’s true about Lisa’s situation?
a. Her homeowner’s policy may protect her from loss.
b. Her lender must initiate a quiet title action to resolve the issue.
c. Her title insurance policy may protect her from loss.
d. The county clerk where the documents were recorded is liable.

798) Your client, Ray, is worried about title issues that may arise after closing. Remind Ray of his secret protection: ______.
a. Buyer Trust Fund
b. Litigation
c. Seller guarantees
d. Title insurance

799) As a licensee, you’re helping a couple buy a new home when you come across issues that could mean there’s a cloud on the title. What should you do?
a. Encourage the couple to move forward with the purchase and not worry about the clouded title.
b. File an affidavit with the court about the knowledge of the clouded title and tell the couple to move forward with the sale.
c. Keep moving forward with the sale but recommend the couple purchase title insurance to insure against any potential title problems.
d. Recommend the couple find another property to purchase, or ask the seller to settle the title through a quiet title action to clear any cloud before moving forward with the sale.

800) Marsha’s title insurance policy was issued on closing day, which was June 18. The policy lists the standard exclusions as well as requirements for the company to issue the policy, such as paying off existing recorded liens. Which one of these will NOT be addressed in the schedule of exceptions?
a. Marsha’s second mortgage on the property, which she plans to get next January
b. Marsha’s unrecorded lease on the property
c. Smith and Martin Building and Rehab’s mechanic’s lien, which was filed on June 18
d. The local cable company’s unrecorded easement through the property for underground wiring. Marsha disclosed this to the title company

801) What special concern do foreclosed properties often present?
a. Buying the property at a discount may have tax implications.
b. The homeowners may or may not have property insurance.
c. The property sale may be subject to additional fees that will be passed to the new buyer.
d. There could be hidden title issues.

802) What can buyers do to protect themselves from title issues when purchasing property?
a. Ensure the seller’s name is on the deed.
b. File a lis pendens claim at the court before buying the property.
c. File a security agreement at the county clerk’s office.
d. Purchase title insurance.

803) Which one of the following protects the owner against financial loss if the real estate title has defects?
a. Abstract of title
b. Chain of title
c. Deed
d. Title insurance

804) Paula is bidding on a property that’s being sold at a foreclosure auction. She’s excited about the great deal she’s getting on the property after she finds out she submitted the winning bid. What could cause Paula’s great deal to turn into a nightmare?
a. The lender has the option to refuse her bid and revoke the deed transferring ownership to Paula.
b. The previous owner may redeem the property by paying Paula at least 50% of the property’s market value.
c. The title insurance company may charge her additional fees after closing to continue the title policy.
d. The title to the property may have hidden issues that could cost her a lot of money to clear.

805) What’s a marketable title?
a. A title that a relative has gifted
b. A title that has been granted by public grant
c. A title that is about to go on the market
d. A title that is clear and free of encumbrances

806) Which document is used to provide a summary of the title history?
a. Abstract of title
b. Chain of title
c. Deed
d. Title insurance

807) Real estate licensees who want to uphold the Fair Housing Act should make a habit out of which of the following actions?
a. Disclose their protected status to all clients.
b. Present sellers with offers from people of the same class so they don’t ask the licensee to discriminate.
c. Show buyers properties in neighborhoods where they are unlikely to experience discrimination.
d. Tell potential clients in their initial meeting that they are committed to upholding fair housing laws.

808) Which agency enforces Title II under the Americans with Disabilities Act of 1990, when it relates to state and local public housing, housing assistance, and housing referrals?
a. Department of Civil Rights
b. Department of Equal Opportunity
c. Department of Housing and Community Development
d. Department of Housing and Urban Development

809) Individuals who experience housing discrimination are provided the opportunity to file a complaint based on the provisions of which act?
a. Americans with Disabilities Act of 1990
b. Civil Rights of 1866
c. Fair Housing Act of 1968
d. Fair Housing Amendments Act of 1988

810) Which protected class refers to a group of people who share common characteristics, typically physical characteristics, such as skin color?
a. Familial status
b. National origin
c. Race
d. Religion

811) Which of these statements best represents what happens after a federal fair housing complaint is made?
a. A fair housing specialist will review the complaint.
b. An official housing discrimination complaint will be filed, and a fair housing specialist will be assigned to the case.
c. FHEO will contact the alleged perpetrator to gather information.
d. HUD will review the complaint to determine if it’s valid.

812) In case history regarding fair housing, which case involved an ordinance that prohibited blacks from living on a block where the majority of the residents were white?
a. Brown vs. Board of Education
b. Buchanan vs. Warley
c. Jones vs. Mayer
d. Plessy vs. Ferguson

813) The Office of Fair Housing and Equal Opportunity is a part of which federal department?
a. CIA
b. HHS
c. HUD
d. NHA

814) Which type of property is exempt from the Fair Housing Act?
a. Condominium with no more than eight units
b. Condominium with no more than four units
c. Owner-occupied with no more than eight units
d. Owner-occupied with no more than four units

815) Which act created the Office of Fair Housing and Equal Opportunity under the Department of Housing and Urban Development?
a. Americans with Disabilities Act of 1990
b. Equal Credit Opportunity Act of 1974
c. Federal Fair Housing Act of 1968
d. Housing and Community Development Act of 1974

816) If a private individual owner doesn’t own more than three single-family homes at one time, which exemption from the Fair Housing Act could apply?
a. Housing designated for senior use
b. “Mrs. Murphy” exemption
c. Owner-occupied buildings with no more than six units
d. Single-family housing sold or rented without the use of a broker

817) What protected class is involved when there is discrimination due to a person being lighter-skinned or darker-skinned?
a. Color
b. Familial status
c. National origin
d. Race

818) Your client submits an application to rent a condo unit. He has excellent credit and has had the same job for a long time. He uses a cane to help with his mobility. When his application is rejected, he feels it’s due to his disability. He is protected under what federal law?
a. Civil Rights Act of 1866
b. Fair Housing Amendments Act of 1988
c. Federal Fair Housing Act of 1968
d. Housing and Community Development Act of 1974

819) Which U.S. Supreme Court decision consolidated five cases involving the constitutionality of state-sponsored segregation in public schools?
a. Brown vs. Board of Education
b. Buchanan vs. Warley
c. Jones vs. Mayer
d. Plessy vs. Ferguson

820) The Housing and Community Development Act of 1974 added which protected class to federal fair housing law?
a. Color
b. Disability
c. Religion
d. Sex

821) Contrary to federal fair housing laws, the state where Katrina lives includes age as a protected class. Which of these statements about this conflict is true?
a. Katrina can follow either the federal or the state law as long as she is consistent.
b. Katrina is permitted to follow whichever law is least restrictive.
c. Katrina must follow federal law for any federally related transaction.
d. Katrina must follow the more restrictive of federal or state law.

822) Prior to a certain act’s existence, there was no legal protection for women who endured sexual harassment from landlords and sellers when they attempted to obtain housing. What’s this act called?
a. Civil Rights Act of 1866
b. Fair Housing Amendments Act of 1988
c. Federal Fair Housing Act of 1968
d. Housing and Community Development Act of 1974

823) A mortgage lender has landed in hot water for fair housing discrimination. Which of these actions might have gotten the lender in trouble?
a. Denying a loan based on income-to-credit ratio
b. Denying a loan that was pre-approved after the mother stops working to care for her baby
c. Imposing different interest rates based on credit scores
d. Refusing to provide literature about loans to consumers with poor English language skills

824) If a landlord refuses to rent an apartment to two single women who live together, this is discrimination on the basis of what federally protected class?
a. Familial status
b. Lifestyle
c. Same sex relationship
d. Sex

825) Which agency enforces fair housing law?
a. FFA
b. FHEO
c. NFHA
d. NHA

826) Which of these actions is legal?
a. A landlord offers an apartment to a woman only if she goes out with him.
b. A landlord refuses to show or rent an apartment to someone who is not Christian or Jewish.
c. A landlord requires a larger deposit for each child who will be living in the home.
d. A man advertises for a roommate to share his two-bedroom apartment and specifies that he prefers female roommates.

827) A landlord with a strict “no pets” policy won’t rent to a woman who uses a service animal to assist with her epilepsy. Which of the following is a true statement about this situation?
a. This is discrimination based on disability.
b. This is discrimination based on familial status.
c. This isn’t discriminatory because service animals are restricted to the vision-impaired.
d. This isn’t discriminatory if the “no pets” policy is universally applied.

828) In what way did the Supreme Court case of Brown vs. Board of Education affect the way fair housing laws are implemented today?
a. The court found that racially segregated school buses were unconstitutional.
b. The court legalized racial segregation through the “separate but equal” doctrine.
c. The court’s decision made segregated school boards illegal.
d. The decision overturned the doctrine of “separate but equal.”

829) A family of four, with children ages six and nine, is denied the opportunity to view an available unit in housing intended for older persons. Which of the following statements is true?
a. The federal Fair Housing Act allows an exemption for communities that are designed and operated for older persons.
b. The federal Fair Housing Act allows an exemption for communities that don’t have playgrounds or play areas for children.
c. This is a violation of the federal Fair Housing Act because it discriminates on the basis of age.
d. This is a violation of the federal Fair Housing Act because it discriminates on the basis of familial status.

830) Which agency is charged with enforcing fair housing laws and holding all parties accountable for compliance with these laws and regulations?
a. Office of Civil Rights
b. Office of Equal Credit Opportunity
c. Office of Fair Housing and Equal Opportunity
d. Office of Housing and Community Development

831) Why did the Civil Rights Act of 1866 fail to have an immediate impact on practice?
a. It was unconstitutional.
b. Nobody understood the Civil Rights Act.
c. The protected classes had to be approved.
d. There was no agency put in place to enforce the laws.

832) Which act provides consumers with remedies if they become victims of discrimination in the sale, rental, or financing of housing?
a. Civil Rights Act of 1866
b. Equal Credit Opportunity Act of 1974
c. Fair Housing Amendments Act of 1988
d. Housing and Community Development Act of 1974

833) In what year was the Americans with Disabilities Act made law?
a. 1950
b. 1978
c. 1988
d. 1990

834) Jericho and Cindy, an unmarried couple, have three children, ages 3, 5, and 12. A seller’s broker refuses to show them a house in a neighborhood where residents tend to be older, and no one else has children. Which protected class status applies?
a. Age status
b. Familial status
c. Marital status
d. Partnership status

835) The Millers moved to a small town and were interested in buying a house. At the first meeting with real estate sales professional Nora, she asked them where they went to church. They replied that they were atheists and didn’t attend church. Nora then told them that she didn’t know of any listings that met their needs, even though that wasn’t true. Nora is discriminating based on _______.
a. Familial status
b. National origin
c. Religion
d. Sex

836) Which decision stated that separate facilities for blacks and whites were constitutional as long as they were “equal”?
a. Brown vs. Board of Education
b. Buchanan vs. Warley
c. Jones vs. Mayer
d. Plessy vs. Ferguson

837) Title VIII of which law prohibits discrimination in the sale, rental, and financing of housing?
a. Civil Rights Act of 1866
b. Civil Rights Act of 1968
c. Equal Credit Opportunity Act of 1974
d. Housing and Community Development Act of 1974

838) A landlord refuses to show or rent an apartment to someone who is not Christian or Jewish. What type of discrimination is this?
a. Disability discrimination
b. Familial status discrimination
c. Racial discrimination
d. Religious discrimination

839) Which fair housing case tested discrimination in a private sale?
a. Brown vs. Board of Education
b. Buchanan vs. Warley
c. Jones vs. Mayer
d. Plessy vs. Ferguson

840) A homeowner has converted two rooms in his home to a rental unit. What does the “Mrs. Murphy” exemption permit him to do?
a. Advertise for a tenant of a specific race.
b. Move out of the property and rent both portions of it, relying on the “Mrs. Murphy” exemption to permit renting only to single females.
c. Refuse to rent to a female tenant.
d. Use the services of a real estate professional to advertise for a male tenant.

841) Which of these is something that is NOT requested in the initial fair housing complaint form?
a. A description of the alleged discrimination
b. A notarized copy of the complaint description
c. The applicable protected class of the complainant
d. The physical location of the discrimination event

842) Which protected class is protected against discriminatory practices, such as against placing limitations on the number or age of children in the residence?
a. Familial status
b. Marital status
c. National origin
d. Partnership status

843) A fair housing specialist is reviewing fair housing complaints. Which of these contains an action that is prohibited?
a. An appraiser inflates the value of a property because the person buying the property stole his girlfriend in high school.
b. A pregnant woman was not given the opportunity to rent a room in a three-bedroom house because the owner doesn’t want to live with a baby.
c. A real estate professional doesn’t respond to any requests to view a property.
d. A transgender woman is evicted from a rental property because she makes the neighbors uncomfortable.

844) When state and federal laws differ, as they sometimes do with fair housing and/or human rights, which of these statements is true?
a. State and local law override federal law.
b. State lawmakers decide which law prevails.
c. The conflicting law is invalidated, effectively removing the law’s requirements.
d. The state law may not remove rights granted to citizens under the federal law.

845) Which of these situations does the Americans with Disabilities Act address?
a. Marcus, a property manager, routinely dismisses rental applications from families with children under the age of 18.
b. Meridian Apartments provides a gym and pool area for residents, but it’s not accessible to residents who use wheelchairs.
c. Metro Agents hired an interpreter to assist Spanish-speaking clients with the real estate process.
d. The Golden Gate senior housing center has no exercise or activity center for its residents.

846) Which act was the first to prohibit any exceptions for discrimination based on race or color?
a. Civil Rights Act of 1866
b. Fair Housing Amendments Act of 1988
c. Federal Fair Housing Act of 1968
d. Housing for Older Persons Act of 1995

847) Which of these statements accurately describes finance- and housing-related legislation?
a. As a stipulation of the Housing and Community Development Act, lenders must offer reasons when rejecting loan applications and must respond to all applications within 30 days.
b. The Americans with Disabilities Act added familial status and disability (both physical and mental) to the existing protected classes.
c. The Equal Credit Opportunity Act of 1974 required lenders to provide consumers with equal access to credit and prohibited credit discrimination based on just the three protected classes of race, color, or national origin.
d. The Fair Housing Act of 1968 prohibited discrimination in the sale, rental, and financing of housing based on race, color, religion, or national origin.

848) Which of these scenarios is legal?
a. A homeowner makes a room available for rent in her residence, but only interviews female applicants.
b. A property manager refuses to show a property to a blind person with a guide dog because the property does not allow pets.
c. A selling agent does not respond to a request to view a listed property because the person’s accent in the voicemail is very thick.
d. The sellers refuse to consider an offer from someone who looks like a man wearing women’s clothing, because they don’t think the neighbors would be happy if they sold their house to someone who might be transgender or gay.

849) Rhonda and Jade both consider themselves to be African-American, although Rhonda has much darker skin and hair than Jade. When Rhonda went to the Valley Falls apartment manager’s office to request a rental application, she was told there were no vacancies. Jade went in a day later and received an application. This may be discrimination based on _______.
a. Color
b. National origin
c. Race
d. Sex

850) As a stipulation of a specific act, lenders must offer reasons when rejecting loan applications and must respond to all applications within 30 days. What’s the name of this act?
a. Americans with Disabilities Act of 1990
b. Equal Credit Opportunity Act of 1974
c. Fair Housing Amendments Act of 1988
d. Federal Fair Housing Act of 1968

851) Which act states that communities and facilities that meet certain criteria for providing housing to older persons are legally exempt from familial status discrimination?
a. Fair Housing Amendments Act of 1988
b. Federal Fair Housing Act of 1968
c. Housing and Community Development Act of 1974
d. Housing for Older Persons Act of 1995

852) Which of these situations would be exempt from most provisions of the federal Fair Housing Act?
a. A homeowner engages a real estate professional to rent out his basement apartment.
b. An investor owns and rents out five duplexes.
c. A non-profit owns 20 properties that it only rents to Caucasian families.
d. The local Elks club owns a property that’s rented only to Elks club members.

853) What is the length of the statute of limitations to file a fair housing complaint with HUD?
a. 10 years
b. Five years
c. One year
d. Seven years

854) How does the Office of Fair Housing and Equal Opportunity support real estate consumers?
a. The FHEO conducts regular audits of licensee advertising activities for fair housing violations.
b. The FHEO makes loans available to first time home buyers.
c. The FHEO provides financing education for future homeowners.
d. The FHEO provides support for protected classes through the fair housing complaint process.

855) Your client tells you to do something. It would violate fair housing laws, but it will earn you an amazing commission. What should you do?
a. Explain that you cannot do it, because it’s a fair housing violation, and you could both get into trouble for doing what she’s asked.
b. Immediately fire her as your client and report her as a violator of federal fair housing laws.
c. Try to talk her out of it, but then go along with what she asks. If you don’t, someone else will, and then they’ll get to cash that giant check.
d. You should do what she asks. As your client’s agent, you owe her the duties of loyalty and obedience above all.

856) To whom/which entity should a licensee who’s been threatened with violence after refusing to violate fair housing law report the threat?
a. HUD
b. Law enforcement officials
c. The governor
d. The National Fair Housing Alliance

857) Which of these might bring a charge of illegal steering against a licensee?
a. Benny screens the properties he shows his clients based on the clients’ preferences.
b. Johnny is working with a client who has a disability. At the client’s request, Johnny refrains from showing the client listings that aren’t ADA accessible.
c. Norton encourages his clients to contact local agencies to learn more about a neighborhood’s schools, crime rates, and religious institutions.
d. When working with single female clients, Cassandra is careful to promote properties in neighborhoods she considers safe.

858) Which of these is an example of blockbusting?
a. A lender withholds mortgage loans in areas considered demographically risky.
b. A licensee doesn’t tell her buyer client about a first-floor condo because she felt it wasn’t safe for the client.
c. A licensee focuses on showing properties in areas that are demographically similar to her buyer clients’ ethnicity.
d. A real estate licensee approaches a homeowner as soon as a demographic shift starts to occur in her neighborhood and convinces her that she needs to sell now, or she’ll never be able to sell.

859) What’s the term for a lender refusing to lend in a specific area, often based on the area’s minority make-up?
a. Blockbusting
b. Gerrymandering
c. Redlining
d. Steering

860) What’s the term for the illegal practice of nudging buyers away from or toward a specific area based on the presence or absence of protected class members?
a. Blockbusting
b. Gerrymandering
c. Redlining
d. Steering

861) Which one of these situations represents the illegal practice of redlining?
a. Arlo, a licensee, distributed a flyer in several neighborhoods warning of impending commercial developments that would negatively impact property values.
b. Based on the neighborhood’s demographics, Hunter, a mortgage broker, refused to underwrite mortgage applications from applicants who want to buy in specific neighborhoods.
c. Eunice refused to allow her listing broker to show her house to families with children.
d. Jaime was working with Korean clients, so he focused on showing them homes in Korean communities because he thought they would be more comfortable there.

862) How should you respond if your buyer says the following? “We’re looking for a three-bedroom, two-bathroom home. We have young children, so we want to make sure we’re in a good neighborhood—somewhere safe, where we’ll find a lot of good families and neighbor kids that we’d want our children to play with.”
a. “I can screen neighborhoods based on good school districts for you. That usually means you’ll end up in the kind of neighborhood you want.”
b. “If you provide me with specific kinds of people you want to avoid, I can screen the properties more closely.”
c. “If you provide me with specific neighborhood names, I can certainly look for homes in those areas. You can learn about the different neighborhoods in the area at neighborhoodscout.com.”
d. “Let’s keep this off the record. We just need to make sure it all looks legitimate from the outside.”

863) Which act attempted to eliminate discrimination caused by blockbusting, steering, and redlining?
a. Civil Rights Act of 1866
b. Fair Housing Act of 1968
c. Housing Discrimination Act of 1974
d. HUD Act of 1961

864) What discriminatory lending practice by lenders resulted in the destruction of whole neighborhoods, with perfectly good housing left abandoned?
a. Blockbusting
b. Gerrymandering
c. Redlining
d. Steering

865) Which of these is a recommended strategy for a real estate professional who wants to avoid being asked to violate fair housing laws?
a. Let consumers know upfront that you adhere to fair housing laws.
b. Only work with clients who are the same race as you.
c. Quiz clients on their views about protected classes.
d. Require your clients to complete training on fair housing laws.

866) Early in its history, the Federal Housing Administration officially supported keeping “incompatible” racial groups out of the newly developed white suburbs. What is this practice known as?
a. Blockbusting
b. Consolidating
c. Redlining
d. Steering

867) In 1934, when the Federal Housing Administration was created, it adopted the practice of crossing off cities and neighborhoods it considered risky and refused to insure loans for purchases in those areas. What is this action called?
a. Blockbusting
b. Gerrymandering
c. Redlining
d. Steering

868) How would you respond if your seller makes the following request? “We’ve lived here 10 years and love our neighbors. They’re really concerned about the changes happening to the blocks around us, so we want to be careful about who we sell this house to. You know what we mean. You’ll help us find the ‘right’ kind of buyer, won’t you?”
a. “I can’t technically do that, but I could choose to advertise only in publications that target a white readership.”
b. “I’m sorry that you feel that way. I am obligated to obey the requests of my clients, but I’m going to need you to write up your request and sign it, so there’s no way I can get in trouble for fair housing violations.”
c. “It would be illegal to limit the search based on race or religion or anything like that, but I promise I’ll find you the most qualified buyer I can, and we’ll sell this house for the highest price possible.”
d. “Let’s keep this off the record. As long as we can come up with other reasons to disqualify the buyers you don’t want, we’ll be okay. We just need to make sure it looks legitimate from the outside.”

869) Which of these sentences most accurately describes the purpose of the Unruh Civil Rights Act?
a. The act grants protections to members of protected classes from discrimination by business establishments.
b. The act protects everyone from discrimination by business establishments.
c. The act protects everyone from discrimination in public housing accommodations.
d. The act removes protections from some of the federally protected classes.

870)
871) What is the purpose of the fair lending notice?
a. To disclose the demographic characteristics of approved mortgagors by the bank over the past five years.
b. To explain that financial institutions have the right to refuse to provide loans on homes in neighborhoods with historically high rates of foreclosure.
c. To notify mortgagors of their rights to equitable interest rates.
d. To notify mortgagors that it is illegal for financial institutions to discriminate on the basis of a protected class or on the basis of the characteristics of the neighborhood.

872)
873) The Unruh Civil Rights Act prohibits discrimination against protected classes by ______ establishments.
a. All business
b. All for-profit
c. Only non-profit
d. Only real estate

874)
875)
876) To make a complaint with the Department of Fair Employment and Housing, the complainant must first complete what form?
a. Formal DFEH complaint form
b. Pre-complaint inquiry
c. Protected class disclosure form
d. Request for temporary restraining order
877)
878) Which act prohibits housing financial discrimination on the basis of protected class make-up or location of a property?
a. The DFEH Act
b. The Holden Act
c. The HUD Act
d. The Unruh Act
879)
880)
881)
882) When a Department of Fair Employment and Housing complaint reaches litigation, the parties have the option to have the case heard before _____________________.
a. A court-appointed mediator
b. Civil court
c. The Department of Fair Employment and Housing or in civil court
d. The Housing and Urban Development Commission

883) Which of these statements about the Unruh Civil Rights Act is true?
a. The act provides for a variety of remedies, including court-ordered damages up to five times the victim’s actual damages.
b. The act provides for a variety of remedies, including court-ordered damages up to three times the victim’s actual damages.
c. The act provides for a variety of remedies, including court-ordered damages up to two times the victim’s actual damages.
d. The act specifies that victims of discrimination may not be reimbursed for attorney fees.
884)
885) Which step of the DFEH complaint process takes place in civil court?
a. Investigation
b. Litigation
c. Pursuit of resolution
d. Remedies

886) Which of these statements is true?
a. The Unruh Civil Rights Act does not include the seven federally protected classes.
b. The Unruh Civil Rights Act extends protections to several classes in addition to the seven federally protected classes.
c. The Unruh Civil Rights Act protects one class—source of income—in addition to the seven federally protected classes.
d. The Unruh Civil Rights Act protects the seven federally protected classes and no other classes.

887) During which step of the DFEH complaint process does the DFEH explore options to resolve a complaint after a violation of the law has been found?
a. Investigation
b. Litigation
c. Pursuit of resolution
d. Remedies

888) The Unruh Civil Rights Act requires: “Full and equal accommodations, advantages, facilities, privileges or services in ______ business establishments.”
a. All
b. For-profit
c. Non-profit
d. Privately owned

889) Which of these statements accurately describes the formal DFEH complaint process?
a. A formal complaint is only filed if a full investigation reveals a violation of the law.
b. DFEH cases are litigated by private lawyers.
c. The formal process begins with filing of a complaint and ends with remedies. In the middle, you have investigation, pursuit of resolution, and litigation.
d. The process begins with mediation in an effort to avoid a costly investigation.

890) Which of these actions would be considered illegal under the Holden Act?
a. Refusing to provide a mortgage loan to a customer who wishes to buy a home in a neighborhood with a high rate of foreclosures
b. Refusing to provide a mortgage loan to a recently divorced woman who just filed bankruptcy
c. Requiring a legal address for the property before approving a mortgage loan
d. Running a credit report on a mortgage applicant who has darker skin

891) How does the Department of Fair Employment and Housing complaint process begin?
a. A pre-complaint questionnaire is completed by the complainant’s lawyer.
b. Complainants fill out a pre-complaint inquiry form and then are contacted by the DFEH to arrange a telephone interview to gather more information.
c. Complainants fill out formal complaint forms on the DFEH website.
d. Someone who has a complaint calls the DFEH to schedule an interview. If the interviewer deems the complaint to be valid, they give the complainant a questionnaire to fill out.
892)
893) Which term refers to the tenant’s right to live in a rental property without harassment or trespass by the landlord?
a. The right of quiet enjoyment
b. The right to live
c. The right to peace
d. The right to possession

894) Lorenzo just received a prestigious fellowship to study abroad for a year! However, he still has six months left on his one-year apartment lease. His landlord has given him permission to draw up a new agreement with his sister Maggie, whereby Maggie will live in the apartment, pay rent to Lorenzo, and then Lorenzo will pay the landlord. This is an example of ______.
a. Assignment
b. Assimilation
c. Subleasing
d. Transfer

895) Malcolm loves his apartment, even though he’s rarely there. His job in international development has him on the road for months at a time. He doesn’t have to worry about missing out on his lease renewal, though, because he has ______.
a. A freehold estate
b. An estate at will
c. An estate for years
d. A periodic estate

896) What type of leasehold is characterized by possession of a property without the express permission of the property owner, such as a situation in which a tenant continues to occupy an apartment after the lease has terminated?
a. Estate at sufferance
b. Estate at will
c. Freehold estate
d. Periodic estate

897) Selma and Richard have the temporary right to live at 123 Elm Street. They can come and go and use the property as they see fit, but they can’t do so indefinitely. They must vacate the property at the end of next year. What sort of interest do they have in 123 Elm Street?
a. Fee simple estate
b. Leasehold estate
c. Life estate
d. Reversionary estate

898) Randolph has a leasehold estate that automatically renews at the end of each lease period. What type of leasehold estate does Randolph hold?
a. Estate at will
b. Estate for months
c. Periodic estate
d. Renewable estate

899) An example of this type of leasehold estate is a month-to-month lease.
a. Estate at sufferance
b. Estate at will
c. Estate for months
d. Periodic estate

900) Eric’s residential tenant hasn’t paid rent for more than three months, so Eric went to court to start eviction proceedings. He’s now been granted the right to remove the tenant. This is a(n) ______ eviction.
a. Actual
b. Aggressive
c. Constructive
d. Sufferance

901) Dawn owns a bungalow three miles from the city center. She rents it to Bob and Jan Siegel. Dawn is a ______.
a. Beneficiary
b. Lessee
c. Lessor
d. Trustee

902) Cedric is opening a model railroad shop, but he knows that he’ll only run the store until his partner finishes law school. He signed a three-year lease, after which the lease will terminate. What kind of leasehold is this?
a. Estate at sufferance
b. Estate at will
c. Estate for years
d. Periodic estate
903)
904) Which of these terms is used to describe when a new occupant lives in a rental unit and pays rent to the previous tenant, who is still under contract with the landlord?
a. Assignment
b. Covenant
c. Estate at will
d. Sublease

905)
906)
907) What’s required for both assignments and subleasing in most cases?
a. An escrow account
b. A real estate license
c. A security deposit
d. Landlord approval

908) Landlords may protect themselves from having to pay for damages to the property caused by the tenant by collecting a security ______ from the tenant.
a. Charge
b. Deposit
c. Guarantee
d. Payment

909) Lorenzo just received a prestigious fellowship to study abroad for a year! However, he’d just signed a one-year lease on his apartment. With the landlord’s permission, he substituted his sister’s name on the lease, and Lorenzo’s sister will pay rent directly to the landlord. Lorenzo may still be liable for the rent if she misses any payments. This is an example of ______.
a. Assignment
b. Assimilation
c. Subleasing
d. Transfer

910)
911) Which type of leasehold lasts for a defined period of time and automatically terminates when that period ends?
a. Estate at sufferance
b. Estate at will
c. Estate for years
d. Periodic estate

912) Jake, who was leasing a house, retained possession even after his right to possess had terminated. Jake has a(n) ______.
a. Estate at sufferance
b. Estate at will
c. Estate for months
d. Holdover tenancy

913)
914) As part of his lease agreement with his landlord, Alex mows the grass around his apartment building each week in return for a small reduction in rent. What is this an example of?
a. Condition
b. Covenant
c. Enjoyment
d. Promissory

915) Sonya’s lease expired, but she hasn’t yet moved out and she’s not paying rent. Walt has started eviction proceedings. Sonya is considered a(n) ______.
a. Expired tenant
b. Holdover tenant
c. Illegal tenant
d. Malingerer

916) Tyra owns a nail salon that’s located in a strip mall. Her rent every month includes $1,800 base rent and 10% of her gross sales. What kind of lease does Tyra have?
a. Graduated
b. Gross
c. Net
d. Percentage

917) How does the “break-even point” relate to percentage leases?
a. Sales proceeds must exceed last year’s total before the percentage applies.
b. The landlord charges a percentage of the cost for improvements to all tenants.
c. The landlord doesn’t charge a percentage of sales until the tenant’s sales exceed a break-even point.
d. The landlord must receive enough in rent plus the share of sales to break even on the debt service.

918) Martin is a tenant. His lease has a fixed rent but also requires that he pay for insurance and other expenses for the property. What type of lease does he have?
a. Gross
b. Ground
c. Net
d. Variable

919) Which clause allows a landlord to increase the lease payment during the lease term?
a. Acceleration
b. Escalation
c. Mid-lease
d. Upward

920) Gary leases a commercial building and pays all expenses related to the building, including taxes and insurance. Gary has a ______.
a. Gross lease
b. Net lease
c. Percentage lease
d. Sublease

921) How is the break-even point calculated for a percentage lease?
a. Divide the annual expenses by the monthly base rent.
b. Divide the monthly base rent by the percentage the landlord established.
c. Multiply the established percentage by the base rent.
d. Subtract the base rent from the monthly expenses.

922) Which type of lease is one in which the tenant pays the rent and some expenses related to the property (e.g., maintenance) separately?
a. Graduated
b. Gross
c. Net
d. Percentage

923) What’s an expense stop as used in leases?
a. A lease that increases its rate when operating expenses exceed a certain threshold
b. A limit to a landlord’s maintenance costs
c. A way of computing capitalization rates for lease agreements
d. A way to limit taxes on income-producing properties

924) Commercial lease escalation clauses typically do not take effect until after what period of time?
a. Five years
b. One week
c. Six months
d. The “base year,” or first year

925) Charlie, who owns and leases out a commercial building, pays taxes, maintenance, and insurance on the building. What type of lease agreement does Charlie have with his tenants?
a. Gross
b. Net
c. Percentage
d. Triple net

926) How does the term “break-even point” relate to percentage leases?
a. Sales proceeds must exceed last year’s total before the percentage applies.
b. The landlord doesn’t charge a percentage of sales until the tenant’s sales exceed a break-even point.
c. The landlord must receive enough in rent plus the share of sales to break even on the debt service.
d. The tenant has to break even on expenses before the percentage charge is applied.

927) A commercial landlord finds herself in trouble because the rent she is collecting is not keeping up with inflation due to the type of leases she signed with her tenants. She has the longest tenancies of commercial landlords she knows, which is probably because she signed with them ______ leases.
a. Cheap
b. Flat rate
c. Indexed
d. Low rate

928) Brittany has a small office in a professional building. She has a set monthly lease payment that has been calculated to include maintenance of the common areas in the building, such as the restroom and small kitchen, and all nets, utilities, and janitorial charges for her space. The payment also includes taxes and insurance. The landlord takes these payments and pays the individual expenses himself. What type of lease does Brittany have?
a. Graduated lease
b. Gross lease
c. Net lease
d. Percentage lease

929) Which of these types of tenants most often uses a percentage lease?
a. Manufacturing
b. Residential
c. Retail
d. Triple net

930) Headhunters Anonymous rents office space in a large office building owned by CEO Properties. CEO Properties pays all expenses for the property, including taxes, insurance, and routine maintenance. What type of commercial lease does Headhunters Anonymous have?
a. Gross lease
b. Net lease
c. Office space lease
d. Percentage lease

931) Raymond just started his clothing business in a high-traffic shopping center. This type of lease agreement will require Raymond to pay the landlord rent based upon the percentage of the periodic gross sales. This type of agreement is called a ______ lease agreement.
a. Gross
b. Ground
c. Net
d. Percentage

932) With a triple net lease, the tenant pays ______ separately from the base rent.
a. Insurance, utilities, and maintenance
b. Maintenance, insurance, and debt service
c. Taxes, debt service, and lease payment
d. Taxes, insurance, and maintenance

933) What type of a lease escalation clause is tied to a market index (typically the CPI)?
a. A flat rate lease escalation clause
b. An expense lease escalation clause
c. An index lease escalation clause
d. A profit margin lease escalation clause

934) Fiona signed a lease with her landlord for a commercial building. A percentage of Fiona’s sales will be paid to the landlord, in addition to her lease payment. Why would Fiona agree to this arrangement?
a. Fiona is hoping to purchase the building at a later date.
b. Fiona wants to demonstrate how viable her business is.
c. Fiona wants to reduce her base rent.
d. The landlord is her business partner.

935) You have a client who is leasing commercial space. The lease terms call for him to pay a portion of the landlord’s taxes, insurance, and maintenance. What type of lease does your client have?
a. Itemized lease
b. Percentage lease
c. Sublease
d. Triple net lease

936) Maxwell is a tenant. His lease has a fixed rent in which the landlord pays all taxes, insurance, and maintenance expenses. What type of lease does he have?
a. Gross
b. Ground
c. Net
d. Variable

937) One of the requirements of an enforceable lease is that both parties are bound to the terms of the lease. This is called ______.
a. Mutuality of assent
b. Mutuality of enforceability
c. Mutuality of liability
d. Mutuality of obligation

938) Which term describes the transfer of possession of rental property?
a. Clairvoyance
b. Contract
c. Conveyance
d. Covenant

939) Which of these terms refers to the mutual agreement between the landlord and the tenant?
a. Lawful object
b. Legal capacity
c. Mutual assent
d. Mutuality of obligation

940) This legal aspect of a lease establishes “privity of contract.”
a. Contract
b. Conveyance
c. Covenant
d. Statute of Frauds

941) Which of these statements about leases is true?
a. A lease must be signed by a notary and recorded in public records to be enforceable.
b. A lease must meet the essential requirements of any contract to be enforceable.
c. A lease that is not signed is not enforceable.
d. A tenant may waive the right to peaceful enjoyment if the lease includes an unlimited right-of-entry covenant.

942) Which terms describes a lease that has been agreed to by both parties?
a. Accepted
b. Delivered
c. Effective
d. Executed

943) Which of these two terms describe the dual legal nature of a lease?
a. Clairvoyance and contract
b. Concession and contract
c. Conveyance and concession
d. Conveyance and contract

944)
945) When a landlord grants possession of a property to a tenant, this is called an act of what?
a. Clairvoyance
b. Contract
c. Conveyance
d. Ownership

946) One of the requirements of an enforceable lease is that both parties are bound to the terms of the lease. This is called ______.
a. Mutuality of assent
b. Mutuality of enforceability
c. Mutuality of liability
d. Mutuality of obligation

947) Which of these contract-specific requirements for a lease prohibits minors from entering into a lease agreement?
a. Lawful object
b. Legal capacity
c. Mutual assent
d. Mutuality of obligation

948) This legal aspect of a lease establishes “privity of estate.”
a. Clairvoyance
b. Contract
c. Conveyance
d. Ownership

949) When presenting a CMA, if you take the time to explain the CMA process, help the prospective sellers understand what’s behind the numbers, and ultimately leave the decision of the list price up to them, what characteristic have you demonstrated?
a. Documentation
b. Effective communication
c. Law-abiding
d. Precision

950) You are working on a CMA for your new listing. The seller has indicated that he really wants to list his home for $400,000 or more. Which of the following would indicate that price may be too high?
a. The closest comparable is a two-story while your client’s house is a ranch house.
b. There are no comparables within the last six months.
c. There were three expired listings priced between $400,000 and $425,000.
d. Two properties recently sold for just under $400,000.

951) Which of the following statements is true about appraisals?
a. “Appraisal” and “CMA” are interchangeable terms for a property valuation.
b. Appraisals may only be performed by certified appraisers (with certain exceptions in some states).
c. Either certified appraisers or managing brokers may perform appraisals.
d. Real estate licensees may perform appraisals on foreclosed properties, but a certified appraiser must perform all other appraisals.

952) Clark works for Acme Bank and asks for your assistance. He wants you to look at a property that’s about to go into foreclosure and provide him with a report on its current marketability and an approximate market value. What’s Clark most likely asking you to provide?
a. Appraisal
b. BPO
c. CMA
d. Professional opinion

953) Which type of listing can help a real estate professional determine how quickly a home in a given price range received an accepted offer?
a. Expired
b. Foreclosed
c. Pending
d. Withdrawn

954) When pricing a property, which of the following is a reason a licensee would consider expired listings?
a. To determine approximately how long it will take the home to sell
b. To determine the price at which a property is most likely to sell
c. To determine the price at which a property won’t sell
d. To determine the property’s competition

955) Marcy’s offer on a home was accepted! Which party will be contacting her about arranging an appraisal?
a. The closing attorney
b. The lender
c. The seller’s agent
d. The title insurance representative

956) What does a CMA determine?
a. Availability of funding
b. Cost of replacement
c. Cost per square foot
d. Market price range

957) When a real estate professional goes beyond a broad brushstroke approach to a CMA and takes the time to research not only recent sales, but competition and expired listings, what trait are they exhibiting?
a. Diligence
b. Documentation
c. Effective communication
d. Empathy

958) Ellen has only been licensed for two weeks, but she’s already toured the home of potential clients, the Birds. What should she do to next to secure the listing?
a. Call her mom and get a pep talk.
b. Prepare a CMA.
c. Print out two copies of her professional resume.
d. Review her pre-licensing coursework for information about taking property photos.

959) When completing a CMA, what might be indicated if a comparable property had a quick sale?
a. It’s a buyer’s market.
b. The market for similar homes is good.
c. The other agent was incompetent.
d. The property was priced too high.

960) Real estate licensees turn to specific information sources when preparing CMAs for clients. Which of the following information sources is best for estimating the market value of a property?
a. Comparable sales
b. Construction costs
c. Previous sales price
d. Time to close

961) In which form of price determination does the real estate professional often just drive by the property and take photos, then complete paperwork for the lender?
a. Appraisal
b. Broker’s price opinion
c. Comparative market analysis
d. Competitive market analysis

962) Which type of analysis is a broad estimate of price in case the lender must take over the property and sell it to an investor or on the market?
a. Appraisal
b. Broker’s price opinion
c. Comparative market analysis
d. Credit analysis

963) Which of the following features is most likely to be the cause of an adjustment to a comparable when preparing a CMA?
a. Busy street
b. Color
c. Demographics
d. Interest rates

964) Which of the following provides an opinion of list price range by looking at recently sold properties, comparing current competing properties and properties that didn’t sell, and estimating buyer appeal regarding the style, location, and size?
a. Appraisal
b. Broker price opinion
c. Collective market analysis
d. Comparative market analysis

965) What’s the primary purpose of a CMA?
a. To determine an appropriate listing price range
b. To ensure that the sales price reflects the cost of replacement
c. To provide the property value to the lender
d. To set a price that an appraiser will approve

966) You need to perform a sales comparison for your clients. Comparable A’s adjusted sales price is $277,000. Comparable B’s adjusted sales price is $255,000. How might you use this data to determine a list price range for the clients’ home?
a. Find the average of the adjusted sales prices of Comparable A and Comparable B.
b. Give more weight to the list price on Comparable A, because it’s lower.
c. Give more weight to the list price on Comparable B, because the subject property will likely sell more quickly at this higher price.
d. Give more weight to the list price on the comparable that’s most similar to the property.

967) Steve is preparing a comparative market analysis for the Joneses and has selected three comparable properties. How many adjustments should Steve make to the Joneses’ property?
a. One
b. Three
c. Two
d. Zero
968) Steve won’t adjust the subject property. Only the comparable’s sales price is adjusted. If it is inferior, adjust upward. If it’s superior, adjust downward.
969) Question 4
970) Which of the following is typically used for purposes other than a prospective listing or sale?
a. Appraisal
b. AVM
c. BPO
d. CMA

971) Jan is a real estate licensee gathering information to help her seller determine a good listing price. How could expired listings help her in this process?
a. They denote the property’s competition.
b. They determine approximately how long it will take the property to sell.
c. They help determine the price at which the property is most likely to sell.
d. They illustrate the price at which the property won’t sell.

972) When licensees follow through on what prospects have asked, arrive for meetings on time, and come prepared, what trait are they exhibiting?
a. Competence
b. Documentation
c. Effective communication
d. Empathy

973) Comparative market analysis is most effective when a licensee limits the data collection time frame for sold properties. A CMA should look at properties that sold within ______.
a. In the last two years
b. No later than three to six months ago
c. Within 18 to 24 months
d. Within the last six to 12 months

974) Which type of analysis starts with a visit to the property, a search on the MLS, and a comparison of comparable sales, and hopefully ends in a listing for a real estate licensee?
a. Appraisal
b. Broker price opinion
c. Comparative market analysis
d. Credit analysis

975) Supply and demand determine competition within a market. Which of the following is a true statement?
a. When there are fewer houses on the market, buyers will pay less.
b. When there are fewer houses on the market, demand wanes, as well.
c. When there are fewer houses on the market, neighborhood blight occurs.
d. When there are fewer houses on the market, sellers can demand more for their properties.

976) When you’re putting together a listing presentation, which of these is a key point to address?
a. Buyers won’t pay more for a home than the market dictates.
b. Everything you talk about with the seller will change in six months.
c. The house needs work before you can sell it for the right price.
d. Your credentials are the best in the market.

977) After you’ve made a professional listing presentation and the seller has declined to use you as a listing agent, what’s the best practice?
a. You should accept the outcome either way.
b. You should ask the sellers for a second chance.
c. You should call the competing salespersons to discuss the matter.
d. You should pursue the sellers with questions about their decision, even if they tell you they don’t want to talk about it.

978) Getting the best price is always a factor for a seller, but the ______ at which it would actually sell must be another consideration.
a. Guesstimate
b. Highest possible price
c. Market price
d. Reduced price

979) If, after seeing your carefully prepared comparative market analysis, a seller doesn’t agree with the price range you prepared in your listing presentation, your best practice would be to ______.
a. Decline the listing if the seller’s price and your price analysis are too far apart.
b. List the property at the seller’s price and hope to reduce the price later.
c. Offer to purchase the property at your suggested list price if it doesn’t sell at the seller’s price.
d. Split the difference.

980) What happens when an appraiser determines a property’s value to be less than the pre-approved loan amount?
a. Most buyers will have an appraisal contingency, so they can back out and receive a refund of their earnest money.
b. Most sellers will have an appraisal contingency, so the seller can keep the buyer’s earnest money.
c. The buyer must make up the difference between the appraisal and the purchase price.
d. The seller must make up the difference between the appraisal and the purchase price.

981) Why is it so important to properly price a property when it first enters the market?
a. If a property is overpriced from the beginning, the chances of the property selling are not impacted significantly.
b. Overpricing a property will drive up the price of other properties as well, causing a false inflation.
c. The first several months are crucial because they’re the best chance for the property to sell.
d. The first several weeks are crucial because they’re the best chance for the property to sell.

982) What are some ways you can make sure you’re pricing a property at fair market value?
a. Ask the sellers what the sales price should be.
b. List to sell as fast as possible.
c. Prepare a well-researched CMA.
d. Price it at the price the house originally sold for to be fair.

983) An agent lists a home that receives an offer for full list price within one day in a buyers’ market. There is a chance the agent ______ the home.
a. Appraised
b. Inflated
c. Overpriced
d. Underpriced

984) What’s a CMA?
a. Company marketing announcement
b. Comparative market analysis
c. Comparison marketing algorithm
d. Comprehensive market appraisal

985) What’s the best advice when challenging an appraisal?
a. Be specific and concise about why the value opinion is different in your mind.
b. Blame it on the appraiser.
c. Don’t bother asking the appraiser to explain why certain adjustments were made or not made.
d. Suggest a minimum value for the appraiser to meet.

986) Many market conditions impact housing prices. Which of the following is a true statement?
a. High unemployment rates mean there are more available buyers in the market.
b. Inflation increases buying power.
c. Low unemployment rates mean there are fewer available buyers in the market.
d. Reduced consumer confidence makes new buyers wary of purchasing and homeowners hesitant to trade up.

987) A property has been listed on the market for four months with no offers. Finally, a buyer makes an offer that is 18% less than the list price. How was this property likely priced when it first hit the market?
a. At appraisal value
b. Fair market value
c. Overpriced
d. Underpriced

988) Demographics impact the housing market. Which of the following is a true statement?
a. An increase in the number of retirees in a given population would negatively impact the demand for large, single-family homes.
b. An increase in the number of retirees in a given population would positively impact the demand for large, single-family homes.
c. An influx of higher wage earners to a given area would create a price decrease for lower-valued homes.
d. An influx of higher wage earners to a given area would decrease the demand for higher-priced housing.

989) Why might a licensee want to make two visits to the property as part of a listing presentation?
a. To find out how many licensees the seller will be interviewing, which will help determine how much effort to put into preparing a comparative market analysis
b. To see if the sellers say the same thing both times
c. To see the property at different times of day
d. To use information from a tour to prepare the CMA

990) When market conditions indicate top-of-the-market pricing, is it always in your client’s best interest to price it there?
a. No, because higher sales prices result in higher taxes.
b. No, it still has to appraise.
c. Yes, because it’s probably what will win the listing for you.
d. Yes, because it will sell fast.

991) Which of the following is a potential consequence of overpricing a property?
a. A competing broker can report you for unfairly pricing a property.
b. It increases the odds that buyers will be interested because it must be worth the higher price point.
c. The property will receive offers from serious buyers only, since it is listed at a higher price point.
d. The property won’t appraise high enough and you could lose the contract if you do get an offer.

992) When pricing a home for the market, what should a licensee try to get sellers to do?
a. Put themselves in the buyers’ shoes
b. See how much it might be able to fetch on the market
c. Set the price at one level, with the expectation of lowering it in 30 days
d. Visit the neighbors and come up with a price

993) An agent has a seller who wants to list the property at $550,000. The market has taken a downturn, and the fair market value is estimated at $495,000. What is the best approach for this listing?
a. Explain the benefits in the long run of entering the market at a fair price.
b. List the home at $550,000 to keep the seller happy.
c. Tell the seller it’s worth a shot to try it and see if you can get more.
d. Tell the seller that you won’t work with her unless she lists the home at $495,000.

994) Which of the following statements is true about the listing presentation?
a. It’s best to leave out financial data (such as a CMA or comparable property information) and listing agreements, so the seller doesn’t think you’re jumping the gun and already counting your commission.
b. The less you say, the better. You don’t want to overwhelm your potential clients with numbers and decisions at this first presentation.
c. The most important part of a listing presentation is to make the buyers like you as a person. Try not to talk numbers or about their house, but instead focus on charming them.
d. You should go into the presentation fully prepared with a comparative market analysis, listing agreement, MLS listings of comparable properties, and your plan for marketing the sellers’ property.

995) If an appraisal is lower than the agreed-upon sales price, what steps can the seller take?
a. A second appraisal can be ordered, although there should be good reason to question the first appraisal.
b. A second appraisal can be ordered, but it’s always the buyer’s expense.
c. A second appraisal can be ordered, but the seller must pay for it.
d. A second appraisal can be ordered, which typically turns out to be higher.

996) Claire, a seller, accepted an offer on her home. However, it just appraised for less than the sales price. Which of the following is true?
a. Claire must refund the buyers for the cost of the appraisal.
b. Claire must take her house off the market.
c. The appraiser must perform a second appraisal.
d. The lender will only approve a loan based on the property’s appraised value.

997) A home enters the market priced above fair market value. Within the same time frame, three additional homes enter the market listed between 5% and 10% less than the first home, at a fair market price. What is likely to happen with the first home?
a. Buyers will recognize the higher price point and immediately submit much lower offers.
b. If a property is overpriced from the beginning, buyers will move on and likely make a purchasing decision before the price is corrected on the overpriced home.
c. The backload of buyers on the market will wait to see if the price is adjusted on the first home.
d. The chances are high there are one or two buyers in the backload of buyers who are willing to make an offer at the entry price.

998) Interest rates determine buying power. Which of the following is a true statement?
a. When interest rates are high, buyers are often priced out of the market.
b. When interest rates are high, buyers will be able to afford higher-priced homes.
c. When interest rates climb, more buyers are encouraged to buy.
d. When interest rates shift higher, buyers can still buy in the same price range.

999) When a property is overpriced, what happens?
a. A backlog of buyers will return to it again and again.
b. It can usually list again at a higher price.
c. It increases buyer interest and demand.
d. It may become stale on the market, resulting in low-ball offers.

1000) An agent is working with seller clients who are very emotionally attached to their home. They want to list the property at $330,000, but the CMA indicates a price range of $255,000 to $275,000. What is the best course of action?
a. Explain the importance of fair market value and offer to walk them through the process.
b. List the home for $300,000 because it’s a good compromise.
c. List the home to sell, so start with the lower end of the CMA.
d. Start with listing for $330,000 and see if you get any interest.

1001) What’s the best strategy for pricing a home?
a. Always go with what the seller thinks it’s worth—the customer is always right.
b. Prepare a detailed comparative market analysis and base the price on recent comparable sales.
c. Price it higher than market value so buyers think it has more to offer and will schedule a showing.
d. Price it lower than market value so that there are lots of offers and a bidding war.

1002) At a listing appointment, licensee Chet asks Sam, the seller, if his property is his own home or an investment property. Why would Chet ask this?
a. Chet can only represent sellers if they’re selling their own home; selling investment properties requires a different license.
b. If the home is his own, he’s likely to be purchasing a new one, so Chet has a chance to land two transactions.
c. Investment homes are easier to sell because they’re sold “as-is.”
d. Investment home sellers tend to be more emotionally attached because the homes bring them more income.

1003) A fire destroyed Meredith’s house. Meredith contacted her insurance company, and she was shocked to learn her insurance policy didn’t fully cover what she paid for the property. How does the insurance company determine the replacement value of her home?
a. Its current market value
b. The amount for which it was appraised
c. The amount it would cost to completely replace her home
d. The original sales price when it was first constructed

1004) Which of these terms can be defined as what a buyer has paid for a property and what the seller has accepted?
a. Appraisal
b. Cost
c. Price
d. Value

1005) Who typically performs an appraisal?
a. Certified appraiser
b. Inspector
c. Real estate licensee
d. Tax assessor

1006) Which economic principle is related to supply and demand?
a. Competition
b. Conformity
c. Contribution
d. Substitution

1007) A rundown home, overgrown with weeds and in desperate need of repairs, is driving down property values on the block. What economic principle is at work here?
a. Anticipation
b. Contribution
c. Progression
d. Regression

1008) The economic principle that tells us that when supply goes up, price goes down is also called ______.
a. Conformity
b. Price dropping
c. Regression
d. Supply and demand

1009) There are a lot more sellers than buyers in the current market. How does this demand influence value?
a. Demand doesn’t influence value.
b. Value is pushed downward.
c. Value is pushed upward.
d. Value remains the same.

1010) The Hendersons were hoping to list their home for $400,000; however, four other comparable homes in the neighborhood just went up for sale, and they now must list their property at $380,000 to sell quickly. Which economic principle is at work here?
a. Competition
b. Conformity
c. Progression
d. Substitution

1011) Boris is an appraiser working for the Smith family. They’ve hired him to perform an appraisal on their six-bedroom house. What two types of data will Boris gather?
a. Digital and hand-written
b. General and specific
c. Old and recent
d. Pertinent and unrelated

1012) What acronym can be used to remember factors that influence real property value?
a. CRUD
b. DUST
c. GIVEN
d. OLD CAR

1013) What type of value may consumers be interested in if they are looking for the potential rate of return?
a. Assessed value
b. Insured value
c. Investment value
d. Value in use

1014) Appraiser Jamie is looking past how a property is being used to determine a higher value. What is Jamie determining?
a. Cost to replace
b. Highest and best use
c. Loan value
d. Value in use

1015) What’s another term for a valuation that’s an unbiased opinion of value?
a. Assessment
b. Comparative market analysis
c. Evaluation
d. Formal appraisal

1016) When appraisers look past how a property is being used to determine a more optimal function, what are they determining?
a. Cost to replace
b. Highest and best use
c. Market value
d. Value in use

1017) Which of the following is the cost of replacing a building in the case of total loss?
a. Insured value
b. Investment value
c. Mortgage value
d. Value in use

1018) Which of the following is defined as what it would take to recreate a property if it disappeared off the face of the earth today?
a. Cost
b. Insurance
c. Price
d. Value

1019) A CMA or a BPO is an example of ______.
a. A formal appraisal
b. An assessment
c. An informal estimate of market value
d. An inspection

1020) What is an appraisal?
a. A determination of property defects and conditions
b. An opinion of listing price as determined by a real estate professional
c. An opinion or estimate of a property’s value as of a specific date
d. A study on the feasibility of developing land

1021) When prices go down because there are too many homes on the market and too few buyers, what economic principle is at work?
a. Competition
b. Conformity
c. Progression
d. Regression

1022) Which factor influences property value and addresses questions such as, “What’s the market like?” and “Are there more buyers than sellers, or vice versa?”
a. Demand
b. Scarcity
c. Transferability
d. Utility

1023) Marcus bought two adjoining pieces of land that were zoned for commercial use. When he realized that combining the two parcels would dramatically increase the land’s value, he jumped at the opportunity. What’s this an example of?
a. Contribution
b. Eminent domain
c. Plottage
d. Zoning

1024) Building codes, zoning laws, and environmental legislation are examples of which force that influences property value?
a. Economic
b. Physical/environmental
c. Political/governmental
d. Social

1025) Which economic principle pertains to how a change in a property affects its value as a whole?
a. Anticipation
b. Conformity
c. Contribution
d. Substitution

1026) Appraiser John is determining how a property is being used to determine a more optimal function. What is he determining?
a. Cost to replace
b. Highest and best use
c. Mortgage value
d. Value in use

1027) Which of the following terms means the price a property is worth to its owner as currently enjoyed?
a. Appraisal
b. Insured value
c. Investment value
d. Value in use

1028) Kevin is having an appraisal performed on a piece of property he’s interested in buying. He’s especially interested in hearing about the estimated rate of return the property could pull. What type of value is he interested in?
a. Assessed value
b. Insured value
c. Investment value
d. Value in use

1029) A property’s value is dropping because the neighboring property’s yard is filled with trash. What’s this an example of?
a. Depreciation
b. Progression
c. Regression
d. Substitution

1030) Appraiser Jerry is looking past how a property is being used to determine a more optimal function. What is he determining?
a. Cost to replace
b. Highest and best use
c. Market value
d. Value in use

1031) What’s the first step an appraiser will perform when conducting an appraisal?
a. Estimate the value of the land.
b. Gather and analyze data.
c. Identify the data that’s needed.
d. State the problem.

1032) The Richards family farm is located on a 10-acre parcel of land, which is very rare in their area. However, the house is rundown and in need of many repairs. Most buyers in the area are looking for a move-in-ready home, which means they would need to either look elsewhere or wait several months for the home to be renovated. Which factor is most negatively impacting the value of the Richards’ property?
a. Demand
b. Scarcity
c. Transferability
d. Utility

1033) Which of the following is a piece of general data an appraiser may gather?
a. Improvements made to a property
b. Kitchen upgrades
c. Population size
d. Property lot size

1034) Your neighbors build a high-quality addition to their home, increasing its value compared to your own home’s value. Because of this, you notice a bump in your property value. Which economic principle is at work here?
a. Conditional value
b. Price bump
c. Progression
d. Regression

1035) Which of the following can be defined as what a property is worth?
a. Appraisal
b. Cost
c. Price
d. Value

1036) What’s one purpose of a BPO?
a. To assist buyers in determining an offer amount or sellers in determining a listing price
b. To assist insurers in determining the amount of liability insurance to place on a property
c. To assist lenders in determining the marketability and potential sales price for distressed properties
d. To ensure that the value of a property is sufficient as collateral for a mortgage loan

1037) What’s the price at which a willing buyer and a willing seller would strike a deal given normal market conditions?
a. Insured value
b. Market value
c. Valuation
d. Value in use

1038) Which of these principles of value is related to how a change to a portion of a property impacts the value as a whole?
a. Contribution
b. Impact on value
c. Plottage
d. Progression

1039) What is the term for an increase in property value caused by the joining of two neighboring parcels of land?
a. Anticipation
b. Contribution
c. Plottage
d. Progression

1040) Appraiser Victor is determining the insured value of a property. What is he evaluating?
a. Items of great importance to a lender to replace or rebuild
b. The cost to replace or rebuild a property
c. The price at which the property can be loaned on or sold at a foreclosure sale
d. The return on investment the property may provide

1041) Trudy loved her new neighbors. The investor couple bought every available house on Trudy’s block and was working hard to renovate them and increase their value. Trudy decided that she’d sit back, relax, and let her property’s value go up, too, thanks to ______.
a. Competition
b. Progression
c. Regression
d. Substitution

1042) What type of value is of interest to taxing authorities?
a. Assessed value
b. Insured value
c. Investment value
d. Value in use

1043) Rico is an appraiser who is performing a valuation on a property. What’s another term for what Rico is doing?
a. Analytical exercise
b. CMA
c. Formal appraisal
d. Price opinion

1044) Which economic principle states that the value of property today is impacted by the current value of the total expected future benefits?
a. Anticipation
b. Conformity
c. Highest and best use
d. Progression

1045) Which of these is true about the assessed value of real estate?
a. It is typical for the assessed value to increase by 5% or more per year.
b. It’s the value used to calculate the property taxes, and it’s based on a percentage of the market value.
c. Property taxes are based on real market value and not assessed value.
d. The assessed value of a property will almost always be higher than real market value.

1046) While market value is an opinion of a property’s worth on the fair market, which of the following best describes market price?
a. How much a buyer has paid and a seller has accepted for the property.
b. How much a lender would be willing to finance for the property.
c. How much an appraiser estimates a property is worth on a given day.
d. How much it would take to rebuild the property from scratch, including the cost of the land.

1047) Identifying the purpose of the appraisal leads the appraiser to do what next?
a. Determine highest and best use.
b. Estimate value of land.
c. Identify data needed.
d. Use three approaches to estimate value.

1048) Quality of amenities, climate, and topography are examples of which force that influences property value?
a. Economic
b. Physical/environmental
c. Political/governmental
d. Social

1049) Parcels of land are valued at $50,000 each. However, when two of the parcels are joined, they are valued at $120,000. What economic principle is at work here?
a. Anticipation
b. Contribution
c. Plottage
d. Progression

1050) Soren is an appraiser. As such, what guidelines must he follow?
a. NAR Code of Ethics
b. National Association of Appraisers (NAA) bylaws
c. Real estate license law
d. Uniform Standards of Professional Appraisal Practice (USPAP)

1051) Which economic principle says that value is created and maintained when the characteristics of a property fit in with its surroundings?
a. Anticipation
b. Conformity
c. Contribution
d. Substitution

1052) John’s home is up for sale. He originally bought it five years ago for $300,000. Its current value is $350,000. His real estate agent notified him that a buyer just made an offer on his home for $365,000, which is the price for which other similar homes in the neighborhood are selling, and John accepts. What does the price of $365,000 represent?
a. The appraised value
b. The assessed value
c. The investment value
d. The market value

1053) If there is some kind of defect on a property’s title, what effect does this level of transferability have on the property’s value?
a. The value falls.
b. The value remains unchanged.
c. The value rises.
d. Transferability has no effect on value.

1054) What well-known economic principle says that a property’s value is determined by what it would cost to purchase a similar property?
a. Conforming value
b. Regression
c. Similar cost principle
d. Substitution

1055) The fewer properties on the market, the greater the scarcity. What’s the effect on prices?
a. Prices are pushed downward.
b. Prices are pushed upward.
c. Prices remain the same.
d. There’s no correlation between scarcity and price.

1056) Interest rates, availability of credit, and employment trends are examples of which force that influences property value?
a. Economic
b. Physical/environmental
c. Political/governmental
d. Social

1057) What two types of data does an appraiser gather?
a. Computer and hand-written
b. General and specific
c. Old and new
d. Related and non-related

1058) The smallest property on the block is priced lower than any others, but the higher-priced properties that surround it help to drive the property’s market value up. What economic principle is at work here?
a. Anticipation
b. Contribution
c. Progression
d. Regression

1059) Which of the following is a piece of specific data an appraiser may gather?
a. Cost of living
b. Employment figures
c. Population size
d. Property lot size

1060) Which of the following is the price a lender believes the property will bring at a foreclosure sale?
a. Insured value
b. Investment value
c. Mortgage value
d. Value in use

1061) Marsha made an offer of $325,000 on a home listed for $350,000. The seller accepted her offer. What service will her lender order to determine the home’s actual value?
a. Appraisal by an appraiser
b. Assessment by the seller’s agent
c. Estimate by her broker
d. Quote by a property insurer

1062) Which economic principle says that a property’s value is determined by what it would cost to purchase a similar property?
a. Anticipation
b. Competition
c. Contribution
d. Substitution

1063) What does Susanna do as an appraiser?
a. She determines what a buyer may pay for a property.
b. She provides an estimate of value that the consumer may influence.
c. She provides an unbiased estimate of value.
d. She’s usually hired by the buyer or seller.

1064) What economic principle is related to a property’s most profitable use that is both legal and economically feasible?
a. Anticipation
b. Contribution
c. Highest and best use
d. Progression

1065) Joaquin is an appraiser. What purpose do Joaquin and other appraisers serve?
a. Cause a sale to go through
b. Determine a property’s value
c. Help buyers buy a property
d. Make a real estate agent’s life better

1066) Population growth, marriage rates, and attitudes toward education are examples of which force that influences property value?
a. Economic
b. Physical/environmental
c. Political/governmental
d. Social

1067) There are a lot more sellers than buyers in the current market. How does this demand influence value?
a. Demand doesn’t influence value.
b. Value is pushed downward.
c. Value is pushed upward.
d. Value remains the same.

1068) ______ is the principle that the more similar properties there are on the market, the lower the price will be driven.
a. Competition
b. Conformity
c. Contribution
d. Plottage

1069) Mary Ann is looking for the potential rate of return. What sort of value is she interested in?
a. Assessed value
b. Investment value
c. Market value
d. Value in use

1070) What standards do appraisers follow?
a. Appraisal bylaws
b. License law
c. NAR Rules of Ethics
d. Uniform Standards of Professional Appraisal Practice

1071) Which factor that influences value considers the property’s function?
a. Demand
b. Scarcity
c. Transferability
d. Utility

1072) Which of the following is the price a lender believes the property will bring at a foreclosure sale?
a. Insured value
b. Investment value
c. Mortgage value
d. Value in use

1073) Margot has fallen in love with a three-bedroom, 2,500-square-foot property in her friend’s neighborhood. It’s listed for $400,000. However, just down the street, another three-bedroom, 2,400-square-foot home very similar to the one Margot loves was just listed for $350,000. Margot and her agent immediately make an offer on the second property. Which economic principle is at work here?
a. Anticipation
b. Conformity
c. Progression
d. Substitution

1074) Jerry is appraising a five-bedroom home in the suburbs. After identifying the purpose of the appraisal, what does he need to do next?
a. Determine the highest and best use.
b. Estimate the value of the land.
c. Identify the data that is needed.
d. Use three approaches to estimate the value.

1075) What does the income approach to value rely on when valuing properties that are five or more units?
a. Gross income multiplier
b. Gross rent multiplier
c. Monthly gross rent
d. Sales comparison

1076) To make valid computations of adjustments for the sales comparison approach to value, elements of comparison must be applied in a specific order. Which element is applied first?
a. Conditions of sale
b. Financing terms and cash equivalency
c. Market conditions
d. Physical characteristics

1077) To make valid computations of adjustments for the sales comparison approach to value, elements of comparison must be applied in a specific order. Which one of these elements listed has the highest priority?
a. Conditions of sale
b. Location
c. Market conditions
d. Physical characteristics

1078) An investor is analyzing a three-unit property by looking at its ability to produce future income. Which of the following would most likely be used to determine this value?
a. Effective gross income
b. Gross income multiplier
c. Gross rent multiplier
d. Potential gross income

1079) A property generates $30,000 in net operating income and has a 15% cap rate. Using the income approach, what is its value?
a. $100,000
b. $20,000
c. $200,000
d. $25,000

1080) Homes in a new home development have been built with a floor plan that doesn’t appeal to today’s buyers. In a cost approach valuation of the houses, what sort of depreciation will the appraiser apply?
a. External depreciation
b. Functional obsolescence
c. None. Depreciation doesn’t apply to new buildings.
d. Physical depreciation

1081) The value principle of ______ is the basis of the income approach to appraisal.
a. Anticipation
b. Capitalization
c. Competition
d. Substitution

1082) An investor is analyzing a property by looking at its ability to produce future income. The property is a 10-unit apartment building. Which of the following would be used to determine this value?
a. Effective gross income
b. Gross income multiplier
c. Gross rent multiplier
d. Potential gross income

1083) Which of the following is a true statement about how adjustments are made in the sales comparison approach?
a. Adjustments are made to the subject property, not the comparables.
b. Appraisers adjust downward when a comparable is missing a feature found in the subject property.
c. Appraisers adjust upward when a comparable is missing a feature found in the subject property.
d. Only three adjustments per comparable property are allowed; otherwise it’s not considered sufficiently similar.

1084) On which principle of value is the sales comparison approach based?
a. Anticipation
b. Competition
c. Conformity
d. Substitution

1085) If a property’s income value is $200,000 and it’s earning a net operating income of $40,000, what is the cap rate?
a. 20%
b. 25%
c. 40%
d. 5%

1086) In the sales comparison approach, which of these are selected and evaluated both quantitatively and qualitatively against the subject property?
a. Alternatives
b. Comparables
c. Conformables
d. Substitutions

1087) In the sales comparison approach, using comparables that are five and 15 years old when appraising a subject that is 10 years old is an example of what?
a. Bracketing
b. Bridging
c. Substituting
d. Surrounding

1088) A strip mall valued at $850,000 has a $67,500 annual net operating income. What is the capitalization rate for the strip mall?
a. 12.59%
b. 7.9%
c. 8.67%
d. 9.2%

1089) Burt owns a development company that specializes in constructing new, energy-efficient houses. The best approach for an appraiser to use in the appraisal of Burt’s newly built homes is the ______.
a. Appraisal process
b. Cost approach
c. Income approach
d. Sales comparison approach

1090) Which approach to value measures the cost to produce a property, including land acquisition and construction costs?
a. Cost approach
b. Income approach
c. Indirect approach
d. Sales comparison approach

1091) A poor floor plan is an example of which type of depreciation?
a. External depreciation
b. Functional obsolescence
c. Incurable depreciation
d. Physical depreciation

1092) With the cost approach to value, what is the replacement cost?
a. Cost of the materials used in construction
b. Cost to build a functionally equivalent improvement
c. Cost to build an exact replica of the subject, with the same materials and deficiencies
d. Cost to buy the property

1093) Which of the following terms may be defined as a form of depreciation or loss in value caused by defects in design?
a. Economic obsolescence
b. External depreciation
c. Functional obsolescence
d. Physical depreciation

1094) Nearby industrial odor is an example of which type of depreciation?
a. Curable depreciation
b. External depreciation
c. Functional obsolescence
d. Physical depreciation

1095) What’s the capitalization formula used in the income approach?
a. Value = cap rate – income
b. Value = income × cap rate
c. Value = income cap rate
d. Value = net operating income ÷ cap rate

1096) The economic principle of ______ says that when there are two houses in the same neighborhood with the same size, appeal, and utility, the lower-priced one will tend to sell first.
a. Correlation
b. Substitution
c. Supply and demand
d. Under-bidding

1097) Giant Industries has a $674,232 gross operating income, operating expenses of $329,129, and other expenses totaling $38,719. What is the net operating income?
a. $306,384
b. $345,103
c. $383,822
d. $635,513

1098) With the cost approach to value, what is the reproduction cost?
a. Cost of the materials used in construction
b. Cost to build a functionally equivalent improvement
c. Cost to build an exact replica of the subject, with the same materials and deficiencies
d. Cost to buy the property

1099) A small duplex sold for $550,000. Each unit can gross $2,500 in monthly rent for the owner, and there are no additional income sources from the property. What’s the GRM?
a. 100
b. 110
c. 200
d. 220

1100) Which approach to value is typically used for investment property of two- to four-family units?
a. Cost approach
b. Income approach
c. Revenue approach
d. Sales comparison approach

1101) Which one of these would NOT be an element of comparison an appraiser would use when applying the sales comparison approach to a property valuation?
a. Financing terms and cash equivalency
b. Income generated
c. Market conditions at time of sale
d. Physical characteristics of the property

1102) The loss in value caused by deterioration in physical condition is called ______.
a. Economic obsolescence
b. External depreciation
c. Functional obsolescence
d. Physical depreciation

1103) A 20-unit apartment building sells for $5 million. The property can bring in $400,000 in annual gross income. What is the gross income multiplier (GIM)?
a. 0.125
b. 125
c. 1.25
d. 12.5

1104) When you’re using the sales comparison approach to value a property, which of the following is considered a category of adjustment?
a. Area demographics
b. Financing terms and cash equivalency
c. Seller motivation
d. Types of obsolescence

1105) A loss in value caused by an undesirable or hazardous influence offsite is which type of depreciation?
a. Economic and material depreciation
b. External depreciation
c. Functional obsolescence
d. Physical depreciation

1106) Which of the following best defines capitalization rate?
a. The expected rate of return on investment
b. The rate at which assets depreciate over time
c. The rate of capital recapture
d. The value of a business as an investment

1107) Using the income approach, determine the value of a property that has a net operating income of $15,000 and a cap rate of 15%.
a. $100,000
b. $15,000
c. 40%
d. 5%

1108) The GRM for Sunny Hills is 147. If a three-bedroom, one-bath house in Sunny Hills rents for $820 monthly and sold for $125,000, what is the suggested value of a house that leases for $1,000 monthly based on the GRM?
a. $120,540
b. $147,000
c. $152,439
d. $198,540

1109) To make valid computations of adjustments for the sales comparison approach to value, elements of comparison must be applied in a specific order. Which one of these elements is applied last?
a. Conditions of sale
b. Location
c. Market conditions
d. Physical characteristics

1110) Related to depreciation, what are the two types of physical deterioration?
a. Curable and incurable
b. Economic and material
c. Internal and external
d. Qualitative and quantitative

1111) Which of these properties are exempt from the FIRREA federal appraisal guidelines?
a. Properties valued at $400,000 or less
b. Properties valued at $450,000 or less
c. Properties valued at $500,000 or less
d. Refinanced properties

1112) Which category of appraiser can appraise one- to four-unit residential property valued under $1 million and that are not complex in nature, and non-residential properties valued below $250,000?
a. Certified general appraiser
b. Certified residential appraiser
c. Residential license
d. Trainee license

1113) Which of the following properties is exempt from the FIRREA federal appraisal guidelines?
a. A refinance of a property valued at $375,000
b. A refinance of a property valued at $475,000
c. The purchase of a property valued at $455,000
d. The purchase of a property valued at $475,000

1114) Which category of appraiser can appraise any residential property without any limitations related to value or complexity, but only non-residential properties valued below $250,000?
a. Certified general appraiser
b. Certified residential appraiser
c. Residential license
d. Trainee license

1115) Which category of appraiser can appraise any real property without any limitations related to value or complexity?
a. Certified general appraiser
b. Certified residential appraiser
c. Residential license
d. Trainee license

1116) Which type of appraisal report makes use of pre-printed documents?
a. Form report
b. Letter report
c. Narrative report
d. Printed report

1117) Which category of appraiser must be supervised by a certified appraiser and can assist on any appraisals their supervisor can perform?
a. Certified general appraiser
b. Certified residential appraiser
c. Residential license
d. Trainee license

1118) What type of appraisal report contains minimal detail, and may be prepared for a specific client for an explicit, limited purpose?
a. Appraisal report
b. Oral report
c. Restricted appraisal report
d. Summary report

1119) What entity sets the standards for the appraisal report?
a. Appraisal Ethics Association
b. FIRREA
c. State real estate license law
d. USPAP

1120) Which of the following actions toward an appraiser would be considered proper?
a. Asking an appraiser to correct errors in the appraisal report
b. Making payment of an appraisal report conditional on the value or estimate to be reached
c. Threatening to no longer do business with an appraiser
d. Withholding payment for a completed appraisal report

1121) Which of the following statements about appraisal activities is true?
a. Appraisers’ activities are highly regulated, especially when a federally related transaction is involved.
b. Appraisers’ activities are not regulated.
c. Appraisers’ activities are only regulated when a federally related transaction is involved.
d. None of these statements is true.

1122) Which type of appraisal report is lengthy and often used for complex properties?
a. Form report
b. Letter report
c. Narrative report
d. Restrictive report

1123) Which of the following actions toward an appraiser would be considered improper?
a. Asking an appraiser to consider additional, appropriate property information
b. Asking an appraiser to correct errors in the appraisal report
c. Asking an appraiser to remove information about adverse property conditions from an appraisal report
d. Giving an appraiser additional details, substantiation, or explanation for the appraiser’s value conclusion

1124) What does the Financial Institutions Reform, Recovery, and Enforcement Act require?
a. Federally related appraisals must be conducted by an appraiser who’s either licensed or certified by the state.
b. Federally related transactions need not be appraised.
c. Non-federally related transactions must be appraised by government employees.
d. Real estate licensees who perform appraisals must have a federal security clearance.

1125) Which of the following is true of agency disclosures?
a. Agency disclosure is not required if a licensee represents both the tenant and the landlord.
b. Agency disclosure is required for both landlords and tenants.
c. Agency disclosure is required for buyers and sellers, but not tenants or landlords.
d. A rental agent only has “agency” with landlords, so only landlords must be provided with the disclosure.

1126) Noah is a real estate professional who is helping a landlord list her rental property. What is the minimum real estate license that Noah must possess?
a. Broker license
b. Listing license
c. Rental license
d. Salesperson license

1127) Which of the following would be a typical task of a rental agent?
a. Advertising a vacancy
b. Collecting rent
c. Preparing year-end tax reports for the building owner
d. Taking care of maintenance and repair
1128)
1129)
1130) Which of the following is a true statement about a rental agent?
a. Rental agents always represent tenants.
b. Rental agents always represent the landlord.
c. Rental agents represent neither the tenant nor the landlord, but instead represent the building itself.
d. The listing agent and leasing agent may be the same person.

1131) Which of these statements about agency disclosure and leases is true?
a. Agency disclosure is not required for leases.
b. Agency disclosure is only required for verbal leases.
c. Agency disclosure is required for written leases with a duration of a year or more.

1132) A lease that has a term of a year or more requires rental agents to complete what type of disclosure form?
a. Agency disclosure form
b. Lease term disclosure form
c. Property condition disclosure form
d. Rental condition disclosure form
1133)
1134) Which of these statements about listing and leasing agents is true?
a. A listing agent and leasing agent cannot represent the same client.
b. Landlords cannot enter into a lease agreement without entering into agency with a listing agent.
c. Listing agents cannot represent tenants.
d. The listing agent and the leasing agent can be the same person.
1135)
1136)
1137) Lorelei doesn’t like the man who is living in her rental home and wants to kick him out. When she goes to his house to give him immediate notice, she takes a copy of the rental agreement, which stated that the rental agreement was at-will, meaning she could resume possession at any moment. What is the best explanation for why the tenant doesn’t need to move out?
a. Lorelei didn’t give 90 days’ notice.
b. Lorelei hasn’t specified why she doesn’t like the tenant.
c. Lorelei needs to have the tenant removed by a sheriff.
d. The lease provision is void, because the right to notice is a non-waivable right.

1138) Which of the following sentences about non-waivable tenant rights is true?
a. Any lease provision that is meant to waive one of the non-waivable rights is void and unenforceable.
b. Lease provisions may only include the non-waivable tenant rights.
c. The non-waivable rights may be waived in writing, but not orally.
d. The non-waivable tenant rights must be provided to a tenant in writing to be enforceable.

1139)
1140) Jake is saving up to move out of his parents’ house. If he finds an unfurnished rental for $1,000 per month, what is the most he will need to have saved up for the security deposit?
a. $1,000
b. $2,000
c. $3,000
d. $4,000

1141) You’re a landlord who wants to increase your month-to-month tenant’s rent from $800 to $900. You may do this if ______.
a. The property is owned by a real estate investment trust.
b. The rental is a multi-unit building constructed prior to 1995.
c. The rental is a single-family residence.
d. The tenant has lived in the unit for more than 12 months.

1142) Rental properties that are less than ______ are exempt from the Tenant Protection Act of 2019.
a. 15 years old
b. 20 years old
c. 25 years old
d. 30 years old

1143) Josie has signed a lease agreement for a furnished apartment for $2,000 and the required security deposit is equal to the highest amount the landlord could ask for. How much is her security deposit?
a. $10,000
b. $2,000
c. $4,000
d. $6,000

1144) You inherit five mobile homes from your favorite Aunt Tina. It’s good to be a land baron. Before you jump into signing rental agreements, what law might you want to consult?
a. Mobilehome Landlord-Tenant Relations
b. Mobilehome Rent Law
c. Mobilehome Residency Law
d. RV Park Occupancy Law

1145) If a landlord wants to increase the rent on a unit that’s regulated by the Tenant Protection Act of 2019, what’s the maximum allowed as an annual increase?
a. 10% plus the cost of living
b. 2%
c. 4%
d. 5% plus the cost of living

1146) A landlord owns a 15-unit rental property in an area without local rental control. Under what circumstances may this landlord increase the monthly rent of a unit by 20%?
a. If it’s covered by the Costa-Hawkins Act.
b. If the landlord lives in one of the units.
c. If the previous tenant moved out and the increased rate is for a new tenant.
d. If the tenant has missed at least two previous rental payments.

1147) Your cousin, Joe, owns a mobile home that he wants to sell, but the park owner told him to take down his “for sale” sign. He knows you’re studying real estate, so he asks you for advice. Where do you recommend Joe start his research?
a. Mobilehome Landlord-Tenant Relations
b. Mobilehome Rent Law
c. Mobilehome Residency Law
d. RV Park Occupancy Law

1148) Hank moved out of a rental house on the second of the month. How long until his landlord must refund the security deposit and/or provide an itemized list of deductions?
a. By the 23rd of the same month
b. By the 26th of the same month
c. By the second of the next month
d. Within 45 days
1149)
1150)
1151) Janey hasn’t been able to use her toilet for a week because the sewer pipe is blocked by tree roots, and her landlord is not responding to her calls. Upon reviewing her lease, she notices she signed an agreement not to sue the landlord for any cause. What can she do?
a. She cannot sue and must contact a mediator.
b. She cannot sue and must pay for the repairs herself.
c. She can still sue because the lease provision is void.
d. She can sue, but will probably be counter-sued for breaching the agreement to not sue.

1152) A landlord owns a 15-unit rental property in an area without local rental control. Under what circumstances may this landlord increase the monthly rent of a unit by 20%?
a. If it’s covered by the Costa-Hawkins Act.
b. If the landlord lives in one of the units.
c. If the previous tenant moved out and the increased rate is for a new tenant.
d. If the tenant has missed at least two previous rental payments.

1153) Which of these landlords has filed an unlawful detainer suit?
a. April fined her tenant $60 for damage to the lawn when he parked his motorcycle there.
b. Cary sued to collect three months’ back rent from his tenant.
c. Chet tried to kick his tenant out, but he wouldn’t leave, so he’s started eviction proceedings.
d. Norma’s tenant always pays his rent late and Norma has decided not to renew his lease.

1154) Which of the following circumstances would likely constitute an emergency, giving a landlord the right to enter a tenant’s premises without notice?
a. Curiosity
b. Inventory of valuables for building insurance
c. Prevention of property destruction
d. Spot check for cleanliness

1155) Deirdre is receiving a lot of advice about how to respond to the breach of contract by one of her tenants. Which of these statements is bad advice because it is blatantly false?
a. Even if you terminate the lease and kick her out, you can sue for the rest of the rent, because she agreed to pay it by signing the lease.
b. If you’re thinking of going the route of eviction, you’ll need to terminate the lease first.
c. Keeping the lease in effect means you can sue for rent owed for the remainder of the lease term.
d. Terminating the lease means the tenant won’t be obligated to pay any more rent.

1156) Harry discovers that his commercial lease requires him to pay for the installation of his business sign. This is a common requirement, called what?
a. Franchise fixtures
b. Tenant encroachments
c. Tenant expenses
d. Tenant improvements

1157) A tenant is not legally obligated to let her landlord enter the premises to visit her goldfish, because she has what legal right?
a. Freedom from harassment
b. Landlord prohibition from entry
c. Right to enjoyment
d. Right to entry

1158) Which of these statements about landlord liability for injuries is true?
a. A residential landlord must regularly inspect the property for defects throughout the tenancy period.
b. Both commercial and residential landlords may be liable for injuries if they promised to repair the defect but never followed through.
c. Commercial landlords are never liable for injuries resulting from the condition of the premises.
d. Residential landlords are only liable for injuries resulting from the condition of the premises if they agreed to make repairs in writing.

1159) Audrey has assigned her lease to her college buddy, Skip. After two months, Skip vacates the premises and is never heard from again. Who could the landlord reasonably sue for non-payment of rent?
a. No one
b. Only Audrey
c. Only Skip
d. Skip and Audrey

1160) Which of these landlords is using their right to maintain a lease in effect after a tenant breach of contract?
a. Ben installs a lock-out bolt on his tenant’s door, prohibiting him from entry.
b. Brenda sues her tenant, Shep, for missed rental payments.
c. Calli serves an eviction notice against her tenant, Steve.
d. Kermit begins legal proceedings against Miss Piggy, who won’t vacate.

1161) Which of these fits the description of the “rent deduction” remedy?
a. Kip found out that his neighbor was paying $10 less rent than he was, so he began deducting that amount from his rent.
b. The landlord didn’t fix the plumbing after the tenant provided notice, so the tenant hired a plumber and deducted the cost from the rent.
c. The landlord refused to replace the stained carpets after the tenant’s cats made a mess on them, so the tenant bought new carpet and deducted it from the rent.
d. The wagon wheel light fixture wasn’t to the tenant’s taste, so the tenant replaced it and billed the landlord.

1162) What is an unlawful detainer lawsuit?
a. A lawsuit filed by a landlord against a holdover tenant.
b. A lawsuit filed by a landlord to regain possession of an improvement to property.
c. A lawsuit filed by a rental agent when the commission is not paid.
d. A lawsuit filed by a tenant when the security deposit is withheld unlawfully.

1163) Who’s responsible for a person’s injury that was sustained on the premises depends on ______.
a. The landlord
b. The tenant
c. Whether the premises are commercial or residential
d. Who’s at fault

1164) Which of these statements about tenant remedies is true?
a. Abandonment is the only remedy a landlord may take without legal representation.
b. A tenant may repair and deduct without providing notice if the repair is under a specific dollar amount.
c. The three types of remedies available include repair and deduct (aka rent deduction), abandonment, and rent withholding.
d. When landlords fail to meet their obligations, tenants have 21 days to choose a remedy to apply.

1165) Which of these scenarios includes a landlord using the right to terminate a lease after breach of contract?
a. Benjamin refused to babysit his landlord’s children and was served with an eviction notice.
b. India missed three rental payments and her landlord sued to collect.
c. No pets are allowed at Hartford Arms. Bob has been warned twice, and now his landlord tells him to move out.
d. Steve is continually taking other tenants’ parking spaces. The landlord fines him one month’s rent.

1166) Which of these is a valid way for a landlord to deliver reasonable notice of a need to enter the property?
a. Knocking on the door prior to entering
b. Leave notice with a neighbor’s kid
c. Mail notice to the tenant the day the landlord needs to enter
d. Personally deliver notice to the tenant 24 hours before entry

1167) A landlord wants to show a tenant’s unit to a prospective tenant. What constitutes reasonable notice?
a. 24 hours
b. No notice is required if the showing occurs during regular business hours
c. One month, for month-to-month tenancy
d. Two weeks

1168) Which of these fits the description of the abandonment remedy?
a. Biff’s boss sent him to Taiwan for six months, so Biff decided to move out.
b. Rats drove Willard out of his apartment.
c. Sheila loved Hawaii so much she never returned to her rental unit.
d. The neighbor’s newborn’s nighttime awakenings were driving Cora to her mother’s every night.

1169) Audrey is raging mad at her landlord, Ruby, who hasn’t sent anyone to fix the toilet. To show that she is serious, Audrey could remind Ruby that she is legally obligated to maintain the ______ of the premises.
a. Habitability
b. Habitat
c. Security
d. Water protection

1170) Which of these actions fits the description of a “repair and deduct” remedy?
a. After his landlord refused to fix the broken window, Rick had it replaced and deducted the cost from his rent.
b. Ryan did not like having carpeting in the bathroom, so he replaced it with vinyl and deducted the cost in his next month’s rent.
c. Seamus is a carpenter and crafted some built-in bookshelves for his unit. Because they will increase the value, he deducts the cost from his rent.
d. The wallpaper was peeling in Susan’s dining room and she hired a contractor to repair it, deducting the cost from her rent.

1171) Which of the following is a valid reason for a tenant to refuse to allow a landlord to enter the property?
a. “I take it back. I don’t want the repairs done today anymore. I’m sleepy.”
b. “The water dripping through the ceiling of the unit below isn’t mine.”
c. “You didn’t provide notice that you wanted to show the property to a buyer today.”
d. “You shall not pass!”

1172) A residential tenant decides the 70s-era shag carpeting has to go, rips it up, and replaces it with nail down wood floors. When she moves out, she can’t take the floor with her, because it is what?
a. A fixture
b. An improvement
c. The wrong color for her new house
d. Too heavy

1173) Marley has just purchased an occupied rental property. Which of these rights does she have?
a. The right to change the terms of the lease, including an increase in rent
b. The right to collect rent according to the terms of the existing lease
c. The right to evict the tenant and take possession for herself
d. The right to terminate the lease, effective immediately

1174) A landlord who wishes to show an occupied rental property to a prospective buyer must provide the tenant with reasonable ______.
a. Compensation
b. Identification
c. Justification
d. Notice

1175) Johnny is overwhelmed by the amount of work that goes into being a landlord and has too many requests for repairs from his tenants. He needs to choose one of these to hold off on for now. Which repair can he legally postpone completing?
a. Evie’s key broke in her deadbolt and she can’t lock the front door.
b. Jay clogged up his toilet again, and still hasn’t bought himself a plunger.
c. The lights and outlets aren’t working in Ethan’s living room.
d. The water to Julie’s shower won’t turn on.

1176) Which of these is a legal reason for a landlord to enter a rental unit without notice?
a. Abandonment of the property
b. To conduct a home inspection for a buyer
c. To inspect a waterbed
d. To make repairs scheduled in advance

1177) One of these parties is likely to be held liable for an injury resulting from the condition of the premises. Who is it?
a. A passerby is hit by a falling icicle left behind by a freak ice storm.
b. A residential landlord promises to repair the exposed wiring in the laundry room, but forgets—until someone is electrocuted.
c. A tenant watches the neighbor start to disappear into a sinkhole in the front yard that she had no idea existed.
d. The owner of a strip mall learns that a shopper tripped over the cord of a vacuum while a tenant was cleaning up some cereal dropped by their child.

1178) Audrey has assigned her lease to her college buddy, Skip. After two months, Skip vacates the premises and is never heard from again. Who could the landlord reasonably sue for non-payment of rent?
a. No one
b. Only Audrey
c. Only Skip
d. Skip and Audrey

1179) A tenant is not legally obligated to let her landlord enter the premises to visit her goldfish, because she has what legal right?
a. Freedom from harassment
b. Landlord prohibition from entry
c. Right to enjoyment
d. Right to entry

1180) Which of these statements about transfer of interest in rental property by a landlord is true?
a. It is illegal for a landlord to transfer interest in rental property while a lease is in effect.
b. The existing lease is unenforceable unless it is renewed by the new landlord.
c. There are two ways a landlord may transfer interest: subleasing or assignment.
d. The tenant retains the same rights and responsibilities that were provided by the original lease.

1181) A jewelry store is relocating from a mall to a free-standing building and is pulling all of its display cases out of the storefront. These cases belong to the jewelry store because they are ______.
a. Franchise fixtures
b. Improvements
c. Jewelry fixtures
d. Trade fixtures

1182) A landlord who wishes to show an occupied rental property to a prospective buyer must provide the tenant with reasonable ______.
a. Compensation
b. Identification
c. Justification
d. Notice

1183) Johnny is overwhelmed by the amount of work that goes into being a landlord and has too many requests for repairs from his tenants. He needs to choose one of these to hold off on for now. Which repair can he legally postpone completing?
a. Evie’s key broke in her deadbolt and she can’t lock the front door.
b. Jay clogged up his toilet again, and still hasn’t bought himself a plunger.
c. The lights and outlets aren’t working in Ethan’s living room.
d. The water to Julie’s shower won’t turn on.

1184) Barb has six months left on her lease when the house is sold in foreclosure. The buyer is planning to move in, which may happen how soon?
a. In 120 days
b. In 60 days
c. In 90 days
d. In six months, when the original lease term expires

1185)
1186) What must be filed for the eviction process to begin?
a. An unlawful detainer lawsuit
b. A writ of possession
c. Evidence of missed rental payments
d. The lease

1187) Jake is unhappy that his lease was extended automatically. What lease provision should Jake review closely to ensure it is enforceable?
a. Automatic lease creation clause
b. Automatic lease extension clause
c. Automatic lease renewal clause
d. Non-cancellation clause

1188) Which of these accurately describes a lease extension?
a. A landlord may impose a lease extension on a tenant.
b. A lease extension is a continuation of the current lease.
c. A lease extension is a new lease.
d. A lease extension occurs as the result of fraud.

1189) Which of these statements about tenants in the military is true?
a. A tenant in the military who cannot pay rent due to military service may be eligible for a 90-day stay of eviction.
b. Landlords may not increase rent on units occupied by tenants in the military.
c. Tenants in the military may miss up to 90 days of rent payments while deployed.
d. Tenants in the military may not rent property with a monthly payment that exceeds $1,200.

1190) Brandy, a member of the National Guard, has been called up to duty. If she’s unable to pay her rent due to her orders, she may be entitled to a delay of eviction service. To qualify, her monthly rent must be __________ as adjusted by the housing price inflation adjustment.
a. $1,500 or less
b. $1,500 or more
c. $2,400 or less
d. $2,400 or more

1191) Which of these answers best describes the difference between lease expiration and lease termination?
a. Termination of a lease may only occur after the expiration date set in the lease.
b. Termination of a lease occurs before the lease would have expired.
c. Termination of a lease requires consent of both parties, whereas expiration is written into the lease terms.
d. There is no difference. A lease that is expired is also terminated.
1192)
1193) Julie has received notice that the house she is renting was sold in foreclosure. She has a month-to-month lease, so how long does she have until her lease may be terminated?
a. 21 days
b. 30 days
c. 60 days
d. 90 days

1194) What legal document must be delivered to the sheriff before a tenant may be forcibly removed from a rental?
a. Writ of eviction
b. Writ of possession
c. Writ of removal
d. Writ of unlawful detainer

1195) What is it called when a tenant repays past-due rent to retain possession?
a. Due process
b. Relief from forfeiture
c. Unlawful detainer
d. Writ of possession

1196) Which of these ways of ending a lease falls into the category of lease termination?
a. A one-year lease reaches the end of its term
b. A periodic lease is automatically renewed per the terms of the lease extension clause
c. The tenant ends the lease after the property is condemned
d. Two parties mutually agree to rescind the contract

1197) Which of these accurately describes a lease renewal?
a. A lease renewal is a continuation of the current lease.
b. A lease renewal is a new lease.
c. A lease renewal is unenforceable.
d. A lease renewal requires an automatic lease renewal clause.

1198) Which of these statements about terminating a lease is true?
a. Rescission is one way to terminate a lease.
b. Termination of a lease differs from rescission of a lease.
c. Termination of a lease requires the consent of both parties.
d. The first step to terminating a lease is to file an unlawful detainer lawsuit.

1199) If a negotiable instrument is transferrable, it must be ___________.
a. Include a “not to exceed” clause
b. On a government-issued form
c. Payable at an indefinite time
d. Signed

1200) Rusty received an acceleration letter from his mortgage lender. What is the most likely reason for receiving this letter?
a. Rusty failed to pay his property taxes.
b. Rusty has paid off his mortgage.
c. Rusty is two or three months in default.
d. Rusty’s mortgage is being sold on the secondary market.

1201) A mortgage is a legally binding document that creates a lien on a piece of property and gives the lender the right to foreclose on the property if the borrower defaults. Who or what entity is considered the mortgagee?
a. Borrower
b. Lender
c. Loan
d. Property

1202) What generally determines the priority of a lien?
a. The amount of the lien
b. The date it is recorded
c. The date the lien is to be paid off
d. The lien holder

1203) What’s a discount point?
a. An upfront charge to make up for the difference between the rate the borrower is receiving and the rate the lender normally requires
b. The amount a borrower charges a lender for using its money, charged either monthly or annually
c. The amount a lender charges to initiate a loan
d. The interest rate at which a bank is allowed to borrow money from the Fed; this rate changes with the stock market

1204) In a title theory state, which of the following is a true statement?
a. A promissory note creates a lien against the property used as security for the loan.
b. It’s generally much easier for a lender to foreclose on a property.
c. The lien makes non-judicial foreclosure typical.
d. The mortgage creates a lien against the property used as security for the loan.

1205) What type of foreclosure is commonly used when a deed of trust is the security instrument?
a. Eviction
b. Judicial
c. Non-judicial
d. Strict

1206) Which one of the following is a true statement regarding prepayment penalties?
a. All loans involve prepayment penalties.
b. Lenders don’t have to tell borrowers about prepayment penalties until the borrower’s payoff amount is received.
c. Lenders must disclose up front if they reserve the right to charge a prepayment penalty, and under what conditions a penalty will apply.
d. Prepayment penalties are illegal.

1207) Ken and Julia took out a five-year subprime loan that included a prepayment penalty clause. They’re on track to pay it off after only three years. Which one of the following is a true statement?
a. Lenders may not charge a prepayment penalty.
b. The lender can only charge a prepayment penalty if it was disclosed to the borrower.
c. The prepayment penalty can be as much as 30 days’ interest.
d. The prepayment penalty can be as much as 5% of the original loan balance.

1208) What purpose does the promissory note serve?
a. It gives the lender the right to begin foreclosure proceedings if the buyer defaults.
b. It gives the trustee the right to begin foreclosure proceedings if the buyer defaults.
c. It’s a promise made to the buyer that the lender will not foreclose as long as the note is kept current.
d. It’s a promise the buyer makes to the lender that the note will be repaid in full.

1209) Olivia took out a 15-year loan secured with a deed of trust. She worked two jobs in order to pay the loan back and finally made her last payment this month. What happens now?
a. The lender releases the deed of trust that secured her mortgage loan.
b. The lender releases the mortgage that secured her mortgage loan.
c. The lender tells the trustee to release the title to Olivia.
d. The trustee releases the mortgage that secured her mortgage loan.

1210) Which of the following statements about the promissory note is true?
a. A promissory note is a negotiable instrument and can be transferred to a secondary holder who has the right to enforce the note’s terms.
b. A promissory note isn’t a legal document.
c. A promissory note isn’t transferable, so it must be held by the original lender until paid in full.
d. A promissory note serves as collateral for a mortgage loan.

1211) Alyssa’s mortgage loan is secured by the note and the mortgage. Which of the following is true if she lives in a lien theory state?
a. Her lender can foreclose on her without advance notice.
b. She holds title to the property, and the mortgage becomes a lien on the property.
c. The lender can never legally foreclosure on her home.
d. The lender doesn’t need to involve the court to foreclose.

1212) Which mortgage clause requires the lender to discharge the mortgage lien once the borrower has paid in full?
a. Acceleration
b. Alienation
c. Defeasance
d. Due-on-sale

1213) Which of the following is one reason a lender might charge a prepayment penalty?
a. Because the lender is a subprime lender
b. To cover the costs of processing an early payoff
c. To deter buyers from ever paying off their mortgage
d. To recover the money lost in anticipated interest

1214) While Martha’s paying off her loan, her lender is holding on to something that includes her name, property address, the interest rate on her loan, what the late charge amount would be, and the amount and term of the loan. When her loan is paid off, the lender returns it to Mary, marked paid in full. What is this item?
a. A deed of trust
b. A mortgage
c. An assignment
d. A promissory note

1215) Daniel purchased a townhome and obtained financing from Bank A on February 1, 2014. On April 1, 2015, he took out a home equity loan on the property with Bank B. On August 1, 2015, Daniel refinanced his mortgage through Bank C, which resulted in Bank A’s loan being paid off. Bank B signed a subordination agreement related to Bank C’s loan. Which lender will be paid first in the event of a foreclosure?
a. Bank A
b. Bank B
c. Bank B and C will be paid at the same time.
d. Bank C

1216) When a deed of trust is used as a security instrument, who holds the deed and the note?
a. The lender holds the deed and the note
b. The lender holds the deed, and the trustee holds the note.
c. The trustee holds the deed, and the lender holds the note.
d. The trustee holds the mortgage and the note.

1217) Generally, there are covenants between the borrower and the lender within a mortgage document. Which of the following is a mortgage covenant?
a. Agree to refinance only with the current lender.
b. Give the lender first right of refusal.
c. Move all checking and savings account to the lender’s institution.
d. Pay any charges and assessments against the property.

1218) Which of the following describes the amount a lender charges a borrower for using money?
a. Discount point
b. Interest
c. Principal
d. Usury

1219) Buyer Ed is reviewing the Loan Estimate he received from the lender he’s working with. He notices the loan terms include a prepayment penalty. Because he’s a savvy consumer, which of the following does Ed do?
a. Ask the lender if there are other options available that would not involve a prepayment penalty.
b. Check with his real estate agent to make sure that the penalty shown is typical.
c. Laugh and throw the Loan Estimate in the trash.
d. Resolve to not try to pay the loan off early.

1220) Elaina and Allen just purchased a home using a deed of trust. Which of the following is most likely true about their home loan?
a. A trustee will hold title until the loan is paid.
b. Their transaction is secured with a mortgage as well.
c. The lender will hold the mortgage, while a trustee will hold the deed of trust until their loan is paid off.
d. The lender will hold the title until the loan is paid off.

1221) Which of the following defines when a lender charges a borrower more than the highest allowable interest rate?
a. Default
b. Discount points
c. Note
d. Usury

1222) In title theory states, which of the following is true?
a. The borrower and lender hold the title jointly.
b. The borrower doesn’t hold the legal title to the property until the loan is paid in full.
c. The borrower receives the title at closing.
d. The lender is not allowed to hold the title.

1223) Which of the following is a mortgagor’s responsibility?
a. Assign the mortgage.
b. Charge late payment penalties.
c. Foreclose on the property if in default.
d. Keep the property in good repair.

1224) Upon examination of his mortgage document, Jared finds a clause stating he will owe additional interest if he pays off his loan within one year of the loan origination date. What type of penalty does this describe?
a. Acceleration
b. Alienation
c. Defeasance
d. Prepayment

1225) Shirley’s lender discharged the mortgage lien on Shirley’s property after processing her final payment. Which clause requires the lender to take this action?
a. Acceleration
b. Alienation
c. Defeasance
d. Due-on-sale

1226) In a mortgage, the property is used as collateral for the loan. What’s the term for the process of pledging something as collateral?
a. Hypercollateral
b. Hyperinflation
c. Hyperventilation
d. Hypothecation

1227) Which of the following is a promise from the borrower to repay a certain sum of money to another party (the lender or holder of the note) under specified terms?
a. Deed of trust
b. Mortgage lien
c. Promissory note
d. Usury

1228) Rob and Jill obtained a mortgage from Taylor Bank & Trust in 1998. In 2014, they obtained a second mortgage from Quail Loans. What is the loan with Quail Loans considered?
a. First mortgage
b. Graduated mortgage
c. Home equity line of credit
d. Junior mortgage

1229) What type of foreclosure is commonly used when a mortgage is the security instrument?
a. Eviction
b. Judicial
c. Non-judicial
d. Strict

1230) Which of the following documents is an example of a promissory note?
a. Borrower Keesha just signed a document that states that she pledges to pay back her mortgage loan of $310,000.
b. First Financial drafted a document for a borrower that includes, among other things, an acceleration clause.
c. The document that Darren is about to sign includes an acceleration clause.
d. The document that Sandra will sign also includes spaces for her lender’s and her trustee’s signatures.

1231) Gerard has been offered a 4% interest rate on a $300,000 mortgage. His monthly mortgage payment would run about $950 per month. He plans to pay $2,000 up front to drop his interest rate to 3.75% and his payment to $920 per month. What is this upfront charge called?
a. Discount point
b. Interest
c. Notes
d. Usury

1232) Which of the following options describes a subordination agreement?
a. An agreement between a contractor and any subcontractors
b. An agreement between a landowner and a contractor
c. An agreement between the court and landowner to decrease property taxes
d. An agreement between two lien holders to modify the order of lien priority

1233) What’s an up front charge to make up for the difference between the interest rate the borrower is paying and the rate the lender normally requires?
a. Discount point
b. Interest
c. Note
d. Usury

1234) When a mortgage is used as a security instrument, who holds the mortgage and the promissory note?
a. The borrower holds the mortgage, and the lender holds the note.
b. The borrower holds the mortgage and the note.
c. The lender holds the mortgage, and the borrower holds the note.
d. The lender holds the mortgage and the note.

1235) Which of the following is the name of a penalty lenders charge when borrowers repay their loans earlier than expected?
a. Discount point
b. Late fee
c. Prepayment penalty
d. Usury

1236) Jim decided to refinance his three-year-old mortgage that has a balance of $300,000. He has to pay a fee of 5% of the loan amount to the original lender for paying off the mortgage early. What is this fee called?
a. A prepayment penalty
b. Closing costs
c. Origination fee
d. Points

1237) How many parties does a mortgage involve?
a. Five: borrower, lender, trustee, trustor, and beneficiary
b. Four: borrower, lender, trustee, and trustor
c. Three: borrower, lender, and trustee
d. Two: borrower and lender

1238) A trustee is holding title to Cassandra’s house until the loan is paid in full. Which type of security instrument was used?
a. Deed of trust
b. Mortgage
c. Mortgage and deed of trust
d. Promissory note

1239) Where are mortgages recorded?
a. Mortgages are not recorded; only deeds are.
b. They’re recorded at the lending bank’s main office.
c. They’re recorded at the real estate brokerage’s main office.
d. They’re recorded at the recorder’s office in the county where the property is located.

1240) Phyllis and Maury obtained a mortgage from Taylor Bank & Trust in 1998. In 2014, they obtained a second mortgage from Quail Loans. What’s the loan with Taylor Bank & Trust considered?
a. First mortgage
b. Home equity line of credit
c. Junior mortgage
d. Subordinate mortgage

1241) Stacy has gone into default on her mortgage. Her lender is demanding that the entire loan balance be paid in full. Which mortgage clause permits her lender to do this?
a. Acceleration
b. Alienation
c. Defeasance
d. Due-on-sale

1242) After getting into a fender bender, Parker had to buy a new car. To make the down payment on the car, he had to skip a couple of his mortgage payments. He received a notice from his lender indicating the remaining amount of his loan is due immediately and in full. What clause in his mortgage stipulates this?
a. Acceleration
b. Alienation
c. Defeasance
d. Due-on-sale

1243) Which one of the following examples describe a prepayment penalty?
a. A fee the government charges the lender if the borrower pays off a loan before its intended time
b. A fee the lender charges for servicing a loan
c. A loan origination fee charged to the borrower
d. A monetary penalty imposed on a borrower for paying off a loan before its intended time

1244) How can a lender with a lien that’s in second position get into the first position?
a. With a deed of trust
b. With an IOU
c. With a promissory note
d. With a subordination agreement

1245) Sondra, a buyer, signs all the required mortgage documentation, promising to make all payments to her lender. Unfortunately, Sondra falls on hard times and misses multiple payments, and the bank indicates that it’s going to foreclose on her. The foreclosure proceedings are more difficult for the lender because Sondra holds the deed to the land. What kind of state does Sondra live in?
a. A deed of trust theory state
b. A lien theory state
c. An intermediary theory state
d. A title theory state

1246) Sheila’s financing calls for the use of a promissory note. What’s a promissory note?
a. A lien on a property
b. An agreement for a consumer to buy a new condominium
c. The borrower’s promise to repay a certain sum of money to another party (the lender or holder of the note) under specified terms
d. The lender’s promise to repay a certain sum of money to another party

1247) Who or what entity has legal title to a financed property in a lien theory state?
a. The beneficiary
b. The borrower
c. The lender
d. The state

1248) Janice is selling her property, and Tim wants to assume her loan. If a due-on-sale clause exists in Janice’s mortgage, ______.
a. Janice will have to pay any loan assumption fee
b. The entire loan balance may be due at once, and Tim won’t be able to assume it
c. The interest rate will rise with the assumption
d. Tim will have to accept existing terms of the loan

1249) What’s the purpose of a typical subordination agreement?
a. It allows a junior mortgage to move into first lien position.
b. It allows the lien(s) ahead of the junior mortgage to be refinanced without changing their priority in lien positions.
c. It raises interest rates incrementally over time.
d. It removes a lien from a property when it’s been repaid.
1250) Jason purchased his dream home six months ago. After Jason received an inheritance from his uncle, he decided to pay off his mortgage. What should he consider before doing this?
a. A second mortgage
b. The state of his local housing market
c. Whether he will incur a prepayment penalty
d. Whether his uncle would like this
1251) What often comprises the sum total of a buyer’s mortgage payment?
a. Principal and interest
b. Principal and taxes
c. Principal, interest, and taxes
d. Principal, interest, taxes, and insurance
1252) Which of the following is a true statement about loan assumptions?
a. Most loans are assumable.
b. The lender may not change the loan terms for the buyer.
c. The seller can’t also ask the buyer to pay the seller for any equity built up.
d. They may trigger a due-on-sale clause, making the seller have to pay the entire loan balance.

1253) When a mortgage holder is released from liability for a mortgage, it’s also called ______________.
a. Clear title
b. Release clause reformation
c. Satisfaction of mortgage
d. Subordination
1254) Which of the following describes a buydown?
a. ABC Lending charges origination points and offers a 4.5% rate.
b. Buyers pay the seller a prepaid lump sum prior to closing to reduce the sales price.
c. Your clients opt to pay their lender two discount points in a lump sum so they can lock in a reduced interest rate.
d. Your sellers pay some of the buyer’s closing costs so the buyer can put more money to their down payment.
1255) Lisa took out a conventional 30-year mortgage at a 6% interest rate when she bought her home 15 years ago. Her payments today are the same as they were when she made her first payment. What’s this an example of?
a. Constant payment method
b. Graduated payment
c. Home equity line of credit
d. Straight loan
1256) What’s a reserve fund?
a. An account brokers use to pay commissions to licensees
b. A specified number of months’ worth of property tax and insurance funds that have been set aside
c. The amount of money a bank reserves for mortgage lending
d. The amount of money lenders keep on hand
1257) What may happen if a property lies in a designated floodplain?
a. Flood insurance may be required.
b. Lenders will not approve a loan.
c. The property may float away.
d. The property will never sell.
1258) Nina and Rob prepaid some of their interest to their lender when financing their new home. What’s this called?
a. A buydown
b. A down payment
c. An adjustable rate mortgage
d. An interest-free loan
1259) Who or what determines the amount that can be set aside in reserve funds?
a. Borrowers
b. Builders
c. Federal regulations
d. Lenders
1260) What’s it called when a borrower’s installment payment remains relatively the same over the life of the loan?
a. Constant payment method
b. Graduated payment
c. Negative amortization
d. Straight loan
1261) ABC Lending requires mortgage borrowers to prepay 12 months of property taxes and insurance at closing. Where must these funds be held?
a. Brokerage account
b. Escrow account
c. Safe
d. Savings account
1262) Which program helps homeowners in flood hazard areas obtain insurance?
a. Federal Emergency Management Act
b. Flood Alleviation Program
c. National Flood Insurance Program
d. Safe Drinking Water Act
1263) Evelyn’s mortgage payments fluctuate. The amount applied toward principal each payment remains the same, but the interest amount varies. What type of amortization is this?
a. Constant payment
b. Negative amortization
c. Standard amortization
d. Straight-line amortization
1264) A reserve fund may also be called a(n) ______ account.
a. Additional
b. Escrow
c. Insurance
d. Taxable
1265) Which of the following is generally true of flood insurance?
a. It is a standard part of any homeowners policy.
b. It is optional for all properties.
c. It is required by lenders for all properties.
d. It is usually purchased separately or bundled with a homeowners policy, but it’s not standard.
1266) Maddy is looking over some documents while preparing for the closing of her first home purchase. She sees that her lender requires six months prepayment of this in her escrow account.
a. Insurance and taxes
b. Insurance only
c. Late fees
d. Taxes only
1267) What might a borrower’s escrow account or reserve fund pay for?
a. Insurance and taxes
b. Insurance only
c. Late fees
d. Taxes only

1268) Your buyer clients have plenty for a down payment and closing costs, and they’d like a lower interest rate than the going rate. How can they use some of their saved funds to get a better interest rate?
a. They can buy down the interest rate.
b. They can eliminate the interest rate.
c. They can postpone paying interest for a certain amount of time.
d. They can’t use funds to get a better interest rate.

1269) Janice is selling her property, and Tim wants to assume her loan. If a due-on-sale clause exists in Janice’s mortgage, ______.
a. Janice will have to pay any loan assumption fee
b. The entire loan balance may be due at once, and Tim won’t be able to assume it
c. The interest rate will rise with the assumption
d. Tim will have to accept existing terms of the loan

1270) With which type of amortization does the amount applied toward the principal remain the same each month, with the interest amount varying according to the outstanding loan balance?
a. Constant payment
b. Graduated payment
c. Negative amortization
d. Straight-line

1271) If a buyer assumes the seller’s mortgage, which of the following is a true statement?
a. The buyer is solely responsible for the mortgage.
b. The mortgagee and mortgagor are both responsible for the note.
c. The mortgagee assumes personal liability for the note.
d. Unless the lender releases the seller, the seller remains responsible for the mortgage and note.

1272) Which occupancy type is eligible for a VA loan?
a. All occupancy types
b. Investment property
c. Owner-occupied
d. Second home

1273) Joann purchased her house with a mortgage loan from her friendly neighborhood bank. Which of these most likely happened to Joann’s loan soon after she received it from her bank?
a. Her bank foreclosed on the loan.
b. Her bank sold it on the secondary market as an investment product.
c. She received another loan on the secondary market when her bank demanded full payment.
d. She sold the loan on the primary market for a lower interest rate.

1274) What type of loan is neither guaranteed nor insured by government agencies?
a. Conventional
b. Federal Housing Administration (FHA)
c. U.S. Department of Agriculture (USDA)
d. U.S. Department of Veterans Affairs (VA)

1275) Which entity’s purpose is to keep U.S. finances in check by maintaining balanced and favorable economic conditions?
a. Federal Reserve System
b. Primary mortgage market
c. Secondary mortgage market
d. Stock market

1276) Amy purchased a new home and obtained financing through a bank, called Natula Bank. Natula originated the loan, but before Amy’s first mortgage payment was due, it sold her loan to CitiMortgage. As a loan originator, what market is Natula Bank operating in?
a. Federal Reserve System
b. Primary mortgage market
c. Secondary mortgage market
d. Stock market

1277) Which of these provides some protection to lenders in the event that the borrower obtaining a conventional loan does not have a down payment of 20 to 25%?
a. Acceleration clause
b. Mortgage insurance premium
c. Prepayment penalty
d. Private mortgage insurance

1278) What are the main benefits to veterans of the VA-guaranteed loan program?
a. A VA guarantee of the property condition
b. Lower interest rates than are available on the open market
c. No down payment, no mortgage insurance, and no prepayment penalty
d. Reduced homeowner’s insurance requirements

1279) Which of the following statements is true of the secondary mortgage market?
a. Borrowers have a say in which entity may purchase their mortgages in this market.
b. Lenders don’t purchase loans from other lenders in this market.
c. The borrower’s rights are unaffected.
d. The loan originator continues to service the loan after it’s sold.

1280) Goldie and Kurt are looking at purchasing their first home. Their credit history is a little shaky and they don’t have enough money saved to put down 20%. What type of loan seems most appropriate?
a. Conventional
b. FHA
c. FHA, VA, or conventional
d. VA

1281) Mick focuses on originating mortgage loans at a company that has in-house loan processors and underwriters. The options he offers consumers are limited to the products his company offers. What’s Mick’s position?
a. Mortgage banker
b. Mortgage broker
c. Mortgage servicer
d. Real estate investor

1282) Which of the following is a true statement about FHA financing?
a. An FHA loan is best for borrowers who have large down payments.
b. An FHA loan is usually more attractive to borrowers who have lower credit scores and down payments.
c. FHA loans are available to all borrowers, regardless of credit history.
d. FHA loans have more stringent requirements than conventional loans do.
1283)
1284) Lydia put the minimum 3.5% down on her $210,000 home. She’ll have to pay an MIP. What type of loan does Lydia have?
a. Conventional
b. FHA
c. Standard
d. VA

1285) What institution was formed in 1968 and took over the sale of the government loan market?
a. Fannie Mae (FNMA)
b. Farmer Mac
c. Freddie Mac (FHLMC)
d. Ginnie Mae (GNMA)

1286) Which of the following is a property requirement for CalVet loans?
a. The property can be transferred, encumbered, or leased as the owner sees fit.
b. The property cannot be a mobile or manufactured home.
c. The property must be a unit in a planned unit development (PUD).
d. The property must be owner-occupied.

1287) Stacey’s lengthy military service makes her uniquely eligible for a(n) ________.
a. FHA loan
b. Piggyback loan
c. Subprime loan
d. VA loan

1288) Which governmental department guarantees VA loans?
a. CFPB
b. FHA
c. HUD
d. VA

1289) Rachel loves convenience. As you can imagine, she was thrilled when she was able to finance her mortgage through the same institution where she deposits her payroll checks. Which of these most likely financed Rachel’s mortgage?
a. Insurance company
b. Investment group
c. Mortgage broker
d. Savings and loan

1290) Any financial institution with deposits that are insured by a federal government agency can sell mortgages to which institution?
a. Fannie Mae (FNMA)
b. Farmer Mac
c. Freddie Mac (FHLMC)
d. Ginnie Mae (GNMA)

1291) What could be a consequence if there were no secondary mortgage market?
a. Interest rates would fall.
b. Lenders might not have funds available to make new loans to the public.
c. There wouldn’t be any institutions available to service loans.
d. Unemployment would rise.

1292) Shelly’s flower business is blooming and it’s time for her business to grow. She plans to take out a business loan to open two more shops on the north side of town. Which lending institution would she most likely go to for the loan?
a. A commercial bank
b. A credit union
c. An investment group
d. A savings and loan

1293) In which market do lenders purchase packaged loans?
a. Housing market
b. Primary mortgage market
c. Secondary mortgage market
d. Stock market

1294) How do the primary and secondary mortgage markets work together?
a. The primary market packages loans to sell to the secondary market.
b. The primary market regulates the secondary market.
c. The secondary market packages loans to sell to the primary market.
d. The secondary market regulates the primary market.

1295) Which of the following statements is true about government loans?
a. They originate in the secondary market.
b. They’re insured or guaranteed by a government agency.
c. They’re serviced by the U.S. Department of the Treasury.
d. They’re underwritten by the Federal Reserve.

1296) Sandra retired from a career in the Navy and is ready to buy her first home, a small bungalow in a quiet neighborhood, for $169,900. Her military service gives her the benefit of Veterans Affairs (VA) loan. What’s her required down payment?
a. $0
b. $1,699
c. $2,548.50
d. $500

1297) According to the PMI Act of 1998, at what percentage of equity position does personal mortgage insurance automatically cancel for homeowners?
a. 20%
b. 21%
c. 22%
d. 25%

1298) Your clients, the Schwans, are financing their home purchase. They want to obtain a conventional loan directly from a bank and to put down at least 20% of the home price. They will most likely get their loan from ______.
a. A primary lender
b. A secondary lender
c. A subprime lender
d. A supra-prime lender

1299) Sgt. Johnson is an active member of the Marines. He’s been serving for 10 years. He wants to buy a home with no money down. What loan option seems like the best fit?
a. Conventional
b. FHA
c. FHA, VA, or conventional
d. VA

1300) The secondary mortgage market buys loans from the primary market. How does this aid the lending market?
a. Avoid foreclosure of borrower properties
b. Ensure funds are available to borrowers
c. Prevent bank runs by consumers
d. Streamline lenders’ bankruptcy processes

1301) Darrel loves working in the mortgage lending industry. On a daily basis, he works with multiple lenders to find and negotiate the best deals for his customers. What is Darrel’s profession?
a. Mortgage banker
b. Mortgage broker
c. Mortgage servicer
d. Real estate investor

1302) The Baxters are looking at a $425,000 home. They have $90,000 in savings to use as a down payment. What loan type(s) would likely be the best option for them?
a. Conventional
b. FHA
c. FHA, VA, or conventional
d. VA

1303) Robin has great credit and was able to secure a loan for her ocean-side dream home. Her 30-year, fixed-rate loan is for an amount that’s above conventional loan limits. What type of loan does Robin have?
a. A conforming Freddie Mac loan
b. A government loan
c. An FHA loan
d. A non-conforming loan

1304) In which market do lenders that originate real estate loans operate?
a. Government market
b. Primary mortgage market
c. Real estate investment trust market
d. Secondary mortgage market

1305)
1306) To which of the following borrowers might a lender be most likely to recommend an FHA loan?
a. An investor who intends to use equity in another investment property as his down payment
b. A retired couple interested in downsizing from a large four-bedroom house they own free and clear to a condominium
c. A single stockbroker with a $40,000 down payment and significant assets in a stock portfolio
d. A young couple with only a few thousand dollars saved for a down payment and relatively low credit scores

1307) Which of the following statements is true about conventional loans?
a. Originators usually package and sell the loans on the secondary market.
b. They’re guaranteed by the U.S. Department of Veterans Affairs.
c. They’re insured by the Federal Housing Administration.
d. They’re provided by the U.S. Department of Agriculture.

1308) Who generally qualifies for CalVet loans?
a. First-time home buyers
b. Low-income households
c. Military personnel and veterans
d. Senior citizens

1309) Recently retired Admiral Bongo and his wife, Lucy, contact you. They want you to help them purchase their dream house now that he’s retired, but one that has the necessary accommodations for the admiral’s disability. They also confide in you that they don’t have a lot of money saved up for a down payment. Which type of financing may work best for them?
a. A conventional loan combined with a seller carry back.
b. A conventional loan using the admiral’s retirement money as a down payment.
c. An FHA 203(k) loan to fix their new home up.
d. A VA loan, which requires no down payment.

1310) Commander Halfback retires after 25 years of service in the Coast Guard. He is looking to buy a home. What type of loan should he use?
a. Conventional
b. FHA
c. FHA, VA, or conventional
d. VA

1311) Which type of lender specializes in taking in savings deposits and then lending money out to consumers through mortgages and other loans?
a. Credit union
b. Mortgage banker
c. Mortgage broker
d. Savings and loan

1312) Noah owns an LLC that buys and sells stocks on the NASDAQ 100. He needs some additional financing. To which type of lending institution might he prefer to go?
a. A commercial bank
b. A credit union
c. An investment group
d. A savings and loan

1313) How does the Fed maintain a balanced economy?
a. By limiting the number of loans a bank may originate
b. By purchasing loans on the secondary market
c. By regulating the flow of available funds and interest rates
d. By shutting down the stock market

1314) Rhonda and her husband filed for bankruptcy five years ago. They want to purchase a new house but don’t have the best credit score. They’ve decided to buy the home using an FHA loan. Which of these is a true statement?
a. A minimum down payment of 3.5% is required.
b. Mortgage insurance is not required.
c. The loan-to-value ratio must be less than 80%.
d. They must have PMI.

1315) What institution was established in 1938 to purchase FHA-insured loans from individual lenders, group the loans together, and sell them as mortgage-backed securities to investors?
a. Fannie Mae (FNMA)
b. Farmer Mac
c. Freddie Mac (FHLMC)
d. Ginnie Mae (GNMA)

1316) Who guarantees VA loans?
a. Federal Housing Authority
b. Housing and Urban Development
c. The primary mortgage market
d. U.S. Department of Veterans Affairs

1317) David is an active duty member of the U.S. Air Force. Assuming he and the property meet the qualifications, which type of mortgage may be the best option for him?
a. A conventional loan
b. A Ginnie Mae-originated loan
c. An FHA loan
d. A VA-guaranteed loan

1318) You’re a farmer. Which loan program might be tailor-made for you?
a. Farmer Mac
b. FHA
c. Freddie Mac
d. Ginnie Mae

1319) Which type of lender is a member-based cooperative that provides credit for auto loans and home loans, takes deposits, and offers savings vehicles and money markets?
a. Credit union
b. Mortgage banker
c. Mortgage broker
d. Savings and loan association
1320)
1321) Lauren obtained a loan that’s insured and that only required a down payment of 3.5%. Which of these is most likely the type of loan Lauren has?
a. Conventional
b. FHA
c. Home equity line of credit
d. VA

1322) Which of the following is a true statement about U.S. Department of Veterans Affairs loans?
a. All properties are eligible.
b. All veterans are eligible.
c. The VA will guarantee a loan based on the sales price or the certificate of reasonable value (CRV).
d. VA loans can be used for investment properties.

1323) What’s it called when a number of percentage points is added to the index to determine the rate for an adjustable rate mortgage?
a. Initial cap
b. Lifetime cap
c. Margin
d. Usury

1324) Which of these is a type of gap financing that’s used temporarily until the consumer can obtain permanent financing?
a. Balloon payment
b. Blanket mortgage
c. Bridge loan
d. Wrap-around mortgage

1325) With this type of loan, personal property is included with the real property in the sale. It’s commonly seen in commercial real estate, but you may also see this in the sale of furnished condominiums.
a. Blanket mortgage
b. Package mortgage
c. Shared equity mortgage
d. Wrap-around mortgage

1326) An adjustable rate mortgage has an initial interest rate of 5%. When the first interest rate adjustment date arrives, the rate can be adjusted a maximum of 1%. At all subsequent adjustment dates, the interest rate can be adjusted a maximum of 2%. The highest rate of interest that may be charged at any given time is 9%. What does the 9% rate represent?
a. Initial cap
b. Lifetime cap
c. Maximum rate able to be charged
d. Periodic cap

1327) Charles is selling his property to Seth. Charles is financing part of the transaction for Seth, who will make payments to Charles while Charles retains the property title. What is this an example of?
a. A land contract
b. An assumable mortgage
c. A straight-term loan
d. A wraparound mortgage

1328) Which type of mortgage has an interest rate that remains constant over the life of the loan?
a. Adjustable-rate
b. Fixed-rate
c. Growing equity
d. Pledged account

1329) What type of loan is given based on the amount of equity a borrower has in the home?
a. Bridge loan
b. Home equity loan
c. Shared equity mortgage
d. Swing loan

1330) This is a type of renegotiable mortgage in which the interest rate on the loan can be renegotiated at specified intervals (usually every five years).
a. Adjustable rate mortgage
b. Rollover mortgage
c. Shared appreciation
d. Swing loan

1331) This is a loan when, at specified intervals, borrowers have the option to renew their loan (with a likely change in interest rate) or immediately pay the remaining loan balance and interest due.
a. Adjustable rate mortgage
b. Renegotiable-rate mortgage
c. Rollover mortgage
d. Swing loan

1332) An adjustable rate mortgage has an initial interest rate of 5%. When the first interest rate adjustment date arrives, the rate can be adjusted a maximum of 1%. At all subsequent adjustment dates, the interest rate can be adjusted a maximum of 2%. The highest rate of interest that may be charged at any given time is 9%. What does the 1% rate represent?
a. Initial cap
b. Lifetime cap
c. Periodic cap
d. Usury

1333) An adjustable rate mortgage has an initial interest rate of 5%. When the first interest rate adjustment date arrives, the rate can be adjusted a maximum of 1%. At all subsequent adjustment dates, the interest rate can be adjusted a maximum of 2%. The highest rate of interest that may be charged at any given time is 9%. What does the 2% rate represent?
a. Initial cap
b. Lifetime cap
c. Periodic cap
d. Usury

1334) What’s the process of paying off a loan by making periodic payments?
a. Accession
b. Accretion
c. Acquisition
d. Amortization

1335) In the eyes of a lender, when financing a residence, what advantage does an investor have over owner-occupied borrowers?
a. Investors always pay cash.
b. Investors are less of a risk.
c. Investors can use rental income to qualify.
d. Investors maintain their property better.

1336) When must lenders provide borrowers with a disclosure statement regarding finance charges, annual percentage rate, etc.?
a. At loan application or within three days after loan application
b. Prior to loan application
c. Prior to or within 10 days after the loan application
d. Prior to or within three days after the loan application

1337) Which percentage reflects the top debt-to-income ratio limit for qualified mortgages?
a. 28%
b. 35%
c. 38%
d. 43%

1338) A homeowner is behind on his mortgage. He’s decided to try to sell the property and is working with his lender to do so. He owes $315,000 on his loan balance and closing costs. He has an offer for $300,000, which the lender approves. What is this an example of?
a. Deed in lieu of foreclosure
b. Eviction
c. Redemption
d. Short sale

1339) To whom does the subprime market cater?
a. High-wealth individuals
b. Investors
c. Less creditworthy borrowers
d. Property managers

1340) Mortgages may still, but only rarely, contain which of the following clauses?
a. Alienation clause
b. Amortization clause
c. Prepayment penalty clause
d. Underwriting clause

1341) Which of the following is a characteristic of predatory lending?
a. Disclosing fees
b. Disclosing the true nature of the loan obligation
c. Linking interest rates charged to consumer creditworthiness
d. Making loans the consumer can’t afford

1342) What is a short sale?
a. The borrower pays back the loan, thus avoiding foreclosure.
b. The borrower sells the property, but for less than the amount owed on the property
c. The borrower turns the deed over to the lender, rather than face foreclosure proceedings.
d. The lender receives the deed as a result of foreclosure proceedings.

1343) Which practice involves talking the consumer into refinancing over and over so a lender can charge fees?
a. Loan flipping
b. Poison lending
c. Premeditated lending
d. Turnover lending

1344) This is a legal process borrowers may go through to either discharge or restructure all of their debt.
a. Bankruptcy
b. Deed in lieu of foreclosure
c. Deficiency judgment
d. Short sale

1345) Which of the following is a mortgage where the consumer cannot later claim that the lender did not comply with the ability to repay requirements?
a. Qualified mortgage with ability to repay
b. Qualified mortgage with a safe harbor status
c. Qualified mortgage with cash payment option
d. Qualified mortgage with the rebuttable presumption

1346) Which of the following prohibits lenders from discriminating based on protected class status?
a. Community Reinvestment Act
b. Equal Credit Opportunity Act
c. RESPA
d. Truth in Lending Act

1347) Which act was created to safeguard the consumer in the use of credit by requiring full disclosure of the terms and conditions of that credit?
a. Community Reinvestment Act
b. Consumer Credit Protection Act
c. Equal Credit Opportunity Act
d. Real Estate Settlement Procedures Act

1348) Which of the following is the process the lender uses to evaluate whether to make the loan?
a. Application
b. Appraisal
c. Commitment
d. Underwriting

1349) How long does the borrower have to rescind or cancel a new mortgage obtained for an already owned property?
a. The borrower has 24 hours after loan application to rescind or cancel.
b. The borrower has 48 hours after loan application to rescind or cancel.
c. The borrower has three days after loan application to rescind or cancel.
d. The borrower must do this at the time of application.

1350) Which of the following loan transactions would be exempt from TILA disclosure requirements?
a. Duplex, with office building used as collateral
b. Grocery store, with personal funds used as collateral
c. Hobby farm
d. Vacation home

1351) A lender is preparing to begin foreclosure proceedings. Rather than go through this proceeding, the borrower decided to turn over the deed to the property. What is this called?
a. Deed in lieu of foreclosure
b. Default
c. Deficiency judgment
d. Redemption

1352) Loans for ______ purposes don’t require TILA disclosure.
a. Business
b. Consumer
c. Housing
d. Personal

1353) Jacqueline found a ready, willing, and able buyer for her client’s condo, with a sales price of $20,000 more than the asking price. However, the appraisal came in just under the asking price. Which number will the lender use to calculate the loan-to-value ratio?
a. A middle point between the two numbers
b. A weighted average based on the sales price, appraisal amount, and recent sales
c. The larger number, as a buyer has already been found
d. The smaller number

1354) Loans made to high-risk borrowers, at higher interest rates and with higher fees, are ______.
a. Highly qualified loans
b. Prime loans
c. Secondary loans
d. Subprime loans

1355) Which of the following is an example of a prime lender, as compared to a subprime lender?
a. Offers higher interest rates
b. Offers lower fees
c. Refuses to work with minorities
d. Targets low credit scores

1356) What is a deed in lieu of foreclosure?
a. The borrower pays back their loan, thus avoiding foreclosure.
b. The borrower sells their property, but for less than the amount owed on their property.
c. The borrower turns the deed over to the lender rather than face foreclosure proceedings.
d. The lender receives the deed as a result of foreclosure proceedings.

1357) Which method of foreclosure involves the court and a sheriff’s sale?
a. Deed in lieu of foreclosure
b. Judicial
c. Non-judicial
d. Strict

1358) Which of the following is a tactic used by a predatory lender?
a. Charging minorities lower interest rates
b. Encouraging debt
c. Refusing to loan to minorities
d. Selling mortgages on the secondary market

1359) How does the lender determine whether the property is worth the sales price?
a. Appraisal
b. Demographics of the area
c. Prior history with borrower
d. Style of home

1360) Jeffrey has accepted an offer of $310,000 for his house. The buyer is making a $50,000 down payment, and the buyer’s appraisal came in at $300,000. On what number will the buyer’s lender base the loan-to-value ratio?
a. $249,000
b. $299,000
c. $300,000
d. There’s no way to tell given the data provided.

1361) You’ve just learned that your buyer, Kirk, can’t obtain a qualified mortgage for his dream home because his debt-to-income ratio would be above the threshold. What is Kirk’s best option?
a. Get a sub-prime loan.
b. No options here; Kirk will need to wait until his debt-to-income ratio meets qualified lending standards.
c. Offer a shared equity situation with the lender.
d. Pay off his other debt and/or increase monthly income.

1362) What is it called when the borrower and lender work together to restructure the terms of a home loan?
a. Deed in lieu of foreclosure
b. Deficiency judgment
c. Loan modification
d. Reinstatement

1363) Which method of foreclosure does not involve the court, but includes a trustee’s sale?
a. Deed in lieu of foreclosure
b. Judicial
c. Non-judicial
d. Strict

1364) Lenders examine a variety of documents to determine whether the buyer is a good risk for a loan, such as _______.
a. Genealogy report
b. Marriage certificate
c. Resume
d. Tax returns

1365) What is it called when borrowers pay back all of the amounts owed and become current (no longer in default) on their loan?
a. Deed in lieu of foreclosure
b. Deficiency judgment
c. Loan modification
d. Reinstatement

1366) Which of the following is an alternative to foreclosure?
a. Deed in lieu of foreclosure
b. Default
c. Deficiency judgment
d. Eviction

1367) When considering loan risk, which two items will lenders consider in equal measure?
a. Borrower and property
b. Credit and employment
c. Debt and income
d. Loan and value

1368) What is it called when borrowers pay back all of the amounts owed and become current (no longer in default) on their loan?
a. Deed in lieu of foreclosure
b. Deficiency judgment
c. Loan modification
d. Reinstatement

1369) Which consumer protection act enacted in 1974 prohibits kickbacks and referral fees and requires written lender disclosure of estimated and final settlement costs?
a. ECOLA
b. Real Estate Settlement Procedures Act
c. The Community Reinvestment Act
d. The Equal Credit Opportunity Act

1370) The Truth in Lending Act requires lenders to make certain ______ to consumers.
a. Concessions
b. Disclosures
c. Loans
d. Rates available

1371) Which of the following is most susceptible to a predatory lender?
a. A borrower with poor credit
b. A family
c. A minority
d. An investor

1372) Loans made to high-risk borrowers, at higher interest rates and with higher fees, are ______.
a. Highly qualified loans
b. Prime loans
c. Secondary loans
d. Subprime loans

1373) Which of the following is a type of subprime loan usually offered to consumers with insufficient or marginal credit history?
a. Qualified mortgage with a safe harbor
b. Qualified mortgage with the rebuttable presumption
c. Qualified with ability to repay
d. Qualified with cash

1374) A qualified mortgage may not include interest-only payments and balloon payments, or lender fees and points that total more than 3% of the loan because these are considered ______ in relation to the qualified mortgage.
a. FHA and VA loan provisions
b. Qualified and allowable
c. Toxic loan features
d. Updated financing provisions

1375) Improving credit scores can also _____________________.
a. Increase credit risk for the lender
b. Increase how much house the borrower can afford
c. Increase risk for the borrower
d. Lower the borrower’s FICO® score

1376) Roth IRA rules state that a first-time homebuyer can withdraw funds with no penalties from a Roth IRA under which of the following conditions?
a. Account has been open for five years or longer
b. Borrower must not have other money saved
c. Distribution does not exceed $15,000
d. Funds are used for renovations only

1377) What effect does a pre-approval letter have on an offer?
a. It assures the seller that the buyer’s financial information has been verified.
b. It has no effect.
c. It kills it.
d. It provides some assurance to the seller, but not as much as a pre-qualification letter would.

1378) Which organization establishes relationships with financial institutions to offer home ownership programs that include down payment assistance through grants and favorable terms?
a. HUD
b. NHF
c. OSHA
d. RESPA

1379) The three companies that track credit for lenders are TransUnion, Equifax, and Experian. Which of the following is a true statement?
a. Each company a uses a slightly different scoring system
b. Each company posts the borrower’s FICO® Score
c. Scoring is consistent across the three companies
d. The higher the score, the higher the credit risk

1380) A borrower’s credit history and willingness and desire to repay a loan are elements of which C of credit?
a. Capacity
b. Capital
c. Character
d. Collateral

1381) From a lender’s perspective, what does a credit score on the low end indicate?
a. Better rates
b. Credit usage
c. Higher risk
d. Lower risk

1382) When your clients improve their credit score, they _____________.
a. Are likely to get better rates
b. Are likely to get better service
c. Must wait three years before applying for a loan
d. Must wait three years before it will show up in their FICO® score

1383) What are the three Cs of credit?
a. Cash, credit, change
b. Character, capital, capacity
c. Character, cash, credit
d. Collateral, character, credit

1384) Your clients are first-time home buyers. They can access up to _________ of their Roth IRA accounts, penalty free, for their down payment.
a. $0
b. $10,000
c. $20,000
d. $5,000

1385) Lenders look at a HELOC balance of less than $50,000 as if ________________.
a. It were a credit card
b. It were an asset
c. It were a paid mortgage
d. It were cash

1386) Increasing income improves your debt-to-income ratio. Which of the following factors is also considered by lenders?
a. Bonus income
b. Demographics
c. Place of work
d. Proof of permanent employment

1387) Who may borrow money from a Roth IRA to obtain down payment funds?
a. Any Roth IRA holder
b. First-time home buyers who’ve held a Roth IRA account for at least 10 years
c. First-time home buyers who’ve held a Roth IRA account for at least five years
d. Only 10-year Roth IRA holders

1388) What is the best way to reduce debt while maintaining cash reserves?
a. Increase spending, using cash
b. Increase tax deductions
c. Placing more on low-interest credit cards
d. Purchase assets

1389) Some first-time homebuyers tap into the bank of mom and dad. In what circumstance would the parents’ contribution be acceptable for loan qualification?
a. A balloon payment must not apply for the first three years.
b. Interest rates for the loan must not exceed 3%.
c. The borrower receives cash at closing.
d. The money is given as a gift with no expectation of repayment.

1390) A borrower is using a gift to fund part of his home purchase. What criteria for the gift holds the most weight in the lender’s eyes?
a. How long ago the gift was given
b. How the gift giver is related
c. The amount of the gift
d. The terms for repayment

1391) What is one way to improve your debt-to-income ratio without reducing your debt?
a. Increase credit card balance
b. Increase debt
c. Increase expenses
d. Increase income

1392) Buyers who intend to finance should understand that the higher their credit score, _______________.
a. The better interest rates they will qualify for
b. The higher their cash reserves
c. The higher their taxes
d. The more house they can afford

1393) As a real estate licensee, you should ______.
a. Be willing to loan money to your clients for their down payment
b. Calculate a buyer’s loan pre-qualification
c. Know the benefits of reverse mortgages
d. Understand what helps your buyer qualify for a mortgage

1394) You’re working with buyers who are close to being financially ready to buy. To prepare themselves for loan approval, they should __________.
a. Delay paying bills with high-dollar amounts to show better available cash
b. Pay down credit card balances
c. Pay off and close all but one or two credit cards
d. Take out a home equity line of credit to pay off credit card debt

1395) Which of the following is the credit score range?
a. 200 and 500
b. 300 and 850
c. 80 and 100
d. One and 10

1396) Paying down your credit cards is a great idea to reduce debt, but it can backfire. In the eyes of the lender, which action is the least damaging to loan qualification?
a. Keeping a high balance card and having several cards with nothing charged on them
b. Keeping one card with a high balance
c. Paying off several cards and cancelling them
d. Several open cards with available credit on them

1397) Most lenders like to see at least _______ months of cash reserves in addition to the buyers’ down payment.
a. 12
b. Eight
c. Four
d. Two

1398) Which of these provides a number that signifies your credit risk to lenders?
a. Credit analysis
b. Credit appraisal
c. Credit score
d. Credit tabulation

1399) Why do lenders care so much about their borrowers’ debt reduction?
a. It eliminates the need for credit.
b. It lowers affordability.
c. It makes it easier for borrowers to pay their mortgages.
d. It raises the debt-to-income ratio.

1400) This letter is created after a borrower submits information about their income and debts, which is verified by the lender, who then estimates how much a borrower qualifies for.
a. Approval letter
b. Disclosure letter
c. Pre-approval letter
d. Pre-qualification letter

1401) The Fair and Accurate Credit Transactions Act of 2003 requires the credit bureaus to _____________________.
a. Caution consumers that information in the credit report only influences FICO® scores
b. Not charge for credit reports
c. Provide consumers with a free copy of their credit report annually
d. Use FICO® scores

1402) A borrower’s ability to repay a loan is which C of credit?
a. Capacity
b. Capital
c. Character
d. Collateral

1403) What is the best-case scenario with a debt-to-income ratio?
a. 100% debt-to-income
b. 20% debt-to-income
c. 60% debt-to-income
d. 80% debt-to-income

1404) Improving a credit score can help a buyer ______________.
a. Avoid financing
b. Decrease debt
c. Increase savings
d. Qualify for better interest rates

1405) Buyers who want to look good to lenders prior to financing should employ which of the following strategies?
a. Close all credit card accounts
b. Keep high credit card balances to improve available cash
c. Pay off as much debt as possible, even if it means they will have no cash reserves
d. Reduce credit, but retain cash reserves

1406) First-time home buyers who’ve had a Roth IRA account for at least five years may withdraw an amount that equal to the contributions they’ve made to use as a down payment. After that, how much more can they withdraw to help with a home purchase without penalty?
a. Up to $10,000
b. Up to $20,000
c. Up to $25,000
d. Up to 50% of their fund balance, or $5,000, whichever is less

1407) Consumers may use Roth IRA funds to obtain the down payment for their home purchase. Which of the following scenarios is allowed?
a. Clayton, who has had his IRA for 10 years, withdraws $15,000 as part of his down payment on a vacation home.
b. Desiree, who has held her Roth IRA for three years, withdraws $7,000 to help fund a down payment on her third home.
c. Mary borrows $5,000 from her brother Jack’s Roth IRA for her home purchase.
d. Nevil, who has held his Roth IRA for five years, withdraws $8,000 to go toward a down payment on his first home.

1408) Which of these is an encroachment?
a. A path providing neighborhood access to a pond cuts through part of Bill’s property.
b. Jeff installed a sidewalk next to his driveway, six inches outside his property.
c. The city seized a formerly private parcel of land for public use.
d. The state took ownership of Dawn’s property when no heirs could be located following her death.

1409) What type of easement is created when the government exercises its right of eminent domain?
a. Easement by condemnation
b. Easement by grant
c. Easement by implication
d. Easement by prescription

1410) When is an easement by necessity created?
a. When a landowner sells a mineral right to another, access to the land is created by this type of easement.
b. When a property doesn’t have direct access to a road, this type of easement is created across any intervening properties.
c. When a property owner allows others to use the property for a specific purpose, this type of easement is created.
d. When the government requires a portion of a property for a public good, the property is taken with this type of easement.

1411) Seth owns a property on a small island with six other property owners. Recently, Seth built a fishing pier along the water’s edge; however, the pier is actually on his neighbor’s property, which Seth has no rights to. What might this be an example of?
a. Easement
b. Encroachment
c. Estate
d. Eviction

1412) What does CC&R stand for?
a. Carparks, curbs, and roadways
b. Conditions, consideration, and reports
c. Condominiums, cooperatives, and residential housing
d. Covenants, conditions, and restrictions

1413) Sam decided to build a swimming pool in his yard. He built it one foot inside his neighbor’s property. What is this an example of?
a. Easement
b. Eminent domain
c. Encroachment
d. Necessity

1414) Which of the following statements about an easement appurtenant is TRUE?
a. It does not involve an adjoining property.
b. It’s an encumbrance on the dominant property.
c. It’s a permanent right that runs with the land.
d. It’s a temporary agreement between two parties.

1415) You’ve just purchased a rural property, and the attorney at the closing tells you, “You have a dominant estate.” What does that mean to you?
a. The property comes with an easement in gross granted to the utility company.
b. You’ll be using an easement across your neighbor Jim’s property.
c. Your property has an easement granted to your neighbor Jim, allowing him to cross your property to access his land.
d. Your property has direct access to a road and doesn’t require an easement.

1416) This is a shared side of a structure; each owner owns his section of the wall in severalty, with the ownership subject to an easement by the other.
a. A party wall
b. Easement by implication
c. Easement by necessity
d. Easement by prescription

1417) A part of your property is used by the local utility company to maintain its power lines. What’s this an example of?
a. Easement
b. Eminent domain
c. Encroachment
d. Illegal use

1418) Which of the following is an easement?
a. A path providing neighborhood access to a pond cuts through part of Bill’s property.
b. Jeff installed a sidewalk next to his driveway, six inches outside his property.
c. The city seized a formerly private parcel of land for public use.
d. The state took ownership of Dawn’s property when no heirs could be located following her death.

1419) The doctrine of “use it or lose it” is known as the doctrine of ______.
a. Eminent domain
b. Escheat
c. Laches
d. Taking

1420) Steven owns 114 acres of wooded, rural land. The abundance of wildlife on his property means that his friends are always asking for permission to hunt on it during various game seasons. If Steven gives a friend permission to hunt on his land, it can be said that he has given his friend a ______.
a. Covenant
b. Easement
c. Grant
d. License

1421) Regarding restrictive covenants/deed restrictions, to what does the doctrine of laches refer?
a. Creation
b. Enforcement
c. History
d. Types

1422) If John suspects that his neighbor’s deck encroaches on his back yard, what should John do to determine whether an encroachment exists?
a. He should check legal description of the property.
b. He should consult a survey for the exact property lines.
c. He should find out if the neighbor’s deed has been recorded or not.
d. He should investigate whether there is a tax lien on their neighbor’s property.

1423) Brent and Kathy recently bought a property in a gated community. While doing some landscaping they noticed that their neighbor’s shed seems to be over the lot line and on their property. What should they consult to determine if the shed is an encroachment?
a. Deed
b. HOA covenant
c. Mortgage
d. Survey

1424) Which of the following is true about easements appurtenant?
a. Only the dominant estate may terminate an easement.
b. Parcels with easements may not be joined.
c. The necessity of an easement by necessity could be terminated even if the reason for the necessity still exists.
d. They can be terminated if dominant and servient lands are merged into one parcel.

1425) Which of the following is a type of encumbrance?
a. Counter-offers
b. Deed restrictions
c. Improvements
d. Options

1426) Kurt bought a vacant lot in a development that was 85% completed. When he started working with the builder to lay out where the house and driveway would be, they found he would need an easement because his driveway would spill over onto the adjacent lot by a few feet. Kurt owns the _______ estate or tenement.
a. Dominant
b. Gross
c. Prescriptive
d. Servient

1427) Without this easement—usually involving access to a road—the owner requiring the right of passage would be landlocked.
a. Easement appurtenant
b. Easement by necessity
c. Easement by prescription
d. Easement in gross

1428) Eloise is interested in buying a bungalow on the outskirts of the city. Her agent is reviewing the property details and informs her that there are several easements on the property. In particular, the gas company has a right of way because the natural gas line for the neighborhood runs through the back of the lot. What type of easement would this be?
a. Easement appurtenant
b. Easement by necessity
c. Easement by prescription
d. Easement in gross

1429) Rancher Ross was thrilled to learn he could sell his property’s mineral rights to a company that’s looking for oil. He didn’t realize he’d also created an ______, allowing them to bring drilling equipment onto his land.
a. Easement by implication
b. Easement by necessity
c. Easement by prescription
d. Easement by right

1430) Sam grants Steve a license to hunt deer on his property. Which of the following statements about the license is true?
a. Sam can revoke the license at any time.
b. The license is a permanent privilege.
c. The license is assignable.
d. The license is inheritable.

1431) Gene and Alex bought a property that backed up to a neighborhood park. The previous owner mentioned that ever since the park was built eight years ago, the next door neighbor who works at the park has cut through the yard to get to the park rather than going around via the streets, which saves about half a mile. What kind of easement is this?
a. Easement by prescription
b. Easement in gross
c. Express easement
d. Visible easement

1432) Elizabeth’s property is encumbered by an easement in gross with which of these entities?
a. The neighbor who constructed his new backyard fence six inches across Elizabeth’s property line
b. The owner of the empty lot down the street that Elizabeth uses as a vegetable garden with the owner’s permission
c. The resident of the adjoining property to whom Elizabeth has given permission to store some items in her gardening shed
d. The utility company that needs to access the power line that crosses a corner of Elizabeth’s land

1433) Sondrine’s beach cottage has a right of way that allows nearby residents to get to the beach. What is the primary difference between a right of way and an easement?
a. A right of way always has a defined expiration date.
b. A right of way is always for an indefinite time period.
c. A right of way offers the right to use the property for some function, as compared to just as a pass-through.
d. A right of way provides a pass-through, but not a right to use the property.

1434) Because of the topography of Elsie’s and Lawrence’s respective yards, Elsie had to install her fence at the top of a hill, which is actually two feet over Lawrence’s property line. What word or phrase best describes Elsie’s fence?
a. Easement in gross
b. Encroachment
c. Servient estate
d. Visible easement

1435) Which of the following describes a deed restriction?
a. It can be placed on a single property, an entire subdivision, or a neighborhood.
b. It ensures compliance with zoning and public safety and preserves property value.
c. It must be placed by the property owner within one year of purchasing the property.
d. It’s limited to three years in duration.

1436) Why is it important for a buyer to know if any easements or encroachments exist on a property?
a. Both easements and encroachments affect the property’s lot size, enjoyment, and use, which can affect a property’s value.
b. Both easements and encroachments are illegal. The buyer could end up in court.
c. It helps determine special assessment levies.
d. The buyer will have to remove these before the property can be re-sold.

1437) Terry purchases a property. The deed includes a description of an easement given to the neighboring property. This is an easement created by ______.
a. Condemnation
b. Express grant
c. Implication of law
d. Prescription

1438) Jason, your client, is developing a subdivision of 140 houses. He may place deed restrictions on as many as ______ properties.
a. 140 (100%)
b. 35 (up to 25%)
c. 70 (up to 50%)
d. Zero

1439) Who or what entity is the beneficiary of a completion bond?
a. The bank
b. The developer
c. The homeowner
d. The municipality

1440) Which map must be filed within two years of approval of the initial map?
a. Final map
b. Lot map
c. Parcel map
d. Tentative map

1441) Which document is issued by the state real estate commissioner to help protect purchasers of subdivision plots?
a. Feasibility study
b. Public report
c. Subdivision map
d. Subdivision regulations

1442) Which document is filed with the local municipality to coordinate development with the community’s general plan?
a. Feasibility study
b. Public report
c. Subdivision map
d. Subdivision regulations

1443) Which of the following types of subdivisions are exempt from filing a public report?
a. A commercial subdivision
b. A planned development subdivision
c. A stock cooperative
d. Campground

1444) Which type of subdivision is defined as parcels of land that purchasers own individually, with no commonly owned areas?
a. Common interest subdivision
b. Standard subdivision
c. Subdivided lands project
d. Undivided interest subdivision

1445) Once the market study has been conducted, a developer can apply to ________________ for approvals.
a. Local agencies only
b. State and local agencies
c. The board of governors
d. The municipal court

1446) In which type of common interest subdivision do the owners have exclusive rights to a unit, as well as a shared interest in the common areas?
a. Condominium project
b. Planned development
c. Stock cooperative project
d. Timeshare

1447) What is the purpose of the Subdivided Lands Law?
a. To coordinate subdivision development with local municipalities
b. To dissuade developers from subdividing lands
c. To enforce public land dedication minimums on developers
d. To protect consumers from subdivision fraud and misrepresentation

1448) Which type of subdivision is defined as a property owned jointly by all purchasers, who are tenants in common with all other owners?
a. Common interest subdivision
b. Standard subdivision
c. Subdivided lands project
d. Undivided interest subdivision

1449) A plat book can be defined as ______.
a. A collection of subdivision regulations and ordinances
b. A public record of subdivision plats held at the county clerk’s office
c. The recorded legal description of a lands lot dimensions
d. Zoning map

1450) A piece of land that’s been split into lots where homes will be built is called a ______.
a. Development project
b. Market
c. Neighborhood
d. Subdivision

1451) The first step in the subdivision development process is the market study. This step includes ______.
a. A feasibility study
b. Fair housing interviews
c. Raising venture capital
d. Underwriting financing

1452) What is the purpose of the Subdivision Map Act?
a. To coordinate subdivision development with local municipalities
b. To dissuade developers from subdividing lands
c. To enforce public land dedication minimums on developers
d. To protect consumers from subdivision fraud and misrepresentation

1453) What is the longest time (with extensions) a developer can have to file a final map after receiving tentative map approval?
a. Eight years
b. Five years
c. One year
d. Two years

1454) Which of the following must be disclosed in a subdivision’s public report, according to the Subdivided Lands Law?
a. The filing date of the first tentative map
b. The financial history of the developer
c. The interest to be acquired by the purchaser
d. The number of parcels to be sold with or without pools

1455) Why may a developer have to pay impact fees?
a. To address a violation of zoning ordinances
b. To address the burden on existing infrastructure caused by the development
c. To apply for a use variance from the Zoning Board of Appeals
d. To pay for an Environmental Impact Statement

1456) In which type of common interest subdivision are the owner’s shareholders in a corporation that owns the property?
a. Condominium project
b. Planned development
c. Stock cooperative project
d. Time-share

1457) When developers consider what to do with leftover pieces of land that remain after the subdivision is built, they are considering what to do with ____________.
a. Municipal boundaries
b. Outlots
c. Parcel overage
d. Residual development

1458) Which of the following must be disclosed in a subdivision’s public report, according to the Subdivided Lands Law?
a. A six-month plan to ensure the removal of any blanket encumbrances
b. Available financing payment options
c. Conditions and restrictions of use included with the purchase of the property
d. The license number of any agent marketing the property

1459) What’s an outlot?
a. A parcel of land left over after the subdivision is built
b. The cornerstone space of a retail center occupied by an anchor tenant
c. The main roadway leading into and out of a subdivision
d. The parcel of land where a home in a subdivision is built

1460) In order for a Adroc Development Corp. to receive approval to build a new subdivision, it is required to create a community park bordering the development. The developer agreed to do so, but what may the city require to ensure the park actually gets completed?
a. A completion bond
b. A feasibility study
c. An IOU
d. A promissory note

1461) What is an impact fee?
a. A fee charged to conduct an environmental assessment
b. A fee paid to clean up the site after development is complete
c. A fee paid to offset the development’s negative effects on the natural environment
d. A fee paid to offset the increased burden on area infrastructure that the new subdivision may create

1462) Which of the following describes a subdivision plat?
a. A collection of subdivision regulations and zoning ordinances
b. A map that defines zoning districts
c. A record in the county clerk’s office that can serve as the legal description on a deed
d. A record of the previous owners of a tract of land

1463) What kind of contracts can a developer enter into if they have obtained an interim report?
a. Any type of contract
b. Binding contracts
c. Free-finance contracts
d. Non-binding reservations

1464) Which type of subdivision is defined as separately owned parcels where purchasers also share interest in common areas?
a. Common interest subdivision
b. Standard subdivision
c. Subdivided lands project
d. Undivided interest subdivision

1465) Which of the following must be included on the subdivision map?
a. Distance from the county clerk’s office
b. Existing and proposed easements and utility locations
c. Financial plan information
d. Solar angles at the subdivision’s latitude

1466) _______ fees are paid to state and local agencies for items such as permits and utility hook-ups.
a. Developer
b. Impact
c. Municipal
d. Residential

1467) Which type of common interest subdivision limits an owner’s exclusive use of the property to a certain period of time?
a. Condominium project
b. Planned development
c. Stock cooperative project
d. Time-share

1468) Chadwick is a developer considering purchasing a large piece of unimproved land for a subdivision development. What should he do before committing to the project?
a. Apply for financing.
b. Conduct a feasibility study.
c. Phone a friend.
d. Start marketing the property to see if there are buyers.

1469) How long after receiving tentative map approval does a developer have before a final map must be filed, according to the Subdivision Map Act?
a. Eight years
b. One year
c. Three years
d. Two years

1470) Which public report can be issued while awaiting final approval and allows developers to take reservations for up to a year while waiting for the final report?
a. Amended report
b. Conditional report
c. Interim report
d. Preliminary report

1471) Which type of common interest subdivision retains individually owned parcels of land, but the owners also share an interest in common areas?
a. Condominium project
b. Planned development
c. Stock cooperative project
d. Time-share

1472) Larry is a developer. His current project involves him taking a large parcel of land, dividing it into hundreds of lots and building single family homes on those lots then selling the properties to home buyers. What is Larry developing?
a. A condominium
b. A cooperative
c. An apartment complex
d. A subdivision

1473) What’s a subdivision?
a. A developed property zoned for multiple uses, such as residential and commercial
b. An unimproved piece of land zoned for residential use
c. A piece of land that has been split into lots where homes will be or have been built
d. A retail development in which one building houses several commercial tenants

1474) Which of the following involves street specifications, lot size, single- or multi-family dwellings, utilities provided and easements, how far houses must be set back from property lines, and drainage requirements?
a. Abstract of title
b. Alquist-Priolo Act
c. CEQA
d. Subdivision regulations

1475) A community apartment project is an example of what type of subdivision?
a. Common interest subdivision
b. Standard subdivision
c. Subdivided lands project
d. Undivided interest subdivision

1476) Determining who the buyers of subdivision homes are, the market niche to target, and whether to have different price points for various phases of development are all considerations in the ___________.
a. Environmental assessment
b. Feasibility study
c. Marketing strategy
d. Subdivision lot release plan

1477) Which type of contract allows developers to enter into binding contracts with purchasers?
a. Binding report
b. Conditional report
c. Interim report
d. Preliminary report

1478) Which of the following must be included on the subdivision map?
a. Account number of the completion bond associated with the project
b. Interest to be acquired by purchasers
c. Marketing plan
d. Widths and names of all streets

1479) Which map only contains the boundary and division lines for lots of land?
a. Final map
b. Lot map
c. Parcel map
d. Tentative map

1480) Who approves subdivision maps?
a. A local judge
b. The county clerk
c. The local planning board
d. The real estate commissioner

1481) What must happen before a subdivision’s tentative map can be approved?
a. A dedication of at least 15% of the land must be given to the local government
b. An in-person site review by all planning board members must occur
c. A notice must be filed with the local planning board, with an opportunity for a hearing
d. The real estate commissioner must sign off on it

1482) How long does a subdivision developer have to respond to a D&R order if they wish to contest it?
a. 10 days
b. 15 days
c. 30 days
d. 90 days

1483) What does the Alquist-Priolo Earthquake Fault Zoning Act have to do with regard to subdivision development?
a. Issues grants to fix faults
b. Limits development next to coastal areas
c. Regulates development in earthquake fault zones and requires disclosure of fault zones to purchasers
d. Requires all houses in fault zones be clearly labeled on the front door or entryway

1484) When financing is structured, when are disbursements typically made?
a. As each home is sold
b. As materials are needed
c. As stages of construction are completed
d. On a particular day of each month

1485) What does a D&R stand for when issued by the state real estate commissioner?
a. Delivery and Research
b. Demolition and Recovery
c. Desist and Refrain
d. Do Not Resuscitate

1486) What does a lot release provision require?
a. That all of the loan be repaid when 50% of the lots are sold
b. That a portion of the loan be repaid when each lot is sold
c. That the developer release deed restrictions on the lots when sold
d. That the lot be released from the subdivision plat when sold

1487) What recourse does a subdivision developer have to a D&R order?
a. Nothing. D&Rs are immediate and irreversible once issued
b. Refund purchasers’ deposit money
c. Sue the commissioner for improper use of authority
d. They can write a request to have a hearing and contest the order
1488)
1489) Which option is an acceptable way for a subdivider to handle a purchaser’s deposit money?
a. Place the deposit money in an escrow account until the blanket encumbrance is lifted
b. Place the money in the company’s bank account
c. Reinvest it back into the property development
d. Use the money to purchase newer equipment

1490) Owner participation is often a key factor in the approval of a construction loan. What does owner participation refer to?
a. Capital provided by the owner’s investors
b. The developer’s own funds used as a down payment
c. The developer’s participation in construction
d. The participation of individual homeowners
1491)
1492) Subdivision financing usually comes from _____________________.
a. A combination of sources
b. A waterfall loan
c. Developer capital
d. One single source
1493)
1494) Construction loans usually come with a higher interest rate because they involve _____ for the lender.
a. Less participation
b. More approvals
c. More paperwork
d. More risk

1495) What does a developer have to do if they are selling lots to a subdivision that is in another state?
a. Disclose the state and location the property is in
b. Petition for clemency
c. Register the project with the BRE
d. Request a permit from the governor to sell out-of-state property
1496)
1497) What is the definition of a blanket encumbrance?
a. An encumbrance on subdivisions with an intended use for industrial textile factories
b. A security bond that protects against encumbrances to subdivided property
c. Both personal and real property are used as security for a loan
d. When more than one lot, unit, or interest in a subdivision is used to secure payment of a trust deed note or other lien of encumbrance

1498) What type of encumbrance exists when one or more property in a subdivision is used to secure a loan?
a. Blanket encumbrance
b. Easement by appurtenant
c. Judgment lien
d. Mechanic’s lien

1499) A buyer is purchasing a home for $400,000 and is financing $300,000. What is the loan-to-value ratio?
a. 72%
b. 75%
c. 82%
d. 96%

1500) A square room has an area of 144 square feet. How long is each side?
a. 10 feet
b. 12 feet
c. 24 feet
d. 72 feet

1501) A buyer is purchasing a property for $500,000. His lender’s loan-to-value ratio is 90%. How much is the buyer financing?
a. $400,000
b. $450,000
c. $50,000
d. $500,000

1502) Jane is purchasing a property for $310,000 and plans to finance $250,000. What is the loan-to-value ratio? (Round to the nearest percentage.)
a. 79%
b. 81%
c. 83%
d. 85%

1503) Your client Ellis is purchasing a property for $520,000. He made a down payment of $200,000 and plans to finance $320,000. What is the LTV ratio as rounded to the nearest percentage?
a. 50%
b. 55%
c. 62%
d. 65%

1504) A property is 60 feet long and 75 feet wide. What is its area?
a. 135 square feet
b. 175 square feet
c. 3600 square feet
d. 4,500 square feet

1505) Property is being sold for $15,000 an acre. A buyer spent $75,000. How many acres did he buy?
a. Eight
b. Five
c. Six
d. Ten

1506) Property is being sold for $15,000 an acre. How much will five acres cost?
a. $15,000
b. $30,000
c. $45,000
d. $75,000

1507) How do you calculate the area for a rectangular room?
a. Add the length of all four sides.
b. Multiply the length of all four sides.
c. Multiply the length of two opposite sides.
d. Multiply the length times the width.

1508) A triangle has a base of 10 feet and a height of eight feet. What is its area?
a. 180 square feet
b. 18 square feet
c. 40 square feet
d. 80 square feet

1509) Your buyer client, Max, just signed a purchase agreement for a $520,000 home. He has a 60% LTV ratio, and his lender’s charging a 1.5% loan origination fee. What loan origination fee can Max expect to pay at closing?
a. $2,200
b. $3,120
c. $4,200
d. $4,680

1510) A property is 30 square yards. How many square feet is this?
a. 270 square feet
b. 27 square feet
c. 300 square feet
d. Nine square feet

1511) Your buyer clients, the Fowlers, obtained an 80% loan on their $600,000 home. At closing, they paid $8,250 for points. How many points did the Fowlers pay to lower their interest rate?
a. 0.017
b. 1.17
c. 1.72
d. 7.2

1512) How much would a lot that is 300 feet wide by 400 feet long cost at $900 per acre?
a. $2,479
b. $2,700
c. $3,600
d. $6,300

1513) A buyer is purchasing a property for $500,000. He has a down payment of $50,000 and is financing the rest. What’s the amount of the loan origination fee if the lender charges one-and-a-half points?
a. $5,000
b. $6,750
c. $750
d. $7,500

1514) How do you calculate the area for a triangle?
a. Add all three sides together
b. Multiply base times height
c. Multiply half the base times the height
d. Multiply the length of all three sides together

1515) A buyer is purchasing a property for $400,000. His lender’s loan-to-value ratio is 80%. How much is the buyer financing?
a. $320,000
b. $360,000
c. $400,000
d. $80,000

1516) How do you calculate the area for a square room?
a. Add the length of all four sides together
b. Add the length of two sides together
c. Multiply the length of all four sides together
d. Multiply the length of two sides together

1517) How large is one square yard?
a. 10 square feet
b. Nine square feet
c. Six square feet
d. Three square feet

1518) You’re working with a buyer who’s purchasing a home that appraised at $80,000. The buyer is obtaining a 90% loan, and the lender will charge a one-point origination fee at closing. How much will the loan origination fee be?
a. $712
b. $720
c. $728
d. $800

1519) A basement is 40 feet long and 20 feet wide. What is its area?
a. 600 square feet
b. 60 square feet
c. 800 square feet
d. 80 square feet

1520) A discount point equals 1% of the _______.
a. Appraised value
b. List price
c. Loan amount
d. Sales price

1521) Your clients Earnestine and Sammie Griffin are financing $180,970 for a $500,000 home. The Griffin’s lender will approve an interest rate of 4.5% if they pay two discount points at closing. How much is this?
a. $10,000
b. $3,619.40
c. $6,380.60
d. $8,143.65

1522) How many feet are in one yard?
a. 10
b. Nine
c. Six
d. Three

1523) Your buyer client Heather just signed a purchase agreement for a $520,000 home. The LTVR is 60%. How much is Heather putting down on the purchase?
a. $208,000
b. $220,000
c. $300,000
d. $312,000

1524) A property is 21,780 square feet. How many acres is this?
a. Half an acre
b. One acre
c. Three acres
d. Two acres

1525) One mile contains ______ feet.
a. 2,400
b. 3,620
c. 4,800
d. 5,280

1526) A triangle has a base of three feet and a height of eight feet. What is its area?
a. 11 square feet
b. 12 square feet
c. 24 square feet
d. Six square feet

1527) Another closing appointment is approaching. These clients are purchasing a $160,000 home. If they have a down payment of 25% and the bank charges two points at closing, how much are they paying in points?
a. $2,400
b. $2,450
c. $2,475
d. $3,200

1528) James is purchasing some property. How will he determine the cost of purchasing that land?
a. Divide the cost per unit by the land area
b. Divide the land area by the cost per unit
c. Multiply the land area by $100 per acre
d. Multiply the land area by the cost per unit

1529) A buyer is purchasing a property for $400,000. His loan-to-value ratio is 80%. The lender also charges a one-point loan origination fee. How much is the loan origination fee?
a. $3,200
b. $3,600
c. $4,000
d. $800

1530) Gunther’s gross monthly income is $3,800, and he has no monthly debt payments. The lender’s qualifying ratios are 28% for the housing ratio and 36% for the total DTI ratio. What’s the maximum housing payment Gunther can afford?
a. $1,064
b. $1,297
c. $1,368
d. $1,492

1531) A buyer with a 20-year, $419,000 loan at a 4.25% interest rate has a monthly principal and interest payment totaling $2,594.59. If $1,483.95 is interest, how much is applied toward principal for that payment?
a. $1,110.64
b. $1,246.10
c. $1,578.57
d. $1,780.75

1532) A borrower has a 30-year, $500,000 loan with an interest rate of 6.25%. His monthly principal and interest payment is $3,078.59. What’s the total amount he’ll pay over the life of the loan?
a. $1,108,292.40
b. $500,000
c. $608,292.40
d. $750,000

1533) A buyer with a 15-year, $250,000 loan at a fixed 5.5% interest rate has a monthly principal and interest payment totaling $2,042.71. What is the total amount of interest the borrower will pay over the course of the loan?
a. $117,687.80
b. $250,000.00
c. $367,687.80
d. $735,375.60

1534) A buyer has a 30-year, $400,000 loan with a 7% interest rate. How much of the first month’s mortgage payment is interest?
a. $2,333.33
b. $28,000
c. $3,100
d. $933.33

1535) A buyer with a 30-year, $750,000 loan at a 5.75% interest rate has a monthly principal and interest payment totaling $4,376.80. If $3,593.75 is interest, how much is applied to principal?
a. $251.66
b. $3,593.75
c. $4,376.80
d. $783.05

1536) A buyer with a 15-year, $250,000 loan at a 5.5% interest rate has a monthly principal and interest payment totaling $2,042.71. What’s the total amount the borrower will pay back over the life of the loan?
a. $250,000.00
b. $30,640.65
c. $367,687.80
d. $735,375.60

1537) George has $625 in monthly debt obligations, and his anticipated mortgage payment is $1,828. His gross income is $9,869, and his net income is $7,895. What’s his housing ratio?
a. 15.23%
b. 18.52%
c. 23.15%
d. 30.71%

1538) You’re working with buyers who are pre-approved for a loan of as much as $200,000. Assuming they lock in a 5.25% interest rate at closing, how much of their first payment will go toward interest?
a. $824
b. $825
c. $874
d. $875

1539) Traditionally, lenders’ qualifying mortgage rules use a range of percentages to qualify for both the housing debt-to-income ratio and the total debt-to-income ratio. What are those ratio ranges?
a. 25% to 28% for housing; 33% to 36% for total debt
b. 25% to 28% for total debt; 33% to 36% for housing
c. 25% to 33% for housing; 28% to 36% for total debt
d. 25% to 33% for total debt; 28% to 36% for housing

1540) The Gatlins’ lender tells them they can afford a monthly payment of $1,830 on their new home loan. What interest rate are the Gatlins getting if this is an interest-only loan with a principal balance of $349,000?
a. 0.524%
b. 5.24%
c. 6.29%
d. 6.39%

1541) Tess has $385 in monthly non-housing debt obligations, and her anticipated mortgage payment is $1,103. Her gross income is $7,598, and her net income is $5,815. What’s her total DTI (debt-to-income ratio)?
a. 14.51%
b. 18.96%
c. 19.58%
d. 25.58%

1542) A buyer with a 15-year, $250,000 loan at a 5.5% interest rate has a monthly principal and interest payment totaling $2,042.71. How many payments will the borrower make over the course of the loan?
a. 15
b. 180
c. 240
d. 360

1543) Phoebe’s gross monthly income is $4,200, and she has $360 in monthly non-housing debt payments. The lender’s qualifying ratios are 28% for the housing ratio and 36% for the total DTI ratio. What’s the maximum housing payment she can afford?
a. $1,075
b. $1,152
c. $1,176
d. $1,512

1544) A borrower has a 30-year, $500,000 loan with an interest rate of 6.25%. His monthly principal and interest payment is $3,078.59. What’s the total amount of interest he’ll pay over the course of the loan?
a. $1,108,292.40
b. $500,000
c. $608,292.40
d. $750,000

1545) Gary has an 80% LTVR on his new $318,000 townhome with an annual interest rate of 4.125%. What’s his interest payment the first month?
a. $1,093.13
b. $1,126.25
c. $874.50
d. $901

1546) A buyer anticipates a house payment of $1,000 per month, with monthly homeowner association fees of $150. The buyer also has a car payment of $400 per month. If the buyer earns a monthly gross income of $5,000, what’s the housing ratio?
a. 20%
b. 23%
c. 28%
d. 31%

1547) A buyer has a 30-year, $750,000 loan with a 5.75% interest rate. How much of the first monthly payment is interest?
a. $10,869.57
b. $3,500.93
c. $3,593.75
d. $3,750.27

1548) Juan secures a fixed rate amortized 30-year loan for $295,000 at 4.25%. If his monthly P&I payment is $1,750, how much interest does he pay in the second month of the loan?
a. $1,038.59
b. $1,042.29
c. $1,044.79
d. $1,750

1549) A buyer has a 15-year, $250,000 loan with a 5.5% interest rate. How much of the first monthly payment is interest?
a. $1,145.83
b. $13,750.28
c. $1,388.89
d. $916.67

1550) Grant and Adela arrange a $150,000 loan at 4.5% annual interest with their lender. What’s their monthly interest amount?
a. $550.25
b. $562.50
c. $570
d. $575.75

1551) At closing, ______ is an amount that’s divided proportionately between the buyer and the seller.
a. A discount point
b. An origination fee
c. Mortgage interest
d. Proration
1552)
1553) Your client Michael feels like he’s getting a great deal on the purchase of his home, since he’s paying only $385,000 and the assessed value is $492,500. He asked you to estimate his monthly property taxes. You know the rate for his jurisdiction is .52%.
a. $159.72
b. $166.83
c. $213.42
d. $234.00

1554) Your seller client has an offer for $300,000. If the agreed-upon commission is 5%, what is net to seller before any other costs are taken into account?
a. $280,000
b. $285,000
c. $290,000
d. $295,000

1555) A buyer is purchasing a $1.5 million property in a city that imposes a transfer tax of $12 per $1,000, in addition to the county transfer tax of 55 cents per $500. What is the total transfer tax this property is subject to?
a. $1,800
b. $18,000
c. $19,650
d. $825

1556) A listing brokerage received a $25,000 check from a property sale, which represented the brokerage’s 2.5% split. The total commission was 5%. How much did the property sell for?
a. $100,000
b. $10 million
c. $1 million
d. $2 million

1557) A licensee sells a property for $325,000. The total commission rate is 6%, which is split evenly with the cooperating agent. What amount goes to the listing broker?
a. $0
b. $19,500
c. $4,875
d. $9,750

1558) Jamal is selling his townhome for $242,000, and closing is set for July 20. He has a loan balance of $193,000 at a 3.7% interest rate, and he’s current on his payments. Jamal has prepaid the property taxes ($1,165) and insurance ($745). Using a calendar year proration method for calculations, how will these amounts appear on Jamal’s closing statement?
a. $523.16 seller credit
b. $523.16 seller debit
c. $798.89 seller credit
d. $872.45 seller credit

1559) Maurice received an offer of $480,000 for his home. The commission on the sale is 6%. Maurice’s mortgage payoff is $78,500. He has additional closing expenses totaling $2,200. What will Maurice net from the sale of his home, rounded to the nearest whole dollar?
a. $289,850
b. $370,500
c. $374,930
d. $398,020

1560) The daily property tax rate is $1.23 and closing is August 31. Assuming the buyer owns the property on closing day, and the seller hasn’t made any payments, what will the seller owe at closing using the calendar year proration method? Round to the nearest whole dollar.
a. $151
b. $242
c. $298
d. $449

1561) A licensee sells a property for $525,000. The total commission rate is 6%, which is split evenly with the cooperating agent. What amount goes to the listing broker after this split?
a. $15,750
b. $3,000
c. $31,500
d. $7,875

1562) Seller Adelaide and buyer Colin close on a transaction for two rental condos on March 15. They live in a state where the seller is considered the owner of the property on the day of closing. The combined rental income per month is $4,000. How much rental income can Colin expect to earn in March?
a. $2,011.56
b. $2,064.48
c. $2,193.51
d. $2,300.25

1563) The Davises pay the annual property tax of $1,825 on their lake house every January. On a whim, they sell the lake house to the Bennets to buy a Winnebago and travel the country. Closing is set for July 31, and the buyers own the day of closing (pay prorated expenses through the day of closing). Using the calendar year proration method (assume that it’s not a Leap year), how much of the pre-paid property tax was the Davises’ responsibility?
a. $1,050
b. $1,055
c. $1,064.70
d. $1,069.77

1564) The Simpsons are buying the Martins’ house for $415,000, and closing is set for March 15. The Martins have a loan balance of $230,000 at a rate of 4.7% and have prepaid property taxes ($2,506) and insurance ($1,400), and they also have mortgage interest to consider. Using a 365-day proration method, calculate the prorated amount the Simpsons will owe the Martins at closing. Assume February has 28 days this year. The sellers own the day of closing.
a. $1,997.62
b. $3,113.46
c. $604.95
d. $792.54

1565) What must you do to convert a fraction to a decimal?
a. Divide the top number by the bottom number.
b. Move the decimal point two places to the left and remove the percent symbol.
c. Move the decimal point two places to the right and remove the percent symbol.
d. Move the decimal point two spots to the right and add a percent symbol.

1566) What must you do to convert a percentage to a decimal number?
a. Divide the smaller number by the larger number.
b. Divide the top number by the bottom number.
c. Move the decimal point right two spots and add a percent symbol.
d. Move the decimal point two places to the left and remove the percent symbol.

1567) Lorena and Julio purchased a home for $205,950. Their loan amount was $164,760, and the assessed value is now $200,500. Their tax rate is 1.5%. How much will their monthly taxes be?
a. $111.04
b. $191.37
c. $250.62
d. $86.49
1568)
1569)
1570) How are real estate-related prorations usually calculated?
a. On a 12-month basis
b. On a 360- or 365-day basis
c. On a 52-week basis
d. On a quarterly basis

1571) Seller Garrett has a closing date of October 11. He’s already paid his annual taxes of $1,825. Assuming the buyer owns the day of closing and assuming a calendar year proration, which of the following statements is true regarding the property tax proration?
a. Garrett will be credited $1,825 at closing.
b. Garrett will be credited $410 at closing.
c. Garrett will be debited $1,415 at closing.
d. Garrett will be debited $410 at closing.
1572)
1573)
1574) Buyer Maria and seller Doug are closing on June 1. Maria’s mortgage loan is $927.86, and $871.86 will go to interest in the first month. Maria will have to pre-pay interest for June using the 360-day proration method. If Doug owns the closing day, what Maria’s prepaid interest cost be at closing?
a. $842.74
b. $871.80
c. $896.97
d. $927.90

1575) A seller wants to net $10,000 after the broker’s commission of 6% and a loan balance of $250,000 are paid. For how much does the property need to sell?
a. $250,000
b. $265,957
c. $276,596
d. $650,000

1576) Sue is selling her house for $265,000. Closing is set for June 19, and Sue owns the day of closing. She has a loan balance of $78,000 at a 4.2% rate, and she’s current on her payments. She prepaid the property taxes ($1,350) and insurance ($925). Using a calendar-year proration method for calculations, how will these amounts appear on Sue’s closing statement?
a. Credit of $1,059.10
b. Credit of $1,350 and debit of $484.04
c. Credit of $721.50
d. Debit of $1,214.85

1577) A seller wants to break even after the broker’s commission of 5% and loan balance of $300,000 are paid. At what price must the house sell?
a. $150,000
b. $300,000
c. $315,789
d. $450,000

1578) Dale is purchasing a property that has an assessed value of $35,190. If the tax rate is 5%, what will he likely pay annually in property taxes?
a. $17,595
b. $1,759.50
c. $17.60
d. $35.19

1579) James is the buyer’s agent. A property sold for $450,000. The total commission rate is 5%, with the listing agent receiving 3% and the buyer’s agent (the cooperating broker) receiving 2%. James has a 75/25 split with his broker (meaning he’ll receive 75% of the commission paid to his broker for the sale). What commission does James receive?
a. $16,875
b. $22,500
c. $6,750
d. $9,000

1580) A real estate transaction has a closing date of May 20. The seller, who’s responsible for closing costs up to but not including the day of closing, has already paid annual property taxes of $1,949. How will the closing statement reflect the proration for the seller? Use a calendar year proration, and round to the nearest dollar.
a. Credited $1,207
b. Credited $742
c. Debited $1,207
d. Debited $742
1581)
1582) Kelly is purchasing a property that has an assessed value of $160,000. If the tax rate is 2.5%, what will Kelly likely pay annually in property taxes?
a. $160
b. $400
c. $4,000
d. $40,000

1583) Your seller wants to net $100,000 after the 5% commission is paid. Assuming no closing costs, at what price does the home need to sell for the seller to net this amount?
a. $105,163.16
b. $105,263.16
c. $105,363.16
d. $105,463.16

1584) Your buyer purchases a property for $120,000. It has an assessed value of $130,000. The annual rate for property taxes is $2.10 per $100 of the property’s tax value paid on a semi-annual basis. On the next tax bill, what amount is due?
a. $1,260
b. $1,365
c. $2,100
d. $619

1585) A seller wants to net $10,000 after the broker’s commission of 6% and a loan balance of $250,000 are paid. For how much does the property need to sell?
a. $250,000
b. $265,957
c. $276,596
d. $650,000

1586) Maurice received an offer of $480,000 for his home. The commission on the sale is 6%. Maurice’s mortgage payoff is $78,500. He has additional closing expenses totaling $2,200. What will Maurice net from the sale of his home, rounded to the nearest whole dollar?
a. $289,850
b. $370,500
c. $374,930
d. $398,020

1587)
1588) What must you do to convert a decimal to a percentage?
a. Divide the larger number by the smaller number.
b. Divide the top number by the bottom number.
c. Move the decimal point two places to the left and remove the percent symbol.
d. Move the decimal point two spots to the right and add a percent symbol.

1589) Sue is selling her house for $265,000. Closing is set for June 19, and Sue owns the day of closing. She has a loan balance of $78,000 at a 4.2% rate, and she’s current on her payments. She prepaid the property taxes ($1,350) and insurance ($925). Using a calendar-year proration method for calculations, how will these amounts appear on Sue’s closing statement?
a. Credit of $1,059.10
b. Credit of $1,350 and debit of $484.04
c. Credit of $721.50
d. Debit of $1,214.85

1590) A property valued at $1 million is returning a net annual income of $85,000. What’s its cap rate?
a. 7.0%
b. 7.5%
c. 8.0%
d. 8.5%

1591) In investments, each type of depreciation is defined by a particular event. Which of the following best describes a depreciation type and an event it’s tied to?
a. Economic depreciation and cost recovery
b. Economic depreciation and physical deterioration
c. Operating depreciation and taxing authority
d. Tax depreciation and physical deterioration

1592) A three-unit income-producing property has a sales price of $600,000. Monthly gross rent is estimated at $6,000. What’s the gross rent multiplier?
a. 100x
b. 10x
c. 83x
d. 8.3x

1593) “Income received before expenses are deducted” is the definition of ______.
a. Effective gross income
b. Gross income
c. Net income
d. Taxes

1594) Which one of the following is a description of economic depreciation?
a. Investors can take a business deduction for annual depreciation.
b. The asset is worth less because the economy took a downturn.
c. The asset is worth more because of capital improvements.
d. The owner/investor is making less income from the property than previously.

1595) Capitalization is the process of using ______.
a. Capital to build equity
b. Income to calculate value
c. Sales to determine income
d. Value to calculate income

1596) A comparable residential property sold one month ago for $300,000. That property is on a busy street, whereas the subject property you’re preparing to list is a corner lot on a quiet street. What should you do to determine the subject property’s market value?
a. Adjust the comparable’s price down
b. Adjust the comparable’s price up
c. Adjust the subject’s price down
d. Adjust the subject’s price up

1597) Yanni is an investor who has just purchased a building for $300,000. Similar buildings are returning a rate of 7%. What can Yanni anticipate his annual net operating income to be?
a. $18,700
b. $21,000
c. $30,000
d. $7,000

1598) In the capitalization formula, what does the I stand for?
a. Impact
b. Income
c. Interest
d. Investment

1599) Jennifer is the owner of the single-family residence in which she resides. How long can she take to depreciate her property?
a. 27.5 years
b. 39 years
c. Indefinitely
d. Zero years (personal residences cannot be depreciated)

1600) Malcolm purchased an old convenience store, and after renovations will open a small vegan grocery. He paid $517,000, of which $417,000 was for the building, and renovations cost him $107,000. What does the amount $524,000 represent?
a. Cash position
b. Depreciable basis
c. Income baseline
d. Investment basis

1601) Based on capitalization rate alone, which investment will have the higher appraised value: one with a 10% cap rate or one with a 4% cap rate?
a. 10%
b. 4%
c. Cap rates have nothing to do with appraised value.
d. It’s impossible determine based on cap rate alone.

1602) When a subject property has a feature that a comparable property doesn’t have, what should the licensee preparing a CMA do?
a. Adjust the comparable’s price down
b. Adjust the comparable’s price up
c. Adjust the subject’s price down
d. Adjust the subject’s price up

1603) Which one of the following statements about investors and tax depreciation is true?
a. Depreciation is not limited to investment properties.
b. Investors are not allowed to take a business deduction for annual depreciation.
c. Investors can depreciate an appreciating asset.
d. Most investors try to avoid depreciation.

1604) A property valued at $500,000 is returning a net annual income of $45,000. What is the cap rate for this investment?
a. 12.5%
b. 7.5%
c. 8%
d. 9%

1605) A comparable property sold one month ago for $400,000. That property has a three-car garage, whereas the subject property you’re preparing to list only has a two-car garage. What should you do to determine the subject property’s market value?
a. Adjust the comparable’s price down
b. Adjust the comparable’s price up
c. Adjust the subject’s price down
d. Adjust the subject’s price up

1606) The sales price, acquisition costs, and capital improvement costs (such as renovations or additions) of a property combine to make up what?
a. Appraisal value
b. Basis
c. Debt coverage
d. Market value

1607) A 30-unit income-producing property has a sales price of $9 million. Annual gross income is estimated at $750,000. What’s the gross income multiplier?
a. 10x
b. 12x
c. 14x
d. 8x

1608) Maya owns a small graphics shop and is meeting with her tax professional to review the year’s receipts and other tax documentation. Her tax advisor lets her know that she has an appreciating asset, which makes Maya very happy! Which of the following is Maya’s appreciating asset?
a. Her new 3-D printer
b. The digital printing press that she bought six months ago
c. The retail addition she put onto the building she already owned
d. The van she’ll use for trade show setups

1609) When a comparable property has a feature that the subject property doesn’t have, what should the licensee preparing a CMA do?
a. Adjust the comparable’s price down
b. Adjust the comparable’s price up
c. Adjust the subject’s price down
d. Adjust the subject’s price up

1610) “Effective gross income” most closely means ______.
a. Income after losses from vacancies and credit losses are deducted from potential gross income
b. Income after operating expenses are deducted
c. Income after taxes are deducted
d. Income that a property could bring if it were leased at full capacity

1611) The income a property could bring if it’s fully leased is known as the ______.
a. Depreciated gross income
b. Effective gross income
c. Net operating income
d. Potential gross income

1612) The gross income multiplier for an area is 12x. If the estimated annual rent is $10,000, what’s the property’s estimated value?
a. $10,000
b. $100,000
c. $12,000
d. $120,000

1613) Your client Joseph has a commercial income-producing property. How long does he depreciate this property?
a. 27.5 years
b. 39 years
c. Indefinitely
d. Zero years (commercial properties cannot be depreciated)

1614) The Siegels are purchasing a commercial investment property and plan to use straight-line depreciation on their financial statements and tax calculations. Which of the following would NOT be included in the Siegels’ depreciation basis calculations?
a. The cost of the electrical system upgrades they did after purchase
b. The cost of the title insurance for the property
c. The loan origination and lender fees that they paid at closing
d. The price that they paid for the property, minus any land costs

1615) You know a property’s effective gross income and its operating expenses. How would you calculate the net operating income?
a. Add income to tax deductions.
b. Multiply annual return by .05 of the property’s value.
c. Multiply monthly income by 12.
d. Subtract operating expenses from effective gross income.

1616) What’s the definition of “potential gross income”?
a. After-tax income
b. Before-tax income
c. Income received after expenses are deducted
d. Income that a property could bring if fully leased

1617) Based on capitalization rate alone, which investment involves more risk: one with a 12% cap rate or one with a 8% cap rate?
a. 12%
b. 8%
c. It’s impossible determine based on cap rate only.
d. They’re equally risky.

1618) Capitalization is the process of using ______.
a. Capital to build equity
b. Income to calculate value
c. Sales to determine income
d. Value to calculate income

1619) Tyrell and Barb bought a commercial investment property in 2009 during the real estate market downturn. Through what year will they be able to depreciate the investment?
a. 2019
b. 2029
c. 2039
d. 2048

1620) If a property has a potential gross income of $50,000, a vacancy and collection loss of 10%, and taxes are another 10%, what’s the effective gross income?
a. $40,000
b. $45,000
c. $50,000
d. $55,000

1621) A property has 10 units and is 90% occupied. Rent is $500 per month. Total vacancy and collection loss equals 10%. What’s the potential gross income?
a. $4,500
b. $5,000
c. $54,000
d. $60,000

1622) Carmen is a builder. Which of the following is true about construction codes as they apply to her next project?
a. Carmen must adhere to all federal, state, and local building codes, which are enforced at the local level.
b. Carmen must adhere to local, but not state or federal, building codes.
c. Carmen must adhere to local, state, and federal building codes, but only if her project is a commercial (non-residential) project.
d. If Carmen builds four or fewer homes, building codes don’t apply at the local level.
1623) Although codes can be established at the local, state, and federal level, they’re generally enforced by local or county authorities.

1624) Which of the following might a builder use to conceal unsightly areas, reduce noise levels, define space, and prevent soil erosion?
a. Foundation
b. Grading
c. Landscaping
d. Paving

1625) May homeowners perform work on their own properties without a contractor’s license?
a. No, a license is needed for any work, no matter who does the work.
b. Yes, homeowners are exempt from contracting laws.
c. Yes, provided it is for a kitchen or bathroom remodel only.
d. Yes, provided the homeowner doesn’t intend to sell right away.

1626) Who must stamp a blueprint to verify its accuracy?
a. An architect or engineer
b. The builder
c. The buyer
d. The real estate licensee

1627) If a site has improper drainage, what might happen?
a. Flooding can occur.
b. Water bills will be higher.
c. Water bills will be lower.
d. Water tables will be lower.

1628) What type of requirements must a contractor applicant meet in order to obtain a license?
a. Pay a fee and post a bond
b. Pay a fee, post a bond, meet educational and experience requirements
c. Perform a 30-hour practicum with a licensed contractor, pay a fee, and post a bond
d. Post a bond and pass an exam

1629) Bob is quite proud of the 600-square-foot garage he’s included in his new home. According to national standards, how can he include the garage square footage in his total?
a. He cannot.
b. He can only include it as unfinished square footage.
c. He can only include it if it cost more than $50,000 to construct, including labor.
d. He can only include it if its value is more than 33% of the home’s value.

1630) According to national standards for measuring square footage of a dwelling, which space should be included?
a. Attached accessory apartment
b. Garage
c. Unfinished attic
d. Unfinished basement

1631) When you’re working with a client who is looking for a home to purchase, why should you determine if any additions to the home have been permitted?
a. Because the buyer may be subject to fees from an HOA if the addition doesn’t meet the CC&Rs.
b. Because the permitting process ensures building code compliance.
c. Because this may provide negotiating power on the offering price.
d. Because this will determine the amount of property tax the buyer will pay.

1632) Cory is applying for his contractor’s license. He has met the educational and experience requirements, and has filed a Certificate of Self-Insurance with the Contractor’s State License Board. What else must he do?
a. Complete a 30-hour practicum with a licensed contractor
b. Post a cash deposit or bond with the state
c. Provide proof of citizenship
d. Register with HUD

1633) Before a builder can obtain a permit, two items must be submitted to the building department. What are these items?
a. A blueprint and building specifications
b. A list of code discrepancies and an environmental assessment
c. A list of contractors and the developer’s bonding number
d. A plat map and contractor verification

1634) Kenny is updating a bathroom. Under what circumstances is a contractor’s license required?
a. If he is not the homeowner and the work costs less than $500
b. If he is preparing his house to sell
c. If he is the homeowner
d. If he is the homeowner and the work costs more than $500

1635) Which of the following individuals is exempt from contractor licensing requirements?
a. Diedre, who is remodeling her kitchen because extended family is coming to live with her
b. May, who is updating her bathroom to prepare her house for market
c. Ray, who is replacing his neighbor’s garage door for $550
d. Thomas, who is putting in a covered porch for Susan at a cost of $1,250

1636) At which level does the Department of Housing and Community Development operate?
a. Federal
b. International
c. Local
d. State

1637) What is another name for a blueprint?
a. Building plan
b. Plat map
c. Road map
d. Tax assessor map

1638) Positioning a house on a lot in order to take advantage of a view is called ______.
a. Dedication
b. Infrastructure
c. Paying the piper
d. Siting

1639) You’re measuring the square footage of a single-family home you’ve just built. What national requirements apply to your measurements?
a. There are no national requirements.
b. You must measure from the inside out.
c. You must measure from the outside in.
d. You must measure from the top down.

1640) Jeb is performing work for a cousin and charging him $450. What requirements relate to Jeb?
a. He must be a licensed contractor.
b. If Jeb is not licensed, he may not charge his cousin for the work.
c. If Jeb is not licensed, he must disclose it.
d. Jeb must post a bond with the state equal to 1.5 times the cost of the work ($675).

1641) Which of the following is true regarding national standards for measuring square footage?
a. They’re required.
b. They’re voluntary but recommended.
c. You should measure to the nearest foot.
d. You should only include attic square footage if the ceiling height exceeds six feet.
1642)
1643) What can proper drainage do for a building site?
a. Improve aesthetics
b. Prevent water pressure problems
c. Protect the foundation
d. Provide a water feature

1644) What benefit is provided by grading a building site?
a. It can improve drainage.
b. It provides a level foundation for out-buildings.
c. It provides an alternative to public water.
d. It provides a score that can be used to market the property.

1645) Glen is a skilled carpenter, and he is building his own home on the unimproved lot he and his wife Sandy purchased. Sandy takes responsibility for handling the permitting and inspection process. Which part of their custom home will Glen and Sandy NOT need to have a permit and inspection for?
a. Interior design
b. Materials used
c. Method of construction
d. Plumbing, electric, and sanitation systems

1646) What are building specifications?
a. A blueprint
b. A survey
c. A written narrative of the building plan
d. The building plan
1647)
1648) What will you find in building specifications?
a. Color choices and a list of appliance vendors and sub-contractors
b. Energy ratings and certifications, and water flow indicators
c. Fixture and furnishing choices
d. Major systems, construction details, and landscaping

1649) At which level of government are building codes generally enforced?
a. Board
b. Federal
c. Local
d. State

1650) Which type of site provides better natural drainage?
a. Hilly site
b. Level site
c. Paved site
d. Sloped site

1651) What is the most severe penalty a person may receive for performing contracting work without appropriate licensure?
a. Criminal charges
b. Fines
c. Revocation of their bond
d. Revocation of their license

1652) A new development is complete, and almost all the homes are now occupied. All is well for the first year, but after a season of heavy rains many homeowners are experiencing issues with sewage backing up into their homes. What process should have prevented this from happening?
a. Compliance with building codes and inspection by a local health official to ensure sanitation and drainage systems were adequate
b. Establishment of special assessment districts to fund adequate drainage systems for the community
c. Professional home inspections ordered by homebuyers prior to closing
d. Seller disclosure requirements regarding potential environmental hazards in a flood plain

1653) What are the national requirements for measuring a dwelling’s square footage?
a. Measurement is required for any home valued at more than $500,000.
b. Only a contractor/builder may measure it.
c. Only the homeowner may measure it.
d. There are no national requirements.

1654) You’re a builder who wants to follow the national standards for measuring the square footage of a home you’ve built. Which of the following areas do you include?
a. A master suite
b. An unfinished attic with six-foot ceilings
c. Attached garage
d. Detached pool house
1655)
1656) According to national standards, under what circumstances may a pool house be included in total square footage?
a. If it is attached to the main house by a hallway or stairway
b. If it is larger than 500 square feet
c. If it is smaller than 500 square feet
d. If its total cost is more than $25,000

1657) What’s one measure a builder would likely take to improve a site’s drainage?
a. Grade the lot
b. Install a moat
c. Install concrete walls
d. Pave the lot

1658) Which type of insulation is no longer manufactured due to concerns about formaldehyde?
a. Flexible
b. Rigid
c. UFFI
d. Vermiculite

1659) Foundation walls are constructed on top of which of these items?
a. Footings
b. Girders
c. Joists
d. Slabs

1660) What must a foundation wall or floor have if it’s in contact with the soil?
a. A radon detector
b. A radon detector and drainage field
c. A sump pump
d. A vapor barrier and termiticide

1661) Which of the following is part of the eave system?
a. Composites
b. Fascia
c. Framing
d. Shingles

1662) Which of the following is a type of loose-fill insulation?
a. Batting
b. Fiberglass roll
c. Vermiculite
d. Wallboard

1663) Architect Camilla is drawing up plans for a house. Her client is passionate about wanting it to be a Craftsman style. Which of the following parts of the roofing system should Camilla check most closely to make sure her client is happy?
a. The flashing that’s installed near the edge of the eaves in the front
b. The pitch
c. The ridge beam, or girder
d. The soffit

1664) What’s used on areas in direct contract with the ground in order to keep moisture out of the structure?
a. Grading
b. Level
c. Termiticide
d. Vapor barrier

1665) Foundation walls are often constructed out of which of the following?
a. Gypsum, concrete, or brick
b. Poured concrete, bricks, or concrete blocks
c. Poured concrete or steel girders
d. Wood, steel, or brick

1666) What is slab on grade?
a. A basement
b. A footing
c. A foundation
d. A wall

1667) When constructing a foundation, besides a vapor barrier, what might local building codes require?
a. Bricks
b. Poured concrete instead of blocks
c. Soil
d. Termiticide

1668) Which structural component is described as “the concrete base that supports the foundation of a building”?
a. Beam
b. Footing
c. Foundation
d. Lally column

1669) Which of the following is a true statement about insulation types?
a. Loose insulation includes batting and UFFI
b. Reflective and sprayed are types of insulation
c. Vermiculite often comes in 15.5-inch rolls for ease of carrying
d. Wallboard and UFFI are types of flexible insulation

1670) Which type of framing is most commonly used in housing?
a. Balloon
b. Platform
c. Post-and-beam
d. Sub-form

1671) What are constructed on top of footings?
a. Foundation walls
b. Joists
c. Lally columns
d. Steel girders

1672) Where would you likely find loose-fill insulation?
a. Attic floor
b. Basement
c. Crawl space
d. Walls

1673) As the most important foundation building block, what’s the purpose of a foundation footing?
a. Act as a mold
b. Make up the foundation wall
c. Provide decorative curb appeal
d. Support the entire weight load of the building

1674) This round steel column is filled with concrete and rests on a base plate called the column footing pad.
a. Beam
b. Girder
c. Lally column
d. Sill plate

1675) What is the purpose of a termiticide?
a. Increases air circulation
b. Prevents moisture build-up
c. Prevents pest damage
d. Prevents water intrusion

1676) In which type of framing are the framing members much larger and spaced much farther apart?
a. Balloon
b. Platform
c. Post-and-beam
d. Sub-form

1677) Where would you likely find blanket insulation?
a. Basement
b. Bedrooms
c. Crawl space
d. Rafters

1678) Which of the following is a framing member?
a. Footings
b. Rafters
c. Soffits
d. Sticks

1679) All of these are components of the flooring system EXCEPT _______.
a. Beams
b. Lally columns
c. Sill plates
d. Soffits

1680) Why is UFFI insulation no longer used?
a. Environmental concerns
b. Not energy efficient
c. Too expensive
d. UFFIs are an endangered species

1681) Which type of framing involves a single system of wall studs run from the foundation through the first and second floors to the ceiling support?
a. Balloon
b. Platform
c. Post-and-beam
d. Sub-form

1682) Why does blanket insulation often come in fiberglass rolls that are 15.5 inches wide?
a. Building code requires it to be no more than 16 inches wide
b. Ease of carrying
c. For ease of blow-in
d. To fit between framing members

1683) What is slab on grade?
a. A basement
b. A footing
c. A foundation
d. A wall

1684) Where would you likely find loose-fill insulation?
a. Attic floor
b. Basement
c. Crawl space
d. Walls

1685) Why must a water heater be strapped?
a. Insulates for energy efficiency
b. Prevents bursting
c. Prevents theft
d. Prevents tipping
1686)
1687) A carbon monoxide detector would be required for which of the following dwellings?
a. A duplex with electric heat and appliances
b. A single family home with a detached garage and electric appliances
c. A single-family home with an attached garage
d. A single family home with an attached pool house

1688) What is a seller’s responsibility regarding water heaters?
a. Ensure energy efficiency
b. Provide buyer notice that it meets earthquake requirements
c. Provide energy efficiency disclosure to buyer
d. Replace before placing the home on the market if the water heater is more than five years of age

1689) Which of the following plumbing elements in a dwelling should be vented?
a. Sink, toilet and tub
b. Sink, toilet, tub, and washing machine
c. Washing machine and sink
d. Washing machine and toilet

1690) Which system uses a central exhaust fan and ducts to move stale air out of the building?
a. Air conditioning
b. Forced air
c. Heating
d. Ventilation

1691) Raymond was comparing two air conditioners. Air conditioner “A” had an EER of five; air conditioner “B” had an EER of eight. What does Raymond know about these two units?
a. A is far more efficient
b. A will cost less to use
c. B is far more efficient
d. B will cost more to use

1692) “That plumbing fixture must be vented.” For which plumbing fixture or fixtures might this statement apply?
a. All plumbing fixtures
b. Sink
c. Sink and toilet
d. Toilet

1693) What type of heating system uses a furnace to heat cool air and transports the warm air via ducts?
a. Electric heating system
b. Forced air system
c. Hot water system
d. Radiant system

1694) All single-family homes sold on or after January 1, 1986 must have operable _____________ detectors.
a. Radon
b. Smoke
c. Smoke and carbon monoxide
d. Smoke, carbon monoxide and radon

1695) Which system pulls stale air out of the kitchen, bathrooms, and other places where smells and pollutant concentrations occur?
a. Air conditioning
b. Forced air
c. Heating
d. Ventilation

1696) Which type of heating system takes cool air and passes it through the heat source using a fan or blower?
a. Boiler
b. Forced air
c. Hot water
d. Steam

1697) You’re evaluating an air conditioning unit. Based on the following energy efficiency ratios, which one is the most energy efficient?
a. 3.0
b. 4.5
c. 5.0
d. 6.5

1698) In older houses built before 1950, which type of electrical system would frequently be found?
a. BX
b. Conduit
c. Greenfield
d. Romex

1699) What type of heating system uses a boiler to produce steam, which is transferred to rooms through a pipe?
a. Forced warm air system
b. Hot water system
c. Radiant system
d. Steam system

1700) You’re a seller of a home built in 1975. What must you have installed before selling your property?
a. Carbon monoxide detector
b. Smoke and carbon monoxide detector
c. Smoke, carbon monoxide and radon detector
d. Smoke detector

1701) We’ve all had this happen: We turn on every appliance in the kitchen and are happily cooking away, then all of a sudden, we’re plunged into darkness and silence. What probably just happened?
a. A circuit breaker tripped.
b. An earthquake has hit.
c. The food we’re cooking splashed into an uncovered outlet.
d. There is a storm outside, and a power line has been hit, taking out your electricity.

1702) What does PVC stand for?
a. Pipe-venting conductor
b. Plumbing viscosity volume
c. Polarity-voltage conductor
d. Polymerized vinyl chloride

1703) What does EER stand for with regard to air conditioners?
a. Electricity energy runoff
b. Energy efficiency rating
c. Energy efficiency ratio
d. Energy Star Rating

1704) Which of the f ollowing is a type of water heater?
a. A/C vent
b. Blower
c. Register
d. Resister

1705) Your clients, the Rawlings, forgot to include smoke detectors or a disclosure about the smoke detectors when they sold their property to the Englebrights. What could happen?
a. The Englebrights can back out of the sale.
b. The Englebrights can sue the Rawlings and you for up to $1,000, plus attorney costs.
c. The Rawlings could be fined $100 plus attorney costs.
d. The Rawlings must pay the Englebrights’ heating bills for the first year.
1706)
1707) Air conditioner efficiency is rated based on _________, which calculates the amount of energy or electricity needed to run a unit.
a. BTUs
b. CSIs
c. EERs
d. ICCs

1708) Where is aluminum wiring used in construction today?
a. In appliances
b. In branch circuit wiring, which goes from the panel through the walls to the outlets and switches
c. In motor vehicles
d. Where the current is heaviest, such as at the service entrance

1709) If a seller fails to install a smoke detector and also fails to provide a smoke detector disclosure to the buyer, what damages may apply?
a. Up to $100, plus court costs
b. Up to $100 total
c. Up to $500, plus court costs
d. Up to $500 total
1710)
1711) Joe is finally remodeling his parents’ home from the late 1960s and, to his mother’s delight, it’s time to install a new washer and dryer. As he is hooking up the new machines, what type of wiring is he likely to encounter?
a. Aluminum
b. Copper
c. Gold
d. Silver

1712) Shannon received a tax credit due to her energy choice option. She likely selected ___________ to provide energy to her home.
a. Coal
b. Gas
c. Oil
d. Wind

1713) Which of the following is a type of pipe often used in construction?
a. Aluminum
b. Polymerized Vinyl Chloride
c. Titanium
d. Wood-framed metal

1714) Which of the following is a type of water heater?
a. Coal
b. Geolectric
c. Tankless
d. Wind
1715)
1716) In an air conditioning system, what takes heat from the air and brings it to the refrigerant?
a. Compressor
b. Condenser
c. Evaporator
d. Recycler

1717) What’s supposed to be installed wherever water can be found, such as in bathrooms, kitchens, basements, utility rooms, garages, outdoors, and near swimming pools, to protect people from getting electrocuted?
a. BX
b. GFCI
c. NEC
d. PVC

1718) If you suspect there might be an environmental issue with a property you’re selling but you’re not sure, what should you do?
a. Ask a lot of questions, ask for help, and disclose everything if issues do exist.
b. Ignore your hunch; it’s not your responsibility.
c. Refuse to sell the property.
d. Sell the property as quickly as possible and cash that commission check.

1719) Your client, Eric, is interested in purchasing an industrial property to start a new business. You’ve recommended that soil, air, and water testing be done, but Eric is on a tight budget and doesn’t feel these tests are necessary. What should you do?
a. Keep records of your recommendations and a written response from Eric.
b. Perform the tests yourself.
c. Refuse to be a part of the transaction.
d. Support Eric in his decision and do nothing further.

1720) Which of the following is one of a licensee’s responsibilities when the licensee suspects an environmental issue exists on a property?
a. Hire environmental experts to perform audits of all property when representing the seller.
b. Investigate and discover hidden environmental issues associated with a property.
c. Know when, where, and how to seek expert assistance regarding environmental issues.
d. Pay for any required environmental audits.

1721) Which of the following scenarios accurately represents your environmental disclosure responsibility as a real estate licensee?
a. You must disclose all known environmental hazards for both residential and commercial properties.
b. You must disclose all known environmental hazards for commercial properties only; residential disclosure is the seller’s sole responsibility.
c. You must disclose all known environmental hazards for residential properties only; commercial disclosure is the seller’s sole responsibility.
d. You must disclose all suspected environmental hazards for both residential and commercial properties.

1722) Mercedes is assisting a buyer who wants to purchase a home in a particular neighborhood. When looking at homes with her client, where should Mercedes look for potential environmental concerns?
a. At her broker’s office
b. Inside the home and other structures
c. The area where the home is built, outside the home, and inside the home
d. The outdoor areas of the property

1723) A licensee must understand risks and provide disclosure of known environmental issues. A licensee must also do which of the following?
a. Be an expert in every aspect of environmental science.
b. Hire professional inspectors.
c. Know when to ask questions.
d. Perform environmental testing.

1724) Your client, Eric, is interested in purchasing an industrial property to start a new business. You’ve recommended that soil, air, and water testing be done, but Eric is on a tight budget and doesn’t feel these tests are necessary. What should you do?
a. Keep records of your recommendations and a written response from Eric.
b. Perform the tests yourself.
c. Refuse to be a part of the transaction.
d. Support Eric in his decision and do nothing further.

1725) Stan is a home inspector who’s evaluating a home for potential buyers. He pointed out that neither of the two bathrooms had vent fans installed. Why is this a potential problem that will be noted on the inspection report?
a. Bathroom fans can mitigate lead paint particles.
b. Bathroom fans vent radon to the exterior of the home.
c. The lack of air circulation in a moist room can lead to mold growth.
d. Unseemly smells located that close to the kitchen are a problem.

1726) Radon can cause _____, if inhaled.
a. Brain cancer
b. Heart attacks
c. Lung cancer
d. Permanent paralysis

1727) What must be provided to consumers who are buying homes built prior to 1978?
a. A list of lead-abatement contractors
b. An Environmental Conservation Law handout
c. The EPA pamphlet titled “Protect Your Family from Lead in Your Home”
d. The hotline number for Lead Poison Control

1728) What act requires sellers, landlords, and their agents to disclose any known lead hazards in the home?
a. DECs Lead Reduction Act
b. Federal Lead Disclosure Act
c. Residential Lead-Based Paint Hazard Reduction Act
d. Universal Lead-Based Paint Disclosure Act

1729) Which one of the following is a reason mold is an environmental issue?
a. It can grow without water or moisture.
b. It damages what it grows on and can be unhealthy to humans.
c. It produces off gasses.
d. It releases radon as it breaks down.

1730) Which one of the following may cause carbon monoxide to be present in a home?
a. A detached garage
b. A gas furnace
c. An electric dryer
d. An electric stove

1731) What makes urea formaldehyde foam insulation a health hazard?
a. It contains asbestos.
b. It contains formaldehyde.
c. It contains radon.
d. Levels increase over time.

1732) Volatile organic compounds can make indoor air quality toxic. Where are VOCs likely to be found?
a. Air fresheners
b. Bamboo
c. Jute
d. Wool

1733) Certain homes and other buildings are designated as “target” dwellings by the EPA. What does this mean?
a. There are specific requirements for contractors performing lead abatement or remodeling these homes.
b. These are the most desirable homes for green living.
c. These homes cannot be inhabited until lead abatement has been performed.
d. These homes have been targeted for removal.

1734) Which one of the following is a substance found in air fresheners, cleansers, paint, and building materials that at high levels can make indoor air quality toxic?
a. BPA
b. Natural scents
c. PCBs
d. VOCs

1735) Under what circumstances should real estate licensees advise buyers to have listed homes tested for radon?
a. In all circumstances, regardless of location
b. Only if the home is located in a high-risk area
c. Only if the home were built before 1978
d. When they’re feeling ill

1736) What are the first symptoms of carbon monoxide poisoning?
a. Dizziness and nausea
b. Heart palpitations
c. Ringing in the ears
d. Sore throat

1737) In addition to providing a disclosure of any lead-based paint hazards in homes built before 1978, what must a seller’s agent provide to prospective buyers?
a. Assurance that the home is lead-free before offering it for sale
b. EPA lead safety pamphlet
c. List of reputable home improvement contractors
d. Written proof that the home is lead-free

1738) What is the name of the fibrous material found in rocks and soil worldwide that was used in construction of older homes and causes chronic lung disease and cancer?
a. Asbestos
b. Lead paint
c. Radon
d. Silicone

1739) Dizziness and nausea are the first signs of what?
a. Asbestosis
b. Carbon monoxide poisoning
c. Good air quality
d. Radon exposure

1740) Radon is an important environmental issue because it causes what?
a. Brain cancer
b. Heart attacks
c. Lung cancer
d. Permanent paralysis

1741) Why is asbestos an environmental issue?
a. It causes brain clouds.
b. It causes chronic lung disease.
c. It causes depression.
d. It takes up space in a landfill.

1742) Which one of the following statements about asbestos is true?
a. Homeowners can safely remove it.
b. It’s harmful only if left in place.
c. It’s not harmful at low levels.
d. No amount of it is considered safe.

1743) Children and pregnant women are especially vulnerable to poisoning caused by what hazard?
a. Asbestos
b. Lead
c. Oil
d. Pigment

1744) Which of the following statements is true about radon?
a. It’s a man-made chemical.
b. It’s a naturally occurring gas.
c. It’s only a problem outdoors.
d. It’s safe at any level.

1745) When lead is present, what rule covers remodeling of the property?
a. Lead Removal, Repair, and Paint (RRP) Rule
b. Lead Removal, Repair, and Renovation (RRR) Rule
c. Lead Renovation, Repair, and Painting (RRP) Rule
d. Lead Repair, Replace, and Painting (RRP) Rule

1746) Which one of the following is a true statement about radon testing?
a. It can only be performed by a licensed professional.
b. It’s not necessary.
c. Test kits are available for purchase.
d. Test kits are only available to certified professionals.

1747) Which one of the following actions is a recommended (and in some states, required) method for protecting occupants of a home from carbon monoxide poisoning?
a. Have a licensed professional install a vent system if carbon monoxide levels are unacceptable.
b. Install a carbon monoxide alarm.
c. Remove all gas-powered devices from the home.
d. Replace all gas-powered appliances with newer electric models.

1748) Microscopic pieces of mold that float around in the air are called what?
a. Isotopes
b. Mites
c. Moldies
d. Spores

1749) Which of the following is a means by which radon may enter a home?
a. In garage debris
b. In public water systems
c. Through floor joists
d. Via trees and shrubs

1750) Which substance when it’s absorbed into the body prevents blood’s ability to transport oxygen?
a. Carbon monoxide
b. Lead
c. Mold
d. Radon

1751) How can a homeowner identify asbestos?
a. By hiring a certified asbestos consultant
b. By looking at it with a black light
c. By performing a normal visual inspection
d. By using an asbestos test kit

1752) Which agency applies the “target” designation to a dwelling and has set specific requirements for lead abatement and remodeling of these homes?
a. DARPA
b. The DEC
c. The EPA
d. The Local Lead Standards Designation Board

1753) Your buyer client is under contract to purchase a home. During the inspection, asbestos is discovered in the home. Which of the following is true about asbestos?
a. It’s an invisible and odorless gas.
b. It’s a potential health hazard.
c. It’s common and of no concern.
d. It’s something homeowners should remove themselves.

1754) In any given property, where will you most likely find the highest radon levels?
a. Closets
b. Garage
c. Highest level
d. Lowest level

1755) Which one of the following is a true statement about radon?
a. It’s a manmade chemical.
b. It’s a naturally occurring gas.
c. It’s a problem outdoors.
d. It’s safe at any level.

1756) Why is asbestos considered hazardous?
a. It can cause serious lung disease and cancer.
b. It causes a skin rash.
c. It causes dementia if levels of exposure are high.
d. It causes premature birth.

1757) What is true about carbon monoxide in the home?
a. It cannot be prevented.
b. It is odorless and tasteless.
c. It is slow to cause symptoms.
d. It is usually not dangerous.

1758) The EPA has special requirements for contractors performing lead abatement or remodeling in “target” dwellings. These requirements relate to what?
a. Cost of the abatement or repairs
b. “Green home” certification from the EPA
c. Safety precautions to protect occupants and workers from lead dust
d. Targeting the dwelling for removal

1759) According to the EPA, at what level does radon become a health concern requiring mitigation?
a. .04 picocuries per liter of air
b. 1.4 picocuries per liter of air
c. 2.4 picocuries per liter of air
d. 4.0 picocuries per liter of air

1760) Radon is found in well water and where else?
a. Ceiling tiles
b. Insulation
c. Plastics
d. Soil

1761) Homes built in which one of the following years are more likely to have asbestos present?
a. 1960
b. 1990
c. 2000
d. 2010

1762) Who is most vulnerable to lead poisoning and its effects?
a. Children
b. Men
c. Pets
d. Women over age 70

1763) ______ is called the “silent killer” because it’s odorless, tasteless, and deadly.
a. Carbon monoxide
b. Formaldehyde
c. Radon
d. VOCs

1764) Lead is a highly toxic metal that may cause a range of health problems, especially in young children. Which one of the following is a true statement about lead hazards?
a. Lead causes blindness on contact with the eyes.
b. Lead is a confounding factor in diabetes.
c. Lead is associated with coronary heart disease.
d. Lead may cause behavioral problems, learning disabilities, seizures, and, in extreme cases, death.

1765) Which product’s fibers are dangerous when inhaled because they can lodge in the lungs and intestines, causing cancer?
a. Asbestos
b. Lead paint
c. Radon
d. Silicone

1766) Microscopic pieces of mold that float around in the air are called what?
a. Isotopes
b. Mites
c. Moldies
d. Spores

1767) Which one of the following is a true statement about asbestos?
a. It can be safely removed by homeowners.
b. It is harmful only if left in place.
c. It is not harmful at low levels.
d. It is not safe at any level.

1768) The Residential Lead-Based Paint Hazard Reduction Act requires sellers, landlords, and their agents to ______ any known lead hazards in the home.
a. Assess the degree of
b. Disclose
c. Negotiate fees for removal of
d. Remove

1769) What are the first symptoms of carbon monoxide poisoning?
a. Dizziness and nausea
b. Heart palpitations
c. Ringing in the ears
d. Sore throat

1770) Which one of the following is a reason mold is an environmental issue?
a. It can grow without water or moisture.
b. It damages what it grows on and can be unhealthy to humans.
c. It produces off gasses.
d. It releases radon as it breaks down.

1771) Sam and Monique knew that the old industrial site that they purchased needed some environmental cleanup, but they don’t have the cash and put cleanup on hold. The EPA hired its own crew to deal with groundwater issues because of industrial solvents and billed Sam and Monique $164,000 when the job was complete. If Sam and Monique don’t pay the bill, which one of the following could happen?
a. Sam and Monique will forfeit their ownership rights to the site and will be forced to foreclose.
b. The EPA can seek damages in court for up to three times the actual cleanup costs.
c. The EPA will have to find the former owners of the site and bill them.
d. The EPA will have to fund the cleanup itself.

1772) An investor is interested in purchasing and rehabilitating a brownfields property. Which of the following is likely true?
a. Many localities would rather these sites sit empty, for fear of disturbing the soil.
b. The investor probably can’t get a loan for the property.
c. The price will likely be so high that he will need additional capital.
d. The state probably has a program to help finance the purchase and rehabilitation of the property.

1773) Which amendment to CERCLA says that “innocent landowners” aren’t responsible for the cleanup of hazardous contamination?
a. Environmental Responsibility Amendment
b. Hazardous Contamination Amendment
c. Superfunds Amendments and Reauthorization Act
d. The Fair Housing Act

1774) What is a Superfund site?
a. A commercial property landscaping project
b. A property with “green” improvements that cost over $1 million
c. A site identified by the EPA as requiring remediation of hazardous waste spills
d. A site paid for by state taxes

1775) Former landfills are often used for what purpose?
a. Brownfields
b. Development of golf courses and parks
c. Special purpose landfills
d. Unregulated waste disposal areas

1776) Many parks and golf courses are the sites of ______.
a. Former landfills
b. Special purpose landfills
c. Unregulated waste disposal areas
d. Working landfills

1777) Where are underground storage tanks primarily found?
a. In newer homes
b. In newer industrial sites
c. In older homes and former industrial sites
d. In parks and golf courses

1778) What role does the Brownfields Law play in the assessment and cleanup of unused commercial/industrial sites that may contain hazardous waste?
a. It ensures safe operation of storage tanks.
b. It oversees the assessment and cleanup.
c. It provides funds.
d. It provides manpower for cleanup.

1779) What is done to a landfill that is put out of commission?
a. It is capped.
b. It is converted to a special purpose landfill.
c. It is no longer tested.
d. Ventilation pipes are removed.

1780) In addition to its potential health hazards, what is a common consequence of a brownfield’s presence in a community?
a. Decreased property values
b. Decreased state regulatory oversight
c. Increased interest in development
d. Increased wetlands and groundwater reserves

1781) An abandoned or otherwise unused commercial or industrial site that contains suspected contaminants is known as a what?
a. A brownfield
b. A Brown Zone
c. A space that cannot be used
d. A special use landfill

1782) What is the term for sites identified by the EPA under the Comprehensive Environmental Response, Compensation, and Liability Act?
a. CERCLA site
b. Hazardous Environment Community Clean-up (HECC) site
c. Superfund site
d. Waste Remediation Environmental Need (WREN) site

1783) Which of these regarding the impact of the Brownfields Law is true?
a. The Mesmer family has discovered petroleum contamination on a site they just purchased. The Brownfields Law holds both them and the previous owner jointly responsible for cleanup.
b. The Rodriguez family purchased a property that was formerly a commercial dry cleaner. They plan to convert the property to a residential dwelling. The Brownfields Law requires that they be held accountable for any contamination on the property.
c. The Smiths have discovered chemical contamination on the property deed to them by their late parents. The Brownfields Law may provide funds to help them clean up the site.
d. The Tennysons purchased a property that they later discovered was contaminated with methamphetamine waste. The Brownfields Law limits their liability since they were unaware of the contamination when they purchased the property.

1784) Lines and drainage pipes are installed in which location to prevent waste from polluting groundwater?
a. Cemeteries
b. Former golf courses
c. Landfills
d. Unregulated waste disposal areas

1785) Jacqueline is a licensee working with a property near a Superfund site. Which of these statements is true?
a. A portion of the sale price must go to the EPA to fund clean-up of the site.
b. She must disclose potential health threats to anyone in the area when showing the property.
c. She must disclose the existence of an environmental hazard in the area.
d. The property can’t be sold until the site is removed from the NPL.

1786) Which of the following is true about special purpose landfills?
a. They are common sites for parks, golf courses, and office buildings.
b. They are not as strictly regulated.
c. They are usually close to areas of human habitation.
d. They contain hazardous waste.
1787)
1788) What type of natural hazard area is designated by local agencies?
a. Earthquake fault zone
b. Forest fire hazard area
c. High fire hazard area
d. Seismic hazard area

1789) A special flood hazard zone is one of the six natural hazards that must be disclosed. How are special flood hazard zones identified?
a. By local government
b. By the EPA
c. By the Federal Emergency Management Agency (FEMA)
d. By the state water board
1790)
1791)
1792) What is the danger of a seismic hazard area?
a. Cracks in the earth greater than 50 feet
b. Earthquake
c. Flooding from dam failure
d. Landslides or liquefaction

1793) In what way, other than actual fire, does owning property in a designated forest fire hazard area affect home owners?
a. They are required to have a fireproof basement in their dwelling.
b. They may not receive fire protection services.
c. They may not use candles, barbecues, fireplaces, or open flames of any sort in their home.
d. They must serve on the volunteer fire department.

1794) With which type of mortgage does the interest rate vary according to a specified index?
a. Adjustable rate
b. Balloon rate
c. Fixed rate
d. Straight term

1795) –Final —

1796) The earth’s surface, extending downward to the center of the earth and upward to infinity, including permanently-attached natural objects, is called ______.
a. Estate
b. Land
c. Real estate
d. Real property
1797) Jarvis is a builder. The building codes that apply to Jarvis’s work were established at what level (or levels) of government?
a. Federal and state
b. Local
c. Local and state
d. Local, state, and federal
1798) What’s needed to protect a property buyer from financial loss if a real estate title has defects?
a. Abstract of title
b. Chain of title
c. Title insurance
d. Title search
1799) How is a standard subdivision defined?
a. Parcels of land or portions of a building owned individually with joint ownership in common areas.
b. Parcels of land smaller than 160 acres being sold for individual ownership with no common interest with other owners of nearby parcels.
c. Parcels of land sold to more than five people with an undivided interest in the entire property.
d. Undeveloped land being sold to individual owners that are typically larger than 160 acres.
1800) Which term represents the transfer of property to another through means of eminent domain, foreclosure, or adverse possession?
a. Dedication by deed
b. Involuntary alienation
c. Public land grant
d. Voluntary alienation
1801) What is the difference between a pre-qualification letter and a pre-approval letter?
a. A pre-qualification letter and pre-approval letter are the same thing.
b. A pre-qualification letter is prepared before a loan is processed and the pre-approval letter is prepared after the home appraisal.
c. With a pre-qualification letter, information provided by the borrower is not verified. With a pre-approval letter, the information is verified.
d. With a pre-qualification letter, information provided by the borrower is verified. With a pre-approval letter, it is not.
1802) Who typically performs a CMA or BPO?
a. Appraiser
b. Inspector
c. Loan servicer
d. Real estate licensee
1803)
1804) What are municipal fees as they relate to property development?
a. Fees a new homeowner pays for items such as permits and utility hook-ups
b. Fees developers pay for items such as permits and utility hook-ups
c. Fees taxpayers pay for items such as permits and utility hook-ups
d. Fees the city pays for items such as permits and utility hook-ups
1805) What’s the name of the required clause in a deed that “grants” or “conveys”?
a. Acknowledgment
b. Granting clause
c. Habendum clause
d. Warranty clause
1806) With this type of commercial lease, the tenant typically pays the taxes, insurance, and maintenance expenses.
a. Gross lease
b. Net lease
c. Percentage lease
d. Triple net lease
1807) Ralph leases 1,000 square feet in a large warehouse. The lease agreement requires him to pay portions of the landlord’s taxes, insurance, and maintenance, in addition to the amount he pays to lease the space. What type of lease does Ralph have?
a. Gross lease
b. Operating stop lease
c. Percentage lease
d. Triple net lease
1808) How do predatory lenders take advantage of consumers?
a. Making loans to consumers who can’t afford them
b. Not selling their loans on the secondary market
c. Selling their loans on the secondary market
d. Underwriting loans
1809) Which agency enforces federal fair housing laws?
a. FHA
b. FHEO
c. NFHA
d. NHA
1810) Jake is unhappy that his lease was extended automatically. What lease provision should Jake review closely to ensure it is enforceable?
a. Automatic lease creation clause
b. Automatic lease extension clause
c. Automatic lease renewal clause
d. Non-cancellation clause
1811) Which of the following is true about VA loans?
a. A 3.5% down payment is required.
b. No funding fee applies.
c. The VA guarantees 100% of home loan amount.
d. The VA guarantees 25% of the home loan amount.
1812) A seller you’re working with still owes $50,000 on his mortgage but wants to net $20,000 after the mortgage and 7% commission are paid. What is the minimum for which the house must sell?
a. $75,269
b. $79,645
c. $89,900
d. $90,645
1813) Which of the following statements is true about zoning?
a. A moratorium is a permanent halt on development.
b. A moratorium is a temporary halt on development.
c. Special use permits are temporary.
d. Variances do not require the petitioner to show hardship.
1814) What is one reason that carbon monoxide could be called a “sneaky” toxin?
a. It creeps in through the soil.
b. It increases when the weather is rainy.
c. It’s odorless and tasteless.
d. It’s present in paint.
1815) What is inverse condemnation?
a. A land owner’s right to give their property to the government
b. The process by which land is given to the government after the death of the land owner
c. The process by which the government can take land from private owners for the good of the public
d. When the government takes land from a property owner without offering compensation, and the owner must sue to be compensated for the property value.
1816) You demonstrate the fiduciary duty of accounting by ____________.
a. Disclosing any adverse material facts
b. Properly tabulating expenses and income
c. Putting your client’s interest ahead of your own
d. Taking care of your client’s funds and paperwork
1817) For how long is a tentative map’s approval good before an extension must be requested?
a. Five years
b. One year
c. Three years
d. Two years
1818) Which of the following provides everything a lender needs to know in order to value the property used as collateral for a loan?
a. Apportionment
b. Appraisal
c. Comparative market analysis
d. Competitive market analysis
1819) Emblements are considered to be ______.
a. A subsurface right
b. Land
c. Personal property
d. Real property
1820) What’s income received before any operating expenses are deducted?
a. Effective gross income
b. Gross income
c. Net income
d. Potential gross income
1821) What must happen if two or more people own a piece of property and one wants to sell?
a. A quitclaim deed must be used.
b. The land is automatically dedicated for public use.
c. The property can only be sold if all owners agree to the sale.
d. The property must be partitioned or sold according to the owner’s portion or share of interest.
1822) Which mortgage market comprises lending institutions that lend directly to the consumer?
a. Government market
b. Primary mortgage market
c. Secondary mortgage market
d. Stock market
1823) Who typically prepares a CMA or a BPO?
a. Appraiser
b. Inspector
c. Loan servicer
d. Real estate licensee
1824) Which term refers to the ordinances/regulations that protect the community and control property development within subdivisions?
a. Environmental impact statement
b. Plat book
c. Subdivision plat
d. Subdivision regulations
1825) Which of the following best describes market price?
a. The amount at which the seller chooses to list the property on the open market.
b. The amount it would take to replicate the property if it were to be rebuilt.
c. The amount that a buyer has paid and a seller has accepted for a property.
d. The amount that an appraiser estimates a property to be worth on the fair market.
1826) Which of these statements is correct when it comes to interpreting contracts?
a. Handwritten insertions take precedence over typed insertions.
b. Insertions must be typed to be legally binding.
c. Insertions must be written in red to be legally binding.
d. Typed insertions take precedence over handwritten insertions.
1827) What’s a certified opinion or estimate of value of a particular property as of a particular date?
a. Appraisal
b. Assessment
c. Evaluation
d. Inspection
1828) Which of these statements about the enforceability of leases is true?
a. A lease is only enforceable when signed by a notary.
b. A lease must be recorded in public records of the county to be enforceable.
c. A lease must meet the essential requirements of any contract to be enforceable.
d. A lease that is not signed is not enforceable.
1829) An ______ minor is considered to be a legally competent party who is able to enter into a contract.
a. Alien
b. Emaciated
c. Emancipated
d. Incompetent
1830) The amount of money that a seller will make on a transaction after closing expenses and brokerage fees are paid is called ______.
a. Commission
b. Net to buyer
c. Net to seller
d. Purchase price
1831) What’s the amount a lender charges a borrower for using the lender’s money?
a. Discount point
b. Interest
c. Principal
d. Usury
1832) Which of the following must be disclosed in a subdivision’s public report, according to the Subdivided Lands Law?
a. An alphabetical listing of all current owners
b. Any unusual conditions are easements
c. The proximity to the nearest grocery store in the area
d. The year the development plan for the subdivision was drawn
1833) What’s the best definition of a cooperating agent?
a. A broker who gives a referral fee to another broker or the other broker’s agents
b. A broker who serves as a dual or designated agent
c. An agent from another brokerage who brings you a buyer when you’re the listing agent
d. An agent with uncommon social graces
1834) As an agent, you owe fiduciary duties to your client. Among these are loyalty, reasonable skill and care, confidentiality, accounting, and disclosure. What fiduciary duty is missing from this list?
a. Kindness
b. Obedience
c. Profitability
d. Strategy
1835) A buyer with a 15-year, $250,000 loan at a 5.5% interest rate has a monthly principal and interest payment totaling $2,042.71. If $1,145.83 is interest, how much is applied to principal?
a. $1,145.83
b. $2,042.71
c. $896.88
d. $916.67
1836) What’s used to calculate the housing debt-to-income ratio and total debt-to-income ratio?
a. After-tax income
b. Gross income
c. Net income
d. Operating income
1837) The Consumer Credit Protection Act, which includes the Truth in Lending Act, is often referred to as _________________.
a. Regulation B
b. Regulation C
c. Regulation T
d. Regulation Z
1838)
1839) Which one of the following terms refers to a tract of land divided into lots or plots and used for building purposes?
a. Plat
b. Site plan
c. Subdivision
d. Topography
1840) Which term describes the act of transferring possession of the rental property from the landlord to the tenant?
a. Clairvoyance
b. Contract
c. Conveyance
d. Covenant
1841) Complete this formula: Net to seller = ______ x (100% – commission rate)
a. Closing costs
b. Commission rate
c. Market value
d. Sales price

1842) In most transactions involving a buyer or seller, real estate agents have limited authority to act on behalf of their clients. Therefore, which type of agency relationship are they in?
a. Designated
b. General
c. Special
d. Universal
1843) Easements are a type of encumbrance that can affect a property. Which of the following is true about easements?
a. Easements are always permanent.
b. Easements are often established by a written agreement between the parties.
c. Easements are rights one party acquires to use another party’s land, usually for one day.
d. Easements require the property owner’s express permission.
1844) What’s a real estate licensee’s responsibility regarding radon?
a. Advise all buyers to have homes tested for radon only if they are in a high-risk area.
b. Advise all buyers to have homes tested for radon, regardless of the location.
c. Assist buyers with installing radon mitigation equipment.
d. Assist sellers with purchasing radon detection equipment.
1845) What is the instrument called that’s generally used to convey property?
a. Deed
b. Lien
c. Mortgage
d. Title
1846) What does a chain of title document establish?
a. A chain of past title liens
b. An abstract of title
c. The path of title ownership over time
d. Whether the title is free of encumbrances
1847) What is eminent domain?
a. The authority to enact legislation to protect the welfare of the public
b. The power of the government to claim interest in a property due to the owner’s failure to pay taxes
c. The power of the government to take private land for public use
d. The process for transferring ownership of private property when the owner dies without a will, heirs, or creditors
1848) What are the two categories of comparison when evaluating comparables to a subject property in the market comparison approach?
a. Broad and specific
b. Components and measures
c. Elements and units
d. General and detailed
1849) Net to seller equals the ______ multiplied by the percent to seller.
a. Closing costs
b. Commission rate
c. Sales price
d. Tax rate
1850) An acre of land costs $15,000. Jerry would like to purchase four acres. How much will this cost?
a. $100,000
b. $15,000
c. $3,750
d. $60,000
1851) Which one of these describes a deed?
a. Abstract of title
b. Ownership document
c. Promissory note
d. Recording fee
1852) Which of the following is used to protect the buyer from title defects after closing?
a. Abstract of title
b. Chain of title
c. Survey
d. Title insurance policy
1853) What does PITI stand for?
a. Principal, insurance, title, and interest
b. Principal, interest, taxes, and insurance
c. Property, insurance, taxes, and interest
d. Property, interest, title, and insurance
1854) What’s a brownfield?
a. An abandoned or unused commercial or industrial site with suspected contaminants
b. A partially restored residential area
c. A special use landfill
d. A wild space saved from development
1855) Who generally writes a broker’s price opinion?
a. A buyer
b. An appraiser
c. A real estate broker for a buyer
d. A real estate broker for a lender
1856) The business under which real estate activities are performed is called ______.
a. A broker
b. A corporation
c. An agency
d. A real estate brokerage
1857) What is the type of possession in which a tenant stays after the right to possess has terminated?
a. Estate at sufferance
b. Estate at will
c. Estate for years
d. Leasehold estate
1858) Who is responsible for supervising and retaining the licenses of the salespersons they employ?
a. Advisory Commission
b. Associate broker
c. Broker
d. Salesperson
1859) Property ownership for an indeterminable length of time is an example of what form of estate?
a. Freehold
b. Homestead
c. Leasehold
d. Periodic
1860) Where can you find out what’s not covered by a title insurance policy?
a. The county clerk’s office
b. The internet
c. The lender’s attorney
d. The title insurance policy’s schedule of exceptions
1861) How long is a public report valid before it must be renewed?
a. 10 years
b. Five years
c. One year
d. Three years
1862) What are three methods of handling purchasers’ deposit money that are acceptable under current law?
a. Putting the money in escrow, dispersing the funds across other investments to reduce risk of loss, or buying deposit insurance
b. Putting the money in escrow, putting the title in trust, or purchasing a bond furnished to the state
c. Reinvesting the new money in other subdivision development projects, purchasing of subdivision equipment, or purchasing resources required for completing subdivision development
d. Throwing the check away, placing it on a desk in an open office environment, depositing it with other mixed funds from the developer
1863) What is the purpose of a deed?
a. It offers proof of a lender’s lien on real property.
b. It’s a method of obtaining an abstract of title.
c. It’s used to determine a property’s assessed value for property taxes.
d. It’s used to transfer real property from one party to another.
1864) In order to assist your clients with environmental issues, what must you do?
a. Assure potential buyers there is nothing to worry about.
b. Disclose environmental issues only if they have not been addressed.
c. Ignore potential environmental issues.
d. Understand the risks and disclose everything.
1865) What is it called when a person who has possession of a property through a life estate abuses the property or allows it to deteriorate?
a. Act of waste
b. Escheat
c. Estate at sufferance
d. Reversionary interest
1866) What exactly is a deed?
a. A mortgage
b. An instrument of conveyance
c. An interest in personal property
d. Chattel
1867) Which fiduciary duty goes beyond closing?
a. Confidentiality
b. Disclosure
c. Loyalty
d. Obedience
1868) Jerome, a real estate licensee, works independently instead of under a sponsoring broker. This means that he is licensed as ________.
a. A broker
b. An associate broker
c. An associate broker with at least five years of experience
d. A salesperson
1869) A month-to-month lease agreement is considered to be this type of leasehold estate, in which the interest is automatically renewed at the end of each period specified in the lease.
a. Estate at sufferance
b. Estate at will
c. Estate for months
d. Periodic estate
1870) What is the term used for the ability to pay off liens against a property up until a foreclosure sale is held?
a. Adverse possession
b. Dedication by deed
c. Involuntary alienation
d. Right of redemption
1871)
1872) Carl is interested in purchasing a lot that is 200 feet wide by 600 feet long. The seller has it priced at $800 per acre. How much would this lot cost?
a. $1,600
b. $2,204
c. $4,132
d. $4,800
1873) The ease with which the property can be conveyed to another describes which factor that influences value?
a. Demand
b. Scarcity
c. Transferability
d. Utility
1874) Which term describes the action taken to force a sale of real property encumbered by a lien?
a. Adverse possession
b. Dedication by deed
c. Foreclosure
d. Judgment lien
1875) A tenant just paid a $6,000 security deposit to rent a furnished home. If the security deposit is equal to the maximum allowed, how much is the rent?
a. $1,000
b. $2,000
c. $3,000
d. $4,000
1876) In what type of lease does the landlord pay taxes, maintenance, and insurance?
a. Gross lease
b. Net lease
c. Percentage lease
d. Triple net lease
1877) What happens when the terms of a lease require the tenant to waive a non-waivable right?
a. The entire lease is void.
b. The lease provision is void, and the lease is voidable by the landlord.
c. The provision is void.
d. The tenant may legally stop paying rent until the provision is removed.
1878) One of a seller’s agent’s duties is to ______.
a. Keep the buyer informed
b. Market and sell the property
c. Negotiate for the buyer
d. Represent the buyer while making sure that none of the seller’s advantages are lost
1879) A(n) ______ is an example of a limited agent.
a. Attorney
b. Escrow officer
c. Facilitator
d. Transactional broker
1880) What is a judicial foreclosure?
a. After borrower and public notice are provided, the property is sold at auction to the highest bidder without court action due to the power of sale clause in the security instrument.
b. After borrower default, the lender records paperwork with the court, the court sets a payment deadline for the borrower, and the lender is awarded title if the borrower doesn’t pay.
c. After sufficient notice to the borrower and to the public, the court permits the property to be sold at auction to the highest bidder.
d. The property is sold at a foreclosure auction for less than the amount due by the borrower and the lender sues the borrower to collect the difference.

1881) What is a capitalization rate?
a. The expected rate of return on investment
b. The rate at which assets depreciate over time
c. The rate of capital recapture
d. The value of a business as an investment
1882) When an appraiser relies on comparable properties to estimate the adjusted market price of a property, the appraiser is using the _______ approach.
a. Cost
b. Income
c. Market value
d. Sales comparison
1883) You’re representing Janice in the purchase of a home. Under which of the following instances would it be unacceptable to disclose confidential information?
a. Disclosure is necessary to defend yourself against an accusation of wrongful conduct
b. Janice gives you written permission to disclose the information
c. The information is made public from a source other than you
d. You suspect the disclosure will enable Janice to buy a home at a lower price
1884) The seller said he never received the buyers’ earnest money deposit. How can the buyers prove they deposited earnest money on time?
a. Covenant
b. Deposit receipt
c. Listing agreement
d. Options
1885) Every foundation in direct contact with the ground should have which two features?
a. Grading and leveling
b. Landscaping and grading
c. Radon detector and carbon monoxide detector
d. Vapor barrier and termiticide
1886) You have a client who has an investment property valued at $400,000. Annual cap rates are 8%. What can your client expect in net operating income?
a. $12,000
b. $22,000
c. $32,000
d. $42,000
1887) Personal interest most often conflicts with what fiduciary duty?
a. Accounting
b. Confidentiality
c. Loyalty
d. Reasonable skill and care
1888)
1889) Which of these is a colorless, odorless, radioactive gas that is released when uranium decays?
a. Carbon monoxide
b. Chlorofluorocarbons
c. Polychlorinated biphenyls
d. Radon
1890) What’s the purpose of zoning?
a. It dictates how land in a specific area can be used.
b. It increases property taxes.
c. It provides safety standards for construction.
d. It reduces development in an area.
1891) First-time homebuyers can access an additional amount up to $________ of their Roth IRA accounts over and above withdrawals equal to their contributions.
a. $10,000
b. $15,000
c. $20,000
d. $5,000
Robert purchased a new home and obtained financing through First Lending Bank, a regional bank located in his city. First Lending originated the loan, but before Robert’s first mortgage payment was due, it sold the loan to CitiMortgage. As a loan originator, what market is First Lending operating in?
e. Federal Reserve System
f. Primary mortgage market
g. Secondary mortgage market
h. Stock market
1892) The Unruh Civil Rights Act requires: “Full and equal accommodations, advantages, facilities, privileges or services in ___ business establishments.”
a. All
b. For-profit
c. Non-profit
d. Privately owned
1893) Which of the following is an example of a metes and bounds description?
a. 123 Roanoke Street Any Town, ST 98765
b. “Beginning at the iron pin 30 paces from the center of the brook that runs across the road Southwesterly from the dwelling …”
c. Lot 6 of Block 3 of the Meridian subdivision …
d. S ½ SE ¼ NW ¼ Section 2 …
1894) What effect will a property’s utility have on the value if it’s currently uninhabitable?
a. Utility doesn’t influence value.
b. Value will be pushed downward.
c. Value will be pushed upward.
d. Value will remain the same.

1895) –part2 final—

1896) What’s a feasibility study?
a. An approach appraisers use to determine the value of a home
b. An evaluation performed by environmental agencies considering the cost of clean-up
c. A process that answers the questions about whether a development is possible and whether there is a market
d. A test that home inspectors conduct to determine whether a certificate of occupancy should be issued
1897) James is obtaining an 80/20 loan. What does 80/20 signify?
a. Amount financed/Down payment
b. ARM
c. Debt-to-income ratio
d. Fixed-rate mortgage
1898) Co-ownership without inheritance rights is what kind of real property ownership?
a. Joint tenancy
b. Tenancy at will
c. Tenancy in common
d. Tenancy in severalty
1899) Jenny and her friend Kali went out to lunch. Afterward, they paid the bill. Their agreement to pay for the food they were served is what type of contract?
a. An audible contract
b. An express contract
c. An implied contract
d. A written contract
1900) Archie signed a contract to buy Pam’s home. The deal eventually closed, but Pam failed to hand over the home’s keys to Archie. A week passed, and Archie filed a lawsuit in an attempt to force Pam to give him the keys. This is an example of ______.
a. Accepting liquidated damages
b. Accepting partial performance
c. Suing for damages
d. Suing for specific performance
1901) What responsibility do licensees have regarding household lead hazards?
a. Disclosing that there’s lead-based paint to a buyer, even when they don’t know for sure it’s there
b. Disclosing that there’s lead-based paint to a buyer when they know about it
c. Making sure all lead is removed, even if they have to personally remove it
d. Making sure their sellers know how to hide the presence of lead-based paint
1902)
1903) Which term is used to describe a correction to a contract that contains a mistake?
a. Disclosure
b. Fraud
c. Reform
d. Renewal
1904) ______ may only be used to help determine an appropriate list price for a property or to help a buyer determine fair market value.
a. A BPO
b. A CMA
c. An appraisal
d. An AVM
1905) Which of the following is an example of a voluntary lien?
a. Estate and inheritance tax lien
b. Income tax lien
c. Mechanic’s lien
d. Mortgage lien
1906) Which of the following activities requires licensure beyond a real estate salesperson or broker license?
a. Advertising three mobile homes at the place of business
b. Collecting rent or royalties from a mineral, oil, or gas property
c. Providing prospective tenants with a list of properties available for rent
d. Selling subdivided property
1907) Which of these is a horizontal wood-framing member used in floor and ceiling framing?
a. Joist
b. Rafter
c. Sill plate
d. Stud
1908) Ellen and Sadie signed an agreement to list Sadie’s condo for sale. After the contract was signed, Sadie’s father, Grant, offered to pay Ellen’s commission as a housewarming present. Sadie’s Mom and stepdad, Linda and Rick also chipped in. Who is Ellen’s client?
a. Grant
b. Linda
c. Rick
d. Sadie
1909) Which of the following is an example of single agency?
a. Mary from XYZ Real Estate represents Susan, a buyer for Seamus’s listing. Seamus represents the seller and is also a licensee for XYZ.
b. Randolph from ABC Realty represents Cindy, a buyer for Carol’s listing. Carol is affiliated with Net Realty.
c. Walter from Sell Fast Realty represents Hallie, a seller. He also represents Jackson, a buyer who wants to make an offer on Hallie’s condo.
d. Whenever dual agency doesn’t exist, it’s single agency.
1910) Gross rent multiplier (GRM) and gross income multiplier (GIM) are used to ______.
a. Determine rent
b. Determine the list price of a property
c. Evaluate the value of income-producing property
d. Get an estimate of annual losses
1911) What actions must you take to renew a real estate license that has been expired for two years?
a. Complete the continuing education requirements and submit a renewal and late fee.
b. File an appeal with the Real Estate Commissioner.
c. Re-qualify for a real estate license by completing pre-licensing courses and passing the state licensing exam.
d. Retake the state licensing exam.
1912) Kim and Kip are a married couple who own community property. What happens when they divorce?
a. Their community property will be divided according to their equal rights of ownership and possession.
b. Their ownership rights terminate.
c. The one who records title first gets the property.
d. They automatically become joint tenants with the right of survivorship.
1913) What’s a finder?
a. A person who helps buyers and sellers locate agents
b. A person who introduces the buyer and seller, but doesn’t represent either party
c. A person who investigates title issues
d. A search featured on the MLS
1914) To determine the net operating income of a property, subtract the total operating expenses from the ______.
a. Effective gross income
b. Potential gross income
c. Scheduled rent
d. Vacancy and collection losses
1915) What are the four external forces that may affect value?
a. Demand, usability, scarcity, transferability
b. Physical/environmental, economic, social, political/governmental
c. Positive, negative, dual, single
d. Unintentional, intentional, express, implied
1916) After a general plan is developed and the planning commission makes its recommendation, what is the next step in the adoption process?
a. Developers bid on areas they would like to develop.
b. Developers clear any existing infrastructure on the land.
c. Residents vote on the plan.
d. The plan is reviewed at a public hearing by the local legislative body.
1917) When a real estate salesperson or broker license is issued, how long is it valid?
a. Five years
b. Four years
c. One year
d. Two years
1918) What hazardous material might be found in vinyl flooring, insulation, and roof shingles of older homes?
a. Asbestos
b. PCBs
c. Radon
d. VOCs
1919) You represent a seller as a single agent. What’s it called when you’re simultaneously working for the buyer’s best interests in the transaction without the seller’s knowledge?
a. Broker agency
b. Dual agency
c. Split agency
d. Sub-agency
1920) According to the Statute of Frauds, in order to be legally enforceable, a contract must be in writing, name the contracting parties, identify the subject matter of the contract, and ______.
a. Be for a legal purpose
b. Be signed by two or more attorneys
c. Include a certain amount of financial consideration
d. Present the essential terms and conditions of the contract
1921) What will a typical condominium legal description reference?
a. Mailing address
b. Township, section, and condominium name only
c. Unit number and condominium name only
d. Unit number, condominium name, plat map, page, and number
1922) Katrina’s business card has the REALTOR® logo on it because Katrina respects the National Association of REALTORS®, although she’s not yet a member. This is ______.
a. A violation of consumer protection laws
b. A violation of real estate law
c. Commingling
d. Okay, as long as she plans to become a member within one year
1923) In which of the following situations would an agent be representing a customer in a real estate purchase?
a. Any time
b. Never
c. When the agent has his broker’s permission
d. When the agent has his broker’s written and signed permission
1924) The requirement that a portion of the purchase money mortgage be repaid when each lot is sold is called ____________.
a. Completion bond
b. Developer incentive
c. Lot release provision
d. Owner participation
1925) In which type of lease does the tenant pay some or all expenses separately?
a. Gross lease
b. Net lease
c. Percentage lease
d. Sublease
1926) What practice did the Fair Housing Act of 1968 attempt to eliminate?
a. Discrimination based on marital status
b. Discrimination based on sexual orientation
c. Discrimination based on source of income
d. Discrimination through blockbusting, steering, and redlining
1927) The requirement of a developer to use their own funds as down payment on a project is called ______________.
a. Completion bond
b. Developer incentive
c. Owner participation
d. Wraparound insurance
1928) What does the rectangular survey system use as the basis for legal descriptions?
a. Principal meridians, base lines, and sections
b. Reference to a subdivision plat
c. Reference to degrees latitude and longitude
d. The beginning point of a boundary line as identified by a surveyor
1929) Before a blueprint and building specifications will receive a building permit, which party must stamp the blueprint?
a. An architect or engineer
b. The builder
c. The buyer
d. The developer
1930) In the conveyance of real property after death, what takes precedent over any terms specified in the deceased person’s will?
a. Heirs’ wishes
b. Intestate
c. Nothing
d. Operation of law
1931) A plan adopted by every city or county in the state outlining the development of the area is called a ______, also known as a master plan.
a. Development plan
b. General plan
c. Specific plan
d. Zoning map
1932) If you take gross income and deduct operating expenses, what do you get?
a. Effective gross income
b. Net operating income
c. Potential gross income
d. Profit
1933) A landlord who wishes to enter an occupied rental unit for a legal reason may need to provide reasonable ______.
a. Compensation
b. Identification
c. Justification
d. Notice
1934) What’s the National Flood Insurance Program?
a. A program that cleans up flooding in hazard areas
b. A program that covers all of the costs of flood insurance in hazard areas
c. A program that helps homeowners in flood hazard areas obtain insurance
d. A program that provides boats to homeowners in flood hazard areas
1935) Joe signed a listing agreement with Marisa. A week later, Marisa’s co-worker, Tina, showed Joe a property that he’s interested in buying once his home sells. A week after that, Ross submitted an offer on Joe’s property on behalf of his buyer client. Who is Joe’s agent?
a. Joe doesn’t have an agent.
b. Marisa
c. Ross
d. Tina
1936) Which of the following statements is true regarding assignments and subleasing?
a. Both assignment and subleasing allow the former tenant to relinquish liability for the lease payment.
b. Both assignment and subleasing require specific written approval of the landlord
c. Neither assignment nor subleasing relieve the former tenant of liability.
d. When you sublet a lease, you’re no longer liable for lease payments, even if the new tenant doesn’t pay rent.
1937) Which of the following best describes a property’s assessed value?
a. A broker’s opinion of the property’s value based on market comparables.
b. The seller’s assessment of the property’s worth based on all known facets and features of the property; used to set the listing price.
c. The value placed on the property by the local jurisdiction’s taxing authorities to calculate property taxes.
d. The value placed upon a property by a certified appraiser.
1938) Supply and demand determine the competitive environment. Which of the following is a true statement?
a. When there are more homes on the market, buyers can’t be picky.
b. When there are more homes on the market, buyers hold the negotiating power.
c. When there are more homes on the market, it drives prices upward.
d. When there are more homes on the market, sellers can demand more for their property.
1939) Supply and demand determine competition within a market. Which of the following is a true statement?
a. When there are fewer houses on the market, sellers can demand more for their properties.
1940) Which of these statements about landlord liability is true?
a. Commercial landlords are never liable for injuries resulting from the condition of the premises.
b. Landlords may be liable for injuries if they promised to repair the defect but never followed through.
c. Landlords must regularly inspect the property for defects throughout the tenancy period.
d. Residential landlords are only liable for injuries resulting from the condition of the premises if they agreed to make repairs in writing.
1941) Which type of lease escalation ties lease payments to a market indicator?
a. Base
b. Direct operating costs
c. Expense stop
d. Index
1942) Why is debt reduction recommended when preparing to obtain financing?
a. Builds discipline
b. Improves credit score
c. Increases loan-to-value ratio
d. Lowers your cash reserves
1943) Tenants in the military who are facing eviction may be eligible for a stay of eviction if they meet which of these criteria?
a. Their ability to pay rent is adversely affected by military service.
b. Their monthly rent is more than $2,400 per month.
c. They have no dependents.
d. They have one or more dependent.
1944) Gerald creates a trust to convey his property to his heirs. His friend, Nancy, is placed in charge of making sure the terms of the trust are carried out. In this example, Nancy is the ______.
a. Beneficiary
b. Broker
c. Trustee
d. Trustor
1945) What is a survey?
a. A description method that uses principal meridians and base lines
b. A description of the land that specifies the boundaries and location of a specific piece of real property
c. An object used as a boundary or starting point for a metes-and-bounds description
d. A professional, on-site measurement of the lot lines and dimensions of a property
1946) Which type of deed offers the strongest and broadest form of guarantee and protection of title to the grantee?
a. Grant deed
b. Quitclaim deed
c. Sheriff’s deed
d. Warranty deed
1947) Jillian has a loan-to-value ratio of 90/100. This means __________.
a. Her loan is 10% of the value of the real estate used as collateral and she is obtaining a second mortgage for 90%.
b. Her loan is 90% of the value of the real estate used as collateral and she is putting 10% down.
c. She is putting 10% down, with 90% being pulled from her IRA.
d. The property is only worth 90% of the amount loaned.
1948) Octogenarians Gertie and Frank met in Sunset Living, a skilled nursing center for people with advanced Alzheimer’s disease, where they’re both residents. They fell in love and get hitched, signing a marriage certificate. This is an example of ______ contract.
a. An executory
b. An implied
c. An invalid
d. A valid
1949)
1950) What happens when a married or otherwise legally joined couple who owns a property as tenancy by the entirety dissolves their union?
a. Their ownership automatically becomes a tenancy in common.
b. Their ownership rights terminate.
c. The one who records title first gets the property.
d. They become joint tenants with right of survivorship.
1951) If a tenant replaces a kitchen faucet, can the tenant take the new faucet when vacating?
a. No, because any fixtures belong to the landlord
b. Only if the new faucet costs more than the old faucet
c. Only if the old faucet is replaced
d. Yes, if the tenant paid for the new faucet
1952) Which of these is a written description of a blueprint?
a. Building permit
b. Building plan
c. Building specifications
d. Offering plan
1953) What type of tenant uses a percentage lease most often?
a. Manufacturing
b. Residential
c. Retail
d. Triple net
1954)
1955) Carla creates a trust to convey her assets to her children. Her brother, Alvin, is placed in charge of making sure the terms of the trust are carried out. In this example, Carla is the ______.
a. Beneficiary
b. Broker
c. Trustee
d. Trustor
1956) How many feet are in three yards?
a. 12
b. Nine
c. Six
d. Three
1957) What duties does a buyer agent have to the seller?
a. To advocate and negotiate on behalf of both parties
b. To disclose the agent’s relationship with the buyer
c. To obtain the highest price possible
d. To provide comparables to support the buyer’s offering price
1958) With which type of commercial lease does the tenant pay some or all of the expenses?
a. Gross lease
b. Net lease
c. Percentage lease
d. Sublease

1959) What is a non-judicial foreclosure?
a. After borrower and public notice is provided, the property is sold at auction to the highest bidder without court action due to the power-of-sale clause in the security instrument.
b. After borrower default, the lender records paperwork with the court, the court sets a payment deadline for the borrower, and the lender is awarded title if the borrower doesn’t pay.
c. After sufficient notice to the borrower and to the public, the court permits the property to be sold at auction to the highest bidder.
d. The property is sold at a foreclosure auction for less than the amount due by the borrower and the lender sues the borrower to collect the difference.
1960) Which lien can be filed after other liens but still take priority over them?
a. Deceased person’s debt and mortgage liens
b. Income tax lien
c. Mechanic’s lien
d. Real property tax lien
1961)
1962) What’s the definition of a “proportionate share” escalation clause in a lease agreement?
a. It allocates electricity among tenants based on the square footage of their unit.
b. It allows the tenants to invoice landlords for repairs done to their units.
c. It requires tenants to pay their fair share of costs to operate the building.
d. It stipulates how the landlord allocates usage of common areas.
1963)
1964) When would a subdivision developer have to disclose that the property being sold has not been examined by the BRE in a disclaimer on all of their marketing and sales contracts?
a. When development has gone on longer than six years without an amended or renewed public report
b. When the developer has an amended public report
c. When the developer has applied for a conditional public report
d. When the subdivision development is in another state or country
1965) What’s the primary purpose of bulk zoning?
a. To allow warehouse facilities in residential areas
b. To increase density
c. To keep like properties together
d. To reduce density
1966) Sisters Sheila and Vickie entered into a contract together to buy a vacation property. The sisters get into a dispute, and Vickie no longer wants any part of the deal. Sheila is in agreement with this idea, and talks her younger brother Joe into replacing Vickie on the contract. Sheila, Joe, Vickie and the seller agree to the substitution. Of what is this an example?
a. Assignment
b. Fraud
c. Mutual mistake
d. Novation
1967) Which of the following is true about the DFEH authority in the event of a complaint against a licensee?
a. After receiving a bona fide complaint, it automatically revokes a licensee’s license as a pre-emptive measure against further violations.
b. If, after interviewing the complainant, the DFEH finds no evidence of a possible law violation, it may dismiss the complaint.
c. It can impose jail time, if the situation warrants it.
d. It must refer any egregious complaints to the Department of Justice.
— Extra random (started with ca principles-6/23) —

1) When does the licensee’s duty of confidentiality to the client end?
2) Drake has a new listing, and he signs a sub-agency agreement with Erika. Erika has a buyer customer, Trinity, who wants to see the listing and eventually buys it. What’s true about the agency relationship in this situation?
3) Serena’s customer, Ben, has some defects in his property’s title. He asks her to please keep this information to herself. What’s Serena obligated to do in this situation?
4) Which laws prevent real estate licensees from setting a standard rate for commissions or compensation?
5) Eric is making an offer on his dream home. He is ready to write the earnest money check. To whom should he make the check out?
6) Fraud is always _______.
7) Buyer brokerage relationships ______.
8) What’s the overhang on a roof called?
9) Aside from price, which of the following is a legitimate reason to counter an offer?
10) Which type of buyer usually has a fixed income and is looking for a home with little to no maintenance?
11) What type of listing agreement provides the most protection for the listing agent’s commission?
12) What do you call the person who or entity that oversees trust or escrow money?
13) Tom is comparing heating systems. He’s looking at an 80,000 BTU system with an AFUE of 85%. Which of the following statements about these measures is true?
14) Which of the following bears the weight of the building?
15) Homeowners can take several actions related to pest infestations, but ______ should be left to professionals.
16) Which of the following would be considered a substantive communication about a property?
17) Which of the following items go into the seller’s credit column and the buyer’s debit column?
18) What electrical component is usually placed in the garage or basement for ease of access?
19) Which of these is a colorless, odorless, radioactive gas that is released when uranium decays?
20) What not a good idea to post photos of your clients’ expensive belongings in place?
21) Who must provide a copy of the seller instructions if a cooperating broker requests it?
22) Your Aunt Peggy works in another county and is thinking of buying a townhome. She’s working with the seller’s agent but isn’t under an agency agreement. What should you tell her about this situation?
23) When a prospective homebuyer isn’t represented, what doesn’t she have?
24) Which of these is a problem with a property that would have a negative impact on the property value or pose an unreasonable risk on the people who will reside in it?
25) Which type of contract is not based not on words, but is based on the parties’ actions or behaviors?
26) To prepare for financing, buyers should ______.
27) Before a blueprint and building specifications will receive a building permit, the blueprint must be stamped by __________.
28) Which of these must be obtained before a developer can begin construction?
29) Mixing escrow funds with personal funds is illegal and is called _______.
30) Who determines the earnest money amount?
31) Francois wants his transaction broker, Shelly, to refuse to show her other customers and clients the property he wants to buy. What should Shelly say to Francois about his request?
32) Which of the following statements best illustrates how the National Electrical Code is enforced?
33) When using the farming approach, diversity is a key factor when identifying a neighborhood. Which statement best describes diversity?
34) What’s your relationship with a buyer who’s not a client but is a customer?
35) Which party is usually responsible for appraisal and credit report fees?
36) In a transaction broker situation, the transaction broker represents _____.
37) Calculate the total debt ratio based on the following information, assuming the lender does not consider any debt with 10 or fewer payments remaining: $1,500 condo payment; $100 monthly association fees; $150 monthly student loan payment; $300 car payment (with only four payments remaining); and a monthly gross income of $5,000.
38) Which of the following would be considered a first practical opportunity for communication about a property?
39) You are not expected to be an expert at investigating or inspecting environmental issues if it is outside your area of expertise. Encourage your clients to seek professional property inspection services to determine material _______ facts.
40) Daria is representing Max, a seller. Unbeknownst to either of them, Max’s home has a serious foundation issue that is only detectable by a trained professional. This type of problem is considered a(n) ______.
41) Which of the following expenses is typically the buyer’s responsibility?
42) Jarvis is a builder. The building codes that apply to Jarvis’s work were established at what level (or levels) of government?
43) Harmful gases resulting from waste incineration are disposed of in a special process. Where are they stored once processed?
44) The seller pays for which of the following closing expenses?
45) Which fees are negotiated between the seller and the broker, and can be either a lump sum or a percentage of the listing amount?
46) As a transaction broker, you are responsible for representing _______.
47) When a loan pre-approval is provided to a buyer, what does it mean?
48) You’re working with buyers who have found their dream home, but it’s almost more than they can afford. When the appraisal comes in, it’s higher than the agreed-upon sales price. Now what?
49) What type of window consists of one or more panes that either move up and down or side to side in tracks?
50) The _______ of a property assumes normal market conditions, a willing buyer and seller, and an arm’s length transaction.
51) Licensee Brooke receives a $1,000 bonus from the seller when she encourages her buyer client to purchase the seller’s property. She doesn’t let her client know about the bonus. Has Brooke committed a violation, and, if so, what violation has she committed?
52) You represent the Taylors, who have minor children and are looking to buy a home. They ask you whether there are registered sex offenders in the area. How should you respond?
53) Which party to the transaction pays earnest money to solidify his or her commitment to completing a real estate transaction?
54) What’s the difference between direct capitalization and yield capitalization when appraising income property?
55) Llorona is working with her transaction broker, Jorge, to list her home for sale. She asks Jorge for advice on setting the listing price for her property. What is Jorge legally allowed to tell Llorona?
56) Which of the following appears on the closing statement?
57) Which of the following statements is true regarding earnest money in Kansas?
58) States where the burden to determine a property’s condition rests on the buyer are considered _______ states.
59) When preparing a market analysis, or CMA, what’s the maximum number of adjustments you can make to the subject property?
60) Bob wants an open listing agreement. Why might this not be in Bob’s best interest?
61) Andy is interested in buying a home, but his credit score isn’t the greatest. Which of the following is a way he could improve it?
62) Private sewage disposal systems, such as septic systems, are governed by the _______.
63) Marnie decided the listing she was representing would be perfect for her family. She had her brother buy it, and after closing, he sold it to her. What is this an example of?
64) Freida is planning the plumbing system for her new building project. She wants the least expensive and easiest-to-install material for all her supply lines. She’s highly sensitive to chemical smells and hopes to avoid the use of chemicals to install the pipes. What’s her best choice in piping materials?
65) What is an escalator offer?
66) A title representative offers to pay you a referral fee for sending more clients to her. Would accepting this fee be a violation?
67) Anthony meets up with his buddy, Ted, a licensee for a brokerage in Shreveport, to discuss the possibility of Anthony getting licensed. Why does his friend tell Anthony it’s so important to get E&O coverage?
68) Cameron had a listing agreement with a client named Ben. Ben got mad at Cameron and said he was terminating the agreement. Can Ben do this?
69) Sometimes when a buyer can’t qualify for a loan, the property seller drops the price and accepts a second mortgage without disclosing it to the original lender. This is a form of mortgage fraud known as ______.
70) From whom or what entity do licensees receive compensation for brokerage services once a transaction is closed?
71) From a real estate professional’s point of view, what’s the purpose of qualifying buyers?
72) What’s the best way to respond when your buyer’s offer is accepted verbally?
73) A broker’s price opinion is generally written by ______.
74) When drafting a sales contract, how should a licensee handle areas that don’t pertain to the current transaction?
75) Last week, The Rialdis’ listing agreement ended after months on the market and not even a single offer to show for it. Today, they received a call from Mindy, a real estate professional who would like to relist the property and has some new ideas for getting it sold. What approach is Mindy using to find listings?
76) Keeping an area dry and keeping the air circulating can ______.
77) In order to avoid wire fraud, always contact the closing officer in order to ______.
78) Karissa is financing her home through a lender and is offering no money as a down payment. What type of loan is she most likely using?
79) When a listing agreement is signed, the two parties who enter into the agreement together are ______.
80) Properly pricing a property that is entering the market will ______.
81) Marissa, a buyer, asks you what she can do to prepare to buy. What should you tell her?
82) A licensee may accept compensation from ______.
83) If buyers see evidence of a pest infestation, they should always inquire with the seller to see if there is ______ on the property.
84) Rick represents Jules, a seller, who wants to know if he has to disclose his leaking roof to buyers. Rick says yes, since the problem constitutes _______.
85) When an investor receives title to a property—often by using a straw buyer—doesn’t make the mortgage payments, and rents out the home until foreclosure occurs, the investor is committing a type of mortgage fraud known as ______.
86) What is an initial cap, as it relates to an adjustable rate mortgage?
a. The number of percentage points that are added to the index to determine the rate
b. The value that limits the amount that interest can adjust at the mortgage’s first interest rate adjustment
c. The value that limits the amount the rate can adjust at subsequent adjustment dates
d. The value that limits the amount the rate can adjust over the life of the loan

87) Licensees must always be paid by their brokers, unless ________.
a. The broker authorizes otherwise in writing
b. The commission is less than $1,000
c. The payment is from a nonprofit organization
d. The payment will be deposited into a corporate account

88) Fiona and her husband, Ed, have just entered into their first-ever agency agreement with their new agent, Ken. The couple is a little nervous, but they like the idea that they have something in writing that explains both their agent’s responsibilities and what they’re expected to do as part of the relationship agreement. Life is good. What type of agency exists between Ken and his clients?
a. Implied agency
b. Oral express agency
c. Undocumented agency
d. Written express agency

89) Wayne conveys a property to Robbie until Robbie’s death, when the property is conveyed to Tiffany. What is this scenario an example of?
a. Fee simple estate
b. Homestead
c. Leasehold estate
d. Life estate

90) Which type of mortgage has a payment that adjusts (usually upward) based on a predetermined schedule and amount?
a. Amortized
b. Blanket
c. Bridge
d. Graduated payment

91) What occurs when one or both parties don’t meet all terms of the contract?
a. Impossibility of performance
b. Partial performance
c. Performance of a contract
d. Specific performance

92) When a buyer and seller enter into an agreement to transfer ownership of property, what type of contract will be used to complete the transaction?
a. Buyer agency agreement
b. Listing agreement
c. Option agreement
d. Sales contract

93) A borrower makes the same monthly mortgage payment for the entire term of the loan. At the end of the loan period, all of the interest and principal is paid off. This is known as a ______ loan.
a. Fully amortized
b. Growing equity
c. Negative amortization
d. Reverse annuity

94) Sheila and Vickie are sisters who enter into a contract to buy a vacation property. The sisters get into a dispute, and Vickie no longer wants any part of the deal. However, Sheila talks her younger brother Joe into replacing Vickie on the contract. Vickie agrees to the substitution. This is an example of ________.
a. Assignment
b. Fraud
c. Mutual mistake
d. Novation

95) Buyer Josephine had just signed a contract on a house when she discovered that seller’s agent Franklin knew that this house was 3500 square feet, but he listed it at 3900 square feet. Which essential contract element has been compromised?
a. Consent
b. Consideration
c. Legal purpose
d. Offer and acceptance

96) An acre of land costs $15,000. Jerry would like to purchase four acres. How much will this cost?
a. $100,000
b. $15,000
c. $3,750
d. $60,000

97) Janice’s life tenant, Jacob, is currently living on her property. Once Jacob dies, Janice has made arrangements that the property will go to the School for the Gifted. What interest does the School for the Gifted currently have?
a. Ownership
b. Possession
c. Remainder
d. Reversionary

98) ______ is the legal concept of property ownership.
a. Certificate of occupancy
b. Deed
c. Title
d. Will

99) Burt is an unrepresented buyer of Sima’s home. Sima’s listing agent is Aubrey. Who’s the client in this transaction?
a. Burt
b. Burt and Aubrey
c. Burt and Sima
d. Sima

100) Assume you’re entering into an agreement with a client to help him look for a property to call his own. What type of contract will you use to identify your agency relationship’s terms?
a. Buyer agency agreement
b. Option agreement
c. Purchase contract
d. Sales contract

101) A(n) ________ is a set of guidelines for ethical conduct.
a. Code of ethics
b. Contract
c. Option
d. Rule book

102) Shawn has agreed to pay $275,000 for his new home, with a $30,000 earnest money deposit. His bank is loaning him 80% of the appraised value of $350,000. In addition, the settlement costs he’s required to pay amount to 6% of the purchase price. If you wanted to calculate how much additional money Shawn needs to bring to closing, which of these would be a good place to start?
a. Calculate 5% of $295,000.
b. Calculate the difference between purchase price and settlement costs.
c. Calculate the loan amount that Shawn will receive from the bank.
d. Figure out why Trish’s agent doesn’t renegotiate the purchase price based on the appraised value.

103) Which of the following is an example of a limited agent?
a. Attorney
b. Escrow officer
c. Facilitator
d. Transactional broker.

104) Who’s responsible for conducting the closing meeting?
a. The broker
b. The buyer
c. The closing agent
d. The seller

105) What’s a brownfield?
a. An abandoned or unused commercial or industrial site with suspected contaminants
b. A partially restored residential area
c. A special use landfill
d. A wild space saved from development

106) Which of the following actions does the secondary mortgage market commonly take?
a. Issues loans to consumers.
b. Purchases loans from lending institutions.
c. Regulates lending institutions.
d. Sets interest rates.

107) What is the legal effect on the purchase agreement if an attached contingency is rejected or not met?
a. The agreement has to be renegotiated.
b. The contract is voidable.
c. The party who failed to meet the contingency must pay a fine.
d. The party who rejected the contingency must offer an alternative.

108) What type of agency exists because of the actions and behavior of the parties?
a. Action agency
b. Behavioral agency
c. Express agency
d. Implied agency

109) As part of the license application, prospective appraisers must submit ________.
a. A fingerprint card
b. An employment bond
c. Performance reviews
d. Physical exam results

110) Along with your two siblings, you have a one-third interest in your childhood home. You’ve all decided to put the house on the market and you’ll serve as the listing agent. What must you disclose to parties to the sale?
a. Nothing, since you own less than 50%
b. That the house is an estate with its owner in a nursing home
c. That you have a financial interest in the house
d. That your siblings will take much less than the list price

111) A subdivision that includes space for offices, shopping centers, movie theaters, and apartment buildings is an example of a _________________.
a. Converted-use development
b. Cooperative
c. Mixed-use development
d. Planned unit development

112) Shawn specializes in the sale of retail stores and shopping centers. What types of properties are these?
a. Commercial
b. Industrial
c. Residential
d. Special purpose

113) Which of the following items go into the seller’s credit column and the buyer’s debit column?
a. Credits
b. Debits
c. Prepaids
d. Prorations

114) Which of the following are addressed by the Subdivided Land Act?
a. Development requirements
b. Financing requirements
c. Labor requirements
d. Reporting requirements
115) Which term refers to the ordinances/regulations that protect the community and control property development within subdivisions?
a. Environmental impact statement
b. Plat book
c. Subdivision plat
d. Subdivision regulations

116) Which of the following statements about restrictive covenants is true?
a. They are permanent and follow the land forever.
b. They are temporary and have a specific time limit.
c. They may run with the land forever, or they may have a time limit.
d. They must last at least 30 years.

117) Donna rents an apartment in a building that’s being converted to condominiums. By law, the owner of the building must give Donna ________.
a. 10 days’ notice before evicting her
b. The option to buy her unit or continue as a tenant for a specified period of time
c. The option to buy the unit at a reduced price
d. The option to continue renting the unit at a reduced rate

118) Marvin purchased the right to use a resort unit for two weeks every year, although he doesn’t own the property itself. What kind of timeshare is this?
a. Divided timeshare
b. Right-to-use timeshare
c. Timeshare estate
d. Timeshare in perpetuity

119) Which option best defines voluntary alienation?
a. A person dies without a will.
b. A property is taken from a property owner due to failure to pay real property taxes.
c. A property owner intentionally transfers property to another.
d. Someone takes possession of another’s property by adding a previous claim to their own.

120) In how many states is undisclosed dual agency legal?
a. 18
b. 38
c. All 50
d. Zero

121) What is a lifetime cap, as it relates to an adjustable rate mortgage?
a. The number of percentage points that are added to the index to determine the rate
b. The value that limits the amount that interest can adjust at the mortgage’s first interest rate adjustment
c. The value that limits the amount the rate can adjust at subsequent adjustment dates
d. The value that limits the amount the rate can adjust over the life of the loan

122) Which document is provided to borrowers no fewer than three days prior to closing and provides details about the costs of the transaction?
a. Closing Disclosure
b. Escrow Closing Notice
c. Loan Estimate
d. Mortgage Servicing Transfer Disclosure

123) What is typically used to prove there are no encroachments on the property?
a. Abstract of title
b. Chain of title
c. Deed
d. Survey

124) Which of the following is a right included with real property?
a. Contamination
b. Encroachment
c. Exclusion
d. Hazardous acts

125) Sue, the seller, and Carl, the buyer, are preparing to close on their transaction. Who is responsible for reviewing the settlement statement before closing?
a. Carl only
b. Sue and Carl
c. Sue only
d. Sue’s and Carl’s attorneys

126) How do predatory lenders take advantage of consumers?
a. Making loans to consumers who can’t afford them
b. Not selling their loans on the secondary market
c. Selling their loans on the secondary market
d. Underwriting loans

127) Dominique purchased a timeshare that conveys the right to occupy the property for two weeks each year, continuing for 20 years. However, the timeshare does not convey ownership. This is an example of a ______ timeshare.
a. Estate for life
b. Fee simple ownership
c. Renewable
d. Right-to-use

128) Only brokers may do which of the following?
a. Conduct brokerage activities
b. Hold open houses
c. Receive compensation directly form buyers or sellers
d. Work directly with buyers and sellers

129) Which essential element of a deed contains the words, “does hereby bargain, grant, deed, and convey?”
a. Acknowledgment
b. Conveyance
c. Delivery and acceptance
d. Recording

130) What does procuring cause refer to?
a. A condition that must be met in order for a contract to be legally binding
b. An uninterrupted series of events that results in a successful transaction
c. Compensation for loss, damage, or injury caused
d. Failure to perform an act agreed upon by all parties

131) If Elizabeth is a property manager, she is acting as what of type of agent?
a. Dual
b. General
c. Special/specific
d. Unlicensed

132) Which of these describes a deed?
a. Abstract of title
b. Ownership document
c. Promissory note
d. Recording fee

133) What happens to a joint tenant’s share of property when the joint tenant dies?
a. The joint tenant’s interest goes to the remaining joint tenants. If only one joint tenant is left, that joint tenant owns the property in severalty.
b. The property must be sold, with the proceeds from the joint tenant’s share distributed to heirs.
c. The tenancy remains, but the joint tenant’s interest passes to heirs.
d. The tenancy terminates, and the joint tenant’s share goes to the state.

134) Which of the following statements about covenants is true?
a. A bargain and sale deed will always come with covenants of warranty.
b. Every conveyance comes with a fully warrantied title.
c. The full covenant and warranty deed contains the strongest and broadest form of guarantee of title.
d. The “full covenant” typically means three covenants are included.

135) Which of the following opinions can a real estate licensee provide?
a. An opinion regarding the appraisal value of a property
b. An opinion regarding the effect of breaking an existing agreement to accept a new offer
c. An opinion regarding the listing price
d. An opinion regarding whether a roof needs to be replaced

136) A dwelling is in untenantable if it substantially lacks
a. A heating unit

137) Transfer of all of a tenant’s rights under a lease is
a. An Assignment

138) If a landlord wants to increase the rent on a unit that is regulated by the Tenant Protection Act of 2019, what’s the maximum allowed as an annual increase?
a. 5% plus the cost of living
139) Malcolm loves his apartment, even though he’s rarely there. His job in international development has him on the road for months at a time. He doesn’t have to worry about missing out on his lease renewal though, because he has a(n) _____________
a. Periodic Estate
140) Eric’s residential tenant hasn’t paid rent for more than three months, and so Eric went to court to start eviction proceedings. He’s now been granted the right to remove the tenant. This is a(n) _________________ eviction.
a. Actual
141) A security deposit on furnished residential property can be no more than
a. 3 month’s rent
142) A retail business has a percentage lease based on 5% of gross income of up to $25,000 per month and 2 1/2% of gross income above that amount. The minimum to be paid is $1,000 per month. For a month in which the business has a gross income of $47,000, what will be the rent payment?
a. $1,800
143) The owner of 417 Main, an office building, receives a guaranteed monthly income from her tenants and pays no expenses. She has
a. A Net Lease
144) Which of these landlords had filed an unlawful detainer suit?
a. Chet tried to kick his tenant out, but he would not leave, so he’s started eviction proceedings.

145) A landlord has a right of entry
a. In an Emergency
146) Buyer Penelope adores the house at 212 Maple Street, but two weeks after making her offer, she’s discovered it’s got some issues that weren’t identified on the state-required seller disclosure form. She still wants to buy the house. Since the seller appears to have lied on the disclosure form, what can Penelope do?
a. Ask the seller to make the repairs needed, or ask for a credit to cover the cost of those repairs.
b. Because the seller lied on the disclosure forms, the purchase contract is invalidated, so Penelope must make a new offer.
c. Complete the transaction, then sue the seller for fraud.
d. Reduce the amount of her offer
147) Jose, who is 16, entered into a contract to sell a condo he owned. Because Jose is a minor, ______.
a. Either Jose or the buyer may void the contract due to Jose’s minority
b. It makes no difference; if he signed the agreement, he must abide by it
c. Only Jose may void the contract
d. The contract is void
148) Which of these is a system that many states use to determine lien priority?
a. First in time, first in right
b. Government payments come last
c. Largest lien has first priority
d. Mortgage liens before judgment liens
149) What’s the definition of a land contract?
a. Buyers purchase a piece of undeveloped land.
b. Land owners divide their land into parcels.
c. Property owners lease their land to someone else, who develops the property.
d. Sellers provide funds or credit to buyers in order to close the transaction.
150) Where is a complaint against a licensee filed?
a. On the Real Estate Commission’s Web site.
b. With a co-worker of the licensee
c. With the licensee themselves
d. With the supervising brokerage
151) Which of the following is true about condominium ownership?
a. A condo is a multi-family dwelling.
b. A condo is a single-family dwelling.
c. It involves proprietary leases.
d. There is a large yard to maintain.
152) What’s a subordination agreement?
a. It’s a document that’s produced by the court during bankruptcy trials that states the order of payment for creditors.
b. It’s an agreement that a previous lender signed allowing a later lender to take over the primary, or first, loan position.
c. It’s an agreement that borrowers sign to determine the order or priority for lien holders against their property.
d. It’s an agreement the lender signs saying it will provide title to the property to the borrower when the loan is paid off.
153) Which act gives companies the right to sue a competitor for making deceptive ad claims?
a. The Gramm-Bliley Act
b. The Lanham Act
c. The Privacy Act
d. The Truth in Advertising Act

154) What’s a benchmark?
a. A permanent reference point for marking datums
b. The beginning point for lot and block surveys
c. The beginning point for metes and bounds surveys
d. The beginning point for rectangular surveys
155) You have clients who are interested in purchasing a property in a floodplain. As their agent, what do you want to ensure they are aware of?
a. That resale will be difficult because the home is in a floodplain.
b. The client will not need flood insurance.
c. The house most definitely has the potential for some kind of flood damage in the next 100 years.
d. Their lender may require flood insurance, which may affect the affordability of the home.
156) What type of ground lease allows a tenant to buy out the lease?
a. Conceivable
b. Irretrievable
c. Redeemable
d. Retrievable
157) Lenders will require which type of fund for taxes and insurance?
a. Balloon fund
b. Emergency fund
c. Mortgage fund
d. Reserve fund
158) In order for you to earn compensation for brokerage activities, you must be employed as the agent of the client. How is this employment accomplished?
a. The client must be a buyer.
b. The client must make an express agreement to pay a commission to your broker.
c. You must be employed by a broker.
d. You must express an interest in representing the client.
159) A broker’s price opinion is generally written by ______.
a. A buyer
b. An appraiser
c. A real estate broker for a buyer
d. A real estate broker for a lender
160) In states without full disclosure requirements, whose responsibility is it to review disclosures, ask questions, and obtain a home inspection?
a. Buyer
b. Licensee representing the buyer
c. Licensee representing the seller
d. Seller
161) A good way for real estate licensees to prevent problems at the closing is to ____________.
a. Check up on the other party in the transaction so they don’t forget anything
b. Communicate frequently with your client and make sure they know what to do
c. Show up early
d. Work only with a known, trusted settlement officer

162) Whose responsibility is it to keep track of all buyer contingency deadlines and ensure they’re not missed?
a. The buyer
b. The buyer and the buyer’s agent
c. The seller
d. The seller and the seller’s agent
163) Which term refers to a permitted deviation from current zoning restrictions that allows an owner to use land for a purpose that’s otherwise prohibited, and requires the owner to prove the zoning creates an unnecessary hardship?
a. Moratorium
b. Property variance
c. Special use permit
d. Use variance
164) Assigning a lower-density use zone to an area that previously allowed higher density and that may reduce property values is known as ______.
a. `Bulk zoning
b. Density-reduction zoning
c. Downzoning
d. Reduction zoning
165) Mortgage lenders will ___________
a. Not use the FICO® score, only their personal judgment
b. Only use the FICO® score to determine creditworthiness of the applicant
c. Sometimes extend credit, even when a FICO® score is low
d. Weigh poor credit from the past the most heavily, even if FICO® scores have improved
166) The location of wetlands and springs at a development site is part of ______.
a. Development cost
b. Development impact
c. TDR
d. Topography
167) Which loan type is a fixed-rate mortgage where the monthly payments increase over time, according to a set schedule?
a. Blanket
b. Growing equity
c. Negative amortization
d. Pledged account
168) Octogenarians Gertie and Frank met in Sunset Living, a skilled nursing center for people with advanced Alzheimer’s disease, where they’re both residents. They fell in love and get hitched, signing a marriage certificate. This is an example of a(n) ______ contract.
a. Executory
b. Implied
c. Invalid
d. Valid

169) What’s a foreclosure?
a. A property sale that occurs in less than one week
b. A sale that fails to receive a high enough bid at auction and then falls to the bank’s ownership
c. The forced sale of a property due to the borrower defaulting on the mortgage loan
d. The sale of a property when the market value of the home is less than what is owed, plus closing costs

170) _______ can be defined as everything that’s not real property.
a. Land property
b. Personal property
c. Private property
d. Real estate

171) Which of the following items must be included in the security instrument used for a real estate transaction?

a. Borrower credit report
b. Legal description of the property
c. Lender disclosures
d. Title insurance abstract

172) Which of the following statements best describes a mortgage broker?
a. An institution that focuses on commercial lending
b. An institution that specializes in taking in savings deposits then lends money out as loans and mortgages
c. A person who works for a specific lender and can offer products from that particular institution
d. A person who works with multiple lenders to find the product that works best for the client

173) Appraiser Niles uses ______ to determine a range of values based on comparing a subject property to comparable sales. He makes sure to use some comparables that lack features of his subject property, and others that have even more desirable features, to balance out the comparison.
a. Bracketing
b. Competition
c. Correlation
d. Substituting

174) At what point in a residential transaction must a seller’s agent deliver a completed Residential Real Property Disclosure Report to a buyer?
a. At least five days prior to closing
b. Prior to showing the property to the prospective buyer
c. Prior to the parties signing a purchase agreement
d. Within three days after the parties sign a purchase agreement

175) Which of the following is a residential dwelling with attached walls, where the owner also typically owns the land on which the home sits?

a. Apartment
b. Condominium
c. Single-family detached home
d. Townhome

176) A ______ is the expected rate of return on an investment.
a. Capitalization rate
b. Cash flow
c. Income ratio
d. Profit margin

177) Carolyn is representing John in the sale of his home. Which listing agreement clause gives her additional authority and obligates her to distribute the listing to other brokers?
a. Broadcast clause
b. Broker extension clause
c. Marketability clause
d. Multiple listing clause

178) _______ are artificial attachments to land that include items such as fencing, buildings, and walkways.
a. Emblements
b. Encroachments
c. Improvements
d. Levies

179) Violators of the Sherman Antitrust Act may be subject to fines. For what amount may corporations and individuals be liable?
a. Up to $100,000 for corporations and $1,000 for individuals
b. Up to $100 million for corporations and $1 million for individuals
c. Up to $10 million for corporations and $1 million for individuals
d. Up to $1 million for corporations and $100,000 for individuals

180) You helped Frasier buy his penthouse condo. He’s just received the keys and you two have said your goodbyes after closing, and you’re heading back to the office to close out the transaction file. Which of your fiduciary duties continue?
a. Accounting and loyalty
b. Confidentiality and accounting
c. Confidentiality, loyalty, and accounting
d. Reasonable skill and care, confidentiality, and loyalty

181) When licensee Linda asks potential seller clients about their reasons for selling, what’s her purpose?
a. To create a data set about typical seller characteristics
b. To develop a rapport with the customer
c. To help her determine a suggested listing price
d. To help her gauge the seller’s motivation as part of her qualifying process

182) In the conveyance of real property after death, what trumps any terms specified in the deceased person’s will?
a. Heirs’ wishes
b. Intestate
c. Nothing
d. Operation of law

183) Which agency duties survive termination of an agreement?
a. Accounting and loyalty
b. Confidentiality and accounting
c. Confidentiality, loyalty, and accounting
d. Reasonable skill and care, confidentiality, and loyalty

184) With regard to contingencies, what responsibility does licensee Wanda have when representing buyers?
a. She should avoid contingencies altogether because they tend to put sellers off.
b. She should maximize the number of contingencies used to avoid being sued.
c. She should use a standard set of contingencies with each buyer.
d. She should use contingencies judiciously to protect her clients and the deal.

185) With which approach to value does the appraiser analyze a property’s ability to earn future income?
a. Cost approach
b. Income approach
c. Sales comparison approach
d. Taxable revenue approach

186) Which federal lending act was introduced to combat lending discrimination in low- and moderate-income neighborhoods?
a. Community Reinvestment Act
b. Consumer Credit Protection Act
c. Equal Credit Opportunity Act
d. Home Mortgage Disclosure Act

187) How large is an acre?
a. 10,000 square meters
b. 43,560 feet
c. 43,560 square feet
d. 5,480 square feet

188) Federal fair housing laws prohibit ______.
a. A 49-year-old, single woman from describing herself as such in an advertisement for a roommate
b. An ad stating families with small children need not apply
c. Evicting a tenant who sells drugs from the property
d. Refusing to rent a property to smokers

189) In a life estate, all of the following apply during the term except ______.
a. Control
b. Ownership
c. Possession
d. Transferability

190) Zoning regulations must be aligned with an area’s ______.
a. Comprehensive plan
b. Government plan
c. Majority opinions
d. Political jurisdictions

191) The courts use three primary tests to determine whether something is personal property or real property. What are the names of the three tests?
a. Method of attachment, acknowledgement and adaptation
b. Method of attachment, agreement, and accessory
c. Method of attachment, agreement, and adaptation
d. Method of reimbursement, agreement, and adaptation

192) Why is it important for a buyer to know if an underground storage tank is present on a property?
a. Buyers don’t need to know.
b. Older tanks may leak and contaminate the ground.
c. The buyer may want to use the tank.
d. The buyer will need to check if the tank is correctly sized.

193) Which of the following is appropriate to include in a buyer agency agreement?
a. A list of duties the agent owes to the buyer
b. An automatic renewal clause
c. The buyer’s age and number of children
d. The buyer’s preference for ethnic ratio of a neighborhood

194) Tim, a new buyer client, is pre-approved for a mortgage loan of as much as $250,000. This information can help to _______.
a. Identify properties
b. Inspect a property he has identified
c. Research a property he is interested in
d. Show him properties

195) It’s not a good idea to post photos of your clients’ expensive belongings. Why is that?
a. It can attract the attention of thieves.
b. It will decrease the market value of the property.
c. It will discourage criminals.
d. It will make the property less attractive to potential buyers.

196) Broker Alex learns that his friend Joann is frustrated with the broker who listed her home. Alex encourages her to break her existing agency agreement and sign with him instead. This violation is an example of ______.
a. Contractual interference
b. Failure to disclose an agency relationship
c. Making a substantial and willful misrepresentation
d. Performing services that would qualify as practice of law

197) Which document provides an estimate of the costs a buyer is likely to pay at settlement?
a. Closing Disclosure
b. HUD-1 statement
c. Loan Estimate
d. Mortgage Servicing Transfer Disclosure

198) Bob and Mary are financing $80,500 for a new home. Their lender will approve an interest rate of 6.5% if Bob and Mary pay three-and-a-half discount points at closing. How much is this?
a. $2,415
b. $2,817.50
c. $5,232.50
d. $8,050

199) What’s the purpose of a short sale?
a. To avoid foreclosure
b. To avoid responsibility for taking the traditional route to selling property
c. To replenish the local real estate market with fresh properties in a short amount of time
d. To sell the property quickly when the real estate market is booming

200) Wyatt is selling his home to Kirk, and promises in writing to have a licensed professional repair the home’s leaky roof. After closing, Kirk, who financed the purchase, discovers that Wyatt patched the roof poorly and it leaks whenever it rains heavily. Under the Illinois statute of limitations, if Kirk wishes to sue Wyatt, he must do so within ________ of the contract breach.
a. 10 years
b. Five years
c. Three years
d. Two years

201) The Lanham Act gives companies the right to ______.
a. A trial by jury
b. Make misleading advertising claims less than 10% of the time, which is known as the Lanham Percentage Right
c. Pursue clients by whatever means possible
d. Sue competitors that are using deceptive claims in ads

202) The power of the state to claim property when the owner dies without a will and without locatable heirs or creditors is also known as ______.
a. Eminent domain
b. Escheat
c. Life estate
d. Taking

203) Agents owe fiduciary duties to their clients. Among these are loyalty, reasonable skill and care, confidentiality, accounting, and disclosure. Which fiduciary duty is missing from this list?
a. Kindness
b. Obedience
c. Profitability
d. Strategy

204) George just applied for a conventional loan on a cottage he wants to buy. What percentage of the loan can he expect to submit as a down payment?
a. 0%
b. 20%
c. 25%
d. 5%

205) Which of the following best describes what an appraisal is?
a. It’s a broker price opinion.
b. It’s a comparative market analysis.
c. It’s an assessment of market value.
d. It’s an opinion of value.

206) Which of these is a recommended best practice after any discussion between a licensee and a client or other party involved in a transaction?
a. Allow no more than 48 hours to pass without additional contact.
b. Enter notes about the discussion in the property’s listing in the MLS.
c. Send a follow-up email to create a written record of the discussion.
d. Send a hand-written thank you note.

207) How do licensees use the funnel?
a. To calculate the number of homes sold in an area that the licensee may be able to list
b. To calculate the number of leads required to generate a certain amount of income
c. To calculate the number of transactions to close each year to reach a certain amount of income
d. To sift through leads to find the clients worth spending time on

208) Your clients, the Meltons, found their dream home, which they will be financing with ABC Lending. What should they include with their offer?
a. A letter describing their family’s lineage
b. A loan commitment
c. A pre-approval letter from ABC Lending
d. Cash (no checks)

209) In which of the following situations is it legal to receive compensation?
a. You help a neighbor buy a foreclosed home, and in addition to your commission, your neighbor pays your rent for that month.
b. You help your aunt sell her house as a for sale by owner, and she gives you a $5,000 savings bond.
c. You refer a client to your favorite mortgage broker, who gives you 10% of the money earned.
d. You refer a client to your sister, who works at another real estate agency. When she gets her commission check, she sends you a thank you note.

210) Dominic’s seller clients want him to lower his commission rate. What’s the best way for him to reply?
a. “I base my fees on my services. Which services would you like to give up?”
b. “No way!”
c. “Sure!”
d. “This is the standard rate in this market.”

211) Whose consent and agreement are required to conduct a short sale?
a. The buyer’s attorney’s
b. The court’s
c. The lien holder’s
d. The seller’s attorney’s

212) Bart and Claire are under contract for Claire to buy Bart’s house, but her financing fell through. They decide to cancel the contract just as if it never happened. Which termination method does this describe?
a. Reformation
b. Release
c. Rescission
d. Restraint

213) Which of these photo descriptions may be a potential MLS violation?
a. A photo of the master bedroom, including the bed, dresser, and jewelry armoire
b. Multiple exterior photos, taken in different seasons
c. Photos taken after a professional cleaning service and stager spruced it up
d. Wide-angle photos of the recently updated bathrooms and kitchen

214) The ______ provides buyers with an approximation of the costs they’re likely to pay at settlement.
a. Closing Disclosure
b. HUD-1 statement
c. Loan Estimate
d. Mortgage Servicing Transfer Disclosure

215) Which of the following activities occurs before closing?
a. The buyer and lender close on the mortgage loan commitment.
b. The buyer obtains an insurance binder.
c. The seller and buyer agents close on their cooperative brokerage agreement.
d. The seller is paid the balance of the purchase price.

216) _________ occurs when the parties meet all terms of the contract.
a. Impossibility of performance
b. Partial performance
c. Performance of contract
d. Specific performance

217) Under what circumstances may a seller legally terminate an exclusive right-to-sell listing agreement before its listing term has passed?
a. If the listing broker agrees in writing to the termination
b. If the seller has found a ready, willing, and able buyer with no assistance from the listing broker
c. If the seller loses his job
d. Under no circumstances

218) When an ______ is added to a sales contract, it changes the original terms of the contract.
a. Addendum
b. Amendment
c. Annexation
d. Appurtenance

219) For a deed to be valid, which two elements are required?
a. Habendum clause and habeus corpus clause
b. Signature of the grantee and habendum clause
c. Signature of the grantor and habendum clause
d. Signatures of the grantee and grantor

220) Agreeing to a specific price, price range, or minimum or maximum charges among competing firms is an example of which type of antitrust violation?
a. Group boycotting
b. Market allocation
c. Price fixing
d. Tie-in arrangement

221) After signing a purchase contract, buyer Pam and seller Waylon both realize that the address for Pam’s newly-purchased home reads “344 Beverly Way” instead of the correct address: “334 Beverly Way.” Which of the following is true about this situation?

a. Pam has clear evidence that Waylon tried to trick her.
b. Pam or Waylon can void this contract and present a new one with the correct address.
c. The contract is invalid because there is no offer and acceptance.
d. This is definitely a case of fraud.

222) What’s the difference between an exclusive right-to-sell and an exclusive agency agreement?
a. No commission is earned if the seller locates the buyer with exclusive agency.
b. No permission is required for dual agency with an exclusive right to sell.
c. One is for buyers, and one is for sellers.
d. They are two names for the same thing (no difference).

223) Sanjiv recently signed a brokerage agreement with a landlord client. To be considered a valid contract in Illinois, the agreement must have either a provision for the client’s right to terminate annually with a 30-day written notice or ______________________.
a. A firm expiration date
b. An automatic renewal clause
c. An option to renew clause
d. A right to early termination waiver

224) Jamilynn violated antitrust law by engaging in price fixing. Which of these actions did she most likely perform?
a. She agreed with licensees from other brokerages not to engage in business with licensees from a certain firm.
b. She followed her brokerage’s pricing policy.
c. She sets her commission based on the services she performs.
d. She told a consumer the commission rate is standard for the industry.

225) What are the three most common forms of legal descriptions?
a. Lot and block, rectangular government survey, and monument
b. Metes and bounds, lot and block, and plat map
c. Metes and bounds, lot and block, and point of beginning
d. Metes and bounds, lot and block, and rectangular government survey

226) What type of loan may be used if the buyer is obtaining seller financing?
a. Graduated payment mortgage
b. Pledged account mortgage
c. Purchase money mortgage
d. Wrap-around mortgage

227) Nina signed an exclusive buyer agency agreement with Ken, her client. Ken buys a property from another agent. What might happen?
a. Ken may owe commission to Nina.
b. Ken may void the transaction.
c. Nina may void the transaction.
d. Nothing; buyers are free to work with whomever they choose.

228) The zoning ordinances changed 10 years after Stan built his home, and it was grandfathered into the current zoning through nonconforming use. Now Stan is selling the home. Which of the following is true regarding the new owners’ responsibilities to comply with zoning regulations?
a. They’ll have to apply for new zoning.
b. They’ll have to comply with the current zoning.
c. They’ll have to get an area variance.
d. They’re able to continue nonconforming use.

229) This statement is part of a promissory note attached to a security instrument: “I have the right to make payments of Principal at any time before they are due.” What’s the name of the clause where this statement is included?
a. Lock-in clause
b. Penalty clause
c. Pre-payment clause
d. Principal clause

230) If a buyer you represent waives the inspection, what should you do?
a. Congratulate yourself—this is going to be an easy deal
b. Get the waiver in writing
c. Hire an inspector anyway
d. Perform it yourself

231) Blake recently negotiated a net lease for space in an office building he owns. Under a net lease, the tenant pays ________.
a. All of the property expenses
b. All of the property taxes
c. A portion of the property expenses
d. No rent

232) Which laws does the Office of Fair Housing and Equal Opportunity uphold?
a. Civil rights laws
b. Equal opportunity laws
c. Federal fair housing laws
d. The Fair Housing and Equal Opportunity Act

233) What was the estimated cost of improvements?
a. value = site value improvement cost – depreciation
b. or
c. improvement cost = value -site value depreciation

234) Which of the following measurement systems is mostly used in states that were part of the original 13 colonies?
a. Compass and ruler
b. Lot and block
c. Metes and bounds
d. RGSS

235) You have found the perfect home for Lucy and she is ready to make an offer. The home was built in 1938. Who is responsible for scheduling paying for the home’s lead inspection?
a. The buyer
b. The listing agent
c. The mortgage company
d. The seller

236) Which of the following is a true statement about options and option fees?
a. An option fee may be for any amount agreed to by the parties.
b. Neither party is obligated to perform with an option.
c. Once the option fee is paid, both parties are obligated to exercise the option.
d. The option is a bilateral contract.

237) The state claimed Sophia’s home under eminent domain. It appraised her property and offered to pay Sophia the appraised value for the home. What’s this process called?
a. Condemnation
b. Inverse condemnation
c. Inverse taking
d. Regulatory taking

238) ______ is when one party didn’t meet the terms of the contract in the specified timeframe, and is now being required to do exactly what was agreed to in the contract.
a. Impossibility of performance
b. Partial performance
c. Performance of a contract
d. Specific performance

239) Jay’s new loan to purchase a property includes the seller’s existing mortgage. What type of loan is this?
a. Blanket
b. Package
c. Unsecured
d. Wraparound

240) What are PCBs?
a. A chemical compound that occurs naturally in the environment
b. A substance resulting from the decay of uranium
c. A substance that grows due to moisture problems
d. Chemical compounds used in cooling and insulating, mainly in electrical transformers

241) Which term is used to define a search of public records going back at least 60 years to establish a property’s title history?
a. Correction deed
b. Limited search
c. Title examination
d. Title report

242) Which of the following describes the appropriate capital gains exclusion for a taxpayer’s primary residence?
a. The taxpayer lived in the home at least five of the seven years immediately preceding the sale, with an exclusion of up to $125,000 for single taxpayers, $250,000 for couples filing jointly.
b. The taxpayer lived in the home at least five of the seven years immediately preceding the sale, with an exclusion of up to $250,000 for single taxpayers, $500,000 for couples filing jointly.
c. The taxpayer lived in the home at least two of the five years immediately preceding the sale, with an exclusion of up to $125,000 for single taxpayers, $250,000 for couples filing jointly.
d. The taxpayer lived in the home at least two of the five years immediately preceding the sale, with an exclusion of up to $250,000 for single taxpayers, $500,000 for couples filing jointly.

243) When is a transfer tax payable?
a. During the title search
b. When passing property from parent to child or between siblings
c. When the deed is recorded
d. When there is an equitable distribution between divorced spouses

244) A buyer can submit the earnest money deposit in the form of __________.
a. A personal check
b. A postdated check
c. A promissory note
d. Verbal assurance

245) Licensees’ ethical duties to the public include not naming false consideration, _________________________, and completing paperwork accurately.
a. Memorizing the Code of Ethics
b. Sharing confidential information
c. Staying informed about real estate issues
d. Taking twice as many continuing education courses as required

246) The cost approach to finding an appraised value measures ______.
a. The cost to acquire a property only
b. The cost to acquire land and construct a reproduction
c. The cost to construct a reproduction only
d. The expenses the property is expected to produce for the owner

247) Wendell is a first-time home buyer who needs to take out a loan to help finance his purchase. What is the first thing Wendell must do once the seller has accepted his offer and the contract has been finalized?
a. Check his credit score
b. Pay off all his credit cards
c. Request that the settlement date be delayed by 30 days
d. Submit a written application for financing

248) What is the highest penalty an unlicensed individual practicing real estate may be fined for more than two offenses?
a. $10,000 per violation
b. $1,000 per violation
c. $25,000 per violation
d. $2,500 per violation

249) Which of the following is an example of a development cost?
a. Crime rates
b. Increased demand on infrastructure
c. Lower unemployment
d. School ratings

250) Which of the following items is something a lender is prohibited from doing if the lender wants to write qualified mortgages?
a. Amortization
b. Balloon interest
c. Debt-to-income ratios less than 43%.
d. Payback terms longer than 30 years

251) The question, “What’s the purpose of this appraisal?” can be answered by which step of the appraisal process?
a. Determine highest and best use.
b. Estimate land value.
c. Identify data needed.
d. State the problem.

252) A valid deed must contain all of the essential elements, and ______.
a. It must be approved by the local judge
b. It must be in nuncupative form
c. It must be in writing
d. It must be sealed in an envelope and sent to all parties via registered mail

253) In order for an owner-occupant of a building with rental units to reject applicants based on sex, marital status, gender identity, and/or sexual orientation, they must not own more than how many rental units in a building?
a. Five
b. Four
c. Three
d. Two

254) How do discrimination testers work?
a. They hold focus groups and ask questions of attendees about fair housing.
b. They provide a 20-point questionnaire on discrimination and score it, with a passing score set at 70% or more.
c. They send a minority into a place offering housing to test how they’re treated.
d. They send two different applicants whose only difference is status within a protected class, and test whether the applicants are treated differently.

255) The VA guarantees _____ of the home loan amount.

256) Investors in commercial real estate often give up _________ when they purchase a new property.
257) A limited liability company combines some advantages of
258) There are many versions of property management agreements, although all management agreements should include
259) Soundproofing and decorative material, shingles and siding made before 1970 contain what hazardous material?
260) The listing agreement is a legally binding contract between __________________.

261) Rick, a builder, is getting a loan in which two properties are used for collateral. This is an example of a _______ loan.
262) Which one of the following is a buyer required to disclose in the Purchaser’s Representations section of the Regional Sales Contract?
263) What is a land contract?
264) What must occur to effect a transfer of title?
265) It’s very important that a buyer obtain a/an _________that shows that he has obtained homeowners fire and hazard insurance.
266) What is the depreciation schedule for a residential income-producing property?
267) Radon has natural origins and is a colorless, odorless, radioactive gas that’s released when ___________ decays.
268) A buyer can submit the earnest money deposit in the form of a check or __________
269) How many approaches do appraisers use when estimating a property’s value?
270) What regulation or regulatory authority identifies sites that have hazardous substances, and requires clean-up by the responsible parties?
271) What is a gaseous compound used in refrigeration cleaning solvents, Styrofoam, and aerosol propellants?
272) The definition, “The earth’s surface extending downward to the center and upward to infinity and including permanently attached natural objects,” describes ____________.
273) When possible, comparable sales from ______ should be used.
a. At least six other properties
b. Competing market areas
c. No more than 24 months ago
d. The same neighborhood

274) In relation to appraisals, what is a “federally related transaction”?
a. An appraisal that a federally licensed appraiser conducts
b. A real estate transaction in which a federal financial agency or regulatory authority is involved
c. A transaction involving the sale of government secrets
d. A transaction in which financing is obtained from foreign investors

275) Which type of REIT receives most of its revenue from rental of its properties?
a. Equity REIT
b. Leasehold REIT
c. Mortgage REIT
d. Tax-deferred REIT

276) The income approach to appraisal is based on which value principle?
a. Anticipation
b. Capitalization
c. Competition
d. Substitution

277) Ownership in a planned unit development consists of ______.
a. A house, but not the property it sits on
b. A house, the property it sits on, and shared ownership of commercial enterprises
c. A parcel of land and the structures on it
d. A parcel of land, the structures on it, and shared common areas

278) Land, plus all things permanently attached to it naturally or artificially, is ______.
a. Interest
b. Private property
c. Real estate
d. Real property

279) John is an investor who wants to find out how much his money could’ve earned if he’d put it into a different investment, which is known as the ______.
a. Capital recapture
b. Cost of capital
c. Return of investment
d. Return on investment

280) Archie wants to buy Claire’s membership share in a cooperative. Assuming he has submitted his application, which of the following statements is true?
a. Archie need not submit an application to the cooperative board.
b. At Claire’s request, the cooperative is obligated to approve Archie’s application.
c. Claire can sell her membership share to whomever she wants, regardless of what the cooperative board says.
d. The cooperative board must approve Archie’s application before Claire can sell her membership share to him.

281) Which of the following establishes requirements for property appraisals in order to protect home buyers who use a conventional loan?
a. Appraiser Independence Requirements
b. Building codes
c. Contract laws
d. TILA

282) A property is uninhabitable in its current state. What effect will its utility have on the value?
a. Utility doesn’t influence value.
b. Value will be pushed downward.
c. Value will be pushed upward.
d. Value will remain the same.

283) Lucille is estimating the property’s loss in value for both curable and incurable items of depreciation. Which method is Lucille using to measure depreciation?
a. Age-life
b. Capitalized Value
c. Market Extraction
d. Observed Condition

284) If an adjustment is needed for sales or financing concessions, when should an appraiser make this adjustment?
a. After adjusting for specific features
b. After adjusting for time
c. First, before adjusting anything else
d. Last, after adjusting for all other factors

285) Which part of the cost approach equation is considered the most difficult part to estimate accurately?
a. Accrued depreciation
b. Property value
c. Reproduction/replacement cost
d. Site value

286) Where in the Uniform Residential Appraisal Report would you find the number of total rooms, bedrooms, and bathrooms?
a. Improvements
b. Neighborhood
c. Sales comparisons
d. Site

287) Property that is free-standing and not attached to real estate is called ______.
a. Land property
b. Personal property
c. Real property
d. Vacant property

288) Which of the following is the presentation of the appraiser’s solution to the appraisal problem for a commercial property?
a. Financial report
b. Narrative report
c. Property value report
d. Subject property report

289) Real estate, plus all of the interests, benefits, and rights included in ownership, is also known as ______.
a. Estate
b. Land
c. Personal property
d. Real property

290) Which approach to finding value would licensed appraiser Christina probably weigh most heavily when appraising a three-unit rental property?
a. Cost
b. Income
c. Sales comparison
d. Substitution

291) What’s the name of a process that estimates future income and then applies a discount rate in order to provide an investment’s present value?
a. Direct capitalization
b. Discounting
c. Reversion capitalization
d. Yield capitalization

292) You’re touring your new seller clients’ property. While you visually assess the property and measure rooms, what else should you do?
a. Ask about the age of the appliances and roof, heat sources, and whether there have been any issues with moisture, pests, or any systems
b. Give them a ballpark range for a list price
c. Have them look over the seller’s disclosures
d. Offer staging advice for the rooms

293) Why should a listing agent include a seller net sheet with a comparative market analysis?
a. This is not a good strategy.
b. To bulk up the CMA with extra paperwork
c. To remind the sellers how much commission they will owe
d. To show the sellers what the current recommended list price will net them

294) Which of the following will an appraiser do first when using the sales comparison approach?
a. Compare properties to the subject property and adjust for differences.
b. Estimate a fair and current market value for the subject property.
c. Identify features of the subject property that are in demand in the market.
d. Select recently sold comparables that are substantially similar to the subject property.

295) What type of information might an appraiser find at the local chamber of commerce?
a. Comparable data
b. Construction cost data
c. General data
d. Specific data

296) Your client has an income-producing property that generates $30,000 per year. The property is valued at $400,000. What is your client’s capitalization rate?

a. 6
b. 7.5
c. 8
d. 8.5

297) Building codes, zoning laws, and environmental legislation can all influence the value of real property. How do appraisers refer to this type of value influencer?
a. Geographic
b. Governmental
c. Physical
d. Social

298) When the building value is known, but the land value is unknown, the ______ technique can be used.
a. Building residual
b. Capital recapture
c. Direct capitalization
d. Land residual

299) What’s the name for a capitalization method which converts a single year’s expected income into a market value?
a. Direct capitalization
b. Income analysis
c. Indirect capitalization
d. Yield capitalization

300) A capitalization rate takes an investment’s ability to produce income and converts it into ______.

a. Anticipated profit
b. Expected ROI
c. NOI
d. Value

301) Which factor that influences value addresses the ease with which the property can be conveyed to another?
a. Demand
b. Scarcity
c. Transferability
d. Utility

302) What type of capitalization helps to determine the expected return on investment the property is capable of producing in a single year?
a. Annuity method of capitalization
b. Direct capitalization method
c. Sales comparison approach
d. Yield capitalization method

303) The income approach to value relies on _______ when valuing single-family and two- to four-unit properties.
a. Capitalization rate
b. Gross income multiplier
c. Gross rent multiplier
d. Monthly net rent

304) What’s an appraisal?
a. An inspection of a home for defects
b. An unbiased estimate of property value as of a specified date
c. The process of forming an opinion of a property’s value
d. The study of a property, potentially for land use or marketability

305) Real property rights include the right ______.
a. Of enjoyment
b. To avoid taxation
c. To encroach on a neighboring property
d. To pollute a neighboring property

306) Which of the following best describes how an appraiser reconciles the adjusted sales prices of the comparable properties to indicate the value of the subject property?
a. The appraiser calculates the average of the three adjusted sales prices to use as the indicated value.
b. The appraiser selects the adjusted sales price of the property most like the subject to use as the indicated value.
c. The appraiser selects the highest value of the three adjusted sales prices to use as the indicated value.
d. The appraiser selects the middle value of the three adjusted sales prices to use as the indicated value.

307) Who is responsible for developing the Uniform Standards of Professional Appraisal Practice (USPAP) that licensed appraisers must follow?
a. Appraisal Practices Board
b. Appraisal Qualifications Board
c. Appraisal Standards Board
d. Appraisal Subcommittee

308) By comparing the number of houses sold to the number of houses listed for sale in a recent time period, appraisers can determine what trend?
a. Built-up percent
b. Neighborhood growth
c. Property values
d. Supply and demand

309) An appraiser is working to find the market rent for a 10-unit apartment building. In order to compare the subject property to similar properties, she will ______.
a. Calculate a gross income multiplier
b. Calculate a gross rent multiplier
c. Convert monthly contract rent to scheduled rent
d. Convert monthly rental income to annual dollars per room

310) Which of the following will an appraiser use to determine potential gross income for an income property appraisal?
a. Capitalized rent
b. Contract rent
c. Market rent
d. Scheduled rent

311) ____________ is when one party didn’t meet the terms of the contract in the specified time frame and is now being required to do exactly what was agreed to in the contract.

312) What’s the purpose of a home inspection?

313) Rick, a builder, is using two properties as collateral for a loan. This is an example of a (n) ________ loan.
314) An acre is equal to _________.
315) Niko has decided to move somewhere else when his lease ends on April 30. This would be considered termination through _________.
316) Which liens take priority over other liens?
317) Real property ownership has significant tax advantages. Which of the following is an advantage?
318) If licensees are asked to discriminate, what must they do?
319) What is self-dealing?
320) Why was the Civil Rights Act of 1866 monumental among fair housing and anti-discrimination laws?
321) The ________ protects consumers from unwanted email solicitations.
322) Given all of the laws prohibiting discrimination in housing, why does it still occur?
323) How does the income from property taxes benefit the community?
324) Which of the following is a benefit of the MLS from a broker’s standpoint?
325) Jamal is a real estate licensee. What’s his responsibility regarding household lead hazards?
a. He must disclose the possible presence of lead-based paint to a buyer if the home was built prior to 1978.
b. Or
c. He must remind the sellers to disclose the possible presence of lead-based paint to a buyer if the home was built prior to 1978.
326) What’s the depreciation schedule for a residential income-producing property?
327) Which of these items should real estate professionals help first-time buyers with recent credit issues understand?
328) Switches that are warm to the touch, damagd panels, and lights that dim or flicker when other appliances are in use can be signs of a (n) _________ problem.
329) With local land use, the stress placed on the community’s infrastructure is an example of __________.
330) What protects the buyer before the sale and can reimburse the buyer after the sale if a title issue arises?
331) If Mega Corporation owns real property, chances are it owns it in _________.
332) What instruments are commonly used to secure the purchase of real property?
333) Jimmy always has a face-to-face meeting before he works with any buyer. What might be a good reason for this?
334) What’s a survey?
335) _________ pay earnest money to solidify their commitment to completing a real estate transaction.
336) A defect on a title that can be monetary or physical is called an _______.
337) Sampson is acting as a buyer agent. What duties does he owe the seller in the transaction?
338) When does the sales contract become a legally binding document?
339) What’s a licensee’s responsibility regarding household lead hazards?
340) What’s the purpose of testing with regards to fair housing?
341) Local real estate developments, such as a new subdivision, will likely impact _______ the most.
342) When banks have lots of funds available for lending, what tends to happen to interest rates?
343) If Rina wants to pay off her mortgage early, what might she consider before doing so?
344) Fiona signed an agreement to either buy or not buy Nick’s vacant lot for $310,000 by a specific date. What’s this agreement called?
345) Edgar’s in the process of selling his home as a short sale. What’s a short sale?
346) You represent a buyer of a $1 million property. The seller’s agent, through the seller, offers a 2.5% cooperative agent commission. Who’s your client?
347) If a rectangular building were 40 feet by 20 feet, the area would be _________.
348) ________ may be found in paint in homes built before 1978.
349) Real estate, plus all of the interest, benefits, and rights included in ownership is also known as ________.
350) Which entity ensures that contractors perform their work according to code by inspecting their job sites?
351) How do you decide whom you represent in a transaction?
352) Which mortgage market is comprised of lending institutions that lend directly to the consumer?
353) What happens when a married couple who owns a property as tenants by the entirety divorce?
354) In caveat emptor states, whose responsibility is it to review disclosures, ask questions, and obtain a home inspection?
355) Who is responsible for ordering an appraisal, completing the loan application, ordering a home inspection, and obtaining homeowners insurance before closing?
356) Which type of antitrust violation involves two or more businesses conspiring against another business?
357) What instrument is generally used to convey property?
358) As a security precaution, when posting on social media, what should you do?
359) When a buyer hands over an earnest money check to you as the buyer’s agent, what’s your responsibility?
360) When assigning a contract, the assignor should also check to be sure that language regarding ________ is part of the purchase contract.
361) In full seller disclosure states, whose responsibility is it to notify the seller of the seller’s duty to disclose all known material defects?
362) Ken, Dale, and James are brothers who own more than 100 acres as tenants in common. The relationship between Ken and James disintegrated, and so James initiated a lawsuit. The end result is that the court gave each brother a designated set of acres to own. What was granted by the court?
A. Bifurcation
B. Parcel
C. Partition
D. Severalty

363) Eva, Stella, and Lynn own a vacation home two blocks from the beach. Sadly, Stella passed away this winter, and so when summer arrives Eva and Lynn will be sharing the home with Stella’s nephew Drew, to whom Stella willed her share of the property. What type of ownership is this?
A. Estate in severalty
B. Joint tenancy
C. Tenancy by the entirety
D. Tenancy in common

364) One way to demonstrate reasonable skill and care is by acting within the scope of your duties. When working an open house for one of her listings, Keira meets a young couple. They’re not looking to purchase anything right now, but are trying to get a sense for how much house their money will buy in different areas of town. Keira tells them about a few listings she knows about and the listing prices compared to house size and amenities. They also ask about financing a new home, the best way to save money for a down payment when they have other debt, and how much they should save. She tells them that in order to receive the best terms, they should have about 20% of the sale price saved for a down payment and that other debt will factor into the ability to obtain financing, so they should pay off anything they can. She also tells them that fixed-rate mortgages are better than adjustable-rate mortgages.
365) Was Keira’s discussion with the couple within the scope of her expertise?
A. Yes. Since the couple are not clients, she has more flexibility in what she can tell them.
B. No. She shouldn’t have told the couple about other properties around town.
C. No. She shouldn’t have given the couple advice related to specific mortgage types.

366) A friend of Keira’s represents sellers of a two-bedroom bungalow that would be perfect for Keira’s buyer client. She shows the buyer the property, but doesn’t tell them she knows the seller’s agent.
A. Loyal
B. Disloyal
367) Keira has a buyer looking at condos downtown, but she shows him a condo in the same price range slightly farther away from his desired area so he can see the difference in what his money will buy.
A. Loyal
B. Disloyal
368) Which of the following statements about the fiduciary duty of confidentiality is true?
A. It doesn’t extend to material facts relating to the property.
B. It encompasses any and all information the client tells the agent, not just confidential information.
C. It ends with the termination of the agency agreement.
D. It never conflicts with the duty of disclosure.

369) Which of the following is an example of the duty of loyalty?
A. Carrying out a client’s instructions without question
B. Keeping a client’s confidential information confidential
C. Never questioning a client’s opinion
D. Putting the client’s interest first

370) Which of the following statements best describes a listing that terminates by performance?
A. Evan performed all required fiduciary duties and tasks in listing Von’s house, even though it didn’t sell before the listing expired.
B. Greg listed a property that failed to sell during the term of the listing agreement. Aside from that, he performed all the tasks promised to the seller.
C. Marty listed Todd’s condo. With Marty’s efforts they got almost to closing only to have the buyer’s financing fall through.
D. Roberto listed a property for Terrence. After two failed offers, the property made it to a successful closing.

371) Which act prevents the fraudulent sale of property sight unseen through the regulation of land sales across state lines?
A. Interstate Land Sales Full Disclosure Act
B. Intrastate Citizens Protection Act
C. Police Power Act
D. Subdivision Act of 1997

372) The statute of frauds states that if a contract transferring ownership of real property is not in writing it is __________.
A. Enforceable
B. Executory
C. Void
D. Voidable

373) What is the key difference between assignment and novation of a contract?
A. Assignment releases the original party from all obligations, while novation does not.
B. Individual contracts must specifically allow novation, but not assignment.
C. Novation is disallowed in many states, while assignment is not.
D. Novation releases the original party from all obligations, while assignment does not.

374) When property changes hands, the deed is recorded. There’s a fee for recording. What is the benefit to the grantee of having the deed recorded?
A. It impacts who owns the property.
B. It protects against foreclosure.
C. It puts the public on notice regarding ownership.
D. It’s required by law.

375) How long after a notice of cessation or completion is filed can a contractor file a mechanics lien?
A. Within 60 days
B. Within 90 days
C. Within six months
D. Within two years

376) Frank has waited 30 days after notifying a client that the project he finished remains unpaid. The client has not filed a notice of completion or cessation with the county clerk. How long does Frank have left to file a mechanic’s lien?
A. 10 days
B. 30 days
C. 60 days
D. 90 days

377) What is the six-month rule for homestead exemptions?
A. No liens may be filed against homesteads unless at least six months’ notice has been given to the homeowner.
B. The property owner has six months to sell the property after a lien is filed.
C. The property owner must live in the home for at least six months before they may qualify for a homestead exemption.
D. The property owner must reinvest the homestead exemption amount within six months in another homestead to protect it from creditors.

378) Kris made an offer on Lincoln’s townhouse. However, Kris offered no earnest money. If Lincoln accepted her offer, would it be binding?
379) Which type of lien affects real and personal property?
380) What law governs the rules and regulations that tenants and landlords must adhere to in counties with 75,000 residents or more?
381) Which document is used to protect the buyer from title defects after closing?
382) In a typical real estate transaction, who is the seller?
383) A property manager is a ______ agent for the owner, and as such is authorized to perform all of the duties related to the property on the owner’s behalf.
384) Which scam, as described by the FBI, involves an appraiser working secretly with a borrower and providing a fraudulent appraisal report to the lender?
385) Which act encourages fair, truthful, non-deceptive, and evidence-supported claims in advertising?
386) Your assistant, Brady, often answers client questions about offers and negotiation. What do we know about Brady?
387) Sandra enters into a contract to sell her home to Paul. Under the statute of frauds, in order to be legally enforceable, the written contract must name the contracting parties, identify the subject matter of the contract, and ______.
388) A complaint was filed against Regina, a real estate licensee. At the TREC hearing, her license was revoked. How many commission members must have agreed with that decision?
389) Which of the following is true about title to a property?
390) The price for which an owner offers to sell a property is called the ______.
391) Per the TAR Purchase and Sale Agreement, when does the sales contract become a binding agreement?
392) In real estate contracts, which are required: legal descriptions or street addresses?
393) If a licensee is serving as a facilitator, rather than representing a buyer or seller, this must be disclosed to whom?
394) A consumer has just sued TREC for its role as an administering authority of license law. What will the likely outcome be?
395) What’s the maximum the Real Estate Education and Recovery fund will pay out on behalf of a single licensee, regardless of the number of awards or transactions involved?
396) Lacey is preparing an offer for her buyer clients, and it’s time to enter the amount of earnest money they’re going to offer. Which of the following statements is true regarding what earnest money the buyers should offer?
397) Which of these is an example of illegal market allocation?
a. Based on licensee expertise, Uptown Homes agrees with Country Cottage Realty to focus exclusively on suburban, rather than rural, homes.
b. A month-to-month lease agreement is considered to be this type of leasehold estate, in which the total duration is unknown.
c. estate at will
398) What may be found in paint in homes built before 1978?
399) A property appraised for $257,000 and the buyer paid $249,000. Which value will a lender use when determining the loan-to-value ratio?
400) Per the EPA, what must be conducted before a project may be approved for development?
401) What’s the purpose of the Interstate Land Sales Full Disclosure Act?
402) As required by the statute of frauds, every deed must have which of the following?
403) Which of the following is an adverse material fact?
404) What must a license applicant demonstrate to minimize the chance of license denial?
405) Errors and omissions insurance covers _______ who are sued by consumers for inadvertent mistakes in a real estate transaction.
406) At its most basic level, which type of antitrust violation is a conspiracy between business competitors to set their prices to buy or sell goods or services at a certain price point?
407) In what type of market might an agent ask the multiple buyers who have submitted offers to submit their highest and best?

408) Which choice correctly identifies the seven protected classes according to the Fair Housing Act?
409) Your clients, the Jamesons, are selling their lakefront property. They receive an offer, and the buyer has included a pre-approval letter. The Jamesons balk, saying, “We want a pre-qualification letter, or we’re not selling.” What do you tell them?
410) Which one of the following statements regarding depreciation schedules is true?
411) Which entity guarantees loans?
412) Based on the duty of reasonable skill and care, if clients ask agents for advice in areas outside of an agent’s scope of expertise, what should agents do?
413) When finding listings, which statement describes the farming approach?
414) Mary, who’s suffering from Alzheimer’s disease, signs a contract to buy Edgar’s home. Before the deal closes, it’s determined that Mary lacks legal capacity to enter into a contract. Which party is permitted to void the contract?
415) Historically, what do property values tend to do over long periods of time?
416) Which type of estate conveys possession and control, but not title?
417) Broker Regina tells her client that a property is zoned as residential, even though she’s pretty sure it’s zoned commercial. This violation is an example of _________.
418) Uh-oh. You failed to present an offer on behalf of your client in a timely manner. As a result, the seller accepted a lower offer from another buyer. For which of the following could your buyer sue you?
419) What’s a covenant between a lessor and lessee?
420) ______ is when the buyer and seller settle all terms of their agreement.
421) What type of real estate market occurs when both supply and demand are low?
422) Once signed, the listing agreement is a legally binding contract between _______.
423) Proposed zoning ordinances must undergo tests to determine their validity. These tests include which of the following?
424) Which type of buyer tends to know little about the homebuying process and has limited funds?
425) In a deed, this person is referred to as “the party of the first part.”
426) When preparing the sales contract, when is it acceptable for a licensee who is not an attorney to offer legal advice to the client?
427) Loans available through the Farm Service Agency have which of the following characteristics?
428) Which type of property manager works mostly with real estate developers and investors?
429) How can a licensee earn commission from a seller who has not listed the property through an agent?
430) The owner-manager relationship is based on the property manager performing particular duties. This would include ______.
431) What would the monthly rate be if annual taxes are $890? Round to the nearest cent.
432) Before closing, who is generally responsible for obtaining an appraisal, completing the loan application, ordering a home inspection, and securing homeowner’s insurance?
433) Co-ownership with inheritance rights is what kind of real property ownership?
434) To what properties does the Tennessee Residential Property Disclosure Act apply?
435) Jorge is a dual agent. He owes his clients all of the following fiduciary duties except ______.
436) The Title and Conveyance paragraph of the TAR Purchase and Sale Agreement stipulates that the seller is conveying the property to the buyer with ________________.

437) An affiliate broker may perform brokerage duties under what circumstances?
438) What is a primary factor a lender reviews when determining if a borrower is a good credit risk?
439) Under which of the following conditions is it unacceptable to disclose confidential information?
440) What type of real estate market occurs when supply is high and demand is low?
441) Brenda, a new licensee, wants to impress her buyer clients, the Changs, who are practically royalty in China, their country of origin. Her responsibility is to _________.
442) Kevin, a real estate licensee, works independently instead of under a sponsoring broker. This means that he is licensed as ________.
443) Your clients, the Samsons, ask you to provide them with an appraisal in order to determine a list price for their property. Since you’re not an appraiser, what should you do?
444) Which of the following is a violation of federal fair housing law?
445) When a higher-quality property is adjacent to a lower-quality property, it can increase the lower-quality property’s value. What economic principle is this?
446) The Emery family, along with 20 other families, purchased a timeshare estate that will enable them to share a condominium in a resort community. A timeshare estate involves a ______ type of ownership.
447) Which of these pieces of legislation work together to prevent discriminatory lending practices?
448) Which of the following scenarios is an example of group boycotting?
449) Caveat emptor means ________.
450) Michael doesn’t have a real estate license, but he helps his friend, Nancy, sell her home. What can Michael legally receive as compensation?
451) Which type of real estate license requires successful completion of a 90-hour course and passing the licensing exam before a license is issued?
452) Brendon is obtaining a loan to buy a home. When reviewing his loan documents, he sees one called a note and one called a mortgage. What is the role of the note?
453) How many approaches to value do appraisers generally use?

454) Mark works at Farm and Country Bank, and has arranged an agricultural loan for Josh, a local organic farmer. Josh didn’t meet the bank’s normal underwriting standards, but Mark made the loan because he was able to arrange for a guarantee from ______.
a. Farmer Mac
b. The Farm Credit System
c. The Farm Service Agency
d. The Federal Agricultural Housing Authority

455) When a developer selling timeshare units receives earnest money deposits or down payments, what is the developer required to do with that money?
a. Forward the money to the timeshare owner’s association
b. Hold the money in the developer’s escrow account for no more than three days
c. Hold the money in the developer’s escrow account through the buyer’s rescission period
d. Maintain the money in a trust fund account that will be used for maintenance of the timeshare complex

456) Which type of events are generally on a title insurance policy’s schedule of exceptions?
a. Claim from an owner with an unrecorded deed
b. Claim that was filed on the public record before a title insurance policy’s effective date
c. Liens or claims that aren’t on the public record
d. Mechanic’s liens filed prior to a title insurance policy’s effective date

457) Annie and George have been saving and are finally ready to purchase their first home for their family (including their two toddlers). They want to make an offer on a sweet little bungalow in a quiet Richmond neighborhood. If the sellers are represented by a real estate licensee, which situation would be a violation of fair housing laws?
a. Their offer is rejected because it’s too low.
b. Their offer is rejected because the seller knows the neighbors don’t like children.
c. They rescinded their offer when a house they were previously outbid on became available again.
d. They rescinded their offer when their inspection revealed structural issues with the house.

458) Who is responsible for testing private wells for water safety?
a. Property owners
b. The DEP
c. The EPA
d. The local water utility

459) Which of these statements about cooperating with other licensees is true?
a. Licensees must cooperate with and compensate other licensees, but only when it’s their client’s best interest.
b. Licensees must cooperate with and compensate other licensees, even if it is not in their client’s best interest.
c. Licensees must cooperate with other licensees, but only if it’s in their client’s best interest, and there’s no obligation to compensate cooperating licensees.
d. Licensees must cooperate with other licensees, even if it is not in their client’s best interest.

460) Who is responsible for testing community wells?
a. The DEP
b. The EPA
c. The local health department
d. The local water utility

461) The ______makes it illegal to send unsolicited commercial solicitations via fax without the recipient’s permission or an established relationship.
a. Anti-Telemarketer Act of 2000
b. CAN-SPAM Act of 2003
c. Do Not Call Implementation Act of 2003
d. Junk Fax Prevention Act of 2005

462) What is a general lien?
a. A claim against a person and all of that person’s property
b. A claim against a specific piece of property
c. A type of mortgage lien
d. A type of tax lien

463) Under standard lease provisions, a demising clause would contain ______.
a. A demising clause states when the landlord will lease the property and the date the tenant will take possession.

464) A requirement for legal competence
a. The date the tenant will take possession of the property
b. The schedule for rate increases
c. The street address and unit number, if applicable, and possibly the legal description
d. The date the tenant will take possession of the property

465) Which of the following statements describes laws and ethics?
a. Both laws and ethics establish what actions are deemed illegal and are punishable.
b. Ethics are consistent from person to person, whereas laws may change.
c. It’s not a punishable offense to violate either laws or ethics.
d. Laws are made by the government, and ethics are dependent on conscience and values.

466) How many hours of continuing education must first-year salespersons take?
a. 16
b. 30
c. 60
d. None; they must take 30 hours of post-licensing education

467) Activities that restrain trade and reduce competition and choices for consumers are considered to be what kind of violations?
a. Agency law
b. Antitrust
c. Fair housing
d. License law

468) When prospecting and soliciting for new business, licensees should be familiar with what federal acts?
a. Do Not Call Implementation Act, CAN-SPAM Act, and Junk Fax Prevention Act
b. Do Not Call Implementation Act, Sherman Act, and Unfair Trade Practices Act
c. Human Relations Act, Fair Housing Act, and Americans with Disabilities Act
d. Sherman Act, Clayton Act, and Unfair Trade Practices Act

469) Real property ownership may have significant tax advantages. Which of the following is a potential advantage?
a. Depreciation
b. Insurance expenses
c. Taxable gains
d. Transfer tax

470) Your neighbor Mort wants to buy an investment property but he’s a busy man and asks you to act as his attorney in fact as well as his buyer’s agent. What should you tell Mort?
a. Sure, but it only under a specific power of attorney
b. Sure, but only because I also hold a law degree
c. That would be a conflict of interest
d. That would not be possible because neighbors are not allowed to be attorneys in fact

471) What’s an MLS?
a. A classified advertising site that charges by the column inch
b. A free service for real estate professionals and the public
c. An online database of active, under contract, sold, expired, and withdrawn listings
d. A proprietary site open only to real estate professionals

472) Carson is purchasing a $600,000 property by obtaining an 80/20 loan. How much is Carson financing?
a. $120,000
b. $420,000
c. $480,000
d. $600,000

473) Why does HUD test for housing discrimination?
a. To create revenue through fines
b. To educate the public
c. To punish blatant discrimination
d. To uncover hidden discrimination

474) Which of the following options describes a method by which a licensee can determine an appropriate listing price range?
a. Appraisal
b. Comparative market analysis
c. Creative market analysis
d. Proforma

475) The secondary market is comprised of _________________________.
a. FNMA, GNMA, FHLMC, and lending institutions that buy loans from other lenders
b. Lending institutions that lend directly to consumers
c. Savings and loans, thrifts, and credit unions
d. The VA and the FHA

476) Which of these is NOT a form of ownership for real estate?
a. Joint tenancy
b. Riparian
c. Severalty
d. Tenancy in common

477) What is the purpose of the Common Interest Communities Law?
a. To administer and promulgate fair housing laws within the scope of common interest communities.
b. To collect taxes from common interest communities.
c. To create a policy board and regulations to administer the Virginia Property Owners’ Association Act, Cooperative Act, Condominium Act, and Time-share Act.
d. To develop regulations for licensure of real estate professionals who specialize in common interest communities.

478) What are two types of evictions?
a. Actual and constructive
b. Easement and encroachment
c. Proactive and reactive
d. Probationary and statutory

479) Federal and state fair housing laws are designed to _______:
a. Allow the disabled to pay lower rents
b. Group like-minded people together in neighborhoods and housing units
c. Help those from other backgrounds assimilate into American culture
d. Protect certain classes of people from housing discrimination

480) If you’re in a caveat emptor state, which statement about property condition disclosures is true?
a. The seller isn’t obligated to proactively disclose property defects.
b. The seller must conduct a home inspection in addition to providing disclosure forms.
c. The seller must proactively disclose any known defects.
d. The seller must proactively disclose any known defects and the seller must have a home inspection conducted.

481) What can a wet environment with little air circulation do?
a. Kill mold
b. Lead to mold growth
c. Prevent mold from growing
d. Remove mold

482) When does the purchase agreement become a legally binding contract?
a. After an attorney reviews it
b. Once both parties sign it
c. Once the seller provides verbal agreement to the buyer’s offer
d. The moment the buyer signs the document and sends it to the seller

483) Joe and Emma Parsons begin informally working with their neighbor Kyle, who’s a real estate licensee, to find a bigger house. The parties have not signed any agreements or discussed the arrangements. This is an example of a(n) ______ agency agreement.
a. Executory
b. Express
c. Implied
d. Unspoken

484) A broker’s price opinion is generally written by whom?
a. A buyer
b. An appraiser
c. A real estate broker for a buyer
d. A real estate broker for a lender

485) Licensee Kyle has had a few casual meetings with a potential client, Mary. Mary told Kyle the type of home and area she’s interested in, and Kyle mentioned a few homes he thinks Mary might be interested in. Although Kyle hasn’t said he will continue to look for homes for Mary, Mary believes he’ll do just that. Which of the following statements about this situation is correct?
a. Because Kyle doesn’t know if Mary is working with another agent, he’s just inadvertently created a dual agency situation.
b. Because Kyle has performed some agency-related tasks for Mary, he has an express agency agreement with her.
c. Kyle and Mary have no agency agreement—either express or implied—until Kyle begins showing Mary homes.
d. Kyle’s actions may have created an implied agency agreement with Mary.

486) Which document spells out for buyers all settlement costs in a federally related residential real estate transaction?
a. Closing Disclosure
b. Consumer Notice
c. Freddie Mac borrower disclosure
d. MLS affidavit to consumers

487) Google and “if this, then that” alerts can assist you with which of the following?
a. Guaranteeing that the property owner receives all rental income
b. Monitoring your online listings for rental scams
c. Posting your online listings for rent
d. Removing your listings from a rental website

488) The number of properties available describes this factor that influences value.
a. Demand
b. Scarcity
c. Transferability
d. Utility
e. Scarcity is related to demand, and reflects the supply of property, or lack thereof.

489) Which of these items should real estate professionals help first-time buyers and buyers who have experienced recent credit issues to understand?
a. Appropriate financing
b. High-risk loan products
c. Rental options
d. Rental options and high-risk loan products

490) Jill needs to pay the web developer who created a new website for her brokerage, but her checking account is low, so she floats herself a loan from earnest money kept in the brokerage’s escrow account and deposits it in her account for a few days before paying the developer. Which answer correctly identifies the violation(s) Jill has committed?
a. Commingling and conversion
b. Commingling only
c. Conversion only
d. Deceptive business practice

491) Which of these situations would result in the earnest money being disbursed to the seller?
a. The buyer backs out when the appraisal comes in too low to satisfy the contingency.
b. The buyer includes hard money in the purchase offer, then terminates the sale when the appraisal comes in low.
c. The escrow agent converts the earnest money.
d. The seller gets cold feet and cancels the transaction.

492) Your client, Bruno, is an investor. He is in the process of selling a fourplex and mentions to you that he hates the idea of the capital gains tax he’ll be subject to. What should you tell him?
a. “Capital gains do not apply to investment properties.”
b. “Investors don’t pay taxes.”
c. “Taxes are required, no matter what you do.”
d. “You might consider a 1031 tax-deferred exchange.”

493) Mary is preparing a purchase offer for her buyer client. It’s a pretty standard offer: a little less than list price, with the seller paying a little toward the buyer’s closing costs. Mary fills in the blanks on a standard form used in her brokerage firm based on the current situation. Is this okay?
a. No, Mary is not an attorney and shouldn’t prepare contracts.
b. No, Mary should have her client prepare the offer.
c. No, Mary should hire an attorney to prepare the purchase offer.
d. Yes, Mary can use the standard forms that her brokerage uses (assuming these forms were originally created or approved by an attorney).

494) Cracks, holes, or rotten areas on a soffit are common ______ issues.
a. Chimney
b. Foundation
c. Roof
d. Window

495) A licensee says, “This is a dream home with the best views in town.” This is an example of _______.
a. A lie
b. Intentional misrepresentation
c. Positive misrepresentation
d. Puffery

496) Plat of Block 28, Woodmen Heights Tract, recorded in Map Book 27, page 68, at the Eldor County Records Office is an example of which essential element of a deed?
a. Consideration
b. Granting clause
c. Habendum clause
d. Legal description

497) Which of the following best describes the fiduciary duty of confidentiality?
a. You must keep all material facts confidential.
b. You must keep all parties’ information confidential.
c. You must not discuss confidential matters with your client.
d. You must not share your client’s confidential information.

498) ______ is a process in which an appraiser determines a probable range of values for a property by comparing a group of comparable sales to the subject. The appraiser attempts to include both superior and inferior units of comparison, such as age, transaction price, etc.
a. Bracketing
b. Bridging
c. Substituting
d. Surrounding

499) Cultivated crops are considered personal property even though they’re part of the soil, and they’re known as _______.
a. Accessories
b. Accoutrements
c. Emblements
d. Produce

500) Which statement best describes a trade fixture?
a. A fixture or item installed by a commercial tenant that becomes personal property of the landlord when the tenant moves out
b. A fixture or item installed by a commercial tenant that’s considered personal property of the tenant
c. Personal property of the tenant used as a bargaining chip when negotiating a sale
d. Property of the landlord that’s used by the tenant and must remain on the premises when the tenant moves out

501) A landlord discovers that his married tenants are expecting their first child. He wouldn’t have rented to the couple had he known they were going to have children, so he serves them with an eviction notice and tells them they must be out in 30 days. The landlord is guilty of ______.
a. Familial status discrimination
b. Racial discrimination
c. Religious discrimination
d. Sex discrimination

502) What types of monies received from income-producing properties should be deposited into an escrow account?
a. Current rent and prepaid rent
b. Current rent and security deposits
c. Current rent, prepaid rent, and security deposits
d. Prepaid rent and security deposits

503) Which option best describes a delivery and acceptance of a deed as required?
a. Grantor has acknowledged and voluntarily signed the deed in front of a public notary and delivered it in person to the grantee or an agent of the grantee
b. Grantor has handed the grantee the deed and the grantee has signed it in front of a public notary voluntarily accepting it.
c. Grantor has mailed the deed to the county clerk’s office for recording.
d. Grantor has signed the deed and left it on the grantees patio.

504) What’s the purpose of a POA’s restrictive covenants?
a. To encourage the residents to live there long-term
b. To make it harder to sell the properties within the POAs
c. To preserve a community’s overall aesthetic
d. To weed out people of certain ethnicities

505) What is the term used to describe submerged land below the mean water mark?
a. Aqueducts
b. Channels
c. Mud pits
d. Water bottoms

506) In which of these situations does the disclosure for unrepresented parties need to be provided?
a. Any time an agent is interacting with an unrepresented party and the discussion starts to become substantive
b. Any time an agent speaks to a party who is not represented by an agent
c. Any time an agent speaks to the opposing party without their agent present
d. To any prospective buyer attending an open house

507) An organization with many investors who jointly participate in a real estate investment and must adhere to the rules and regulations of the Securities and Exchange Commission is a ______.
a. C corporation
b. Partnership
c. S corporation
d. Syndicate

508) Which term describes the process of real property becoming personal property by detaching it from the land?
a. Accoutrement
b. Annexation
c. Emblement
d. Severance

509) What’s the purpose of testing with regard to fair housing?
a. To educate applicants
b. To increase fines on landlords
c. To punish blatant discrimination
d. To uncover hidden discrimination

510) A borrower has a 30-year, $500,000 loan with an interest rate of 6.25%. His monthly principal and interest payment is $3,078.59. How many payments will he make over the course of the loan?
a. 180
b. 240
c. 30
d. 360

511) All of the homes on Elm Street are currently on septic systems. However, the county plans to extend the sewer lines to Elm Street within the next two years. What’s the biggest reason why it’s important for your buyers to know this?
a. Public sewers have a better safety record than septic systems.
b. Sewer installation means construction traffic.
c. Some people prefer septic systems to having to tie into public sewers.
d. The county will likely impose an installation fee on Elm Street residents to cover the costs.

512) Which statement about lead-related health problems is true?
a. Lead can be traced to senioritis.
b. Lead causes blindness upon contact with the eyes.
c. Lead is associated with coronary heart disease.
d. Lead may cause behavioral problems, learning disabilities, seizures, and, in extreme cases, death.

513) John’s property is shaped like a triangle. The street side is 185 feet, and from the street to the longest point of the triangle is 225 feet. How do you calculate the square footage of John’s property?

a. Add 185 to 225.
b. Multiply 185 by 225, then divide by four.
c. Multiply 185 by .5; multiply your answer by 225.
d. Multiply 185 x 225.

514) Using the capitalization formula, what is the value if the net operating income is $20,000 and the rate of capitalization is 10%?
a. $2,000
b. $20,000
c. $200,000
d. $2 million

515) A fire destroyed Meredith’s house. Meredith contacted her insurance company, and she was shocked to learn her insurance policy didn’t fully cover what she paid for the property. How does the insurance company determine the replacement value of her home?
a. Its current market value
b. The amount it appraised for
c. The amount it would cost to completely replace her home
d. The original sales price when it was first constructed

516) A quitclaim deed does which of these?
a. Transfers a property with only the covenant of warranty
b. Transfers the property with full covenants
c. Transfers without warranty any interest or title the grantor has when conveying it
d. Transfers with warranty any interest or title the grantor has in the property when conveying it

517) In many cases, property managers must get explicit permission in order to disburse funds from a trust account. What is one common way to do so without this explicit permission?
a. Ensure the bank has a signature card for the property manager.
b. Give the property manager a power of attorney.
c. Have all who supply trust funds sign waivers.
d. Put it in the property management agreement.

518) Johannes must obtain a permit for a construction project that is located right next to a wetlands. Which federal law or regulation requires him to get the permit?
a. Army Corps Construction Regulations
b. Clean Water Act
c. Coastal Zone Management Act
d. Rivers and Harbors Act

519) When a licensee is working with a property located near a Superfund site, what does that mean?
a. A portion of the sale price must go to the EPA to fund clean-up of the site.
b. The licensee is required to disclose potential health threats to anyone in the area when showing the property.
c. The licensee must disclose the existence of an environmental hazard in the area.
d. The property cannot be sold until the site is removed from the NPL.

520) Which of these situations represents the illegal practice of redlining?
a. Arlo, a licensee, distributed a flyer in several neighborhoods warning of impending commercial developments that would negatively impact property values.
b. Eunice refuses to allow her agent to show her house to families with children.
c. Hunter, a mortgage broker, refuses to underwrite mortgage applications from applicants who are buying in specific neighborhoods, based on the neighborhood’s demographics.
d. Jaime is working with Korean clients. He’s focusing on homes in Korean communities because he thinks his clients will be more comfortable there.

521) Redlining is the practice of selecting geographical areas in which no mortgage loans will be written (based on demographics instead of creditworthiness).
522) Jeanetta leases an apartment from Quad City Leasing. Jeanetta has filed a complaint with the state real estate licensing division stating that Marissa, Quad City’s property manager, breached her fiduciary duty of loyalty to Jeanetta. Which of these statements about this situation is true?
a. As a property manager, Marissa doesn’t owe fiduciary duties to clients or residents.
b. As a property manager, Marissa owes fiduciary duties to her client and the apartment community.
c. If Marissa did breach a fiduciary duty to Jeanetta, Jeanetta has a legitimate complaint.
d. Marissa owes fiduciary duties only to the landlord.

523) Property managers owe fiduciary duties to their clients (the landlord) and the community as a whole, not to individual residents.
524) In which of these situations would the property most likely be conveyed with a trustee’s deed?
a. Karla is the executor of her father’s estate and is selling his farm.
b. Marvin and Tricia are selling their house.
c. Tim’s property will be sold at auction in a foreclosure action.
d. TLC Lending is selling an REO property.

525) states that use a deed of trust as security for a mortgage, the trustee conveys foreclosed property with a trustee’s deed.
526) Luci’s client Kaden wants to purchase a new construction property, and he wants to get as much house as he can afford. Which of the following does Luci need to advise Kaden about regarding interest rates when purchasing a newly built home?
a. If Kaden uses his builder’s lender, he can get a better interest rate and won’t have to worry about market fluctuations between now and closing.
b. Kaden doesn’t need to worry about interest rates for his long-term mortgage until 90 days prior to closing when he can lock in the best rate.
c. Kaden needs to allow for the possibility of an interest rate increase between now and closing because lenders aren’t likely to lock in an interest rate for more than 90 days before closing.
d. Kaden needs to lock in the interest rate on his long-term mortgage now to avoid unexpected increases that could put his loan amount over his approval amount.

527) Jerrica is set to close on the property she’s buying on Friday. Because of other delays in the closing date, Jerrica’s interest rate as of the day of closing will increase by 1/4 of a percent. What impact does this have on the closing?
a. A new Closing Disclosure must be issued at least three days before the closing date.
b. A new Loan Estimate must be issued, so the closing date must be moved back.
c. Jerrica will not be able to close until she re-applies for her loan.
d. The closing date will remain the same, but Jerrica will need to bring additional funds to the closing

528) Mike’s been friends with Tim since college. They often work together: Mike flips houses and Tim’s an appraiser that he uses frequently. It works out great for both friends and Mike definitely gets a better appraised value on the flips Tim handles. For every appraisal Tim handles for him, Mike gives him a $100 gift card. In what illegal practice does it sound like they’re engaging?
a. Equity skimming
b. Falsely inflating appraisals
c. Under-valuing the homes
d. Violating fair housing laws

529) For conventional loans in which the loan-to-value ratio is in excess of of a certain percentage, lenders generally require private mortgage insurance. What’s this percentage?
a. 75%
b. 80%
c. 85%
d. 90%

530) Loans above 80% don’t conform to Fannie Mae/Freddie Mac guidelines, so a lender may require PMI to offset the risk.
531) Corinne is 68 years old and employed full time. She’s of Spanish descent, is raising her 12-year-old grandson, and lives with her partner, Katherine. She requires an accessible apartment because she uses a wheelchair. Under which of the following federally protected classes might Corinne be protected if she faces housing discrimination?
a. Age, employment status, national origin, familial status, and sexual identity
b. Age, race, familial status, sexual identity, and disability
c. National origin, sex, disability, and familial status
d. Religion, familial status, and disability

532) Federal fair housing laws don’t name age, employment status, or sexual identity as protected classes. Corinne would be protected if she experienced housing discrimination based on her national origin, sex, disability, or familial status.
533) Savvy’s buyer client made an offer on a property but is having second thoughts. Savvy tells her client that she’ll ask the seller’s agent for an extension on the inspection period “to gather more bids,” and use that time to look at other properties to avoid losing out on the current property. Savvy’s client found a property she liked better, so they made an offer. The offer was accepted, so Savvy contacted the first property’s agent to terminate that offer. Is this wrong?
a. No, she acted in her client’s best interest.
b. No, she fulfilled her duty of loyalty to her client.
c. Yes, she broke a contract.
d. Yes, she did not treat the other party honestly, or act in good faith.

534) In pricing a property, what might expired listings tell the real estate professional?
a. The price at which a property is most likely to sell
b. The price at which a property won’t sell
c. The property’s competition
d. When the home will sell

535) How are principal meridians and baselines used in the rectangular government survey system?
a. All legal descriptions in this system use a single principal meridian and multiple baselines.
b. A principal meridian separates each township from the next and baseline separates each tier from the next.
c. Each legal description in this system originates at the intersection of a principal meridian and a baseline.
d. The boundary formed by two principal meridians and two baselines forms a township.

536) A buyer is purchasing a property for $400,000. His loan-to-value ratio is 80%. The lender also charges a 1% loan origination fee. How much is the loan origination fee?
a. $3,200
b. $3,600
c. $4,000
d. $800

537) An 80% LTVR means the buyer is financing 80% of the purchase price. This equates to $320,000, and 1% of this amount is $3,200.
538) Margo’s accountant tells her that she’s eligible to deduct the property taxes she paid last year. Select the statement about this deduction that’s true.
a. Margo can only deduct the property taxes charged back to her at closing.
b. Margo has to be an investor to be eligible to deduct property taxes.
c. Margo is in the ownership stage of the property ownership lifecycle.
d. Margo is in the reversion stage of the property ownership lifecycle.

539) Katherine is purchasing a second home as an investment/vacation property. She has a large down payment, and the seller is financing the rest of the purchase. Which of these statements is true?
a. The CFPB provides forms similar to the Closing Disclosure and Loan Estimate for seller/financers to use.
b. The Closing Disclosure and Loan Estimate aren’t required in a seller-financed transaction.
c. The seller is required to provide the same disclosure forms to Katherine as a standard lender would provide.
d. The seller will provide the Closing Disclosure and Loan Estimate to Katherine but has a longer timeframe to do so than a traditional lender would have.

540) In a seller-financed transaction, the Closing Disclosure and Loan Estimate aren’t required. Some other form of statement may be prepared to show the buyer and the seller their respective closing figures.
541) The purchase price of the home Leroy is buying is $300,000. He’s putting $100,000 down and is paying three discount points. How much will this cost?
a. $2,000
b. $4,000
c. $6,000
d. $9,000

542) What title guarantees will Jody have if her property is deeded to her after a foreclosure?
a. The covenant against encumbrances
b. The covenant of further assurances
c. The covenant of quiet enjoyment
d. The covenant of seisin

543) Which of these statements about statutory duties and fiduciary duties is true?
a. Statutory duties are typically imposed in addition to fiduciary duties.
b. Statutory duties spring from common law and include six duties that licensees owe clients.
c. Statutory duties spring from state statutes and tend to be more specific than fiduciary duties.
d. Statutory duties tend to be more broad than fiduciary duties.

544) The two real estate firms in one small town, Vineyard Realty and Homestead Homes, agree to charge the same commission rate to avoid the possibility of clients selecting a firm based simply on price. What specific federal legislation prohibits this?
a. The Clayton Act of 1914
b. The Federal Trade Commission Act of 1914
c. The Restraint of Trade Act of 1894
d. The Sherman Antitrust Act of 1890

545) Which of these examples describes a prepayment penalty?
a. A fee the government charges the lender if the borrower pays off a loan before its intended time
b. A fee the lender charges for servicing a loan
c. A loan origination fee charged to the borrower
d. A monetary penalty imposed on a borrower for paying off a loan before its intended time

546) An abandoned or otherwise unused commercial or industrial site with suspected contaminants is known as what?
a. A brownfield
b. A Brown Zone
c. A space that cannot be used
d. A special use landfill

547) year! Kim is taking a leave of absence from her job to accompany Marta. They don’t want their home in a gated community to sit empty, so they’d like to rent it out for the year. What might prohibit them from doing so?
a. County ordinance
b. Homeowner regulations
c. Neighborhood watch group
d. State law

548) County or state laws likely wouldn’t address homeowners’ ability to lease an owned piece of property, but HOA regulations might.
549) What’s the primary difference between an ordinary and a pur autre vie life estate?
a. An ordinary life estate ends when the grantor dies; a pur autre vie life estate ends when the estate holder dies.
b. An ordinary life estate ends within a specified period of time; a pur autre vie life estate ends when the estate holder dies.
c. An ordinary life estate ends with the death of the estate holder; a pur autre vie life estate ends with the death of someone other than the life estate holder.
d. A pur autre vie life estate ends within a specified time period; an ordinary life estate ends when someone other than the estate holder dies.

550) Elaine owns a home on a flag lot behind James. Her easement for a common driveway runs through James’s property. What kind of ownership rights does Elaine have of the driveway that runs through James’s property?
a. Absolute
b. Non-possessory
c. Possessory
d. Temporary

551) Jerry and Simon signed a contract so that Jerry could purchase all of Simon’s restaurant equipment for one price after Simon closes his restaurant next month. The contract contains a provision that states Jerry has one year from the purchase date to file a suit relative to the purchase. After the year is up, Jerry forfeits the right. What kind of contract clause is this?
a. Specific time
b. Statute of limitations
c. Time is of the essence
d. Time of performance

552) Dave’s company just did some renovation work on a free-standing hobby store in order to ensure that it’s ADA compliant. As Dave is doing the final walk-through, he notes that the aisles are now wider, the restrooms each have an accessible stall, and the water fountain near the restrooms is lower and has more clearance. But he notices that one critical renovation hasn’t been made. Which of these is key for ADA compliance?
a. The cash register should be lower with no visual barrier.
b. There should be a completely separate accessible restroom.
c. There should be an accessible pay phone in the store.
d. There should be a ramp in addition to steps for wheelchair accessibility.

553) Pay phones aren’t required, nor are accessible cash registers. But ramps for wheelchair access to the store are key!
554) How many acres are in a parcel described as, “The E 1/2 SE 1/4 NE 1/4 Section 3, Township 4 North, Range 2 East of the 6th PM”?
a. 160
b. 20
c. 40
d. 80

555) If the private individual owner doesn’t own more than three single-family homes at one time, which exemption from the Fair Housing Act could apply?
a. Housing designated for senior use
b. “Mrs. Murphy” exemption
c. Owner-occupied buildings with no more than four units
d. Single-family housing sold or rented without the use of a broker

556) Celia was obtaining a conventional loan, and she put $50,000 down as a down payment. Why might her lender also require her to obtain private mortgage insurance?
a. Her down payment of $50,000 isn’t at least 20% of the purchase price.
b. Her lender is a subprime lender.
c. PMI is triggered at the $50,000 down payment amount.
d. She has poor credit.

557) Roland’s farm land is assessed at 1.5 million dollars and the improvements for $500,000. At a tax rate of 4 mills, how much are Rolan’s monthly taxes?
a. $6,667.00
b. $667.00
c. $8,000.00
d. $80,000.00

558) Which of these areas would be included in the livable area calculation?
a. A detached garage
b. An attached garage
c. An unfinished attic area with seven-foot ceilings
d. A pool house connected to the house by a hallway

559) In a residential real estate sale involving a federally related loan, what entity is required to provide Real Estate Settlement Procedures Act disclosures to the consumer?
a. The consumer’s lender
b. The consumer’s mortgage broker
c. The consumer’s real estate broker
d. The settlement officer for the transaction

560) Shalonda is looking to purchase a home for $325,000 using a conventional loan. She has $49,000 to place as a down payment on the house. Which of the following statements is true?
a. Her down payment on the loan only needs to be 3.5%.
b. She must come up with another $16,000 to purchase the house.
c. She will be required to purchase MIP.
d. The loan-to-value ratio exceeds 80%.

561) Seller Jamison is closing on his property with buyer Conrad. Jamison paid the current year’s property taxes already. Is this a prepaid or accrued expense, and how will it be represented on the settlement statement?
a. The taxes are an accrued expense, and will appear as a buyer credit and a seller debit.
b. The taxes are an accrued expense, and will appear as a buyer debit and a seller credit.
c. The taxes are a prepaid expense, and will appear as a buyer credit and a seller debit.
d. The taxes are a prepaid expense, and will appear as a buyer debit and a seller credit.

562) These taxes have already been paid, so they are a prepaid item. They’ll appear as a buyer debit and seller credit at closing.
563) If there’s no state or local building code to cover a specific situation, what code must the builder abide by?
a. The Builder Code of 1912
b. The builder’s own
c. The Development Code of 1986
d. The federal building code

564) A closing agent has several duties to perform both before and after the closing. Which of the following is a task the closing agent must complete after the closing?
a. Obtain title insurance
b. Pay the existing loan off
c. Perform a title search
d. Prepare a closing statement

565) A brokerage firm that hires licensees as employees instead of as independent contractors must ______.
a. Advise the state licensing regulators of the non-traditional working relationship
b. Avoid controlling their activities too closely to ensure proper worker classification
c. Offer incentive bonuses to ensure a motivated workforce
d. Pay licensees a regular salary regardless of the revenue they generate

566) Stu is buying Freddie’s property. What must occur for the transfer of title to take place?
a. Freddie and Stu must sign the deed.
b. Freddie must intend to convey the property to Stu.
c. Stu must convey the deed.
d. Stu must sign the deed.

567) What’s the penalty for violating federal do not call rules?
a. A fine of more than $40,000 for each day violations took place
b. A fine of more than $40,000 for each violation
c. Restrictions on all business telephone use
d. Suspension of the violator’s business license

568) Which of the following is an example of commingling?
a. Mixing earnest money with personal funds
b. Mixing two earnest money deposits
c. Paying licensee bonuses from forfeited escrow deposits
d. Using escrow funds to pay business expenses

569) Your clients are purchasing a $160,000 home. If they have a down payment of 25% and the bank charges two points at closing, how much are they paying in points?
a. $2,350
b. $2,400
c. $2,450
d. $2,475

570) Christine listed her house with you. Tailleur represents the buyer, Rebecca, and the seller’s mother, Freida, is paying your commission. Which of these factors determines how legal agency is determined in this situation?
a. Christine listed the property with you.
b. Christine’s mother, Freida, owns the house you listed.
c. Freida is paying your commission.
d. Tailleur represents the buyer.

571) LaTonya’s aunt left her a bungalow on the outskirts of the city. For many years, it was the place for family holiday gatherings, and LaTonya’s sister was even married there. That’s why her family is so upset to learn that she plans to sell the bungalow as soon as she gets it cleaned out. Which real property right allows her to sell the property?
a. Control
b. Disposition
c. Exclusion
d. Possession

572) The right of disposition includes the right to determine how, when, and if the property is to be sold or transferred to another owner.
573) Which of the following would be a description used for real property and a fixture?
a. Above-ground
b. Free-standing
c. In-ground
d. Movable

574) Your client Faye is buying a condo downtown for $565,000 and financing 60% of the purchase. Her lender is charging a one-point loan origination fee and two discount points. Can you help Faye calculate the dollar amount for points she’s going to pay on her loan?
a. $10,170
b. $16,950
c. $4,520
d. $6,780

575) Jansen and his listing agent just left the closing on Jansen’s house. What kind of notice does Jansen, his agent, the buyer, and the buyer’s agent have regarding the sale of Jansen’s house?
a. Actual notice
b. Constructive notice
c. Legal notice
d. Personal notice

576) Dale and Barbara, your buyer clients, aren’t thrilled about the current interest rates on home loans. They opt to pay two discount points to their lender to bring down their monthly payment. They’re financing $235,000 on their new $400,000 home, so how much can they expect to pay for points at closing?
a. $2,350
b. $3,300
c. $4,700
d. $8,000

577) Why are lenders required to provide the Loan Estimate and Closing Disclosure forms to loan applicants and borrowers?
a. Because interest rates may rise if the buyer doesn’t close on time
b. So borrowers can compare loans and make decisions regarding the affordability of loans offered
c. So government entities can track the numbers of borrowers who decline certain types of loans
d. So they can collect information about loan applicants and borrowers

578) While walking around the exterior of a rural home she’s inspecting, Juanita noticed a metal vent pipe sticking out of the ground 25 feet from the house. She documents this because it may be a sign of what potential environmental hazard?
a. Capped well
b. Radon vent system
c. Septic system
d. Underground storage tank

579) What factors directly affect an adjustable rate mortgage?
a. Amortization tables, index, and rate
b. Index, tax basis, and margin
c. Rate, index, and margin
d. Rate, loan-to-value ratio, and index

580) Sondra thinks the new business contract she signed with her business partner is valid. Both parties are legally competent, the contract has a legal purpose, an offer was made and accepted, and a fee has been negotiated and documented. Which essential element of a valid contract has Sondra not yet considered?
a. Whether consent was voluntary
b. Whether the contract has been translated into all possible languages
c. Whether the contract is in writing
d. Whether the parties are over 21

581) The only element Sondra hasn’t considered is whether the consent to enter into the contract was voluntarily given. Only real estate contracts have to be in writing, and parties are legally competent to enter into contracts from the age of 18.
582) Danette hasn’t paid the first quarter water bill on her property. It was due on April 1. She’s closing with the buyer, Jason, on April 1. What type of expense is this and how will it appear on the settlement statement?
a. This is an accrued expense, and will appear as a buyer debit and a seller credit.
b. This is an accrued expense, and will appear as a seller debit and a buyer credit.
c. This is a prepaid expense, and will appear as a buyer debit and a seller credit.
d. This is a prepaid expense, and will appear as a seller debit and a buyer credit.

583) Shira bought a condominium in a planned unit development. The development has a small playground, tennis and basketball courts, and a putting green. Who owns these recreational facilities?
a. The businesses located in the PUD
b. The condo owners
c. The development investors
d. The PUD developer

584) Joe gave land to a school, but still wanted to have some control over its use, so a deed was prepared that gave the school title as long as the land is used for educational purposes. What type of interest does the school have?
a. Fee simple conditional
b. Fee simple determinable
c. Fee simple subject to a condition subsequent
d. Legal life estate

585) Ashton, an appraiser, is estimating value using the sales comparison approach. He applies more weight to two comparables over several others he used. What process is he utilizing?
a. Averaging
b. Bracketing
c. Conformity
d. Correlation

586) Through a correlation process, the most weight may be given to one or two comparables, or equal weight may be given to all. The term reconciliation is often synonymous with correlation.
587) Casey signed a contract form offering a purchase price of $309,000 on a home, and gave his agent a $5,000 earnest money deposit. The owner is out of town and her agent can’t reach her. At this point what does Casey have?
a. An executory contract
b. An implied contract
c. An offer
d. A voidable contract

588) Sandra is purchasing a home for $200,000 and provides a $3,000 earnest money check to the seller. Her closing costs and down payment total $7,000. Assuming that Sandra is financing the purchase, how much should she bring to the closing?
a. $2,000
b. $3,000
c. $4,000
d. $5,000

589) Alexandra sells her house to Clark for $178,000. They negotiate to split the transfer tax, which has a rate of $0.33 per $100. What do they each pay to cover the transfer tax?
a. $29.37
b. $293.70
c. $58.74
d. $587.40

590) Joan is representing the buyer, Carlton, and Reggie is representing the sellers, Zeb and Teresa Martin. Carlton’s Great Aunt Matilda has agreed to pay any portion of Joan’s commission the sellers don’t cover. Teresa’s father, Teddy, has agreed to pay half of the sales commission that will be owed to the listing agent. Which of these statements is true?
a. Carlton and the Martins are the agents’ principals in this transaction.
b. Matilda and Teddy are the agents’ principals in this transaction.
c. Reggie’s clients are Zeb, Teresa, and Teddy.
d. Since she’s paying Carlton’s share of the commission, Matilda is Joan’s client.

591) What’s a typical prepaid item that will go into a seller’s credit column and a buyer’s debit column on a closing statement?
a. Broker fees
b. Loan fees
c. Property taxes
d. Recording fees

592) Related to the legal test of a fixture, in the acronym MARIA, what do the two As stand for?
a. Acceptability of the fixture and agreement of the parties
b. Adaptability of item and accessibility to the property
c. Adaptability of item to land’s use and agreement of the parties
d. Allowable use and acceptable use

593) Which of these is NOT one of the ways in which an agency relationship may be terminated without penalty for either the agent or the principal?
a. Delaney signed a buyer’s representation agreement with Martha. After Delaney made an offer on a house, she changed her mind and terminated the agency agreement.
b. Martha listed Sonja’s home for sale. Martha helped Sonja negotiate an offer and performed the other tasks required of her. The closing has taken place.
c. Phyllis listed her home with Brad. Brad put the property on the MLS, but Phyllis hasn’t heard from him in more than two months.
d. Richard listed Ole’s ski chalet for sale. Two weeks later, an avalanche destroyed the property.

594) Which statement best describes an adjustable rate mortgage?

595) Helen is purchasing a home for $150,000 and provides a $2,500 earnest money check to the seller, which will be applied to her down payment. She’s financing the transaction, and her closing costs and down payment total $4,800. How much should Helen bring to the closing?
a. $2,300
b. $2,700
c. $4,800
d. $7,300

596) Which task is NOT the responsibility of an escrow officer?
a. Determine how earnest money is to be distributed in case of a dispute.
b. Manage transaction documents from all parties.
c. Prepare closing documents and manage the closing meeting.
d. Verify funding of the buyer’s loan.

597) Which of these is NOT a likely features of a bridge loan?
a. Amortized loan paid back over a period of no more than five years
b. Interest-only loan
c. Secured by the borrower’s existing home
d. Temporary, short-term loan

598) Following all of the client’s lawful instructions describes which fiduciary duty?
a. Disclosure
b. Loyalty
c. Obedience
d. Reasonable skill and care

599) Georgina is an escrow agent who’s holding funds for several transactions. Which of these statements about how she’ll disburse these funds is true?
a. If the transaction closes, Georgina will disburse the earnest money to the listing broker as part of his commission.
b. If the transaction closes, she’ll refund the earnest money to the buyer, since the buyer brings the full amount necessary for the down payment and loan costs to closing.
c. If the transaction doesn’t close, Georgina will disburse the earnest money as instructed by the parties or according to state law.
d. If the transaction doesn’t close, Georgina will refund the earnest money to the buyer.

600) A prospective buyer is curious why a previous owner is selling such a perfect home. The licensee knows that the previous owner recently died due to complications from AIDS. How should the licensee respond to the prospective buyer’s inquiry?
a. The licensee can disclose that the owner had AIDS, but can’t reveal whether the owner died from the disease.
b. The licensee can obtain permission from the seller to reveal the previous owner’s AIDS diagnosis.
c. The licensee can share that the previous owner died from AIDS.
d. The licensee can’t disclose that a previous owner had HIV or AIDS.

601) Broker Sam has extended an offer to licensee Jane, who has accepted the offer. Jane will work as an independent contractor for Sam. Based on this, which of the following statements is true?
a. As an independent contractor, Jane will not have to fill out any tax-related or IRS-related paperwork.
b. It is up to Jane whether or not she wants to have taxes withheld from her pay. If she does choose to have taxes withheld, she must complete a W-4.
c. Jane will need to fill out a W-4 for tax withholding information.
d. Jane will need to fill out a W-9 for IRS reporting purposes.

602) You’re showing your buyers a house that clearly has a second-story addition. What important thing do you need to find out from the sellers?
a. How much the seller’s heating and cooling bills went up after the addition was put on
b. Whether or not a licensed general contractor did the work
c. Whether or not the addition was permitted
d. Whether or not the materials used match the original construction

603) Shemar owns a starter home a few miles outside of the city center, and he wants to deed it to his grandson, Tyler. According to the paperwork Shemar had drawn up, Tyler will own the property as long as he continues to pay the property taxes on time. After the second missed property tax payment, ownership would revert to Shemar. What did Shemar place on the deed?
a. CC&Rs
b. Deed condition
c. Deed covenant
d. Deed limitation

604) Gus has applied for a home equity line of credit from his federally insured bank so that he can make some renovations to his kitchen. The same bank is his lender for his home mortgage. Will this loan be subject to Real Estate Settlement Procedures Act requirements?
a. No, because Gus won’t be using a real estate professional.
b. No, because there’s no transfer of title involved.
c. Yes, because RESPA applies to any residential loan transaction from a federally insured financial institution, including equity lines of credit.
d. Yes, because the bank is also the lender for his home mortgage. If he’d used a different lender, RESPA would not apply.

605) Chip is a residential and commercial agent. His friend asks him to list his cattle ranch for sale, but Chip’s never listed an agricultural property before. How should Chip handle this listing so he can still work for his friend but also not work outside his area of expertise?
a. Disclose to his friend that he’s not an agricultural expert and ask his friend’s permission to work with an agricultural expert in his firm.
b. Refer the listing to an agricultural agent and ask his friend to keep him informed of the transaction’s progress.
c. Take the listing and apply commercial real estate practices, since agricultural sales are similar to commercial sales.
d. Turn down the listing, citing his lack of experience in agricultural work.

606) Tiers in the rectangular government survey system are formed by ______.
a. Parallel baselines
b. Parallel principal meridians
c. Parallel range lines
d. Parallel township lines

607) SARA is an amendment to which environmental act?
a. CERCLA
b. Clean Air Act
c. Clean Water Act
d. Environmental Responsibility Act

608) Rhonda purchased an existing pet store in her neighborhood, and she’s so excited! Her animal-loving aunt is thrilled for Rhonda but disappointed that she won’t be able to visit the store in her wheelchair, as the aisles are narrow and there isn’t enough room to move around. What is true about Rhonda’s responsibilities to her aunt and other people with disabilities?
a. At a minimum, Rhonda is required to add an accessible bathroom.
b. At a minimum, Rhonda is required to add an accessible entrance to the building.
c. Because Rhonda purchased a retail business, she must meet the same ADA requirements as new construction buildings.
d. Since Rhonda purchased an existing building and business, the ADA requirements aren’t as strict as with new construction and vary by building.

609) Related to reasonable accommodation of being allowed to have an assistance animal, which statement is true?
a. If the disability for which the tenant is making the request is obvious, the landlord may not ask why it is needed.
b. If the disability is not obvious, the tenant must provide the landlord with full medical records to support the request.
c. The landlord is not obligated to consider the request unless the tenant can produce either the original or a certified true copy of the animal’s service certification.
d. The landlord must consider the request but may require an additional “pet” security deposit.

610) Henry submits an offer on a condo and includes an earnest money check for 10% of his offer, which the seller accepts. Later on at closing, he brings a cashier’s check for $34,450 (comprising the remaining half of his 20% down payment and $7,950 in closing costs). What’s the condo’s purchase price in whole dollars?
a. $132,500
b. $265,000
c. $344,500
d. $88,333

611) Subtract the closing costs from cashier’s check amount ($34,450 – $7,950=$26,500) for half of down payment. The total DP was double this ($53,000). Next, divide $53,000 by 20% (to find purchase price ($53,000 ÷ .2=$265,000). Purchase price is $265,000.
612) What’s the estimated value by cost approach for a property if the site value is $25,000, the new cost of improvements is $100,000, and the total depreciation estimate is $15,000?
a. $110,000
b. $115,000
c. $140,000
d. $90,000

613) An appraiser used the cost approach to estimate a property’s value at $220,000. The site value was $50,000, and the total depreciation estimate was $4,000. What was the estimated cost of improvements?
a. $166,000
b. $174,000
c. $266,000
d. $274,000

614) Dean’s new business venture is a software services firm where IT professionals handle programming and customer service tasks for a number of business clients. His employees all work at tables in an open office space. Dean most likely has a _______ lease for the office space.
a. Gross
b. Loft
c. Percentage
d. Triple net

615) The best way to start comparative market analysis data collection is to use properties that sold when?
a. 18 to 24 months ago
b. Between two and three years ago
c. In the last 12 to 18 months
d. No later than three to six months ago

616) Why is proof of ownership required when transferring real property?
a. It places the new owner’s name on the deed.
b. It provides evidence that the title is marketable.
c. It provides proof that property taxes have been paid for the property.
d. It verifies the property address.

617) Tom and Martha live in a neighborhood where lawn ornaments are prohibited. They want to put up a nativity scene at Christmas and argue that the covenant doesn’t apply to temporary decorations but only to permanent ones. Their homeowners association disagrees. Which entity enforces subdivision covenants?
a. The civil court system
b. The homeowners association
c. The municipal code enforcement agency
d. The original developer of the neighborhood

618) At what point must a listing agent disclose material facts to all parties involved in the transaction?
a. As soon as possible
b. If asked directly by a party to the transaction
c. Never
d. Only with the seller’s permission

619) Which of these situations might be addressed by limitations or a subject to clause in the deed Jane is using to convey property to Moira?
a. An easement runs across the property, permitting Jane’s neighbors to access the neighborhood boat dock.
b. Jane has given Moira 24 hours to accept delivery of the deed.
c. Jane wants to limit her liability for any title defects that may occur.
d. Moira’s acceptance of the deed is subject to receiving her financing

620) Most often, what’s the first course of action for disputed home warranty claims?
a. Arbitration
b. Condemnation
c. Litigation
d. Mediation

621) Gabe’s home has an assessed value of $172,000, and his tax rate is .55%. What are the annual taxes?
a. $1,125
b. $1,265
c. $935
d. $946

622) First you have to convert the percentage to a decimal. .55% = .0055, so multiply the assessed value by the tax rate to calculate annual taxes: $172,000 × .0055% = $946.
623) Which of the following is an acceptable ad based on Regulation Z?
a. Get a low interest rate of 4.75% (4.925% APR) with as little as 10% down payment and a 30-year fixed rate with no points.
b. Get a low interest rate of 4.75% on a monthly payment of $900.
c. Get a low interest rate of 4.75%, with 85% loan to value.
d. Get a low interest rate of 4.75% with as little as 3% down.

624) Citytown officials know that they have an abandoned factory site that has been identified for cleanup under CERCLA. When city officials tried to trace the ownership of the property, they found several shell corporations but can’t determine which individual or corporate entity actually owns the property. What is a likely outcome of this situation?
a. Citytown will apply to the CERCLA trust fund for cleanup costs.
b. Citytown will bill the EPA for cleanup costs.
c. Citytown will end up paying for cleanup.
d. The factory site won’t be cleaned up and will sit empty.

625) Quentin brought an application before city council to build a shopping mall on 17 acres south of town that currently don’t have a zoning designation. The council referred him to the planning commission, which will review the application in light of the city’s ________.
a. Comprehensive plan
b. Economic development plan
c. Health and sanitation ordinances
d. Zoning ordinances

626) Since the parcel isn’t currently zoned, zoning should be established in alignment with an area’s comprehensive plan.
627) Belinda is a licensee whose client asked her to draft an addendum containing complicated terms that even Belinda doesn’t fully understand. Belinda should ______.
a. Avoid unauthorized practice of law
b. Hire an attorney
c. Refuse to work with this client
d. Use legalese

628) Which act sets guidelines for public and common use areas at housing developments?
a. Accessibility Options Act
b. Americans with Disabilities Act
c. Fair Housing Act
d. Multi-Family Dwelling Act

629) Sebastien’s four-story home includes a 400-square-foot unfinished bonus room on the top floor, an upper level with 850 square feet, a main level with 1,450 square feet (which includes a garage that’s 500 square feet), and a finished basement that’s 900 square feet. The MLS system in Sebastien’s area includes below-grade square footage. What square footage will be reported on his MLS listing?
a. 2,200
b. 2,700
c. 3,600
d. 4,100

630) Sebastien should exclude the unfinished bonus room and the garage and add the remaining area (850 (1,450 – 500) 900).
631) Your buyer, Billy, wants to make an offer on the craftsman house he saw today, but he wants the sellers to start the paperwork for a tax reassessment before closing. This isn’t part of the standard sales contract in your area. What will you use to accomplish this request?
a. Addendum
b. Amendment
c. Annotation
d. Appendix

632) Joaquin sold his house for $327,600. He bought it several years ago for $139,900 with a $100,000 loan. The loan balance when he sold it was $73,400. What was Joaquin’s equity?
a. $114,300
b. $187,700
c. $214,300
d. $254,200

633) Kelly is closing on the house she’s purchasing on Wednesday. Which of these statements is true?

a. Kelly must receive the Loan Estimate at least four days before closing.
b. The closing officer must deliver the Closing Disclosure at closing.
c. The lender must provide the Closing Disclosure by Friday of the week before closing.
d. The Loan Estimate amounts must be within 1/4 of a percent of the final settlement costs.

634) Gerald practices real estate in a state that recognizes sub-agency. Which of the following statements is true of Gerald’s authority to appoint a sub-agent?
a. He can independently appoint a sub-agent at any time during the transaction.
b. He must receive the principal’s permission in writing in order to appoint a sub-agent.
c. Only Gerald’s broker can appoint a sub-agent.
d. Only the principal can appoint a sub-agent.

635) How many acres are in a parcel described as, “The S 1/2 NW 1/4 Section 3, Township 4N, Range 2W of the 6th PM”?
a. 160
b. 20
c. 40
d. 80

636) If a community isn’t growing in an orderly fashion, which local land use group is likely at fault?
a. Downtown business association
b. Planning board
c. PTA
d. Zoning board of appeals

637) Tracy is looking in the MLS and sees a listing marked “REO.” Which of these statements regarding REOs is correct?
a. An REO property is one that the lender is trying to help the owner sell before beginning foreclosure proceedings.
b. Banks acquire REOs through failed foreclosure sales or deed in lieu of foreclosure actions.
c. REOs are properties that the lender has given permission to sell for less than the loan amount.
d. REOs refer to investment properties a bank owns.

638) Melisa’s mother gave her house to Melisa, along with a signed copy of the deed granting ownership to Melisa. Years later, Melisa decides to downsize by selling the property. The title company shows that the property is still in Melisa’s mother’s name. What does Melisa have to do to clear this up?
a. File a suit to quiet title.
b. Present the signed deed to the new buyer.
c. Present the signed deed to the title company.
d. Record the signed deed.

639) What’s a good policy that a buyer’s agent should employ regarding contingencies?
a. Avoid contingencies because they tend to put sellers off.
b. Maximize the number of contingencies allowed.
c. Use a standard set of contingencies with each buyer to avoid missing any.
d. Use contingencies judiciously to protect the clients and the deal.

640) Alice owned a double lot on the waterfront. She sold the lot to Ronesha and included a deed restriction prohibiting construction of any building taller than one story. Ronesha wants a three-story house. What should she do?
a. Apply to the zoning board of appeals for a variance.
b. Check to see if the building code will permit a larger house.
c. Conform to the deed restriction.
d. File a suit against Alice to have the restriction removed.

641) What type of arrangement allows the buyer to retain title to the property, but places a security interest in the property on behalf of the seller?
a. A straight-term loan
b. Land contract
c. Purchase money mortgage
d. Wrap-around mortgage

642) Tristan’s offer has been signed by all parties and delivered back to the seller. This means that ______ has occurred.
a. Acceptance
b. Binding acceptance
c. Notarization
d. Personal delivery

643) Compared to conventional loans, what are typical characteristics of construction loans?
644) An __ contract or agreement is one that exists based not on words, but on the parties’ actions or behaviors.
645) __ consist of agreements in which the terms are stated by the parties. The terms may be stated orally or in writing. But the contract as a whole must reflect the intention of the parties.
646) The Equal Credit Opportunity Act is designed to prevent discrimination in ______.
647) __ asks the court to force the opposing party into a contract that binds them to actually perform the contract at issue, rather than award damages for breach of contract. In real estate litigation, a buyer can force a reluctant seller to live up to the purchase and sale agreement.
648) __ are typically voluntary liens. Voluntary liens are placed on the subject property with the consent of the owner. This is usually done through the loan documents (mortgage and promissory note).
649) When a loan is recasted, what does it essentially become?
650) Which of the following may be used to defer paying taxes when there is an almost immediate repurchase of what’s called a “like-kind” property?
651) What is a clear zone?
652) When it comes to advertising in real estate, a __ is an established zone created to prevent safety hazards and unsightly advertising.
653) ______ is a leasehold estate of definite duration that terminates automatically and is inheritable.
654) Sandra enters a contract to sell her home to Paul. Under the statute of frauds, the written contract must name the contracting parties, identify the subject matter of the contract, and ______.
655) What is a capital gain?
656) For an investor, purchase price plus closing expenses is known as ___________________.
657) Your client, Lee, a foreign investor, is selling his property and learns a 15% withholding of the sales price will be imposed. Why is this?
658) The requirement is two of the last five years, and the exclusion is up to $250,000 for single taxpayers and __ for couples filing jointly.
659) The __ is a person who applies for a mortgage and makes a home purchase on behalf of another. The actual buyer may be someone with bad credit who is unable to qualify for a mortgage themselves, or a scam artist looking to profit by manipulating the mortgage and real estate transaction process.
660) A __ typically has no right of survivorship. This means that if A and B are tenants in common of Blackacre, and A dies, A’s share does not to go B. Rather, A’s share goes to the party selected in A’s will.
a. tenancy in common

661) Kevin, your buyer client, signed a contract to buy Lydia’s home. The contract states that “time is of the essence.” You correctly advise Kevin that this means ______.
662) Ensuring land is put to the use for which it is best suited while also protecting livability of a community and property values is achieved through ______.
663) The local planning and zoning commission is reviewing multiple applications at this week’s meeting. Which of the following new developments is likely to be reviewed relative to a mixed-use zoning ordinance?
664) A __ lease is usually for a large open space that may have few amenities.
665) A __ is the “embryo stage” of a land purchasing process that analyzes and determines if the property is practical for the planned use of the land. This task can also include reviewing all aspects of the property from both a financial and environmental perspective as well.
666) A __ is a legal proceeding that asks the court to remove any claims, or “clouds,” against the title so that it can be conveyed.
667) Terry has a costume shop in a commercial building. He has a one-year lease that automatically renews for another year unless either Terry or the landlord terminates. What type of leasehold estate is this?
668) __ does impact property values and may be perceived as infringing on personal rights; therefore, public opinion is sought before zoning changes are made.
669) In an amortized mortgage, the monthly payment is the same each month. While the portion used to pay interest decreases over time, the portion used to repay principal ______________.
670) Edgar is in the process of selling his home in a short sale. What’s a short sale?
671) ______ is allowed to perform appraisals on any type of real estate.
672) Frank took out a mortgage from First National Bank in order to purchase a new home. In a lien theory state, who or what retains the title to the property?
673) Which type of property management situation requires a license?
674) According to the Telephone Consumer Protection Act guidelines, who or which entity may call a person listed on the Do Not Call Registry?
675) With an interest-only payment plan, ______.
676) Which term involving trespassing is used when someone other than the owner claims title to real property?
677) Which of the following is true about pocket listings?
678) What type of contract is one in which the terms of the agreement and consideration to be exchanged are defined in words, whether verbally or in writing?
679) A landlord locks a tenant out and requires the tenant to pay past-due rent before regaining access to the unit. This is considered ______.
680) Which activity requires a license?
681) In addition to residential and commercial real estate sales, King County Realty has an active residential property management department. The firm rarely holds earnest money on sales transactions, so it has a single trust account for earnest money and security deposits. The firm ______.
682) How do you decide which party you represent in a transaction?
683) What is a margin, as it relates to an adjustable rate mortgage?
684) Your client, Brian, is an investor who likes to put as little cash down on his investments as possible. Brian believes in the power of ______.
685) In order to be enforceable, what does the statute of frauds require a real estate contract to be?
686) What is usury?
687) Stanley is having second thoughts about taking his neighbor to court over a written agreement they have concerning who pays the rent on a storage unit that they share, because it’s used to store stolen merchandise. Stanley doesn’t think the contract will stand up in court. What type of contract does Stanley have?
688) What brokerage activities can Austin perform if his license is inactive?
689) Seller Darlene wants to know when she’ll be paid the full amount of the purchase price for her property. What should you say?
690) Three friends entered into a contract to buy a vacation property. The friends got into a dispute, resulting in one of them wanting out of the deal. The remaining two friends didn’t want to lose the deal, but couldn’t afford it on their own. They talked a fourth friend into replacing the person who backed out of the contract. The seller agreed to the substitution, and they moved forward with the purchase. What does this describe?
691) Cheryl wants new carpeting for her rectangular living room. Her living room is 18 feet by 12 feet. How much carpeting does she need?
692) What’s alienation with regard to real estate?
693) One regulatory requirement says that a broker has a specified amount of time to provide copies of transaction documents to a managing or designated broker. How long is this window of time?
694) Carlos, a property manager at Your Best Bet Property Management Company, manages multiple properties for their owners. Which of the following statements is true?
695) When you refuse to screen prospective buyers based on their ethnicity, your client, Matt, “fires” you as his agent, and you agree to his decision to part ways. Do you still owe this guy any fiduciary duties?
696) Liz listed her property with an agreement end date of May 31. The property went under contract on May 12, and the buyer’s earnest money was deposited on May 13. Based on the home inspection results, the buyer legally terminated the contract on May 20. When did the listing agreement between Liz and the listing broker officially terminate?
697) Curtis is having second thoughts about taking his partner to court over a written agreement they have concerning the purchase of a rental property. Curtis doesn’t think the contract will stand up in court because the partner is only 17 years old. What type of contract does Curtis have?
698) The appraiser applies a capitalization rate to an income comparison of similar properties with which of the four methods used to measure depreciation?
699) Janice’s life tenant, Jacob, is currently living on her property. Once Jacob dies, Janice has arranged for the property to be given to the School for the Gifted. What interest does the School for the Gifted currently have?
700) James creates a trust to hold a piece of real estate he owns. He directs a corporate fiduciary to hold title to the real estate and provides instructions for the management, control, and disposition of the real estate upon his death. Given that the trust only holds real estate, James likely set up a(n) ______ trust.
701) Which entity is responsible for deciding the general layout of a specific municipality —a city, town, or village—and mapping the zones and the uses allowed within each zone?
702) What’s the purpose of a brief adjudicative hearing?
703) What is the purpose of an operating budget?
704) Janie’s got an open house scheduled for Sunday, but lets her friend in on Saturday to preview it. It’s love at first sight! With the owner out of town, Janie decides to cancel the open house so there won’t be any other offers. Her friend makes an offer and it’s accepted on Monday. What fiduciary duty or duties has Janie breached?
705) During the closing, whose job is it to deliver the title commitment after ensuring the title is marketable and without defect?
706) Isabella is thinking about buying a one-bedroom residence in a cooperative. A residence in a cooperative, unlike a condominium, is considered ______.
707) What is the term for paying off a loan over time?
708) Maria’s neighbor is building a shed in his backyard that appears to be about a foot over the property line into her yard. What term describes the placement of the shed on Maria’s property?
709) The Jeffersons would like to sell their home. However, they had their home painted last year and never paid the contractor. The contractor has placed what type of lien on the home?
710) Which of these is an example of a lot and block description?
711) Which term refers to the division of community land into designated districts on a map that includes a text description defining the uses permitted under each classification?
712) What’s a vendee’s lien?
713) The Consumer Financial Protection Bureau ______.
714) The government’s power to take private land for public use is called ______.
715) A tenant is entering into a 12-month agreement with an owner of an upscale apartment complex to rent an apartment. What type of contract will be used to identify the rental arrangement’s terms?
716) Dual agent Barbara Park can only disclose Seller Carrie’s reason for moving if:
717) Which term is used when someone claims someone else’s property by using it for an extended period of time?
718) Which of the following is a residential dwelling with shared walls where the owner also typically owns the land on which the home sits?
719) The ______ provides administration and enforcement of federal fair housing laws.
720) You’ve signed a listing agreement with a client. Which of the following activities will you address next in order to complete the sales process for your listing?
721) Which liens take priority over all other liens?
722) What form should be provided to borrowers no fewer than three days prior to closing?
723) Which of the following statements about agents and the duty of obedience is true?
a. An agent can ignore a client’s instructions if they negatively affect the agent’s commission.
b. An agent should carry out the client’s instructions as long as they are within the law.
c. An agent should never question a client’s instructions.
d. The duty of obedience extends beyond the termination of the agency agreement.

724) What does REO stand for?
a. Real estate office
b. Real estate owned
c. Rental equality ownership
d. Rental equal opportunity

725) What does the rectangular government survey system use as the basis for legal descriptions?
a. Principal meridians, base lines, and sections
b. Reference to a subdivision plat
c. Reference to degrees latitude and longitude
d. The beginning point of a boundary line as identified by a surveyor

726) Randi is a licensee who would like to update her advertising. What must she be sure to include on any advertising listed with her or any other brokerage?
a. Brokerage name
b. Fax number
c. Franchise logo
d. Personal photo

727) Seller Randy signed a listing agreement with Barbara, who worked very hard to find him a buyer. Randy’s cousin decided to purchase the house during the listing period. Is Barbara owed a commission?
a. No, because sellers don’t have to pay a commission if a relative purchases the property.
b. Yes, because Randy is not a licensee.
c. Yes, because she worked hard for Randy.
d. Yes, if she has an exclusive right-to-sell agreement.

728) Mario doesn’t want to include a religious preference in his listing ad, so which of the following phrases should he use?
a. Apartment available for members of attached temple
b. Close to Catholic cathedral
c. Jewish community
d. Within walking distance to a mosque

729) Homeowners can take several actions related to pest infestations, but which of the following actions should be left to licensed pest management professionals?
a. Applying pesticides
b. Installing a vapor barrier
c. Looking for sings of an infestation
d. Removing moisture from the home

730) Which of these transactions would require the Missouri licensee to provide written disclosure of his or her interest?
a. Henry is the listing agent for a vacant property in the condo complex where he lives.
b. John is the listing agent for his neighbor’s house.
c. Sally is the buyer’s agent for a couple that was referred to her by her previous client.
d. Step is her father’s buyer’s agent.

731) Which of the following is true about an attorney’s opinion of title?
a. It protects buyers from material defects.
b. It’s no longer required anywhere.
c. It’s the document that notes the cloud on the title.
d. It uses public records to validate property transfers.

732) What’s designed to protect buyers from financial loss if the title to the property they buy has defects?
a. Abstract of title
b. Chain of title
c. Title insurance
d. Title search

733) When considering buying property subject to an existing lease, it’s critical to understand the lease terms, including the lease duration, rent amount, renewal/purchase options, and the __________________.
a. Lease start date
b. Property management responsibilities
c. Security deposit amount
d. Tenant’s occupation

734) Which of these may be covered by a builder-backed home warranty?
a. Custom exterior paint
b. Owner-installed landscaping
c. Ugly carpeting
d. Workmanship

735) Jasper has a new listing, and he appoints Esther as his sub-agent. Esther brings Julie, a buyer customer, to the transaction, and Julie buys Jasper’s listing. What’s true about the agency relationships in this situation?
a. Esther owes her loyalty to the seller
b. is the sub-agent to Esther.
c. Jasper is the sub-agent to the seller.
d. Julie is the sub-agent to Jasper.

736) Heath leases space in a commercial building for his sporting goods store, and the building owner insisted on having Heath sign a percentage lease. Under the terms of a percentage lease, Heath must pay ________.
a. All of his net income to the property owner
b. A percentage of his sales to other tenants in the building
c. A percentage of his sales to the property owner
d. A percentage of the rental rate of charity

737) With which type of government power can a lien be placed on a property, giving the government a claim to the property?
a. Eminent domain
b. Escheat
c. Police power
d. Taxation

738) The Johnsons are shopping for a mortgage loan and are attracted to the below-market interest rate offered for the first year of an adjustable rate mortgage. What’s this type of rate called?
a. Bait and switch
b. Balloon payment
c. Fixed rate
d. Teaser rate

739) At a business meeting among heads of the top brokerages in town, the keynote speaker discussed a minimum listing fee. What’s this is an example of?
a. Group boycotting
b. Market allocation
c. Price fixing
d. Tie-in arrangement

740) The tax associated with property taxes is relatively stable and a high revenue generator because ______.
a. No one is exempt from paying property taxes
b. People enjoy paying taxes
c. Property values tend to remain stable over time
d. Taxes are always increasing.

741) A fee a lender charges for processing a loan is called _______.
a. A buydown
b. A loan origination fee
c. A loan servicing fee
d. An appraisal fee

742) The Knolls are purchasing a property and are concerned about the title. They want to have a title search performed. Who can perform a title search?
a. A property inspector
b. A title insurance company
c. The Knolls
d. The Knolls’ real estate agent

743) What type of emails are prohibited by the CAN-SPAM Act?
a. Customer service emails
b. Emails containing more than three hyperlinks or attachments
c. Junk emails
d. Subscriber emails.

744) Clara signs a net lease for office space. Under a net lease, she’ll be responsible for ________.
a. A portion of the property’s operating expenses.
b. Cleaning the property’s common areas herself.
c. Ensuring the parking areas are well lit and safe.
d. Paying for repairs to the property’s foundation.

745) Charles is selling his home to Sheila. Charles has an existing loan that he will continue to make payments on. Charles is also extending credit to Sheila for the balance of the purchase price. Sheila will make monthly payments to Charles. What type of financing is used in this transaction?
a. Home equity loan
b. Loan amalgamation
c. Refinance
d. Wrap-around loan

746) Which of the following equals one furlong?
a. 16.5 feet
b. 220 yards
c. 2.47 acres
d. 7.92 inches

747) Which of the following is considered an act of discrimination under federal fair housing laws?
a. Renting only to Catholics
b. Renting to a married lesbian couple
c. Renting to a white man who has good credit
d. Showing a property to qualified buyers only

748) Compared to working without a buyer agency agreement, a buyer who works under a buyer agency ?
749) Switches that are warm to the touch, damaged panels, and lights that dim or flicker when other appliances are in use can be signs of a(n) ______ problem.
750) What is the purpose of the Consent for Dual Agency form?
751) What types of leases must be recorded?
752) Which of these is an example of a rectangular survey system description?
753) Jorge is a dual agent in a single-license dual agency situation. He owes his clients all of the following fiduciary duties EXCEPT ___________.
754) Shelly buys Mark’s house, which is still in an option period with Monique. Monique decides to exercise her option after Shelly moves in. What will happen?
755) Your client exchanged one property for a similar property and did not have to pay capital gains taxes that year. How did he do this?
756) Soundproofing and decorative material, shingles, and siding may contain what hazardous material?
757) Jay’s new loan to purchase a property includes the seller’s existing mortgage. This type of loan is called a ______ loan.
758) What is one drawback of a real property transfer?
759) When assigning a contract, the assignor should ensure that ______ is not prohibited in the purchase contract.
760) You’re trying to impress your neighbors, who are considering selling their house. You’d like to get the listing. They ask you about a listing your firm has that’s been on the market forever. Why isn’t it selling, they want to know? You answer:
761) Which of the following occurs when a property owner dies without having a will in place, and no heirs or creditors can be found?
762) To effect a transfer of title by deed, _________________ must occur.
763) When operating under a power of attorney concerning the transfer of real property, who may sign in place of the principal?
764) Carla Ricardo asks the landlord if she could be let her out of her lease early. The landlord agrees to let her out of her lease, no strings attached. Carla and her landlord have decided to terminate the contract through _________________.
765) Single agency is _______.
766) Which of the following closing activities occurs on the day of closing?
767) In relation to appraisals, what’s a “federally related transaction”?
768) First-time homebuyers can access up to $________ of their Roth IRA accounts, penalty-free, under certain conditions.
769) Which of the following is the best definition of a covenant between a lessor and lessee?
770) Which of the following is a material fact that must be disclosed to prospective buyers?
771) The National Fair Housing Alliance believes in promoting the message that __________ neighborhoods are stronger neighborhoods.
772) Which of the following can indicate drainage problems?
773) Which of the following are landlords required by law to ensure?
774) A deed must be ______________ before it can be recorded.
775) What type of agency exists because a written or oral agreement is in place?
776) Which act introduced the “innocent landowner” defense that states that a landowner isn’t responsible for clean-up of contamination that occurred prior to their ownership, provided they have not tried to cover up the contamination and can prove due diligence in investigating the property when it was purchased?
777) Which of the following terms best describes real property?
778) In the sales comparison approach, the appropriateness of the various comparable sales in relationship to the subject is considered in a process known as ______, where certain factors may be given more weight.
779) What is the definition of a testator?
780) You are meeting with prospective clients in person for the first time. What are you required by law to explain to them?
781) Which of the following is true?
782) What type of tenancy can be automatically created if a tenant under a lease stays beyond the lease’s terms, and the landlord continues to accept rent from that tenant?
783) What might the financial implications be if a buyer needed to use individual retirement account funds toward a down payment?
784) Kip is a sub-agent working with a buyer customer, Charlie, for Sheila’s listing of May’s property. To whom does Kip owe his loyalty?
785) When a lower-quality property is adjacent to a higher-quality property, it can diminish the value of the higher-quality property. What economic principle is this?
786) At what point in a residential transaction must a seller’s agent deliver a completed Residential Real Property Disclosure Report to a buyer?
a. At least five days prior to closing
b. Prior to showing the property to the prospective buyer
c. Prior to the parties signing a purchase agreement
d. Within three days after the parties sign a purchase agreement

787) Which portion of a mortgage payment is the financial institution’s charge for the use of its money?

a. Insurance
b. Interest
c. Principal
d. Tax

788) What’s it called when a person who has possession of a property through a life estate abuses the property or allows it to deteriorate?

a. Act of waste
b. Escheat
c. Estate at sufferance
d. Reversionary interest

789) Which ownership type involves one person owning the property?
a. Co-ownership
b. Dual ownership
c. Estate in severalty
d. Property partnership

790) Which of the following is designed to protect buyers from financial loss if the title to the property they buy has defects?
a. Abstract of title
b. Chain of title
c. Title insurance
d. Title search

791) When people are treated differently because they were born in another country or are from a specific part of the world, this is discrimination based on _______.
a. Color
b. Familial status
c. National origin
d. Race

792) You’re obligated to preserve all the confidential information you receive from a seller client. This obligation ______.
a. Can be ignored if you’re sharing confidential information with someone other than the buyer
b. Ceases once the seller’s property is sold
c. Continues even after your fiduciary relationship with the client ends
d. Ends 30 days after you’ve received the confidential information

793) REEB automatically suspended the licensee’s real estate license when the board found the licensee guilty of which of these offenses?
a. Cynthia, a salesperson, accepted a commission payment from her buyer client.
b. Jeannie, a salesperson, failed to properly remit an earnest money deposit she received.
c. Teresa, a broker, failed to disclose to the buyer a property defect that her seller client told her about but didn’t want to disclose.
d. Tom, a real estate licensee who works in property management, denied a rental application from Ram and Aarthi Ramesh because of their race.

794) Which one of the following elements of a deed signify the grantor’s intention to transfer title to the grantee?
a. Act of conveyance
b. Consideration
c. Evidence
d. Grantor/grantee

795) The transfer tax rate is $0.37 per $100. A property that sold for $300,000 would have a ______ transfer tax.
a. $1,110
b. $1,200
c. $2,200
d. $920

796) How does discrimination still occur, even though it’s illegal?
a. Discrimination is human nature.
b. Discrimination is often not visible to the public.
c. Discrimination makes good business sense.
d. Not all laws make sense.

797) As a property manager, Darby expects to _______.
a. Charge tenants for maintenance calls
b. Have the property owner reimburse her for expenses
c. Include free lawn care service
d. Pay some expenses out of pocket

798) Which type of estate conveys all rights of ownership?
a. Fee simple estate
b. Leasehold estate
c. Legal estate
d. Life estate

799) Alexandra is perusing her closing statement, particularly those amounts that are a benefit to her. What’s the term for these items?
a. Benefits
b. Credits
c. Debits
d. Favorables

800) You’ve signed a listing agreement with a client. Which of the following activities will you address next in order to complete the sales process for your listing?
a. Deposit the earnest money check.
b. Hold an open house.
c. Prepare a features list.
d. Publish the MLS listing with photos.

801) Which stage of the property ownership life cycle can be affected by income tax issues?
a. Acquisition, ownership, and reversion can all be affected by income tax issues.
b. Only acquisition
c. Only ownership
d. Only reversion

802) How can an agent offer dual agency legally?
a. By getting general agreement from both parties
b. By having clients sign waivers
c. By not disclosing one of the agency relationships
d. By obtaining informed consent in writing from both parties

803) Which type of contract involves an exchange of consideration between two parties?
a. Bilateral
b. Executed
c. Mutual
d. Unilateral

804) A clause that allows the parties to agree that they won’t litigate if there are any contract disputes is a/n _________.
a. Arbitration clause
b. Choice of law clause
c. Indemnification clause
d. Severability clause

805) Conrad and Evan have been renting their house in Green Bay for several years. The end of their current lease is approaching, and the couple wants to continue renting the home. Which of the following is true of the lease arrangement they will enter into with their landlord?
a. They can simply extend the lease they are currently in.
b. They must enter into a new lease.
c. They must go on a month-to-month lease.
d. They must pay a renewal fee to the state.

806) What is the definition of a tax lien?
a. A tax lien can be attached to a property as a result of an unpaid mortgage.
b. A tax lien can be attached to a property for a violated covenant restriction.
c. A tax lien can be attached to a property for work performed on a property by a contractor.
d. A tax lien can be attached to property for failure to pay any type of taxes, including property taxes and income taxes.

807) What figure results when you subtract the buyer credits from the buyer debits on the closing statement?
a. The amount the broker will distribute on behalf of the buyer
b. The balance due from the buyer at closing
c. The balance due to the seller at closing
d. The buyer’s total expenses and fees

808) Roger just discovered that his loan includes a hidden balloon payment, so now he must ________.
a. Make one large final payment to pay off the principal
b. Make one large initial payment to pay down the principal
c. Pay off the interest with a second mortgage
d. Pay off the interest with higher payments for the first year

809) Mario does not want to include a religious preference in his listing ad, so he decides to use which of the following phrases?
a. Apartment complex with a temple
b. Close to Catholic cathedral
c. Jewish community
d. Within walking distance to a mosque

810) Juniper is buying a newly constructed home with a fireplace and garage. A _______ is required, per state laws.
a. Carbon monoxide detector
b. Radon test
c. UST
d. Well inspection

811) Seller Julius knows he has asbestos in his insulation, and he wants to remove it before listing his house. What’s Julius’s best option for removal?
a. Hire an odd jobs contractor
b. Hire someone with proper and training and certification
c. Leave it for the buyer to deal with it
d. Remove the insulation himself

812) A listing agreement describes how compensation the seller’s agent earns will be shared with the licensee who brings the buyer. This is known as the _______.
a. Buyer’s split
b. Cooperating broker’s split
c. Honor system
d. Office fee

813) Fred wants to make sure that his home is radon free. He wants to check all likely access points, including which of the following?
a. Doorways
b. Drains
c. Outlets
d. Windows

814) Ralph has a right of first refusal agreement on his neighbor’s property. When the property goes up for sale, how will Ralph exercise his right?
a. He’s allowed to review and refuse any offer the seller would like to accept, giving him control over who lives next door.
b. His neighbor isn’t allowed to market the property until Ralph has decided to either purchase the property at market value or give up his right of first refusal.
c. His neighbor must notify Ralph as soon as he receives his first offer, giving Ralph the opportunity to match the offer and buy the property. If Ralph doesn’t do so, he gives up his right of first refusal.
d. Ralph is allowed to refuse any material change to the property, including a sale, lease, or substantial change to the property improvements.

815) Which of the following is an example of a deed restriction?
a. Eminent domain
b. EPA wetland conservation guidelines
c. Fence height
d. Zoning regulation

816) A property manager is authorized to perform all of the duties related to the property on whose behalf?
a. The lender’s
b. The owner’s
c. The state’s
d. The tenant’s

817) uyer Yun-Wah is purchasing a property for $400,000. His loan-to-value ratio is 80%. The lender also charges a one-point loan origination fee. How much will his loan origination fee be?
a. $2,400
b. $3,200
c. $3,600
d. $800

818) What’s the area of a rectangular building that’s 40 feet by 20 feet?
a. 800 feet
b. 800 square feet
c. 80 feet
d. 80 square feet

819) Karen wants to sell her lakeside vacation home. Upon visiting for the first time in six months, she discovers it flooded during the rainy season. She should have the property checked for _______.
a. Formaldehyde
b. Lead-based paint
c. Mold
d. Radon

820) Al is a real estate licensee. Assuming that none of the following people are his clients but are parties to a potential transaction, to whom must he provide an agency disclosure form?
a. Any party
b. Only buyers
c. Only sellers
d. Only tenants

821) REALTOR® Jim wants to become a social media influencer to get his name out there as an exceptional real estate professional. Why might this be a good idea?
a. It isn’t; NAR prohibits REALTORS® from becoming social media influencers.
b. Social media platforms are exempt from license law.
c. The Code of Ethics doesn’t apply to social media, so he can get away with more ruthless marketing tactics.
d. Used the right way, it can be a great way to find clients.

822) What is it called when a seller removes an item or fixture from a property (so that it becomes personal property instead of real property) before an agreement of sale has been signed or after negotiations have commenced?
a. Adaptation
b. Annexation
c. Detachment
d. Severance

823) Which of the following is something the seller is required to disclose to a buyer in a transaction?
a. Any and all offer amounts from other buyers.
b. The kitchen drain often clogs and backs up into the sink.
c. The seller has HIV.
d. The seller’s willingness to offer seller financing.

824) Which of the following is a duty that licensees owe to ALL parties in a transaction?
a. Exercising reasonable skill and care
b. Negotiating on a party’s behalf
c. Placing a party’s interests first
d. Protecting confidential information

825) Which of the following is a reason that wetlands are protected?
a. To be developed at a later date
b. To grow commercial crops
c. To open them to commercial fishing
d. To stabilize soil and help control erosion

826) What’s an encumbrance?
a. A claim on property that limits the owner’s use or rights, or decreases the property value
b. A defect on the property found during inspection
c. An unauthorized claim to property
d. Anything that affects the marketability of a property

827) Felicity doesn’t mind if her listing firm represents potential buyers of her home, but she would prefer that her listing agent only represent her in the transaction. What type of agency relationship should she select in her residential listing contract?
a. Designated agency only
b. Multiple representation relationship with designated agency
c. Multiple representation relationship without designated agency
d. Rejection of multiple representation relationships

828) Vanessa has just returned $200 to a former tenant whose security deposit was $800. What else, if anything, must she do?
a. She doesn’t have to do any of these things.
b. She must send a letter to the tenant that confirms the end of the lease in writing.
c. She must send the tenant an itemized statement that details how the missing money was spent.
d. She must use the missing $600 to fix the damage caused by the tenant’s normal wear and tear.

829) In terms of encumbrances, what’s a license?
a. Permission to alter someone’s land or property
b. Permission to do something on another’s land while also possessing an interest or ownership in the land
c. Permission to do something on one’s own land
d. Permission without possession, interest, or ownership

830) Shelly is a landlord and places an advertisement for her apartment complex saying, “Bienvenido! These Spanish-style apartments are perfect for the Spaniard in you.” Is this a fair housing violation?
a. No, because as the property owner, Shelly can advertise as she likes
b. No, because it appeals to a certain style of housing
c. Yes, because it’s discriminating based on national origin
d. Yes, because Shelly doesn’t know for a fact that the housing is Spanish-style

831) What’s the term for an addition to a sales agreement form that can be added before it is signed without changing any of the other terms that have already been agreed upon?
a. Addendum
b. Amendment
c. Annexation
d. Appurtenance

832) Ella, a listing agent, accidentally discriminated on the basis of familial status by using which statement in her advertisement?
a. “Families will love it here!”
b. “Features a cozy fireplace.”
c. “House located on quiet street.”
d. “Offers a spacious family room.”

833) Which of these is a requirement when licensees present a party’s written proposal to their client?
a. Ensure the client’s decision is given to the party in person.
b. Ensure the party is promptly notified of the client’s acceptance; rejection doesn’t require notification of the party.
c. Present the client’s decision to the other party within 24 hours of receiving the written proposal.
d. Promptly notify that party of their client’s decision.

834) Which of these statements regarding the purpose of real estate governance is the most accurate?
a. Real estate governance organizations are created primarily to ensure that licensees have the appropriate education and experience before becoming licensed.
b. Real estate licensing law is in place to assure that brokers treat licensees equitably.
c. States enact licensing laws to ensure that licensees are well-qualified and that they act within the law.

835) Lease types, space planning, area design, and building layout are especially important for a property manager who’s working with a ______.
a. Condominium property
b. Non-residential property
c. Residential property
d. Vacation property

836) What responsibilities does a real estate professional have regarding property taxes?
a. Assist with paying property taxes at closing
b. Determine whether property taxes have been correctly assessed
c. Testify at property tax hearings
d. Understand how property taxes are calculated and disclose to buyers what their property taxes will be based on true taxes, not assessed value nor taxes after exemptions are taken

837) Licensees conduct CMAs to determine ______.
a. An appropriate listing price
b. Appraisal value
c. Construction costs
d. Multiple methods

838) Listing agent Paula receives three offers for the property overnight and finds them in her inbox first thing in the morning. How should she handle them?
a. For any offers that a buyer has submitted directly, she must first verify the source. Those that come from other agents should be presented to the seller promptly.
b. She must present them one at a time in the order received, according to the time stamp on the email. The seller must make a decision on the offer before she presents the next one.
c. She should present them all promptly to the seller for review.
d. She should present them promptly to the seller unless the seller already has an offer under consideration. If so, she must hold all other offers until the seller has made a decision.

839) A home sells for $225,000. Per the listing agreement, the total commission is 7% of the sales price. The listing brokerage will split the full commission with the buyer’s broker 50/50. Kiko the seller’s listing agent has a 70/30 split arrangement with her brokerage, with Kiko receiving the “70”. After sharing the commission with the buyer’s broker and her commission split with her brokerage, how much will Kiko receive?
a. $15,750
b. $2,362.50
c. $5,512.50
d. $7,875

840) Determine which of the following statements is TRUE when an as-is clause is used.
a. Sellers are exempt from lead-based paint disclosure requirements.
b. Sellers are required to fill out Real Estate Condition Reports.
c. Sellers have no disclosure obligations.
d. Sellers must still disclose any potential material adverse facts.

841) What do buyers provide to the seller as an indication that they are serious and intend to go through with the purchase?
a. A copy of the signed agency agreement
b. A promissory note
c. Earnest money
d. Their word

842) To avoid discriminating against those with disabilities in her advertisements, June, a listing agent, should use which of the following phrases?
a. Fourth-floor walk-up
b. Ideal for active singles
c. No service animal allowed
d. No wheelchairs on premises

843) Lenders require that borrowers purchase and maintain adequate _____, which is usually bundled into their monthly PITI payment.
a. Hazard and flood insurance
b. Legal counsel
c. Personal property insurance
d. Pest and hazard inspections

844) Where is an appropriate place for a broker to place client trust funds?
a. In an interest-bearing account within the state, with a ledger entry noting they are trust funds
b. In a non-interest-bearing general business account
c. In a trust fund account or neutral escrow account
d. In the broker’s personal checking account

845) You should make sure that any property management agreement you sign has _______ that outlines why and when you have the right to terminate a contract with an owner.
a. A hold harmless clause
b. An activation clause
c. A reasonable care clause
d. A termination clause

846) REEB has received information that leads the board to believe that a broker has pursued a continuing course of mortgage fraud. Which of these statements about the board’s authority is true?
a. REEB may issue a summary suspension pending a disciplinary investigation and hearing.
b. REEB may petition the attorney general’s office for a temporary injunction against the broker.
c. REEB must give the licensee an opportunity to appear at a hearing before taking any action against the licensee.
d. REEB must schedule a show cause hearing before beginning an investigation or commencing any disciplinary action.

847) The potential for health hazards related to ______ must be disclosed when selling or renting homes built before 1978.
a. Arsenic
b. Asbestos
c. Lead
d. Radiation

848) Which law requires the EPA to establish air quality standards?
a. The Clean Air Act of 1970
b. The Clean Air Act of 2010
c. The Environmental Quality Act of 1970
d. The EPA Air Quality Standards Act

849) In which type of contract does only one of the parties offer consideration?
a. Bilateral
b. Executed
c. Mutual
d. Unilateral

850) Which of the following is a private agreement that impacts the use of the land?
a. Assessment
b. Deed restriction
c. Encroachment
d. Encumbrance

851) John is a qualified third party conducting a standard review of a property. John is conducting a(n) ______.
a. Analysis
b. Inspection
c. Review
d. Test

852) Lester, a confirmed bachelor, decided to celebrate the fact that he just made the final payment on his home in Oshkosh. He invited several friends over for a “burn the mortgage” party. How does Lester own his home now?
a. As chattel
b. As tangible property
c. Encumbered
d. In severalty

853) Jerome is buying Joanne’s bungalow in Kenosha. Both parties decided they would prefer a title agent hold the earnest money prior to closing. In what type of account is the earnest likely to be deposited?
a. Broker’s operating account
b. Escrow account
c. Mortgage account
d. Trust account

854) A late spring snow melt caused a river to swell past its bank. The flooding led to many landowners losing portions of their properties. What is the process called that caused this land loss?
a. Accretion
b. Avulsion
c. Erosion
d. Prior appropriation

855) Wanda wants to use some copyrighted material on her website. The law _______.

a. Allows her to legally use up to 15% of the original work
b. Offers no rules permitting the use of a specific number of words or percentages of a work
c. Permits her to use whatever she wants
d. States that she can legally use 300 words

856) Which of the following describes a timeshare?
a. Non-transferable property
b. Property with a divided form of ownership or use rights that is usable during defined periods
c. Real property that can be used at any time
d. Theoretical property
857) When can real estate agents give legal advice to a buyer about backing out of a contract?

a. An agent should never give legal advice unless the agent is also a practicing and licensed attorney.

b. They can give legal advice any time.

c. They can give legal advice any time they are asked by the buyer, if the information is provided orally.

d. They can give legal advice any time they are asked to do so by the buyer, and they provide the information in writing.
858) Raj wants to protect some of the equity in his home in case of bankruptcy or foreclosure. He should file a(n) _____.

a. Equity Protection form

b. Foreclosure waiver

c. Homestead exemption

d. Security Interest form

859) A claim of misrepresentation can stand up in court if it includes ________ elements.

a. Five

b. Four

c. Three

d. Two
860) The ______ form is used to form the type of contract that only binds the seller, who must not sell the property to anyone else during the specified time period. The buyer, on the other hand, isn’t bound by the contract.
a. WB-1
b. WB-11
c. WB-24
d. WB-35

861) Hilary just learned that some of the repairs the seller was going to make on the house she is buying in the Milwaukee suburbs will not be completed before closing. Rather than delaying the closing, what can Hilary and the buyer do?
a. Draft a post-closing escrow agreement with instructions for how the seller will pay for the repairs.
b. Hilary can hire her own contractor to finish the repairs and send the seller the bill.
c. Nothing, Hilary will have to pay for any repairs that are not made before closing.
d. Require the contractor to work overnight to complete all repairs.

862) Levinia is preparing a sales contract for her clients Rose and Lily. When is it acceptable for her to offer them legal advice?
a. Never
b. When covering the options for terms and contingencies
c. When determining the purchase price amount
d. When discussing the amount of earnest money to place as a down payment

863) What’s the term for paying off a loan over time?
864) What occurs when a tenant moves out because an issue with the unit makes the unit uninhabitable, such as a lack of heat in the winter?
865) What’s true of a contract amendment once it’s signed by both parties to the transaction?
866) What term is used to describe the illegal use of escrow funds, such as earnest money?
867) Serena works in the property management department of a large apartment complex. For which of the following tasks would she be required to hold a real estate license?
868) When preparing a property for showing, which of the following is true?
869) Sam the appraiser is most likely to use the cost approach for which of the following properties?
870) Why might a buyer want to assume a loan?
871) Leading up to closing, who should ensure that all deadlines are being met, all contingencies are cleared, and all paperwork is fully executed and delivered?
872) Which of the following responsibilities does the commercial property manager have that the residential property manager doesn’t have?
873) Which mortgage market is made up of lending institutions that lend directly to the consumer?
874) Which IRS forms are independent contractors and employees required to complete?
875) Lacey is preparing an offer for her buyer clients, and it’s time to fill in the amount of earnest money they’re going to offer. Which of the following statements is true regarding what earnest money the buyers should offer?
876) Jamie enters an agreement to buy Yolanda’s home. Per the agreement, Jamie promises to provide a $5,000 earnest money deposit, whereas Yolanda promises to sell her home to Jamie. These promises represent forms of ________, which are required to make the contract valid.
877) As supply increases, price ______.
878) Which of these statements about licensee cooperation is true?
879) Which term describes a contract in which the parties have met all agreement terms?
880) Which type of REIT receives most of its revenue from rental of their properties?
881) Government tax assessment offices determine the _________________ by comparing similar properties in a geographic area.
882) Dawn and John own a home together, but they’re getting a divorce. They agree that John will keep the house and assume the loan they signed together. Will the alienation clause in their security document prevent the assumption?
883) The process the government uses to take someone’s property is called __________.
884) The designated broker for Jennifer’s firm left the firm without warning. Can Jennifer and her fellow licensees continue to provide brokerage services?
885) Abe signs a contract to buy Penelope’s home. The deal eventually closes, but Penelope fails to hand over the home’s keys to Abe. A week passes, and Abe files a lawsuit in an attempt to force Penelope to give him the keys. This is an example of ________.
886) Archie wants to buy Claire’s membership share in a cooperative. Which of the following statements is true?
887) A line of credit that’s based on a percentage of the equity a person has in a property and which can be drawn upon for a number of years is known as a ______.
888) Which of the following statements about the duties that seller and buyer clients owe to their agents is true?
889) Janie’s got an open house on Sunday but lets her friend in on Saturday to preview it. It’s love at first sight! With the owner out of town, Janie decides to cancel the open house so there won’t be any other offers. Her friend makes an offer and it’s accepted on Monday. What fiduciary duty or duties has Janie breached?
890) What must you disclose to be in full compliance with an agent’s fiduciary duty to disclose?
891) How should you respond to a buyer who says the following? “I know that you technically can’t show me just the white neighborhoods, but I’m paying for your help. My time is valuable, and I don’t want to waste it going to showings in neighborhoods I don’t want to see. If you won’t screen properties for me the way I want you to, I’ll find someone else who will.”
892) When preparing the sales contract, when is it acceptable for a licensee to offer legal advice to the client?
893) Which option is a right guaranteed under the Privacy Act of 1974?
894) After selling your first house, you decide to cash the commission check yourself, and then give a bonus to your licensed assistant. What type of violation have you committed?
895) What’s the purpose of police power?
896) Trinity is 18 and wants to be a managing broker in Washington. She has completed the required 90 hours of coursework. What else might prevent her from taking the managing broker’s licensing exam?
897) Place the stages of the loan approval process in the correct order.
898) What’s the term for a contract for which one or more terms have yet to be completed?
899) The DOL director received a complaint against broker Carl Savage and has decided to investigate. What’s the next step in the process?
900) You prepared a comparative market analysis and have a plan for educating the seller about the value you can provide. Which stage of the residential sales process are you in?
901) What’s a legal description?
902) Jacob and Cynthia are purchasing a house from Carlos. They want to be protected from having to purchase the house if they find substantial property condition defects. What can they do with the contract to protect themselves?
903) Which of the following is an example of the duty of obedience?
904) Prior to closing on the property, Monica substituted her daughter’s name, Melanie, as the buyer. Although Melanie is now listed as the buyer, Monica isn’t released from her contractual obligations. This is an example of ______.
905) According to the Federal Communications Commission, who or which entity may call a person listed on the national Do Not Call Registry?
906) Why would a retail tenant be willing to sign a lease in which a percentage of sales proceeds are paid to the landlord?
907) What type of agency exists when a buyer’s broker is the listing agent for the same property?
908) Which term refers to a tract of land divided into lots or plots and used for building purposes?
909) How are independent contractors compensated and their income reported?
910) Which of the following statements is true about a licensee’s duties to a landlord the licensee represents?
911) A property owner’s right to access ponds, lakes, oceans, and other closed bodies of water bordering the owner’s land is called ______ rights.
912) Melissa, a new broker, is excited to meet with her first seller. She knows she needs some sort of form to outline her agreement with the seller. What should she do?
913) Renatta is under contract to sell her home to Marcus. Marcus has a financing contingency, and he finds that he’s unable to get financing for the home. He terminates the contract under this contingency. Renatta’s brokerage firm is holding the earnest money. What is their responsibility regarding disbursement of those funds?
914) You represent Cynthia and Ronald, who signed a contract to buy Margie’s home. The contract included the phrase, “time is of the essence.” You explain to Cynthia and Ronald that this phrase means ______.
915) The installment land contract is what type of financing?
916) A real estate licensee can provide which of the following opinions?
917) The secondary mortgage market is comprised of _________________________.
a. FNMA, GNMA, FHLMC, & lending institutions that buy loans from other lenders
b. Lending institutions that lend directly to consumers
c. Savings and loans, thrifts, and credit unions
d. The VA and the FHA

918) Which document is provided to borrowers no fewer than three days prior to closing and provides disclosures about the costs of the transaction?
a. Closing Disclosure
b. Escrow Closing notice
c. Loan Estimate
d. The Mortgage Servicing Transfer disclosure
e.
919) Which document given before closing provides an estimate of the costs a buyer is likely to pay at settlement?
a. Abstract of title
b. Closing Disclosure
c. Loan Estimate
d. The Mortgage Servicing Transfer disclosure
920) If a lead-based paint risk assessment or inspection reveals hazards on the property and the seller refuses to fix the problem, what options does the buyer have?

a. The buyer can declare the contract null and void or remove the contingency and continue with the purchase of the property.

b. The buyer can report the seller to the EPA and force the seller to make the repairs or serve jail time.

c. The buyer can sue the seller for breach of contract.

d. The buyer has only one option and that is to back out of the contract.
921) How much notice must a tenant give if they want to terminate their lease?

a. 30 days
b. It depends on the type of tenancy.
c. Three weeks
d. Two weeks
922) Elisa and Simone signed an agreement to list Simone’s house for sale. After the contract was signed, Simone lost her job, and her father, George, offered to help Simone out by paying Elisa’s commission. The buyer’s agent, Carl, also reduced his commission by a quarter of one percent to help Simone out. Who is Elisa’s client?

a. Carl
b. Carrie
c. George
d. Simone
923) Renae showed a property to a Shannon, a buyer client, then to another client later that week. The second client made an offer and the seller accepted. The next day, Shannon called Renae to make an offer on the property and was angry that Renae showed it to another buyer. Did Shannon have a case?
a. No. Renae hasn’t violated agency law by showing the same property to two separate buyer clients.
924) How does the building department ensure that a builder who has obtained a permit builds according to code?
925) When must informed consent for dual agency be obtained?
926) When a local planning board is reviewing density, it would consider ______.
a. Federal impact
b. Impact on neighboring states
c. Property values
d. Setbacks and boundaries
927) What regulation or regulatory authority identifies sites that have hazardous substances, and requires the responsible parties to clean them up?
928) Agatha helped her client Rufus complete the form that documents Rufus’s purchase offer to the seller for the property he’d like to buy. What is this form?
a. Buyer representation agreement
b. Listing agreement
c. Promissory note
d. Sales contract

929) Which of the following is an example of positive misrepresentation?

a. An agent knowingly made a false statement that caused harm.
b. An agent made an unintentional error that resulted in a positive outcome.
c. An inadvertent error occurred.
d. It results in a positive outcome.

930) What type of violation are you committing when you fail to include a material fact or make false or misleading advertising statements?
a. Conflict of interest
b. Improper brokerage commission
c. Improper delivery of instruments
d. Misrepresentation
931) Although Kirk has been paying rent toward his ground lease for more than 17 years, he will never be able to buy the lease from the landowner. What type of ground lease does Kirk have?
a. Assumable
b. Irredeemable
c. Non assumable
d. Redeemable

932) Dan is buying Chuck’s property, which is listed with Nevin’s brokerage. Who are the parties to the exclusive right-to-sell listing agreement?
a. Chuck and Nevin’s brokerage
b. Dan and Chuck
c. Dan and Nevin
d. Dan, Chuck, and Nevin

933) Which formula calculates net to seller?
a. (Net amount mortgage or other expenses) / (100% ‒ commission rate)
b. Sales price ÷ (100% – commission rate)
c. Sales price – (100% – commission rate)
d. Sales price x (100% – commission rate)

934) Which of the following terms best describes an item that is both a fixture and real property?
a. Built-in
b. Chattel
c. Free-standing
d. Movable
935) To indicate that they understand and consent to the terms that appear on each page of the sales contract, what are the seller and buyer required to do?
a. Check the “We understand and consent to the terms presented on this page” statement.
b. Initial and date the bottom of each page of the contract.
c. Nod their heads ‘yes.’
d. Sign a consent form.

936) A negotiable instrument must contain an order to pay or a ________.
a. Flexible sum of money
b. Hand written signature
c. Notary stamp
d. Promise to pay

937) Offers become binding contracts when they’re ______.
938) Cari is preparing an operating budget, and it shows a net loss. What should she do?
939) What is tortious interference?
940) Which of the following statements is true regarding conventional loans?
941) Genevieve is a licensee interested in purchasing a new home. She found the perfect place, which happens to be listed by the brokerage where she’s affiliated. What must she do if she intends to purchase the property?
942) What pricing strategy could work well in any market, primarily by generating buyer interest?
943) Why is it important for a company to revisit its objectives periodically?
944) A(n) _______ is an independent contractor who’s an employee by statute for certain employment tax purposes. An example is a food delivery driver who’s paid on commission.
945) A ____________________ is a worker who’s classified by the common understanding of the profession. An example would be a food server.
946) Georgette is meeting with her buyer clients to fill out the purchase and sale agreement. Which of the following must be true?
947) You’re writing an offer for your buyer client in a cold market. What would be a good negotiation strategy?
948) What’s it called when a real estate company establishes policies and procedures designed to keep confidential information secure, particularly regarding in-house transactions?
949) The buyer and seller are prorating property taxes. Step one is to calculate the daily rate. Next, the number of_________ is multiplied by the daily rate to get the prorated amount.
950) When evaluating the income listed on a loan application, what will the lender consider?
951) Not wanting to cause the sellers or mortgage lenders unnecessary concern, Gwen, the buyer’s agent, wasn’t exactly forthcoming about a slight change in her client’s financial status that her client had shared with her in confidence. Which fiduciary duty to the customer is Gwen violating?
952) What determines how frequently an interest rate adjusts in an adjustable rate mortgage?
953) Which of the following is an example of what would be included in a mission statement?
954) You’ve just accepted a new listing. Why would you want to view the details of past listings for this property?
955) Liam is buying Abigail’s home. Per their agreement, Liam promises to buy the home for $325,000, and Abigail promises to sell her home to Liam. These promises represent forms of ______, which are required to make the contract valid.

956) Jacob and Alexa have decided that they’ve had enough of city life and it’s time to move to the county. Which of the following should be included in the listing agreement they sign with Carla?
957) When preparing a purchase agreement, when is it appropriate for a licensee to offer legal advice to the client?
958) What’s the best way to describe your sphere of influence?
959) Terry just passed her licensing exam, and she’s been working with a broker for the last two months. So far, though, she doesn’t have any clients. How can she spend her time most productively?
960) Which of these is the best definition of a property’s market value?
961) Which entity guarantees government loans?

962) Of the benefits of seller agency, which is the most important to convey to a seller?
963) When you interview with a broker, which of the following goals should your questions help you confirm?
964) You have a duty of honesty and fairness to customers. You have a duty of obedience to your clients. What happens if a client asks you NOT to be honest about a material fact related to the property?
965) What’s a residential marketing plan?
966) Jan is a listing agent assisting the Chesters with the sale of their home. What is one of Jan’s duties?
967) When performing a market analysis, you’ll want to evaluate the number of houses on the market in a given price range and region. What is this data point called?
968) In Janie’s comparative market analysis, comparable A has an adjusted price of $118,000, comparable B has an adjusted price of $112,500, and comparable C has an adjusted price of $121,300. What would be a good way to use this data?
969) What is the purpose of the seller net sheet?
970) Stella is looking for a good broker with whom to affiliate. She begins her search by identifying brokerages located in a particular area. Which of these would be most important in terms of location?
971) Which of the following statements about using real estate assistants is true?
972) Minimizing risk in part means avoiding public networks, unsecure sites, and ______ sites.
973) Which of the following is the best piece of advice you would give to a licensee for avoiding legal concerns over any contract?
974) If you’re alone at an open house, what should you never post online?
975) Broker Janelle is deciding on an office location for her new firm. The main purpose of the office will be to meet with customers and clients. Where can she find data about where her prospective clients are located to help her decide on an office location?
976) Matt is representing the Tyler family in the sale of their house. What should he tell them about the property disclosure form?
977) What are vacancy rates, new building permits, inventory rates, and sales volume?
978) Clayton is your seller client, and you’ve provided him with an appropriate list price range for his house. He’s now found another house he’d like to purchase, but he needs to sell his current house before he can make an offer. Should his desire for another property impact pricing strategy?
979) Jose, a listing agent wants to write an ad for his new listing. Which of the following phrases is acceptable under fair housing guidelines?
980) Benji is a buyer’s agent, and he’ll receive a split of the commission paid from the sale of Harriet’s listing. The property sold for $425,000. The total commission paid from the sale is 6%, split evenly between the buyer and seller brokerages. Benji has an agreement with his broker that he earns 80% of the commission received. How much will Benji be paid from this sale?
981) To meet legal and ethical standards, all transactional records that you keep should be complete and ________.
982) Built-to-Last Construction, Inc., entered into a contract to build a new home for Jane and Dick Monahan. The contract specified that the home must be completed by June 1. Built-to-Last Construction finished the home on May 28. What’s this an example of?
983) Calculate the housing ratio based on the following information: $1,500 condo payment; $100 association fees per month; $150 monthly student loan payment; $300 car payment (with only four payments remaining); and a gross monthly income of $5,000.
984) Which of the following options describes a method by which a person with a real estate license can determine an appropriate listing price range?
985) In an analysis of comparables, property A is next door to the subject property and had six adjustments. Property B is three blocks away and had three adjustments. Property C is six blocks away and had two adjustments. Property D is one block away and had eight adjustments. Which comparable should carry the most weight in determining a list price range?
986) Your client, Arliss Xavier, insists on finding a buyer who is willing to pay top dollar for her property. You, on the other hand, would like to get the property sold so you can get your commission. What should you do?
987) Camille makes it a point to check the MLS for seller clients’ properties’ former MLS listings. What information will she find there?
988) Can Jeremy, a licensee, receive a referral fee for sending his buyer client to Ajax Title?
989) Marcus is representing a seller client. Which of the following is a true statement?
990) Last week, The Rialdis’ listing agreement ended after months on the market, with not even a single offer to show for it. Today, they received a call from Mindy, a real estate professional who would like to relist the property and has some new ideas for getting it sold. What approach is Mindy using to find listings?
991) What’s the purpose of the loan application?
992) Because of the lack of control over the individual by the employing party, which of the following persons is not classified as an employee?
993) From a seller’s perspective, what’s one reason to use the MLS to promote a property?
994) REALTOR® Randy has a seller client who’s proving difficult to work with, and Randy knows he won’t appreciate the advice Randy needs to give him: The market has cooled and the listing price they agreed to should be lowered. He puts off contacting his client, hoping someone will make an offer in the meantime. Is Randy acting according to the NAR Code of Ethics?
995) Sylvia, who’s suffering from early onset Alzheimer’s, signs a contract to buy Theodore’s home. Before the deal closes, it’s determined that Sylvia lacks legal capacity to enter into a contract. Which party or parties is permitted to void the contract?
996) Why is it important to try to view the world from your client’s perspective?
997) While reviewing her purchase contract, Jeanette’s client asked, “What does this inspection contingency do?” How should Jeanette frame her response?
998) Edmond, a broker, signs a listing agreement with Julia, who’s selling her home. Julia insists that the agreement state that only Christians will be allowed to buy her home. For what reason would this agreement be considered void?
999) The formula for net to seller is sales price x (100% – _______).
1000) Besides building seller rapport, what’s a key purpose of touring a subject property?
1001) Which of the following phrases should Monica include in her new listing ad if she wants to be careful to avoid including a religious preference?
1002) What value principle assumes that if an identical property were sold recently, its sales price should be a good indicator of the value of the subject property?
1003) Which term means a calculated percentage used to determine who owes how much of a given expense over a certain period of time?
1004) Traci is hosting an open house for her seller, Alex. Rashid, a potential buyer, stops by, loves the home, and starts talking with Traci about buying the property. Rashid isn’t working with a broker. How does Traci avoid an undisclosed, unintentional dual agency situation?
1005) In accordance with RESPA prohibitions, rebates may only be offered by licensees to transaction parties, if _____.
1006) Lorena is getting ready to post information about her new listing on social media. Which of the following should she do?
1007) One type of seller financing is a(n) ______.
1008) In most states, tenancy in common is the assumed form of property ownership unless otherwise noted in a contract. Which of the following statements about tenancy in common is also true?
1009) Which of the following is a legitimate business deduction for income tax purposes for a real estate licensee?
1010) Which of the following statements applies to both employees and independent contractors?
1011) What’s the acronym for the legislation that eliminates illegal referral fees among settlement service providers?
1012) If an appraisal contingency is in place, what happens when a property appraises lower than the agreed-upon sales price?
1013) What measurement indicates how many properties are selling in a given area?
1014) Per the Real Estate Settlement Procedures Act (RESPA), licensees may not receive or give referral fees or finder fees (or anything of value) from/to whom?
1015) Where are the top two places you should spend your marketing dollars?
1016) When does express agency exist?
1017) The Real Estate Settlement Procedures Act is a consumer protection statute that ______.
1018) What’s a cooperating broker?
1019) You’re the agent for a 2,500-square-foot property that has four bedrooms, two baths, and a full basement. Your first comparable is a 2,400-square-foot home with three bedrooms, one-and-a-half baths, and no basement that’s listed for $239,000. You adjust the price by $2,500 for the lack of a bedroom, $3,000 for the missing half bath, and $5,000 for the reduced square footage. What is the adjusted price of the comparable property?
1020) Although open houses don’t usually result in the sale of the home, they’re still important. Why?
1021) How does a budget compare to a forecast?
1022) What is another name for a land contract?
1023) Which of the following is a map of a proposed subdivision development that must be approved by the planning commission, before development may begin?
1024) What’s the most common way that buyers’ brokers protect their compensation?
1025) Who’s ultimately responsible for determining the role a licensee is expected to play in any transaction?
1026) Why do licensees help buyers estimate closing costs?
1027) A $400,000 property depreciated in value by 2%. What’s its new value?
1028) To determine the indicated market value of a subject property, which of the following data would be correct to use?
1029) Which buyer negotiation strategy is unlikely to work in a hot market?
1030) It’s not a good idea to post photos of your clients’ expensive belongings. Why is that?
1031) As supply increases, what happens to price?
1032) Denise is a real estate licensee performing a market analysis. She uses the rule of three, which means that she selects three comparables that ______.
1033) What’s your responsibility regarding contingencies when representing a buyer?
1034) Which one of the following best describes the fiduciary duty of confidentiality?
1035) Which of the following are common with hot markets?
1036) Three friends entered into a contract to buy a vacation property. The friends got into a dispute, resulting in one of them wanting out of the deal. The remaining two friends didn’t want to lose the deal, but couldn’t afford it on their own. They talked a fourth friend into replacing the person who backed out of the contract. The seller agreed to the substitution, and they moved forward with the purchase. What does this describe?
1037) What does the Rule of Three say about comparables when preparing a CMA?
1038) As demand increases, what happens to price?
1039) What element of the listing presentation outlines the various ways a licensee will advertise and boost awareness of a seller’s property to potential buyers?
1040) How does the seller agency relationship benefit the seller?
1041) What is closing?
1042) Prior to closing on the property, Monica substituted her daughter’s name, Melanie, as the buyer. Although Melanie is now listed as the buyer, Monica isn’t released from her contractual obligations. What is this scenario an example of?
1043) Which type of worker is defined in statute under tax law as an independent contractor and not an employee, examples of which include direct sellers, licensed real estate agents, and certain companion sitters?
1044) Matt and Elaine are brokers who plan to go into business together, and they’re working on a business plan to present to prospective lenders. Which section will provide a synopsis of the plan?
1045) Jillian just received a trio from a title company. It contains a property profile, deed, and ______.
1046) If a seller receives a full-price offer, which of the following is a true statement?
1047) You represent Cynthia and Ronald, who signed a contract to buy Margie’s home. The contract included the phrase “time is of the essence.” How do you explain to Cynthia and Ronald what this phrase means?
1048) After adjusting sales prices of comparables for a market analysis, which comparable carries the most weight in determining a list price range?
1049) Kathy is preparing a market analysis for her clients, the Winstons. Why might she include a seller net sheet?
1050) The Nguyens must get top dollar. Competitive properties are priced at $250,000 and $255,000. What’s a good pricing strategy?
1051) The _______ orders the title search in an escrow closing.
1052) What’s the purpose of the buyer pre-qualification letter?
1053) Mona is a licensee who strives to be professional in all of her actions, so how does she keep her business account?
1054) Which of the following is a true statement regarding short sales?
1055) Mary is preparing a purchase offer for her buyer client. It’s a fairly standard offer: a little less than list price, with the seller paying a little toward the buyer’s closing costs. Mary fills in the blanks on a standard form used in her brokerage firm based on the current situation. Is this okay?
1056) What is the purpose of a pre-closing checklist?
1057) After signing a purchase contract, buyer Pam and seller Waylon both realize that the address for Pam’s newly-purchased home reads “344 Beverly Way” instead of the correct address: “334 Beverly Way.” Which of the following is true about this situation?
1058) When Shelby had lunch with an old high school friend, he mentioned his new career as a real estate licensee. They spent a few minutes discussing the real estate market, and Shelby’s friend promised to call when he and his wife started looking for a home to buy. Then they continued reminiscing about old times. Is the cost of the meal now an allow
1059) James’s brokerage, Urban Roots, will specialize in urban living spaces. During the situational analysis, he found that the population his brokerage will serve prefers to meet with sales agents virtually. Part of the brokerage’s mission statement is: “Help our customers to find the perfect urban living space in a way that suits their busy lifestyles.” Which of the following should be included in Urban Roots’ plan to address this?
1060) Henrietta makes an offer for $250,000 on Ollie’s bungalow. Ollie has until June 21 to respond to her offer. Before Ollie responds, Henrietta finds a house she likes better, and she withdraws her offer to Ollie. Which of the following is true of this situation?
1061) Which of the following hardware and software configurations is best suited for a brokerage office that will primarily serve as a meeting place for virtual sales professionals?
1062) You’re working with sellers who need to maximize their proceeds. Competitive properties are priced at $370,000 and $375,000. What’s a good pricing strategy?
1063) Nancy is thinking about paying off her mortgage loan early. She looked at the loan contract and found that her lender charges a pre-payment fee based on a percentage of interest paid within six months. The lender charges 80% of six months’ interest. Nancy’s mortgage has $50,000 remaining, and she pays 6% interest. How much would she owe in penalty fees?
1064) An example of confidential information is ______.
1065) Which of the following best describes the purpose of the Truth in Lending Act?
1066) Adam owes $125,000 on his home. It’s currently worth $340,000. How much equity does Adam have in his home?
1067) As a security precaution when posting information for a listing, which of the following should you do?
1068) One reality of real estate is that you’ll often need to ______ in order to make a sale.
1069) In the income capitalization approach to appraisal, NOI is found by ______.
1070) What is a reason a homeowner may seek a short sale?
1071) Peter is a broker with a listing agreement with the sellers, the Averys. Under the terms of the listing agreement, Peter will earn his commission whether he, the Averys, or another brokerage finds a buyer for the property. What type of listing agreement did the Averys sign?
1072) Why is it important to include active comparable listings in a market analysis?
1073) What, when signed by all parties to a sales contract, changes the original terms of the contract ?
1074) After the open house has ended, it’s best to _______.
1075) Your sellers, the McIntoshes, ask you about the MLS and why they should market their house on it. Which of the following would you tell them?
1076) Two types of prorations are _______.
1077) Bart is an independent contractor. Which of these does his managing broker have the right to do?
1078) Abe signs a contract to buy Penelope’s home. The deal eventually closes, but Penelope fails to hand over the home’s keys to Abe. A week passes, and Abe files a lawsuit in an attempt to force Penelope to give him the keys. Of what is this an example?
1079) When interest rates are lowered, real estate purchases become more ______ for buyers.
1080) When looking for a broker with whom to affiliate, an important consideration is to find out if the broker is ___________ .
1081) Under which of the following circumstances might you be advised to refuse to write a listing contract with sellers?
1082) Buyer Josephine had just signed a contract on a house when she discovered that seller’s agent Franklin knew that this house was 3500 square feet, but he listed it at 3900 square feet. Which essential contract element has been compromised?
1083) What is usually the first place serious buyers look for homes for sale?
1084) Risks to computer systems can be reduced by avoiding public networks, ______ sites, and suspicious sites.
1085) Which of the following is an action that real estate licensees may take without practicing law illegally?
1086) The multiple listing service is a go-to resource for data when researching a subject property. What information will you find there?
1087) Pam is a new real estate licensee who must receive a high level of supervision. Even with the supervisory requirement, the Internal Revenue Service allows Pam to be classified as an ______.
1088) A listing agent’s primary duty to a seller is to ______.
1089) What does a credit score tell a lender?
1090) Which of these is a factor in calculating a consumer’s credit score?
1091) Ginger, a licensee, tours a home that’s packed with clutter. She should ______.
1092) Real property ownersip has significant tax advantages. Which of the following is an advantage?
1093) Ways to minimize computer risks include avoiding public networks, unsecure sites, and ______ sites.
1094) Which of the following describes a sale subject to a mortgage?
1095) Homes built before 1978 may have what environmental hazard in their paint?
1096) Why would a buyer want to know whether any additions or alterations were made to a property?
1097) When a client understands what dual agency is and agrees in writing to allow a firm to act as a dual agent for them in a real estate transaction, this is known as ______.
1098) What is one drawback of sub-agency from a seller’s standpoint?
1099) In a real estate transaction, who may a licensee represent?
1100) Members of the Real Estate Commission serve _________-year terms.
1101) If a consumer wants to file a deceptive ad complaint, which entity should be contacted?
1102) Species habitat, beauty, erosion control, and pollution treatment are all reasons why wetlands are ___________.
1103) Kerry is a real estate licensee who has committed an ethical violation. Which of the following is a true statement about her potential penalties?
1104) One of Mrs. Wilson’s tenants is leaving in a few months. She hates to see this particular tenant go because he has been an ideal tenant—always paying his rent on time, keeping his place clean, and never a complaint. Unlike so many of her other tenants, this tenant deserves to get back his security deposit. By law, when must Mrs. Wilson return the deposit to her tenant?
1105) If a licensee is convicted of a controlled substance offense, what can the Real Estate Commission do?
1106) A buyer asked Clifton why she would benefit from signing an agency agreement with him. Clifton answered: ______
1107) At a business meeting attended by the heads of the top brokerages in town, the keynote speaker discussed a minimum listing fee. This is an example of ______.
1108) What type of agency relationship exists if an agent from ABC Realty represents a buyer and the seller is affiliated with Net Realty?
1109) Article 3 of the Code of Ethics requires NAR brokers to cooperate except
1110) Which term describes the addition of alluvion land to a property through the natural process of accretion?
1111) Which of the following are examples of Single Agency?
1112) Under what name must sole proprietors conduct business?
1113) Glenda is engaged as seller’s agent. Gary, the seller, hasn’t consent to dual agency. A prospective buyer would like Glenda’s assistance in drafting an offer to present to Gary. Can Glenda do this?
1114) The lender, the loan applicant, and the _____________ all complete part of the request forms for verification of deposit forms.
1115) April is having a limited coverage searched performed on her condo. When is a limited coverage search used?
1116) Which Law does the Office of Fair Housing and Equal Opportunity Uphold?
1117) According to the NAR code of Ethics and Standards of Practice Preamble, “REALTORS should recognize that the interests of the nation and its citizens require the ____________.”
1118) Ownership is a right in the bundle of rights. Which of the following is considered a form of ownership?
1119) Which of the following financing types involves the sale of personal property with the real property?
1120) In a transfer of ownership in real property, who conveys the title?
1121) At what level or levels does antitrust oversight exist?
1122) Stephanie’s primary residence is in SC, has a fair market value of $225,000, and is in an area with a millage rate of .325. Stephanie qualifies for the state homestead exemption. What could she expect to pay in property taxes?
1123) Sally is a licensee working under a written brokerage agreement with buyer Barney. Although she’s assisting him in the transaction, he’s her customer (not her client), and she doesn’t owe him any fiduciary duties. Based on this, you know that Sally’s acting as a __________.
1124) What’s a subordination agreement?
1125) Which of the following describes the appropriate capital gain exclusion for a taxpayer’s primary residence?

–00cceshop00—7.23 continue-cali practice

1) Single-family, multi-family (duplex, triplex, etc.), apartment buildings, condominiums, and cooperatives are part of what property category?
a. Industrial
b. Leisure
c. Residential
d. Retail
2) Title companies are a useful relationship to cultivate for many reasons. For example, what can they provide you with to help you in your business?
a. E & O insurance
b. Mailing lists
c. Properties to sell
d. Training
3) Gordon is busy preparing transactional paperwork for the property his client is selling. What activities accompany this duty?
a. Obtain signatures and provide copies to the parties.
b. Prepare a comparative market analysis.
c. Prepare marketing materials.
d. Write the MLS listing.
4) A title company, a title representative, and a mortgage broker are three ______ after you are licensed.
a. Entities you should avoid
b. Professional relationships you should establish
c. Professions you should study
d. Services you are prohibited from recommending

5) Because these types of properties have both specific physical and complex operational requirements, they are usually handled by more experienced real estate professionals.
a. Industrial
b. Leisure
c. Residential
d. Retail
6) Sophie has been working hard since she started as a real estate licensee, but the market is slow, and she has yet to complete a single transaction. What strategy could help her find more listings, even though the market is slow?
a. Being more flexible in the types of properties she handles
b. Learning to work with commercial real estate
c. Reaching out to her sphere
d. Signing up with a listing service
7) Hotels, motels, golf courses, resorts, and sporting arenas belong to which of these property categories?
a. Industrial
b. Leisure
c. Residential
d. Retail
8) Rhonda is considering what her niche should be. Which of the following would make the best niche for her to pursue?
a. She could focus on only residential properties.
b. She could focus on single-family properties that list between $300,000 and $500,000.
c. She could guarantee a sale at list price within 30 days.
d. She could start learning Spanish and serve Spanish-speaking clients.

9) At which point in the residential selling process does the real estate professional prepare a comparative market analysis?
a. Closing
b. Listing and marketing
c. Managing the transaction
d. Obtaining the listing
10) Marketing exclusively to which of the following niches may be illegal?
a. Catholic parishes
b. Commercial investors
c. Dentists
d. First-time buyers
11) Sheldon has worked hard to create a marketing plan tailored to his client’s property, to hold open houses and arrange showings, to help his client stage the property so that it appeals to buyers, and, finally, to negotiate a deal with a buyer and the buyer’s broker. His client has now accepted the offer. Has Sheldon completed what is needed for the commission check to be sent to his broker?
a. No. Sheldon is still in the marketing phase of the selling process.
b. No. Sheldon still needs to complete the listing activities of the selling process.
c. No, Sheldon still needs to complete the transactional activities of the selling process.
d. Yes!
12) The real estate cycle is affected primarily by __________________.
a. Availability and affordability
b. Immigration
c. Marriages and family size
d. Population growth

13) Shopping centers and malls belong to which of these property categories?
a. Industrial
b. Leisure
c. Residential
d. Retail
14) Licensee Bonita has just submitted an MLS listing with photos for her client. Which of the following steps will she need to complete next?
a. Expose the property to prospective buyers using a tailored marketing plan.
b. Meet with the client for a listing presentation.
c. Prepare the seller’s net sheet.
d. Verify the progression of the buyer’s loan.
15) What is the advantage to niche marketing?
a. Focuses your efforts and increases your chances of being noticed
b. Guarantees a minimum income
c. Reduces the real estate professional’s liability
d. Requires no marketing effort
16) Erica presented an offer to her seller client, and after a bit of negotiating with the buyer and buyer’s broker, the offer was accepted. Which one of these activities will Erica be taking care of at this point in the sales process?
a. Arrange a showing of the property.
b. Prepare a comparative market analysis.
c. Sign a listing agreement with her client.
d. Verify progression of the loan through the buyer’s broker.

17) When Henry first began his real estate career, he focused on residential properties. As he gained more experience, he found that he really enjoyed helping business owners find warehouses for their products, or properties where they could conduct manufacturing activities. Of the primary categories of real estate, what types of properties does Henry handle?
a. Industrial
b. Leisure
c. Residential
d. RetailWarehouses and manufacturing facilities are industrial properties.
18) At which point in the residential selling process does scheduling a photographer take place?
a. Listing and marketing
b. Managing the transaction
c. Obtaining the listing
d. Preparing for listing
19) Which of the following groups represents a niche?
a. Empty nesters
b. Home buyers
c. Homeowners
d. Urbanites

20) Which of the following is true about interviewing at a brokerage?
a. Being a new licensee is a distinct advantage.
b. Most brokers prefer not to hire new licensees.
c. Very few licensees are selected; it’s highly competitive.
d. You are interviewing the broker as much as the broker is interviewing you.
21) It’s your first week in real estate and you realize you made a terrible selection with your broker—she’s awful! What is your best course of action?
a. Quit the business
b. Sit tight; you can’t leave until two years have passed
c. Switch brokerages
d. Turn in a letter of resignation
22) Jill is trying to choose between two brokers. One no longer practices real estate, while the other is a very active broker. If training with her manager is a concern for her, which broker should she choose?
a. The active one, because she can learn on the job
b. The active one, because she’ll likely get more leads
c. The one who’s not practicing, because it’s best to learn from someone who’s not practicing
d. The one who’s not practicing, because she’ll likely get more time with the broker
23) One of the best ways to select a brokerage and managing broker with whom to work would be to ________.
a. Call the Better Business Bureau
b. Interview other new licensees
c. Interview several managing brokers
d. Request an income guarantee
24) What’s floor time?
a. Overtime
b. Time spent at an open house that is vacant, without chairs
c. Time spent evaluating carpeting and linoleum for possible upgrades
d. Time spent in the office instead of the field
25) As a new licensee, how should you select a broker to work with?
a. Broker interviews
b. Salary comparison
c. Volume of business
d. Working hours comparison
e. A broker who provides a variety of marketing materials is most likely ______.
f. A graphic design expert
g. A micromanager
h. Going to be difficult to work with
i. Invested in the success of affiliated licensees
26) Karen, a new licensee, is interviewing at a brokerage and asks to see its policies and procedures manual. Why might she do this?
a. To determine whether there are systems in place for her success
b. To find out if the brokerage has a policy of promoting from within
c. To look like she knows what she’s doing to the broker
d. To see if the brokerage pays overtime

27) Laura, a new licensee, just started working for broker Bill. Which of the following is a true statement?
a. Laura likely won’t get a salary for six weeks.
b. Laura may leave the brokerage and join another at any time.
c. Laura must stay with Bill for at least two years before she transfers brokerages.
d. Laura will be put on a three-month probation.
28) Will is looking at two brokerage offices. The commute to one is 45 minutes, and it’s in a neighborhood he intends to farm. The other brokerage is within walking distance of his house. Which office is best for Will’s business?
a. The closer one, because gas is expensive.
b. The closer one, because he can meet clients at the office easier.
c. The commuting one, because he will spend most of his time in the field.
d. The commuting one, because most business is conducted in the car.
29) Broker Bob and new licensee Lisa are meeting to determine whether they will work together. Which of the following is a true statement?
a. Bob is the only one with a decision to make.
b. Lisa should make sure the fit is right before agreeing to work with Bob.
c. Most brokers prefer new licensees.
d. New licensees should accept work with the first broker who offers.
30) Michelle always volunteers for floor time. Why might she do this?
a. She doesn’t like being in the office.
b. She needs the overtime pay.
c. She really likes flooring and interior design.
d. She’s hoping for leads.

31) Shaniqua’s appointment with a prospective broker was cut short because the broker said he had a client meeting. This broker is likely _____________.
a. A managing broker but not practicing
b. A practicing broker
c. Lying; brokers do not meet with clients
d. Politely blowing her off
32) Gary is a good broker to his new licensees. That is most likely because he ______.
a. Guarantees the success of his licensees
b. Has a robust training program
c. Offers comprehensive vision and dental insurance
d. Pays a competitive salary to his independent contractor licensees
33) One of the best ways to select a brokerage and managing broker with whom to work would be to ________.
a. Call the Better Business Bureau
b. Interview other new licensees
c. Interview several managing brokers
d. Request an income guarantee
34) Will is looking at two brokerage offices. The commute to one is 45 minutes, and it’s in a neighborhood he intends to farm. The other brokerage is within walking distance of his house. Which office is best for Will’s business?
a. The closer one, because gas is expensive.
b. The closer one, because he can meet clients at the office easier.
c. The commuting one, because he will spend most of his time in the field.
d. The commuting one, because most business is conducted in the car.

35) Which of the following factors helps the IRS determine whether a licensee is classified as an employee or an independent contractor?
a. Whether another broker supervises the licensee
b. Whether the brokerage offers regular guidance and instruction to the licensee
c. Whether the firm provides the licensee with a copy of the brokerage’s policies and procedures manual
d. Whether the licensee receives benefits from the brokerage firm
36) Lisette is an employee at ABC Brokerage. She’s not licensed and her role is to answer phones and process paperwork. She’s supervised by broker Bob. Which of the following statements is true?
a. Bob can control the number of hours that Lisette works each day.
b. Bob can define the results he wants Lisette to achieve, but he isn’t allowed to direct how she does her work.
c. Lisette is paid according to what she produces at work, not by the number of hours she works.
d. Lisette is responsible for paying her own work expenses.
37) Which of the following statements is true of independent contractor licensees?
a. Their brokerage firm pays certain expenses, such as gas and travel time.
b. They receive benefits, such as sick pay, from their brokerage firms.
c. They’re paid by the job.
d. They’re required to do work in a certain order.
38) Real estate licensees may be classified as ______ for tax purposes, even though they’re subject to supervision from a more experienced broker.
a. Employees
b. Employment agency employees
c. Independent contractors
d. Unlicensed assistants
39) Because of the employing party’s lack of control over the individual, which of these is not classified as an employee?
a. Common law employee
b. Hired worker
c. Independent contractor
d. Statutory employee
40) What form do independent contractors file with the IRS to deduct business expenses?
a. Schedule C
b. Schedule D
c. Schedule E
d. Schedule for Independent Contractor Expenses
41) What happens if an independent contractor earns $600 or more during the tax year?
a. Nothing, but the worker must still pay self-employment taxes.
b. The broker must withhold income taxes and FICA from the worker’s pay.
c. The independent contractor must change his worker classification to employee and have taxes taken out of his pay.
d. The worker’s brokerage firm must prepare and submit forms 1096 and 1099 to the IRS and distribute form 1099 to the worker.
42) The way in which independent contractors and employees are compensated and how their income is reported to the IRS differ. Which of the following statements describes how independent contractors are compensated and their income reported?
a. The worker does not receive a salary and must pay self-employment taxes.
b. The worker receives a salary and must pay self-employment taxes.
c. The worker receives a salary, and taxes are withheld from his pay.
d. The worker receives a salary, and the brokerage firm pays federal and state unemployment taxes on the worker’s behalf.
43) Which type of worker, though an independent contractor, is defined as an employee by statute for certain employment tax purposes? A food delivery driver who is paid on commission is an example.
a. Common law employee
b. Independent contractor
c. Statutory employee
d. Statutory non-employee
44) Which of the following is a reason that the federal and state government classify workers into taxing categories?
a. To determine whether the worker is exempt or non-exempt for purposes of the Fair Labor Standards Act
b. To ensure brokers withhold income taxes from their independent contractors
c. To ensure brokers withhold taxes for independent contractors
d. To ensure that both employees and independent contractors receive health insurance benefits
45) For tax purposes, employees are required to complete IRS form W-4. Which IRS form or forms are independent contractors required to complete?
a. W-2 form
b. W-3 form
c. W-4 form
d. W-9 form
46) What type of worker, defined under tax law as an independent contractor and not an employee, includes direct sellers and licensed real estate agents?
a. Common law employee
b. Employee
c. Statutory employee
d. Statutory non-employee

47) Which of the following statements applies to independent contractors?
a. Their broker sets their work hours.
b. Their broker supervises them.
c. Their work must be done in a specific location.
d. They’re paid by the hour, not by the job.

48) Andrew just received a compensation check from his brokerage firm. Since Andrew is an independent contractor, what determines how he’s paid?
a. Andrew’s date of hire
b. Andrew’s sales
c. The number of hours that Andrew worked
d. The number of sales agents at the brokerage

49) Which of the following is a reason you should avoid posting photos of yourself with expensive jewelry or belongings?
a. It allows strangers to connect with you through your personal social media accounts.
b. It can make your client’s home a target while you’re away.
c. It gives criminals a road map to your door.
d. It may attract thieves.
50) The “who, where, when” safety tip refers to telling someone who you are with, where you will be, and when you will be there. Why should you make sure clients you’re meeting know you have shared this information?
a. If clients know how busy you are, they won’t take up too much of your time.
b. This way, your clients know you’re very busy and have made time for the meeting anyway.
c. You’ll look prestigious to your clients.
d. You’re less likely to be attacked when clients know you would be missed and that you’ve shared their identifying information with others.
51) Chuck arrives at a vacant home for a showing. He thinks he sees a light on inside the home and distinctly remembers turning off all of the lights when he left yesterday. He decides to be safe and take a walk around the house and discovers a basement window propped open. What should he do?
a. Call the authorities to check it out.
b. Enter the home and wait for the client.
c. Leave immediately without telling anyone.
d. Wait for the client to arrive so that they can enter the house together.
52) When it’s second nature for you to consider the risks before doing anything—even marketing yourself—you’ve adopted a “_____________” mindset.
a. Economics first
b. Paranoid
c. Risky
d. Safety first
53) Showing which of the following can make your loved ones vulnerable?
a. Your Agent of the Month award
b. Your car keys
c. Your cell phone
d. Your family photos
54) You are meeting a new potential client at your listing. You’ve only talked to the prospect on the phone. You arrive first, and take a few minutes to review all of the egress points in the house. What is this an example of?
a. Fighting back
b. Installing a safety app
c. Situational awareness
d. Using an escape route
55) Which of the following is true about performing an Internet search on your name?
a. It can help you monitor your online reputation.
b. It can hurt your reputation.
c. It can’t help your personal marketing efforts.
d. It is a waste of time.
56) How can privacy tools available on most social networking sites protect your personal safety?
a. They can allow you to control what pictures and information other people see.
b. They can allow you to upload your photos faster.
c. They can help you to avoid posting provocative pictures of yourself.
d. They can make your online information completely private.

57) If you’re alone at an open house, what should you never post online?
a. A professional photo of yourself
b. Photos of the home’s selling features
c. That you have a great listing
d. That you’re alone at an open house
58) Which of the following are reasons you should insist clients enter a space first?
a. If you enter a space first, you could be cornered, locked in, or pushed from behind and disabled.
b. It is poor etiquette.
c. The person might see something you don’t want them to see.
d. The person might take one look at the property and try to leave.
59) Janice has encountered a creepy individual who claims to be interested in a home purchase, but continually sends inappropriate and threatening emails to her personal account, and also frequently leaves her voicemail messages on her cell phone. She could have avoided this situation if she had done what?
a. Scrapped the provocative photos
b. Set up separate personal and business accounts and only allowed strangers to contact her through her business account
c. Turned off location information
d. Used her phone’s privacy settings
60) If someone steals this, they could have access to your family, personal information, contacts, photos, email, and social media accounts. What is it?
a. Family photos
b. Your Agent of the Month award
c. Your car keys
d. Your cell phone
61) For safety reasons, which of the following should not appear in your personal marketing?
a. Your home address
b. Your office address
c. Your office email address
d. Your office phone number
62) When you meet a new client for the first time, you should always do what?
a. Meet them at a public place nearby.
b. Meet them at the brokerage office first.
c. Meet them at the listing first so that you can expedite the sale.
d. Meet them at your home.
63) It’s a bad idea to include information about your loved ones and pets in your personal marketing because it’s a safety risk to your loved ones. From a safety standpoint, there’s also another reason to avoid including this information in your personal marketing. What is it?
a. Names and birth dates of children and pets can be used as clues to your passwords.
b. Your business associates might not like it.
c. Your family and pets might make you look bad.
d. Your loved ones might not like it.
64) Telling someone that your co-workers know where you are and whom you are with is an example of _____________.
a. Fighting back
b. Getting out
c. Talking your way out
d. Wasting time

65) Janet is so happy to finally be on vacation. As she sits happily in her lounge chair on the beach, she decides to share her joy with her social media friends. From her phone, she posts, “Having such a great time just being alone. I can’t believe I have the whole week all to myself.” Since she’s turned off her location tracking information, she feels it’s okay to let the world know she’s on vacation. Is that a good idea?
a. No, Janet’s home could be robbed while she’s away.
b. Yes, her friends will be so envious!
c. Yes, it’s great social marketing to let everyone know she’s in a tropical paradise.
d. Yes, no one knows where she is.
66) In order to protect the confidentiality of client data, which of the following should you avoid?
a. Displaying photos of your family.
b. Ensuring that client paperwork is properly secured.
c. Leaving clients/customers unsupervised in the office.
d. Sharing personal information about your family.
67) Which of the following precautions can help keep you from being cornered, locked in, or pushed from behind and disabled?
a. Always carry a fully charged cell phone.
b. Always make sure to go first into a space.
c. Always make sure you follow a client into a space.
d. Always make sure your car is not blocked in.
68) Many lawsuits have been filed against companies that fail to protect the security of what?
a. Confidential client data
b. Personal belongings of employees
c. Public information
d. Your bowl of jelly beans
69) Why should you always meet new clients at the brokerage first?
a. To impress them with your work space.
b. To make sure they’re really interested in the listing.
c. To photocopy their ID and introduce them to others.
d. To show them other listings they might be interested in.
70) When meeting a new client for the first time, where would be an ideal place to meet?
a. At a home the client wants to see
b. At your brokerage
c. In your car
d. In your home office
71) Privacy tools are available on most social networking sites. How can they be used to protect your personal safety?
a. They can allow you to control what pictures and information other people see.
b. They can allow you to upload your photos faster.
c. They can help you to avoid posting provocative pictures of yourself.
d. They can make your online information completely private.
72) Which of the following is true about getting to safety?
a. Each person and each situation is different.
b. Once you are in danger, there is no chance for escape.
c. There is one approach that works for pretty much every situation.
d. You should never try to talk your way out of a dangerous situation.

73) When you’re planning your personal marketing materials, you should always consider ___________ a top priority.
a. Economics
b. Government control
c. Safety
d. the Internet
74) Practicing strategies for getting to safety is known as ______________________.
a. Avoiding all contact with people
b. Hoping for the worst
c. Imagining failure
d. Mental rehearsal
75) Having information about clients you’re meeting gives authorities something to work with in case something goes wrong. This is why you should do what?
a. Collect identifying information from the client/customer
b. Complete an agent itinerary form
c. Dress for safety
d. Insist that clients enter first
76) Janet is so happy to finally be on vacation. As she sits happily in her lounge chair on the beach, she decides to share her joy with her social media friends. From her phone, she posts, “Having such a great time just being alone. I can’t believe I have the whole week all to myself.” What feature on her phone might make this dangerous?
a. Photo editor
b. The ability to track her location through GPS
c. Web browser
d. Wireless connection
77) Personal ___________ is an area where many people do not consider their safety.
a. Checking
b. Choice
c. Marketing
d. Space
78) When presented with a dangerous situation, saying something like, “My office knows where I am and who I am with” is an example of _________.
a. Fighting back
b. Getting out
c. Talking your way out
d. Wasting time
79) How can you mentally prepare for getting to safety?
a. Avoid all contact with people.
b. Hope for the best.
c. Imagine failure.
d. Rehearse successful escape strategies.
80) It’s acceptable from a safety standpoint to include ______ in your personal marketing.
a. Your home address
b. Your home phone number
c. Your office address
d. Your personal cell phone number

81) What information should you avoid sharing so that would-be criminals cannot find out where you are or when you are away from home?
a. Location information
b. You list of contacts
c. Your privacy tools
d. Your profile photo
82) Why is it a good idea to turn off location sharing information when using social media?
a. Because other licensees may see where your listings are
b. Because potential criminals can use it to find out when you are home and where your home is located
c. So everyone knows what a glamorous life you lead
d. So your clients can always find you
83) You should always make sure this is secure (locked) when not in use.
a. Your Agent of the Month award
b. Your bowl of jelly beans
c. Your computer
d. Your family photos
84) Because each person and each situation is different, it’s important that you ______.
a. Do nothing
b. Ignore your intuition
c. Rely on others to decide the best way to proceed
d. Stay calm and assess the situation
85) You should be very cautious when approaching a vacant home. If you see anything suspicious, what should you do?
a. Call the authorities to check it out.
b. Enter the home and wait for the client.
c. Leave immediately without telling anyone.
d. Wait for the client to arrive so that you can enter the house together.
86) Which of the following photos should a licensee avoid posting on social media when advertising an open house?
a. A glamorous selfie
b. The front door, showing the address
c. The landscaping
d. The outdoor pool
87) When considering your personal marketing, what should one of your primary concerns be?
a. How envious everyone will be when they see that photo of you wearing your huge diamond ring and bracelet
b. How fabulous you look in that sundress on vacation
c. How to best use your personal assets to attract customers of the opposite sex
d. The overall intention of your marketing
88) When it comes to personal marketing, photos of you should be what?
a. Glammed up and ready to go
b. Professional, almost understated
c. Provocative
d. Revealing

89) It’s important that you present yourself both professionally and safely in your _____________.
a. Conversations with friends
b. Family life
c. Personal marketing plan
d. Private life
90) What should you do when working alone in the office?
a. Eat all of the donuts
b. Lock doors and windows
c. Move a lot of files around so it looks like you’ve been busy
d. Open the doors and windows to attract foot traffic
91) In order to avoid sharing where you are and when you are away from home, you should disable_______________.
a. Location information/location sharing in social media
b. Your list of contacts
c. Your privacy tools
d. Your profile photo
92) Which of the following represents a safety risk and should be avoided when meeting with clients?
a. Carrying a fully charged cell phone
b. Entering the room last
c. Wearing comfortable clothing
d. Wearing high-heeled shoes
93) Which of the following can be a valuable tool for protecting your personal safety, but can also be a risk?
a. Disclosing the names and ages of your children
b. Family photos
c. Leaving clients unattended in the office
d. Your cell phone
94) How can carrying a fully charged cell phone assist you with personal safety when showing a home?
a. It allows you to stay up-to-date with social media
b. It can allow you to call for assistance if your safety is threatened.
c. It helps ensure your car is not blocked in.
d. It makes you look important.
95) If this is not secure, then your clients’ data and your computer systems are also endangered.
a. Your Agent of the Month award
b. Your bowl of jelly beans
c. Your computer
d. Your family photos

96) Why are most new real estate licensees hesitant to market to their friends and family?
a. Their brokers don’t want them marketing to that audience.
b. They are afraid they’ll be asked to reduce their commissions.
c. They don’t want to seem pushy.
d. They want wealthier clients than their friends and family.
97) Deborah was initially thrilled when she signed a listing agreement with her client, Jeb, to sell his five-bedroom colonial in a beautiful neighborhood. Since then, however, it was becoming more and more difficult to get along with Jeb. She felt like she was doing her best to sell his house, but with every day that passed without an offer, he became more and more disagreeable. She wondered what she could do to resolve the situation. What advice would you give Deborah?
a. Might as well ask your broker to send back your license; you’re not cut out for this business.
b. Refer Jeb to a colleague who might be a better match and take the referral fee.
c. Tell Jeb what a jerk he is and that he’d better shape up if he really wants his house to get sold anytime soon.
d. Tough it out and do what it takes to make the client happy.
98) Which of the following is a true statement about working in real estate?
a. Everyone in the business is ethical.
b. It involves nights and weekends.
c. It’s a good hobby career.
d. You’ll probably mesh with all of your clients.
99) In real estate marketing terms, what’s a farm area?
a. An agricultural district
b. A targeted market
c. Vacant land
d. Your sphere of influence

100) What are the two places you should concentrate your marketing efforts before all others?
a. Billboards and bus benches
b. Craigslist and Facebook
c. Radio and TV advertising
d. Sphere and farm
101) How would you qualify a member of your sphere?
a. By asking if they know someone to whom they would refer real estate business
b. By income
c. By location
d. By running a credit check
102) You should try to have a face-to-face meeting with each person in your sphere at least how often?
a. Daily
b. Monthly
c. Quarterly
d. Weekly
103) Of the following marketing techniques, which is most essential for a new licensee?
a. Ability to smooth talk people
b. A love of leisure time
c. A strict 9-to-5 work ethic
d. Perseverance

104) Which of the following is most true about a career in real estate?
a. It requires a strong work ethic.
b. It’s all about schmoozing.
c. It takes minimal effort to succeed.
d. Most people succeed.
105) What’s one mistake that new real estate licensees frequently make regarding their “sphere”?
a. Asking for referrals
b. Connecting with people they don’t know
c. Not promoting their services to friends and family
d. Sending quarterly newsletters
106) What’s a popular myth about real estate?
a. Cyclical nature
b. Easy money
c. Hard work
d. Service counts
107) Rather than spend money on lead generation programs, new real estate licensees should focus on which of the following marketing techniques?
a. Billboards
b. Cold calling
c. Newspaper inserts
d. Sphere marketing
108) What’s the failure rate for new real estate licensees?
a. 24%
b. 56%
c. 71%
d. 87%
109) Calli is a new licensee. If she wants to succeed in real estate, she should ______.
a. Seek out a broker who does a lot of business.
b. Try to be all things to all people.
c. Work a regular work week (Monday through Friday, 9 a.m. to 5 p.m.).
d. Work hard and stick with it.
110) Which of the following describes marketing to one’s sphere?
a. Buying ad space on bus benches
b. Buying display advertising
c. Connecting with your own network of family and friends
d. Picking a geographic area in which to concentrate efforts
111) Stacey is a new licensee. In order to get the most out of her marketing efforts, what she should concentrate on?
a. Billboards and benches
b. Craigslist and Facebook
c. Her sphere and farm area
d. Radio and TV advertising
112) In order to succeed in real estate, you need to ______.
a. Be disciplined and diligent
b. Focus on making money, not building relationships
c. Never work for free
d. Understand that it’s a better hobby than a business
113) Your cousin wants to get into real estate. Now that you know the reality, you tell your cousin, ______.
a. “Buy advertising; it always works.”
b. “This is the easiest job you’ll ever have.”
c. “Where you work doesn’t really matter.”
d. “You should have six months’ living expenses set aside before beginning.”
114) Natalie has been concentrating her marketing efforts in her farm area, which is ______.
a. An agricultural district
b. A targeted market
c. Her sphere of influence
d. Vacant land
115) Natasha has been working her farm area and is starting to see results. If her efforts are most efficient and effective, how often is she likely sending out her newsletter to the contacts in her farm area?
a. Daily
b. Monthly
c. Quarterly
d. Weekly

116) Which of the following is true about careers related to your real estate experience?
a. Because real estate is so specialized, experience in the field doesn’t translate well to other professions.
b. It’s possible to transition to one of several related careers after becoming an experienced real estate professional.
c. Preparing comparative market analyses allows you to work as an appraiser.
d. Real estate counselors don’t need as much experience as a real estate licensee.
117) Which one of the following is a true statement about commissions when working within a real estate team?
a. Any split you receive will likely be less than if you were not in a team.
b. Commission splits are standard among all teams.
c. It takes longer to earn a commission in a team than if you go on your own.
d. Members of a team share commissions only among team members; the brokerage does not take a split.
e. Malcom decided to join a team within his first brokerage. He will likely _______.
f. Be required to forego his commission for the good of the team
g. Receive a commission check sooner than if he’d been on his own
h. Receive a team blazer
i. Work the full array of real estate tasks
118) Which of the following is true about careers related to real estate?
a. A real estate attorney must have a broker’s license.
b. A real estate license qualifies you for a law degree, with practice limited to real estate.
c. Complementary careers include real estate counseling, appraisal, and education.
d. Only brokers with a teaching certification can be real estate educators.
119) Barb is a real estate broker and has decided real estate sales are not for her. She likes valuing properties, though. What might be a natural career change for her?
a. Real estate appraiser
b. Real estate educator
c. Stager
d. Transaction coordinator
120) What is one advantage of joining a real estate team within a brokerage?
a. Doing so allows you to specialize.
b. Joining a team offers higher commission per transaction.
c. Team membership gives you broad experience.
d. The cooperative agreement includes free advertising.
121) Which one of the following is true about a real estate team?
a. Members compete with one another for business.
b. Only the team leader is responsible for supervision.
c. Team members are generalists.
d. There is usually one lead generator and several specialists, such as buyer agents.
122) You’ve been in real estate for a while, have your broker’s license, and have been serving as an associate broker for several years. If you have business acumen and like managing people, a natural next step in your career would be becoming a _______.
a. Real estate broker
b. Real estate counselor
c. Real estate educator
d. Sales associate

123) Which real estate career requires the ability to advise clients using your extensive real estate expertise and ability to evaluate the potential of a given property?
a. Real estate attorney
b. Real estate counselor
c. Real estate educator
d. Real estate investor
124) What is one disadvantage of joining a team?
a. It may take longer to earn a commission.
b. The risks are minimized.
c. The salary is lower.
d. You may not learn all aspects of real estate due to specialization.
125) Rob is a real estate broker who enjoys helping buyers locate loan programs that suit their financial situation. What’s an obvious alternate career path for Rob?
a. Mortgage broker
b. Real estate appraiser
c. Real estate educator
d. Real estate stager
126) If a new licensee is worried about making commission soon, what is one strategy that could help?
a. Buy display advertising.
b. Join a team.
c. Send a mailer.
d. Spend more than usual on marketing campaigns.

127) If an agent lists a home for his sister and it sells, can the agent accept his commission directly from his sister?
a. No, agents cannot accept commissions from immediate family.
b. No, the commission must go through the agent’s broker.
c. No, the commission must go through the escrow company first.
d. Yes, because she’s a close relative.
128) At what point must an agency disclosure be given?
a. As soon as the relationship becomes more than casual
b. At the first contact
c. At the first conversation
d. At the first in-person meeting
129) Jeremy, a buyer, refused to sign Calli’s agency disclosure form. Later, he decided to use Calli as his agent. How many disclosure forms must Calli retain in her files?
a. Four
b. One
c. Three
d. Two
130) What happens if a consumer who refused to sign an agency disclosure later decides to use that same licensee as their agent?
a. An amendment noting the change in agency status must be signed
b. A new agency disclosure must be signed
c. Nothing, as long as the consumer was presented with the form the first time
d. The old agency disclosure must be discarded
131) Jim from Greater SW Realty represents Andy as the buyer of a parcel of land. Roger, also from Greater SW Realty, has the listing for that land. Is this a dual agency situation?
a. No, because each party has their own representation.
b. No, because land is not subject to dual agency requirements.
c. Yes, because any time more than one party is involved in a transaction, it is dual agency.
d. Yes, because both Jim and Roger work for the same broker.
132) Brenda, a consumer, meets Charlie, a licensee. Which of the following actions could Brenda take that would meet the definition of “more than casual” relating to agency disclosure?
a. Asking for a copy of a flyer for her brother, who is looking to buy
b. Asking for advice in negotiating with another party
c. Inquiring about the availability of a property
d. Inquiring about the price of a property
133) Bradley provided his clients with a dual agency disclosure. He obtained his clients’ signatures and provided copies to his clients. What step did he miss?
a. He did not make sure his clients understood the form before signing it.
b. He did not offer to also mail his clients a certified copy.
c. He did not receive his broker’s permission.
d. No steps; if he obtained signatures, he has done his job.
134) Brad is a dual agent representing Gina and Dawn as buyer and seller, respectively. If Gina tells Brad that Dawn’s home was her childhood home and she is absolutely determined to live there, may Brad share this with Dawn?
a. No, because this is confidential information.
b. Yes, because Dawn may be willing to cut Gina a break because of the family connection to the property.
c. Yes, Dawn will think that is cute.
d. Yes, he must tell her because it is a material fact.

135) Gillian is a real estate licensee who attends a party at the home of a mortgage broker, Tim, with whom she has worked in the past. At the party, Tim offers Gillian tickets to a concert, saying that he can’t use them. She accepts gladly, and laughs when Tim says as he hands the tickets over, “And all I ask in return is that you send a customer or two my way!” Is Gillian guilty of a violation?
a. No, but Tim is.
b. No, there is no violation.
c. Not unless she neglects to disclose the exchange and the value of the tickets to her broker within three days.
d. Yes, Gillian is guilty because she has accepted what is essentially a referral fee from a mortgage broker.
136) Cheri, a licensee, refuses to negotiate for either party in her dual agency transaction. What might happen to Cheri?
a. Nothing; this is perfectly legal.
b. She can be cited for failure to perform.
c. She can be sanctioned for breach of contract.
d. She may lose her license; this is a flagrant violation of licensee duties.
137) For how long must a licensee retain a signed agency disclosure?
a. Forever
b. For one year after the agency relationship ends
c. For three years
d. Until the agency relationship ends
138) Harriet, an out-of-state licensee, is friends with Tonya, a licensee who works with Perfectly at Home. Harriet referred one of her buyer friends to Tonya, so Tonya plans to pay Harriet a referral fee. Which one of the following statements about this fee is true?
a. It’s illegal for Tonya to pay an out-of-state licensee a referral fee.
b. Referral fees have no disclosure requirements.
c. Tonya must pay the fee directly to Harriet since Harriet is an out-of-state licensee.
d. Tonya must pay the referral fee through her brokerage firm to Harriet’s brokerage firm.
139) Kamut met with Amy, a buyer, and showed her his new listing. If Amy is unrepresented, did Kamut err by not providing Amy with an agency disclosure?
a. No, because he is the listing agent
b. Only if Amy asked for advice or offered confidential information
c. Yes, because any time you meet with a buyer, you must provide agency disclosure
d. Yes, because he showed her property
140) With written permission, Robert, a licensee, represents two separate parties who each want to buy a new townhome. What do you know about Robert’s situation?
a. Robert is a dual agent
b. Robert is breaching his fiduciary duty
c. Robert is in violation of agency law
d. Robert must also be an attorney
141) Margie wrote an offer for Lisa on 645 Rudolph Street on Tuesday. Before hearing back, another client decides she would also like to write an offer on 645 Rudolph Street. May Margie write a competing offer?
a. No, this would breach her fiduciary duty to Lisa.
b. Yes, if both parties sign a dual agency disclosure.
c. Yes, if Lisa doesn’t find out about it.
d. Yes, if the new offer is lower than Lisa’s offer.
142) Risa is a licensee. She told Kim, her seller client, about Ranger’s willingness to pay more for her house—something Ranger did not want Kim to know. Did Risa violate her duties?
a. No, because a licensee’s duty to a seller is greater than that to a buyer
b. No, because licensees may share confidential information with their clients, no matter the source
c. Yes, because Ranger did not want the seller to know
d. Yes, if Ranger is also a client

143) Before entering into an agency relationship with a consumer, what must a licensee do?
a. Ask their broker’s permission
b. Discuss commission rates
c. Provide a lead-based paint pamphlet
d. Provide an agency disclosure form and obtain signatures
144) Which of the following situations would require agency disclosure?
a. A prospective buyer asks a licensee whether appliances are ENERGY STAR®
b. A prospective buyer asks a listing agent the price of the property
c. A prospective buyer asks an agent their license status
d. A prospective buyer asks an agent why the sellers are moving
145) Chuck represents Benny. April is buying Benny’s property, but Chuck does not represent her. Which duty does Chuck owe Benny that he does not owe to April?
a. Confidentiality
b. Disclosure of material facts
c. Good faith
d. Honesty
146) To whom does an agent owe the duty of disclosure of material facts?
a. All parties to a transaction
b. The buyer, if a client
c. The seller, if a client
d. The seller or buyer, if they are customers
147) Which of the following situations would qualify as “more than casual,” and therefore require an agency disclosure form to be signed?
a. When a ‘for sale by owner’ seller asks a licensee whether the licensee believes the house is overpriced
b. When a licensee shows a couple who is expecting their first child around an open house
c. When a listing agent shows an unrepresented buyer their own listing
d. When a listing agent shows a visitor around at an open house
148) Connie is a new licensee and has just entered into an agency relationship after obtaining a signed agency disclosure from her new client. What must Connie do now?
a. Give a copy to her client and retain the form for three years
b. Have the form notarized and provide a copy to her client
c. Record the document with the county
d. Shred the document, as it contains financial information
149) You work for XYZ Realty under the supervision of broker Luke. Your buddy in the next county gave you a referral fee. The check came to your office in your name. You deposit it. Is this okay?
a. No, because agents can only be paid directly if they’re paid in cash.
b. No, because all compensation must come through your broker.
c. Yes, if the check is endorsed by your broker, as well.
d. Yes, provided your broker knows about the check.

150) To whom must a licensee, representing a buyer, disclose agency status?
a. All parties in the transaction
b. Broker
c. Buyer
d. Seller
151) Bill is a seller who tells his neighbor, “I got lucky! My listing agent is buying my house from me.” What could be the danger to Bill?
a. Additional taxes may apply if the sale happened too quickly
b. Bill might have to pay extra commission
c. Bill’s agent might not have marketed the property well, hoping to get a reduced price
d. His neighbors won’t want a real estate licensee living next to them
152) Which of these is NOT an example of agency coupled with interest?
a. Carma agrees to list Tera’s property for free if Tera signs an agreement to purchase her new home through Carma.
b. Gene, a real estate professional, is purchasing a home for his personal use. He negotiates a reduction in the sales price in return for taking no commission from the seller.
c. Jeanine agrees to charge no commission from her buyer’s purchase of a four-plex if the buyer agrees to pay Jeanine a 3% fee for each unit for which she finds a tenant after the sale.
d. Rhoda loans Carl the money to catch up his mortgage payments in return for a listing agreement to sell Carl’s home for a 4% commission.
153) Mark didn’t like the offered cooperative commission rate, so he wrote a higher commission rate into his buyer client’s offer. Did he do anything wrong?
a. No, as long as he had his client’s permission.
b. No, because commission rates are negotiable.
c. Yes, because he is interfering with the contractual relationship between the listing agent and seller.
d. Yes, because making a change to a contract is practicing law without a license.

154) Max has a written agency agreement with Rufus in which Max will receive all of the listings in the subdivision that Rufus purchased (with Max’s representation) and is developing. One day when Rufus is visiting the site of the subdivision, a work truck accidentally runs him over and he’s seriously injured. Rufus can no longer run the development of the subdivision. What happens to Max’s agency coupled with interest?
a. It’s still in place because it doesn’t terminate on the death or incompetence of the principal.
b. Max has no recourse; the agency relationship is terminated and he receives no compensation.
c. Max now owns the subdivision as a result of the principal’s death or incapacity.
d. Rufus must now pay Max the commission that he didn’t get from the original listing, and the agency relationship is terminated.
155) Imagine that you’re an active real estate licensee as well as an architect, and you’d like to partner with a builder who’s just beginning a development. Which of these creates agency coupled with interest?
a. You agree to design the houses for this builder in return for getting the listings when the properties are finished.
b. You agree to list the properties for a reduced commission once they’re built.
c. You have the builder and developer sign listing agreements now that will be effective when the properties are complete.
d. You tell the builder that he has to hire you to design the houses if the builder wants you to list them when they’re finished.
156) Under what circumstances would undisclosed dual agency be most likely to occur?
a. When meeting a buyer at an open house
b. When meeting a seller at an open house
c. When representing a seller and assisting an unrepresented buyer
d. When representing the buyer and assisting a seller who is represented by another broker
157) Janice is a licensee with a buyer client who just found a great house. Which of the following is she NOT required to disclose to her client?
a. She co-owns the property.
b. She knows the house was damaged in a severe fire two years ago.
c. She lives two blocks away.
d. The owner is her brother-in-law.

158) Danielle is selling her home and has enlisted Camden as her agent. Shortly after signing the listing agreement, Camden informs Danielle that he’d like to purchase her home. What can Danielle do?
a. Danielle may cancel the listing agreement and seek representation from another agent.
b. Danielle must accept Camden’s offer.
c. Danielle must cancel the listing agreement.
d. She already signed the listing agreement with Camden. She must fulfill the contract.
159) Which of the following is a true statement about buying one’s own listing?
a. Even when it’s legal, some brokerages won’t allow their agents to do it.
b. If full disclosure is provided to the seller, it is fine to do.
c. It is always illegal.
d. It’s a great way to make money in real estate.
160) Sue believes she’s about to get into an undisclosed dual agency position. What should she do?
a. Inform all parties to the transaction
b. Inform the seller
c. Say nothing
d. Terminate her agency relationship
161) If a listing agent is interested in purchasing her own listing, what must that agent do?
a. Disclose to the seller that the agent is interested in purchasing the property.
b. Hold any other offers so the seller accepts the listing agent’s offer.
c. Price the property above fair market value so the seller gets a better deal.
d. Price the property below fair market value so the agent gets a better deal.

162) Which of these is an example of agency coupled with interest?
a. A listing agent agrees to accept a commission of 2.5% upon sale of the property.
b. A listing agent agrees to split the commission on the sale of a property with a cooperating agent who brings the buyer to the table.
c. An agent foregoes buyer agent commission, provided the purchasing developer gives the agent the listings on the developed lots.
d. An agent is interested a property the agent has listed.

163) You’ve been practicing real estate for a while and decide to purchase a property as an investment along with a business partner (who’s not a real estate broker). Since you’re a licensee, which of these actions must you take?
a. You must be represented by another broker in this transaction.
b. You must disclose your licensed status, any conflicts of interest, and any relevant facts that might affect the seller’s decision to accept your offer to the seller.
c. You must offer the full list price, regardless of any other factors affecting the property value.
d. You must sign an agency agreement to represent your business partner before you can make an offer to the seller.

164) Savvy’s buyer client made an offer on a property but is having second thoughts. Savvy tells her client that she’ll ask the seller’s agent for an extension on the inspection period “to gather more bids,” and use that time to look at other properties to avoid losing out on the current property. Savvy’s client found a property she liked better, so they made an offer. The offer was accepted, so Savvy contacted the first property’s agent to terminate that offer. Is this wrong?
a. No, she acted in her client’s best interest.
b. No, she fulfilled her duty of loyalty to her client.
c. Yes, she broke a contract.
d. Yes, she did not treat the other party honestly, or act in good faith.
165) In a real estate transaction, which two parties are owed the same duties?
a. Clients and cooperating agents
b. Clients and customers
c. Clients and other parties
d. Customers and other parties
166) In a real estate transaction in which you represent the seller, your duty to other parties is to ______.
a. Be honest in all matters that do not affect your client’s interests
b. Be polite and courteous
c. Maintain the confidentiality of all matters that other parties disclose to you
d. Treat them honestly and fairly
167) Jason is the seller’s agent. His seller has a leaky roof he’d rather keep secret from buyers. What should Jason do?
a. Fulfill his duty of loyalty. Revealing the roof leak may not be in his client’s best interest.
b. Fulfill his duty of obedience by keeping the roof secret, as his client instructed.
c. Inform the seller that the roof leak is a material fact that he is obligated to disclose to buyers.
d. Quit representing the seller.

168) When representing the seller, what duty do you owe a buyer?
a. Advise the buyer on negotiating a better price.
b. Pre-qualify the buyer before presenting their offer to your seller.
c. Present offers from the buyer to your seller.
d. Recommend the buyer obtain a property inspection.
169) Jerry is a licensee employed by Sal, a real estate broker. Jerry must adhere to the policies, procedures and lawful instruction of Sal. What duty is this an example of?
a. Accountability
b. Disclosure
c. Obedience
d. Reasonable skill and care
170) Zack represents a seller and receives an offer through another agent. The offer is higher than the listing price. The property is already listed at a very high price, and no other offers have been received. Is Zack obligated by his duties to the other party to disclose that the offer is too high?
a. No, but Zack should honor his duty to all parties by asking his client to decline the offer.
b. No, his fiduciary duty is to his own client. The buyer’s agent must be responsible for advising on a fair price for the property.
c. Yes, Zack must be honest and fair with all parties in the transaction.
d. Zack can request that both parties consent to dual agency so that he can negotiate an honest price that will be fair to all.
171) In which of these situations has the licensee compromised the duties of loyalty and disclosure?
a. Diana, the seller’s agent, presented an offer to the seller even though it was under list price.
b. Hillary, in working with the seller, told the buyer about a material defect the seller hadn’t disclosed.
c. Josie, in listing Rob’s property, failed to disclose to Rob that he represents the seller.
d. Nate didn’t tell his client about a conflict of interest related to the sale of his client’s property.

172) Which of the following is an example of an agent exercising the duties owed to customers and other parties?
a. Ari didn’t present the buyer’s offer to the seller, since it was a lowball offer.
b. Francine disclosed information about the flooding basement to the buyer and buyer’s agent.
c. Mark complied with the buyer’s agent’s instructions to change the available times for showings so the potential buyer could see the property.
d. With her client’s permission, Missy shared the entire inspection report with the seller’s agent.
173) You represent Ember as her listing agent. Ashley is the buyer, and Trinity represents her. What duties do you owe Trinity?
a. Honesty and fairness
b. The duty of confidentiality
c. The duty of loyalty
d. The same duties you owe Ember
174) Your seller client asks you not to mention to buyers that the basement leaked last year. Should you obey?
a. No, because obedience is not a required duty.
b. No, because the leak occurred last year.
c. No, because this is a material fact related to the property.
d. Yes, because obedience is a fiduciary duty.
175) Your seller client needs to sell as soon as possible. How should you respond if a prospective buyer asks you whether your seller is firm on price?
a. “I don’t know.”
b. “The seller believes the home is priced fairly. I suggest you write your highest and best offer.”
c. “The seller is highly motivated.”
d. “The seller would probably be willing to entertain any offer.”

176) Jack is a licensee employed by Steve, a real estate broker. Jack just heard that the brokerage is representing a well-known professional athlete looking for a new property. He tells a couple of his friends, who happen to be avid fans. Which duty did Jack break?
a. Accounting
b. Confidentiality
c. Disclosure
d. Reasonable skill and care
177) Which of the following duties are owed to customers and other parties to a real estate transaction?
a. Fairness and loyalty
b. Honesty and fairness
c. Honesty and obedience
d. Obedience and loyalty
178) Which of the following is an example of self-dealing?
a. A licensee lists his property with another firm and sells his home without informing buyers of his license status.
b. A licensee purchases a listing through his cousin but does not inform the seller.
c. A licensee purchases a property for personal profit.
d. A licensee sells a property for personal profit.
179) Which of the following is true of a material fact?
a. A material fact is known only to real estate licensees.
b. A material fact is only related to the condition of a property.
c. A material fact need not be disclosed to all parties.
d. A material fact would cause a reasonable person to not take an action that would otherwise be taken, or take an action that would otherwise not be taken.
180) Leo’s client is looking for a property with at least 2,500 finished square feet. Leo finds a 2,200-square-foot property with all the other features the client is looking for, and purposely doesn’t mention the square footage to his client. His client agrees to look at the property, falls in love with it, and wants to make an offer, but does not realize it doesn’t contain his desired square footage. Which of these statements accurately represents Leo’s level of misrepresentation in this situation?
a. Because Leo didn’t state the square footage, he’s not guilty of misrepresentation.
b. It’s the buyer’s responsibility to ensure that the property has the proper square footage, so Leo’s in the clear.
c. Leo accidentally omitted a material fact. This is considered unintentional misrepresentation.
d. Leo knew about the square footage and intentionally didn’t mention it. He’s guilty of intentional misrepresentation.
181) Which of the following is true about inadvertent misrepresentation?
a. A false statement was made.
b. No harm was done to anyone.
c. The person hearing the false statement did not rely upon it.
d. The
182) Which of the following is an example of puffery?
a. “I love this house, and I know it will appreciate better than the average house its size!”
b. “This apartment will definitely increase in value. You can’t lose!”
c. “This condo has the best view this side of the river!”
d. “This home is built to last. You won’t have maintenance issues for a decade, at least!”
183) In order for misrepresentation to occur, what must happen to the person who relied upon it?
a. He must be harmed.
b. He must believe the statement to be false.
c. He must not be harmed.
d. He must research all claims.
184) The main difference between puffery and misrepresentation is that _______.
a. Misrepresentation doesn’t exaggerate
b. Misrepresentation falsely represents material facts that a reasonable person would rely upon
c. Puffery doesn’t make wild claims
d. Puffery is used to help sell a property
185) What is misrepresentation?
a. An inadvertent misstatement of fact only
b. An intentional misstatement of fact only
c. An intentional or inadvertent misstatement of fact
d. A statement of opinion or exaggeration that’s generally understood to not be a statement of fact person making the false statement knew it was false.

186) What’s the difference between commingling and conversion?
a. Commingling involves client funds; conversion involves your own funds.
b. Commingling is mixing client funds with your own; conversion is using them.
c. Only commingling is illegal.
d. They’re essentially the same thing.
187) One element of intentional misrepresentation is that ______.
a. No one relied on the false statement
b. The false statement did not cause harm to the person who relied upon it
c. The person making the false statement knew it was false (or should have known)
d. The person relying on the false information knew it to be false
188) What is the difference between positive misrepresentation and inadvertent misrepresentation?
a. Positive involves a beneficial outcome; inadvertent results in a negative outcome.
b. Positive means intentional; inadvertent means it wasn’t intentional.
c. Positive means made by the seller’s side; inadvertent is misrepresentation by the buyer’s side.
d. Positive means the parties agreed to the facts; inadvertent means the parties disputed the facts.
189) What is puffery?
a. A home’s list price is inflated to make it appear more luxurious than it really is
b. An intentional or inadvertent misstatement of fact
c. A real estate licensee boasts about the price for which he can sell a home
d. A statement of opinion or exaggeration that’s generally understood not to be a statement of fact

190) What types of misrepresentation exist?
a. Blatant and hidden
b. Blatant and unintentional
c. Intentional and accidental
d. Positive and unintentional
191) Which of the following is true about positive misrepresentation?
a. A principal was harmed by the misstatement.
b. The misstatement ended in a positive outcome.
c. The misstatement wasn’t relied upon.
d. The person making the misstatement did not know it was false.
192) Which of the following is an example of a material fact?
a. The fact doesn’t influence the value of the property.
b. The fact would not have resulted in a different outcome.
c. The seller would have accepted an offer regardless of the fact.
d. The seller would not have accepted an offer had the fact been known.
193) A licensee stating that a property is “guaranteed to increase in value over the next five years” is an example of ______.
a. A fact
b. An aphorism
c. Misrepresentation
d. Puffery

194) Which of the following is true of the harm caused to a person relying on false information?
a. The harm can be physical or monetary.
b. The harm must be monetary.
c. The harm must be physical.
d. The monetary harm must exceed a specific dollar threshold.

195) As soon as potential buyers contact Amelia, she sets them up to receive weekly emails with listings that fit what they’re looking for. The thing is, they hardly ever get in touch with her after that. What’s the best thing Amelia could do to improve her likelihood of sealing the deal?
a. Call to make sure her emails aren’t going into their spam folders.
b. Have an in-person buyer presentation meeting.
c. Increase the number of emails to three times a week.
d. Send them a postcard, as well.
196) What type of buyer tends to know little about the home buying process, has limited funds, and may be borrowing down payment money from relatives?
197) First-time buyer
198) Retiree
199) Trade-down buyer
200) Trade-up buyer
201) Janelle is eager to have a place to call her own. She brings her mom and best friend to every showing and relies heavily on their opinions, since she doesn’t know much about the process. After years of apartment living, she’s looking for a place with some space and privacy. What type of buyer is Janelle?
a. First-time buyer
b. Retiree
c. Trade-down buyer
d. Trade-up buyer
202) A call from a buyer who saw your sign in the yard of a recent listing needs to be qualified. What problem situation is possible with these types of buyer calls?
a. Buyers who call after seeing your sign are probably not serious about buying.
b. Buyers who call after seeing your sign are unlikely to have a pre-approval letter.
c. Buyers who call after seeing your sign may already be working with a licensee at your firm.
d. Buyers who call after seeing your sign may have another home to sell before buying.
203) Which of the following is a true statement regarding working with buyers?
a. Assisting buyers is typically a very short-term prospect.
b. It’s important to work with all buyers, whether or not they’re currently ready to buy.
c. They will always buy from you if you put in effort for them.
d. You should pre-qualify buyers before deciding to work with them.
204) Prior to offering services to a potential buyer, why would an agent want to ask questions to pre-qualify a buyer?
a. To add the buyer to a contact database
b. To find out if the buyer is worth the agent’s time
c. To steer the buyer toward a specific lender
d. To take the buyer away from a competing agent
205) Owning a condo on a golf course is Tom’s goal, and Erma is happy to be along for the ride. The condo association takes care of maintenance, and Tom is steps away from the clubhouse at all times. What better way to spend their golden years? What type of buyers are Tom and Erma?
a. First-time buyers
b. Retirees
c. Trade-down buyers
d. Trade-up buyers
206) From a buyer’s perspective, what’s the primary benefit of signing a buyer agency agreement?
a. It ensures a higher level of service.
b. It ensures that the buyer will find the right property at the right price.
c. The buyer cannot purchase real estate without one.
d. The buyer is on the hook for the entire commission without one.

207) Where is the best place to hold a sit-down meeting with a new buyer client?
a. At the buyer’s home
b. At your office
c. Over the phone
d. Via a video conference
208) A prior client referred her sister to you because she wants to finally buy a house instead of renting. When you meet with the sister, she shares that she’s been looking for almost 18 months and “simply can’t find anything suitable.” What red flag does this indicate?
a. The buyer has unrealistic expectations and may never commit.
b. The buyer has used too many contingencies with her prior offers.
c. The buyer probably can’t get financing.
d. The housing inventory is too small to support the buyer population.
209) What’s an appropriate strategy when working with a new buyer who hasn’t been pre-qualified and isn’t working with a lender?
a. Ask the buyer a series of financial questions to determine the price range the buyer should be looking in.
b. Provide the buyer with contact information for three qualified lenders.
c. Recommend your favorite lender.
d. Refuse to work with a buyer until the buyer has been pre-qualified.
210) A buyer representation agreement establishes an agency relationship between which parties?
a. Buyer and broker
b. Buyer and salesperson
c. Seller and broker
d. Seller and salesperson
211) ________ have a fixed income, but they may have large down payments from selling prior homes. Accessible properties with little to no maintenance tend to be attractive to these buyers.
a. First-time buyers
b. Retirees
c. Trade-down buyers
d. Trade-up buyers
212) Licensee Janice has found a way to work with prospective buyers without ever leaving her desk: She sets them up with automated email messages for listings that meet their criteria, and answers any questions they have when they call. Is Janice doing anything wrong?
a. No, this is how agents work with buyers.
b. No, this is how all agents work.
c. Yes, because she should meet them in person before working for them.
d. Yes, because this constitutes the illegal practice of real estate.
213) What’s something you should definitely do when conducting a buyer presentation?
a. Ask probing financial questions.
b. Explain the transaction process.
c. Focus on your track record as a sales professional.
d. Obtain copies of the buyer’s last two pay stubs.
214) Judy is in her 70s and has just listed her two-story home on a quarter-acre lot. Although she loves her home, it’s getting harder to go upstairs and to manage all the yard work that her land requires. She’s going to make an offer on a small, one-story condo where she can walk to the market. What type of buyer is she?
a. First-time buyer
b. Investor
c. Retiree
d. Trade-up buyer

215) Butch and Meg listed their five-bedroom Colonial and are looking for a three-bedroom luxury townhome to buy. Now that their kids have grown and moved away, they don’t need such a big house, but definitely want to be close to parks, major travel routes, and the local casino (Meg loves the slots). What buyer category most fits Butch and Meg?
a. First-time homebuyers
b. Retirees
c. Trade-down buyers
d. Trade-up buyers
216) Danny and Sandy just had their second child. They live in a two-bedroom home and would like for their girls to each have their own room, so they’re looking for a home with at least three bedrooms. What kind of buyers are they?
a. First-time buyers
b. Retirees
c. Trade-down buyers
d. Trade-up buyers
217) When preparing a buyer presentation, what should you keep in mind?
a. The buyer’s national origin
b. Ways to build trust
c. Your commission
d. Your well-rehearsed sales pitch
218) This type of buyer is new to the process and asks a lot of questions. The buyer may be moving out of a family home or apartment into a small, modest home.
a. First-time buyer
b. Retiree
c. Trade-down buyer
d. Trade-up buyer
219) Why might you opt out of working with a buyer unless you’re working under an agency agreement?
a. An agency agreement is required by law.
b. Having an agency agreement allows you to represent the buyer’s interests.
c. It commits the buyer to a two-year contract.
d. It would be dual agency.
220) What is a major benefit to a buyer for signing a buyer representation agreement?
a. It costs less
b. It guarantees the agent will get a commission
c. It makes the buyer look better
d. Representation
221) When working with new buyers, it’s important to qualify the buyers before devoting too much time to them. What type of qualifying is important?
a. Age
b. Ethnicity
c. Family status
d. Readiness
222) Claudius has some trust issues; he’s been to three different brokerages already and still refuses to sign an agency agreement. He says he wants to “keep my options open.” What should you tell him?
a. “I can’t represent you without a written agreement.”
b. “If you sign today, I’ll waive the administrative fee.”
c. “Signing the form is legally required.”
d. “You won’t be able to enter into a contract without buyer representation.”
223) Why might a licensee want a buyer to sign a buyer representation agreement?
a. It helps ensure buyer loyalty.
b. It provides the agent with bragging rights.
c. It’s required by law.
d. It will ensure that he’ll receive the standard commission rate.
224) When buyers contact you for the first time, why is it important to ask how they found you?
a. If they refuse to give you an answer, they are probably not serious buyers.
b. It can help you determine what additional questions to ask.
c. You want to make sure it isn’t a telemarketer just claiming to be a potential buyer.
d. You want to make sure your name isn’t appearing anywhere that you haven’t approved.
225) ______ rely on their knowledge from previous homebuying experiences. This experience helps them to identify what they’re looking for in a new property, which is often more space or a newer home with a good location and extra living space.
a. First-time buyers
b. Retirees
c. Trade-down buyers
d. Trade-up buyers
226) Why should you ask potential buyer clients if they need to sell their home before purchasing a new one?
a. If they don’t, they’re probably wasting your time.
b. Selling their home before purchasing a new one is more work for you and might not be worth your time.
c. Their current home might be a potential listing for you.
d. You won’t need to check their credit if they’ve qualified for a home in the past.
227) What is the primary purpose of making a buyer presentation before representing a client?
a. To build trust
b. To earn your commission
c. To establish credentials
d. To show properties
228) Maurice is meeting with a buyer who is also selling his current home. Which question should Maurice ask to pre-qualify the buyer?
a. Are you currently working with any other agents?
b. Have you ever been convicted of any felonies?
c. What is your income?
d. What is your tax bracket?
229) From a real estate licensee’s standpoint, what’s the purpose of qualifying buyers before working with them?
a. To determine their financial wherewithal
b. To determine their readiness to purchase and make sure they’re not already working with another agent
c. To learn if you have things in common with them
d. To pre-qualify them for a loan
230) What type of agreement is most commonly used as a buyer representation agreement?
a. Exclusive right-to-represent
b. Exclusive right-to-sell
c. Net listing
d. Open listing

231) What’s the purpose of a buyer presentation?
a. To build rapport with the buyer
b. To run the buyer’s numbers for financial purposes
c. To sell the buyer on a specific neighborhood
d. To sell the buyer on your credentials
232) This type of buyer lives on a fixed income and is looking for a smaller property that requires little to no maintenance. Accessibility is an appealing feature this buyer type.
a. First-time buyer
b. Retiree
c. Trade-down buyer
d. Trade-up buyer
233) Which of the following is a good tip to follow when identifying properties to show a buyer?
a. Identify properties above the buyer’s price range.
b. Identify properties sold within the last three to six months.
c. Identify properties that are no longer on the market.
d. Identify properties within the buyer’s price range.
234) Rose, a new licensee, is thrilled that a potential buyer client has agreed to have a sit-down meeting with her. Where should this meeting take place?
a. Anywhere, as long as it’s a public place
b. At a coffee shop
c. At Rose’s office
d. At the buyer’s home
235) “I get why YOU want a buyer representation agreement,” your buyer tells you. “But what’s in it for me?” You answer ____________.
a. “It is required by law.”
b. “Without it, I owe you no duties.”
c. “Without it, I won’t work very hard for you.”
d. “Without it, you are unrepresented.”
236) Mark is trying to set up a face-to-face meeting with potential buyers the Tomlins, but the Tomlins have refused. What should Mark do next?
a. Give their number to a colleague and hope for referral compensation.
b. Give up.
c. Politely insist on a meeting.
d. Wait a week and then call them again.
237) What is the very first thing that a licensee should do when beginning a buyer presentation?
a. Discuss any agency disclosure information.
b. Do a walk-through to understand the buyer’s style and preferences.
c. Have the buyers sign a representation agreement.
d. Present the buyer with a rate card.
238) Dawn is a real estate licensee working with Midge, a buyer. If Dawn were trying to explain the advantages of a buyer representation to Midge, what could she say?
a. “All buyers are required to sign buyer representation agreements.”
b. “Buyer representation agreements don’t obligate you in any way.”
c. “Without a written representation agreement, I don’t represent you.”
d. “You won’t owe as much commission if we work under an agreement.”

239) Using a buyer’s pre-approval or pre-qualification can help in ______ properties.
a. Identifying
b. Inspecting
c. Researching
d. Showing
240) If you’re working with potential buyers who are currently renting, why should you ask when their rental contract is up?
a. It’s illegal to buy a house if they are currently under a rental contract.
b. It will help you establish a purchase time frame.
c. Renters are rarely serious buyers.
d. You will need to talk to their landlord before you can begin searching for a home for them.
241) If buyer customers initially contact you because they saw your number on a yard sign, what could this mean?
a. The buyers are not serious about buying a home.
b. The buyers do not want to commit to becoming your clients.
c. This could end up being a dual agency situation.
d. You cannot answer any questions since you represent the seller.
242) Kramer is a buyer who just signed a buyer agency agreement. He likely did this so that ______.
a. He could avoid breaking the law
b. He could avoid paying commission
c. He would receive a higher level of service
d. He would receive more service while paying a bit more for that service
243) Bonnie always schedules an in-person meeting with prospective buyers before she begins sending them data on properties. Why might this be?
a. She needs their written permission to send them data.
b. She needs to define the buyers’ needs and wants.
c. She needs to have them sign an agency agreement before she can work with them.
d. She needs to see if she likes them enough to work with them.
244) Which of the following is an advantage of scheduling an in-person meeting with potential buyers?
a. Because they have invested time with you, they’ll be less likely to want to start all over with another broker.
b. You can ask them a series of questions to determine if they have the financial means to be worthwhile clients.
c. You can impress your boss by holding a steady stream of meetings at the office.
d. You have the opportunity to show them high-end properties that will result in a hefty commission for you.
245) Boy, have these last 18 years flown by. The Martins remember the day their son was born like it was yesterday. And here he is today, preparing to head off to college. Now that he’ll be out of the house soon, the Martins really don’t need a house this large. What type of buyer are the Martins?
a. First-time buyers
b. Retirees
c. Trade-down buyers
d. Trade-up buyers
246) Licensee Alex is doing a buyer presentation for the Reynolds family. She explains that she would be committed to helping them find a property that will best meet their needs. She will work around their second-shift schedules whenever possible, and always returns calls within the same business day unless she is with another client. Which quality does this demonstrate?
a. Confidentiality
b. Experience
c. Professionalism
d. Service mindset

247) Which of the following is a role of an agent who’s assisting the buyer, but representing the seller?
a. Advise the buyer on an appropriate price.
b. Negotiate for the buyer.
c. Present the buyer’s offer.
d. Select the buyer’s lender.
248) Why might some agents work for buyers without ever having met them?
a. It’s the most effective use of their time.
b. They believe they’ll be able to get the buyer to commit to an agency agreement later.
c. They don’t particularly like people.
d. They’re afraid to turn down any business.
249) What’s an advantage an in-person meeting has over another way of communicating with a potential buyer client?
a. It increases the likelihood that the buyer will purchase a more expensive property.
b. It puts pressure on clients to sign a buyer representation agreement.
c. Licensees can get a signed agreement faster that way.
d. Since they’ve had face time with the licensee, buyers are more likely to stay with that broker.
250) Buyers in this category want to purchase smaller homes, likely because their children have moved out or because their financial situation has changed. Many look for smaller properties that can offer the same quality of living as the property they’re moving from.
a. First-time buyer
b. Retiree
c. Trade-down buyer
d. Trade-up buyer
251) What type of buyer tends to look for properties with less space than their existing home, but that will still offer them a similar quality of living?
a. First-time buyer
b. Retiree
c. Trade-down buyer
d. Trade-up buyer
252) The Elliotts have lived in their current house for five years. Space got a little tight after their first child was born. Now that they’re expecting their second child, they’ve decided they really need a new house with more space in a good school district. What type of buyers are the Elliotts?
a. First-time buyers
b. Retirees
c. Trade-down buyers
d. Trade-up buyers
253) If your cousin Jack is contemplating his first home purchase and wants to use you as his agent, should you pre-qualify Jack before working with him?
a. No, because you can’t work with relatives.
b. No, it’s not necessary to pre-qualify relatives.
c. Yes, because he’s a relative, you can ask financial questions and pre-qualify him yourself.
d. Yes, you should determine whether Jack is ready to buy.
254) These types of buyers want to purchase larger or newer homes. They’re fairly knowledgeable because they’ve purchased before.
a. First-time buyer
b. Retiree
c. Trade-down buyer
d. Trade-up buyer

255) Which of the following items can you expect to see on a buyer representation agreement?
a. Description of the property being sought and obligations of the seller to the buyer
b. Description of the property being sought, method and timing of the broker’s compensation, and obligations of the buyer and the buyer’s agent
c. Method and timing of the broker’s compensation and obligations of the seller to the buyer and agent
d. Obligations of the buyer, the seller, the buyer’s agent, and the seller’s agent

256) Rick is a licensee who’s meeting with a prospective new client, Kate. Kate is looking to purchase a home, and would like Rick to represent her throughout the process. Which agreement should Rick and Kate enter into?
a. Exclusive right-to-represent
b. Exclusive right-to-sell
c. Net listing

257) When working with potential buyers who say they just want a little information but won’t sign a buyer representation agreement, why should you recommend they become clients?
a. By law, buyers must be represented in order for the transaction to proceed.
b. If they won’t sign an agency agreement, there’s a higher chance they won’t be loyal to you.
c. It’s illegal to give potential buyers information without a signed buyer representation agreement.
d. When they sign a buyer representation agreement, you can then run their credit report to make sure they’re worth your time.Open listing
258) Buyers are typically in a power position in ______ markets.
a. Cold
b. Dynamic
c. Hot
d. Static
259) Your buyer client is making an offer on her first home Although she can afford the full listing price, you advise her to offer 10% below the list price. What’s a good reason for doing so?
a. The market is cold.
b. The market is heating up.
c. The market is hot.
d. The market is neutral.
260) Which of the following is an example of an escalator offer with a cap?
a. Buyer offers $750,000. Seller accepts.
b. Buyer offers $750,000. Seller counters at $775,000. Buyer accepts.
c. Buyer offers $750,000. Seller counters at $775,000. Buyer counters back at $765,000.
d. Buyer offers $750,000 with clause that buyer will beat all competing offers by $5,000 up to $775,000.
261) When a seller’s need is related to obtaining a specific price, what can a buyer offer to meet that need?
a. An escalation clause
b. A quick closing
c. Full price or more than full price
d. Waive appraisal
262) If a seller is concerned about an appraisal, what can a buyer do to address this need when structuring the offer?
a. Allow an escalation clause.
b. Offer a quick close.
c. Offer full price or more than full price.
d. Waive the appraisal.
263) Which of these dangers might buyer’s agents see from clients in a cold market?
a. Being outbid by another buyer
b. Being tempted to offer above their price range to win a bidding war
c. Waiting too long and missing the market
d. Waiving inspection
264) When a seller wants to expedite the closing process, what can a buyer offer to address this need?
a. An escalation clause
b. A quick closing
c. Full price or over full price
d. Waive appraisal
265) Dani is in love with the ranch-style home on Cardinal Avenue, says she simply must have it, and is willing to pay cash. The seller is concerned about an appraisal. Which of the following would be a good strategy for structuring her offer?
a. Include an escalation clause.
b. Offer a quick close.
c. Waive the appraisal.
d. Waive the inspection.

266) ______ tend to benefit most in a hot market.
a. Buyers
b. Clients
c. Customers
d. Sellers
267) Which of the following is an example of an escalator offer without a cap?
a. Buyer offers $750,000. Seller counters at $775,000. Buyer accepts.
b. Buyer offers $750,000. Seller counters at $775,000. Buyer counters back at $765,000.
c. Buyer offers $750,000 with clause that buyer will beat all competing offers by $5,000.
d. Buyer offers $750,000 with clause that buyer will beat all competing offers by $5,000 up to $775,000.
268) Which of the following is a way a buyer’s agent can find off-market listings?
a. Check out For Sale by Owner sites.
b. Contact sellers who are under contract to see if they’ll terminate their contract.
c. Search the MLS.
d. Visit real estate brokerage websites to see what properties they are advertising.
269) Jamie is looking to purchase a home. He is hesitant to ask for repairs and risk the seller accepting a different offer. In what type of market is this concern most valid?
a. Cold
b. Dynamic
c. Hot
d. Static
270) With certain types of off-market listings only the listing agent, the seller, and individuals the seller and listing agent have informed know the property is for sale. What’s another term these listings are also known as?
a. Illegal
b. MLS listings
c. Pocket listings
d. Sold properties
271) In what type of market could the buyer’s strategy be to offer 10% below list price?
a. Cold market
b. Hot market
c. Neutral market
d. Secondary market
272) Sellers are typically in a power position in ______ markets.
a. Cold
b. Dynamic
c. Hot
d. Static
273) The Hendersons are having a very difficult time finding a property that meets their needs. What is a way they can find off-market listings?
a. Ask a real estate agent to poll her sphere of influence.
b. Ask a real estate agent to search the MLS.
c. Search homebuying websites.
d. Visit real estate brokerages to see what properties they are advertising.

274) Your buyer clients really like the patio set and bedroom furniture in the house you’ve just shown them. Because the market is hot, what would you advise they do?
a. Ask for the one thing they like best as part of their offer but not the other.
b. Ask for those items and more as part of their offer.
c. Ask for those items as part of their offer.
d. Don’t include those items in their offer.
275) Your buyer clients are submitting an offer on a newly built home in a very trendy part of town. The seller requires that the home be sold for at least $450,000. What is a good strategy for structuring the offer in this case?
a. Offer a quick close.
b. Offer full price or more.
c. Waive the appraisal.
d. Waive the escalation clause.
276) When competing against other offers, what can a buyer do to make their offer more competitive?
a. Include inspection and appraisal contingencies
b. Include terms favorable to the buyer
c. Include terms favorable to the seller
d. Obtain a pre-qualification instead of a pre-approval

277) Bob and Dina are putting together an offer on the property. Which of these items would make their offer LESS competitive and possibly cause another buyer’s offer to be accepted?
a. Higher-than-full-price offer
b. Large earnest money payment
c. Seller grace period after closing
d. Seller pays a portion of the buyer’s closing costs
278) The National Association of REALTORS® Board of Directors enacted MLS Statement 8.0. What’s its more common name?
a. Clarity in Cooperation
b. Clear and Cooperative
c. Clear Cooperation policy
d. Cooperative Clarity
279) Your buyer clients are submitting an offer on a home where the seller is moving to another state and wants to expedite the closing process. What would be a good strategy for structuring an offer in this case?
a. Include an escalation clause.
b. Make a full price offer.
c. Offer a quick close.
d. Waive the appraisal.
280) How may licensees market office exclusive listings?
a. Announcements to other licensees affiliated with the same brokerage firm
b. A page on the firm’s website
c. Emails to a curated list
d. Private listing network
281) In what type of market is a buyer cautioned against asking for personal items?
a. Cold market
b. Hot market
c. Neutral market
d. Secondary market

282) Which of these actions could make a buyer’s offer more competitive?
a. Below-list-price offer
b. Full-price offer, with seller paying buyer closing costs
c. Higher-than-full-price offer
d. Include terms favorable to the buyer
283) What is the buyer benefit of including a cap on an escalator offer?
a. It could cause the buyer to lose out on a property by as little as $1.
b. It helps ensure the buyer stays within an affordable price range.
c. It helps the buyer avoid a default.
d. It tells the seller the maximum the buyer is willing to pay.
284) Larry is buying a new home and has assembled quite a list of repairs he’d like the seller to make to the property. The seller, fearing she might lose this buyer, agrees to every item on the list. In what type of market is this concern most valid?
a. Cold
b. Dynamic
c. Hot
d. Static
285) ______ tend to benefit most in a cold market.
a. Buyers
b. Clients
c. Customers
d. Sellers
286) In what type of market could a buyer’s strategy be to ask the seller to pay closing costs?
a. Cold market
b. Hot market
c. Neutral market
d. Secondary market

287) Which of the following statements accurately represents a major difference between a pre-approval letter and a pre-qualification letter?
a. Buyers receive a pre-approval letter only after the lender has verified at least some information the buyer provided.
b. Pre-approval letters mean that the buyer has received final approval for a loan after going through the entire loan process.
c. Pre-qualification letters are more difficult to get than pre-approval letters.
d. Unlike a pre-approval letter, a pre-qualification letter ensures that the lender has verified information the buyer provided.
288) What happens when an appraisal comes in lower than the agreed-upon sales price?
a. A new appraisal will always be ordered.
b. The buyer will be forced to terminate the contract immediately.
c. The parties may choose to negotiate the difference.
d. The seller must reduce the price to the appraised value.
289) Which of the following is true regarding loan pre-qualification and pre-approval?
a. Pre-approval is preferred over pre-qualification because it’s stronger proof that a buyer is qualified to purchase the property.
b. Pre-qualification and pre-approval don’t carry any weight with sellers.
c. Pre-qualification is a more thorough process than loan pre-approval because a buyer’s financial information is verified.
d. Pre-qualification is preferred over pre-approval because it’s faster.
290) Which of the following is an example of a cloud on a title?
a. An unbroken chain of ownership
b. A paid-off mortgage
c. A property with a city easement that prohibits the owners from installing a pool
d. A third party has staked a claim on a property
291) What’s one of the main purposes of a home inspection?
a. To create a maintenance plan for the new home owner
b. To discover cosmetic and structural issues
c. To discover cosmetic issues
d. To discover defects that could materially affect value
292) Closing issues do occur. Which is a common closing issue?
a. Either the buyer or seller fails to appear.
b. The buyer doesn’t bring a cashier’s check to closing and fails to wire funds.
c. The seller leaves valuable artwork behind.
d. The seller refuses to move out.
293) Susan has been pre-approved for her new home loan, and the closing process is well underway. She’s so excited that she tells you she’s going to use her credit card to purchase a complete set of living room and dining room furniture. What should you tell her?
a. It’s important to avoid spending money on non-essentials or adding to her debt load prior to closing on the loan.
b. She should use money from her savings account to make the purchase instead of using her credit card.
c. She should use store credit instead of her credit card to purchase the furniture since the interest rate is probably lower.
d. She should wait until after she closes on the home and then use a home equity line of credit to make her furniture purchases.
294) What are the hurdles that most often delay or prevent closings?
a. Buyer and seller disagreements, commissions, and contingency issues
b. Inspection issues, paperwork, and recording problems
c. Loans and appraisals, titles, and home inspections
d. Titles, commission, and lending problems
295) Your seller clients are angry because the buyer’s financing fell through. “The buyer was pre-qualified! How can this happen?” they ask. How do you answer?
a. Pre-qualification does not equal pre-approval.
b. The lender must have used the wrong formula.
c. We can sue.
d. You win some, you lose some.
296) Sean represented Jamie as a buyer’s agent. Jamie purchased a property that allowed cooperating agents to receive compensation of 2.5% of the sales price upon closing of the transaction. Sean hasn’t been paid and the transaction closed six months ago. What can Sean do?
a. Sean can ask the buyer to write a check for his commission.
b. Sean can ask the seller to write a check for his commission.
c. Sean can bring action against the broker who did not pay his commission.
d. Sean can’t do anything. The statute of limitations has passed.
297) Drake’s offer to purchase Kevin’s condo currently has a financing contingency, an inspection contingency, an appraisal contingency, and a sale of current home contingency. Kevin also got an offer from Lucy, which came in at $5,000 less than Drake’s offer but with only an appraisal contingency. What is true about Drake’s offer compared to Lucy’s?
a. It’s likely viewed as a less favorable offer.
b. It’s likely viewed as a lowball offer.
c. It’s likely viewed as a more favorable offer.
d. It will likely set off a bidding war.
298) Which of the following is a common hurdle parties might encounter on the way to closing?
a. A change in unemployment statistics in the area
b. Low appraisal
c. Revised income tax deductions
d. The bankruptcy of a major area employer
299) You’re working as a buyer’s agent for Neil and Sharon, who just found the home of their dreams. However, they’re concerned about the condition of the roof and the moisture in the basement, and don’t have endless funds to make repairs. When they ask you about adding contingencies to their offer, what do you tell them?
a. “In order to avoid lawsuits down the line, let’s add as many contingencies as possible to protect our interests.”
b. “Pick the three contingencies that mean the most to you, and let’s go with those.”
c. “Sellers don’t like contingencies. We want the strongest offer possible, so let’s remove all of them.”
d. “You definitely want to make it as easy as possible for the seller to choose your offer, but you have to protect your interests.”
300) The appraisal can be a sticky wicket on the way to closing. Which of the following is a true statement about appraisals and closings?
a. If an appraisal comes in higher than the agreed-upon sales price, the buyer must pay more for the property.
b. If an appraisal comes in lower than the agreed-upon sales price, the seller must lower the sales price.
c. If the appraisal comes in lower than the sales price, the buyer may be able to negotiate a lower price.
d. It is the buyer agent’s responsibility to share market comparables with the appraiser.
301) Your clients, the Manfreds, are first-time homebuyers. They barely scraped together their down payment and really want to minimize their cash outlay. They would prefer to avoid the home inspection and just have their parents look over the property, saving the $500 for other purposes. What should you tell them?
a. “Great idea!”
b. “I have to obey you; it is my fiduciary duty.”
c. “In that case, let’s remove the home inspection as a contingency.”
d. “I would not recommend that.”
302) What’s the purpose of the financing contingency?
a. To make sure the seller’s interests are protected
b. To obligate the seller to lower the price if interest rates rise
c. To protect the buyer in case the buyer cannot obtain financing
d. To provide for seller financing in case the buyer’s financing falls through

303) As a buyer’s agent, which of the following is a best practice to help avoid closing issues?
a. Call the sellers the morning of closing to remind them of their closing appointment.
b. Have a meeting with all parties involved in a closing a day before closing is scheduled.
c. Make copies of all the closing paperwork for the lender.
d. Review the closing statement in advance.
304) Your client wants to include multiple contingencies in his offer. But you know several buyers are interested in the property, and it’s going to be a competitive bidding situation. You say to your client, ______.
a. “Contingencies always kill a deal.”
b. “Great idea. This will help our offer stand out.”
c. “Let’s evaluate which contingencies matter most to you and consider omitting the rest.”
d. “To be competitive, you should remove all contingencies.”
305) Your client Katrina is ready to close on her new home, but when you checked yesterday, the seller still hadn’t dealt with the foundation issue that the inspector found. What is your responsibility at this point?
a. Ensure that Katrina knows that not all contingencies have been cleared.
b. Make the seller fix the foundation issue.
c. Report the seller and the seller’s agent to the real estate commission.
d. Threaten the seller’s agent with a lawsuit if the problem isn’t quickly fixed.
306) From a seller’s perspective, what represents the best offer?
a. A full-price offer contingent on a satisfactory pest inspection
b. A full-price offer that includes seller-paid repairs
c. A full-price offer without a contingency
d. An offer $5,000 over full price that is contingent on the buyers selling their current home
307) Why is it important to record closing documents?
a. Not important at all
b. To make them a matter of public record
c. To receive the property keys
d. To serve as the actual conveyance
308) What effect does a pre-approval letter have on an offer?
a. It assures the seller that the buyer’s financial information has been verified.
b. It has no effect.
c. It kills it.
d. It provides some assurance to the seller, but not as much as a pre-qualification letter would.
309) As a buyer’s agent, what is your responsibility regarding the funds the buyer must provide at closing?
a. You must deliver them.
b. You must make sure your buyer knows they’re required and the amount needed.
c. You must pick them up.
d. You must pick up and deliver them.
310) Margo has found her dream house. It’s listed at $370,000, and she plans to offer $365,000. She has a letter from her lender stating that she’s been pre-approved for a maximum $375,000 loan. Why should she ask her lender to re-write the pre-approval letter?
a. By law, the letter can only note that she’s been approved for the amount she’s offering.
b. By providing the letter with her maximum loan amount, Margo risks reducing her negotiating ability.
c. Pre-approval letters should only state that the buyer’s income, assets, and liabilities have been verified.
d. The lender must issue a separate letter for each offer the buyer intends to make.
311) Besides the appraisal, what’s a common hurdle as transactions approach closing?
a. The buyer changes his mind.
b. The buyer’s financing falls through.
c. The property burns down.
d. The seller dies.
312) What does the underwriting step of loan processing typically involve?
a. Property inspection
b. Title search
c. Verification of the borrower’s financial situation
d. Verification of the seller’s financial situation
313) What’s one purpose of the final walk-through?
a. To begin moving in the buyer’s belongings
b. To confirm the property is in the expected condition
c. To hand over the key to the buyer
d. To see if the buyer still wants the house
314) Part of your job as a buyer’s agent is to ______.
a. Clear any title cloud that has been discovered
b. Consult with the official entities that keep track of chain of ownership
c. Pay the preliminary title report fee
d. Review the preliminary title report
315) What is the schedule of exceptions?
a. A list of items title insurance won’t cover
b. An appraiser’s list of unrelated properties
c. An inspection repair list
d. An underwriting issue
316) The main difference between loan pre-qualification and loan pre-approval is that loan ______ doesn’t include lender verification of buyer-provided data.
a. Pre-approval
b. Pre-qualification
c. Research
d. Underwriting
317) Which of the following is true regarding the buyer’s check for closing?
a. It may be a personal check, cashier’s check, or wired funds.
b. It must be in the form of a cashier’s check or wired funds.
c. It must be mailed within five business days of the closing.
d. It must be signed by a notary public.
318) Your buyer clients had a home inspection done, and it turns out that the water heater is on its last legs and should be replaced immediately before it bursts. What advice do you provide to your buyers?
a. To ask the sellers to replace the water heater or issue a credit
b. To pay for the replacement immediately, even before closing
c. To schedule the replacement immediately after closing
d. To walk away, because if the water heater is bad, there are likely other issues

319) Which of the following is NOT something an underwriter will evaluate before granting a loan?
a. Census statistics on a neighborhood’s ethnic make-up
b. Credit
c. Monthly housing expenses
d. Monthly income

320) Your buyer client, Percy, wants to start searching for his dream house and knows he needs to obtain financing to accomplish that. What’s his first step?
a. Complete a loan application.
b. Obtain a pre-qualification letter.
c. Sign a purchase agreement.
d. Write an offer.

321) Which contingency protects the buyer in the event the buyer cannot get a loan?
a. Appraisal
b. Financing
c. Inspection
d. Interest rates

322) What’s a good strategy for an agent representing a seller as the closing date approaches?
a. Call the buyers daily to check on loan status.
b. Demand answers from title reps and lenders.
c. Use a closing task checklist.
d. Wait and see.

323) It’s January, and the pool at Roger’s listing has been prepped for winter for several weeks. The homeowner assures Roger that it’s in good working order. Roger has no reason to disbelieve the homeowner, so he tells prospective buyers that the pool is fine. The property sells, spring comes, and the new owners call to complain that the pump doesn’t work, and the pool drain appears to be clogged. What did Roger commit?
a. Fraud
b. Negligent misrepresentation
c. Puffery
d. Unintentional misrepresentation
324) What does the Federal Trade Commission consider to be an unfair ad?
a. Any ad or business practice that causes or is likely to cause injury
b. Any ad that is likely to mislead consumers acting reasonably under the circumstances
c. Any ad that makes a health claim
d. Any ad with a claim that’s difficult to evaluate
325) What does the FTC consider to be a deceptive ad?
a. Any ad likely to mislead consumers acting reasonably under the circumstances
b. Any ad or business practice that causes or is likely to cause injury
c. Any ad that makes a health claim
d. Any ad with a claim that’s clearly not true
326) The Lanham Act gives companies what right?
a. The right to a trial by jury
b. The right to make misleading advertising claims less than 10% of the time, which is known as the Lanham Percentage Right
c. The right to pursue clients by whatever means possible
d. The right to sue competitors using deceptive claims in ads
327) What should a licensed broker offering pre-paid rental listing services do at least four days before referring a listing to prospective tenants?
a. Confirm the property is still available
b. Offer the property family and friends first
c. Post it on Craigslist
d. Renew his PRLS license
328) Which of the following items would be considered a truth in advertising violation according to FTC guidelines?
a. An advertisement lists the square footage of the living area as 3,145 feet, which doesn’t include storage outbuildings.
b. An advertisement states “HVAC unit like new!” when in fact the unit is used but has had most of the parts replaced recently.
c. An MLS listing shows a property as available even though the parties closed on the transaction three weeks ago.
d. The licensee’s name in an ad is followed by the designation REALTOR®. The licensee is a member of NAR.
329) Which of the following scenarios is considered a violation of FTC advertising rules?
a. Marcy just listed the Brown property with the following description: “2,000 square feet of living space for a total of 2,800, including two outbuildings and an unfinished garage.”
b. Sarah just started her career as a solo agent and decided to try a new marketing campaign slogan: “Come let our team of hard-working agents find you the home of your dreams!”
c. Shelia just closed on the Martin property yesterday. She’s taken down all the signs and online listings for it.
d. Vickey just posted an MLS listing for the Kennedy property without her principal broker’s approval.
330) Marcus, a listing agent, told a potential buyer that his seller client’s property had no flooding issues, though the seller had mentioned water in the basement a few years back when there was a particularly heavy rainy season. Which of these statements is true?
a. Marcus committed intentional misrepresentation because he knew his statement was false.
b. Marcus committed unintentional misrepresentation.
c. Marcus didn’t commit misrepresentation, because the property current has no flooding issues.
d. Marcus is guilty of puffery.
331) Which federal act protects consumers from unwanted email solicitations?
a. Anti-Spam Act of 2000
b. CAN-SPAM Act of 2003
c. Do Not Email Implementation Act of 2003
d. Junk Email Prevention Act of 2005
332) Jerrold reviews the floor plan of the house he’s going to sell. It’s 3,800 square feet. In his advertising, he bumps that number up to 4,000 square feet to better justify its asking price. What has Jerrold done?
333) Active misstatement
334) Exaggeration
335) Intentional misrepresentation
336) Puffery
337) You’ve started creating your own advertising. Where can you look for reliable information?
a. Brokerage policy manual
b. Copy other peoples’ advertisements
c. Google it
d. Your broker friend’s website.
338) Even though the Federal Trade Commission is concerned with all ad claims, what sort of ads would most likely concern the commission?
a. Ads for products that don’t offer any specific value to consumers
b. Ads making exaggerated claims most reasonable consumers wouldn’t believe
c. Any ad that is demonstrably false
d. Any ad that makes a health or safety